SVB Collapse Explained, D2C Brands That May Fail, And Suli's Next Venture

sean do you wanna set us up what are we doing what are we doing here within the first time the three of us have been on a pod so so please come on i think three or four times somehow you've never been here during during those even though y'all are friends you know each other and that's just strange to but i think this we'll see how these goes i mean i think this will be fun the three of us here i wanted somebody to come on because there was a whole bunch of like rich people smart people shit that was going on over the weekend there was the silicon valley bank disaster bank run all that good stuff there's stuff going on the stock market and so so as is the guy i go to whatever i have questions i said alright well just bring them on the pod instead i'll ask you the questions here over instead of just texting or calling and so that was my that was my idea did you guys did you guys get impacted by this at all i had money in silicon looking at valley things through my my fund our or our our venture fund had money through angel angel keeps all their money or kept all their money in silicon valley bank and so we were lucky that i started hearing about it and i was like yeah i think we should get out and and so we ended a pat we had like one point five or one point six million dollars in that account maybe a little more actually because they hold some for management fees and then we got it all transferred out to a bank i've never heard of they were like you wanna move to grasshopper bank i so you could put it in the fucking field outside your office you know you can put it anywhere just don't leave it in the bankrupt where there where it's like a bank that's going on yeah exactly you but we fine so we got we got out like literally in the nick of time yeah we were almost impacted but not not in a like major major major like there were some people that were stuck tens of millions or even a hundred billion dollars so i'm sure you heard some crazy stories like what did you hear i i how did it play out from your perspective so yeah i was at this sv angel founder event founder summit in san francisco on thursday when the bank was happening and people all around me were on their phones trying to take all their money out of sv and transfer it and people walked out of the sessions and we're sitting on their laptop trying to do that one guy told me that he wired seventy million dollars out of his sv accounts that morning into his personal morgan stanley account because he don't wanna wait for a bank account in the business name to open because that would take twenty four forty eight hours which literally in in normal circumstances that would be maybe not illegal but hugely frowned upon definitely ill advised yeah it looks like you're about to steal seventy million dollars of other people's money and put in your pocket but i think the people right away was it like let's see what happens because that you know the the the series of steps was i saw the stock price go down that was the first text i woke up to sam and our group chat somebody showed the stock was down thirty or forty percent and it just seemed like a stock problem it seemed like oh the company you know getting hammered but like do i feel like i've seen that five times in the last you know five months with something out of the block is down forty percent but then somebody was like oh yeah could this mean that the bank goes under and then the wheel started turning in my head and fortunately i had seen i had seen and not acted on two crypto like bank runs in the last year and been burned by those so my i'm i'm a criminal under under reactor i don't really react even in cases of emergency which is good because a normal life usually things are not an emergency it serves me well but when there is an emergency i'm also pretty laid back and so this time i i i was i was smart enough to be like hey we should do something right now don't wait don't wait to see how this plays out there's is no upside in waiting to see how this plays out did people recognize it right away where you were solely like hey there this katrina a bankrupt yeah and i think in the beginning of the day know everyone was kinda chill about it but a ton of vcs i think starting with peter t said to their portfolio companies if you have money in sv take it out and take it out immediately like right now do whatever you need get it out of sv and let me explain i'm the least educated on finance stuff here so let me explain from a five year old's perspective what happened here so basically silicon valley bank it's like the nineteenth largest bank in america something like that top twenty sixteenth sixteenth and it's usually used by silicon valley based start and other people who related to startups and so what happened was during two thousand twenty one twenty two when vcs were going crazy starts to raise a huge amount of money they used silicon valley banks so they took on tens of billions of dollars of new bank accounts but the and so they had all this new money and so what they did was they bought long term bonds that yielded a rate of like one point five percent which in a way it was them thinking like we're just gonna be conservative and like and not do anything crazy here with all this extra money then fed increases the rate to three and four percent and there's their customers which is startups with new cash are burning tons of money and lowering their deposits or their their savings and checking accounts and then it became public on wednesday at the quarterly earnings at the earnings report that they said we bought these one point five percent bonds which is not good because the fed recently raised the rates to three and four percent which means our one point five percent long term bonds are now dev valued we have to sell a bunch of them at a huge loss people heard about that social media went crazy vcs tweeted get your money out immediately everyone starts to pulling their money out and then by friday the fed or the government substance in and says we gotta stop this they're gonna ride of money this is not good everyone's gonna get hurt is that a good summary of from a from a from a dummy perspective of what happened yeah i think it's pretty good i think that all of those things could have happened except if you know silicon valley is just such a insular place but also such a viral place where everyone talks to each other so i think if it wasn't for the fact that it was silicon valley and everyone talks to each other there wouldn't have been a bank run this fast like on thursday when the bank run happened forty two billion dollars people try to wire out forty two billion dollars in one day out of silicon valley bank much money did they have a hundred billion hundred they have something two hundred yeah something like a hundred and eighty billion dollar in deposits so twenty five percent twenty five cents on every dollar was tried to be wired out in one day and what happened when people tried to do that it just said no i mean what what was the what what what did they see on their screen in the beginning of the day it was working so this guy wired out seventy million dollars a bunch of other people at that as the angel event we're wiring money out no problem come the afternoon they couldn't log in to silicon valley bank so it just wouldn't let you log in in fact i tried to log in yesterday i a silicon valley bank personal account and it also said you can't log in until monday and were you buy this silly because you've i know in the past your companies use silicon valley bank i think you you raised money from them so first were you affected it in second why does everybody use silicon valley bank why i think they said fifty percent this on their website i don't if it's true fifty percent of venture bank startups use silicon valley bank that's crazy is it just the brand or did they do something that that was like advantageous to start yeah they do a couple of things so one they have strong relationships with all the vcs and or so they thought yeah so they thought so they they they've had strong relationships with everybody so all the vcs are like doing their own banking all the lp p all the venture funds are doing banking at silicon valley bank already and then they host tons of events around silicon valley and sponsor tons of events so you just see their brand name everywhere as the bank that you should use and it kinda has like an elite vibe a little bit which is yeah stupid because or that sounds stupid but the the a lot of media headlines are like bank used by the richard famous tech elite is going under and so the sentiment was like oh screw them which maybe that is par part of the reality a lot of rich people do use them but like payroll companies use them and when you there was a lot of companies like rip that the hustle used for payroll years ago where you pay your payroll to pay your employees rip is the inter is the middleman man they hold on your money for three or four days and then they pay your employees rip use them and so three or four hundred five hundred thousand employees of companies both blue collar and white collar weren't gonna be able to pay their bill or weren't gonna be able to receive their paycheck so it's not just like you know the elite yeah it's kind of a the names a little bit of a mis number for who it represents yeah the other reason we used them at tiny c and this might be my greatest personal achievement was i got free tickets to the nba finals from silicon valley bank where they invited me to hang out in their box and watch the game so you know there's a bunch of perks like that for using silicon valley bank and then also if you raise any debt they're a huge venture debt provider in silicon valley so oftentimes when companies will raise an equity round they'll also raise a little bit of debt so they'll raise you know ten million dollars of equity and three to five million dollars of debt sometimes depending on kinda what their capital needs are and so when you raise debt from silicon valley bank they require that silicon valley bank is your exclusive banking provider so all of your deposits have to be at silicon valley bank as well that way they've got visibility into it and that kind of thing so a ton of startups ups will get debt and then they have to use silicon valley bank as their bank so they have no other choice and over the weekend basically there was a bunch of people we have a bunch of our mutual friends where they are just like sitting there friday this saturday and sunday morning thinking i think i just had all my money's gone i don't know what's gonna happen i was with like maybe a dozen people and they're like you know i've had hundreds of thousands or tens of millions of dollars i just don't have that and i have no idea how i'm wanna pay my employees i don't know what's happen sunday night we find out that everything's gonna be fine the the corporation silicon valley bank is going under if you're a stock that i think you're gonna lose if you're a bond holder and that company coming i think you're gonna lose everything but if you're a deposit or if you're a customer you're gonna be made whole and so it's no big deal i think you could access your money now is that right is out this is currently being resolved yeah that's exactly right so the federal reserve and yes treasury department were like if silicon valley bank deposit lose their money this is gonna create a systemic risk that systemic risk is everyone who has money in these two thousand local community regional banks is gonna take their money out monday morning because they're afraid that their personal bank will have a bank run also so which would this is literally bank run also right like anybody being proactive would be triggering an actual bank run across many many other banks and so they had to they had to basically get people to chill before monday morning yeah exactly like first republic bank is the bank that i use and a ton of other startups use and in fact first republic bank provides is the bank that mark zuckerberg uses to get loans for from for buying a house or just getting a loan against his stock and there were rumors over the weekend a bunch of my finance friends in new york text and said hey do you have any money at first republic bank if so get it out monday morning well so today it's down sixty five percent so even though this happened why is it still down so bad i think people are just still afraid that there's gonna be the deposit are still gonna take money out of first republic bank there was a funny there was a funny headline and it said that you know when you think of this you think of like literal pitch forks and like guys wearing straw hats and like torches standing outside of the bank because there was like a headline that says people are rallying outside the bank just banging doors to get in and you think like you know like a pitch fork mob and it was really it was like eight or nine like asian guys wearing facebook book bags and like north face sweaters and they and and they were smiling at the camera like this this article i'm like they look really happy they're like a waving at the camera and i saw that because was it was a pretty funny thing well i think that was part of the problem here was like like you said in silicon valley everybody so tightly network that like word spread like wildfire and then back in two thousand eight when the global financial crisis happened the in the the sort of the the other bank failures happened there wasn't really like like twitter was very new at that point in time smartphones had only come out that same year so it wasn't like as fast so this was basically like a bunch of people who are all inc and all talk to each other a ton on top of that you can now do online banking and just quickly log in your phone or your laptop and wire out seventy million dollars you even need to go to the bank like normally it's like bank there's gonna be a huge line yeah that huge line itself is a like barrier to this happening but in this case ever everyone talked about it everybody moved it out digitally and words started spreading you know basically fear started spreading across twitter tiktok in other places and it just felt like stand of the world you know move now and that that sped this whole thing up into a one day like tsunami financial tsunami that that hit what do you think about but it's crazy because the i bet the ceo of silicon valley bank woke up thursday morning and was like what's the big deal guys this is gonna be fine and what was it a big deal sue like it besides the the the fear was it actually that big like was the was the business itself at risk there is some there's a real problem with the silicon valley balance sheet because of the the sort of deposit taking money out in general so even before wednesday because of all of the startups that because of the startups ups are the ones that bank at silicon valley bank they were withdrawing money every week to pay payroll and because of their burn rates so there was already a problem but i think that you know regulators are monitoring bank balance sheet on a monthly basis very closely so they were like this is all fine up until that point and so nobody thought this was a problem like the silicon valley bank ceo was like this isn't a problem regulators thought this isn't a problem yeah but on one line that was bad he goes i we don't panic i think he said don't panic exactly he did such a terrible job of p r and the way that they came out on wednesday and said hey we're gonna raise one point eight billion we are gonna raise two billion dollars because we lost one point eight billion dollars like they just mis this from a p perspective and i think if they've done a better job of that they wouldn't have gone wouldn't be dead today and to to sean's point around just the speed of this happening so the biggest bank failure in american history is washington mutual in two thousand eight and in two thousand eight ten seventeen billion dollars was removed from washington withdrawn from washington mutual in ten days and in silicon valley bank it was forty two billion dollars in one day on thursday so just the speed with which business happens is like you know so much faster now and i want i wanna get your reaction to two people so peter t some people like oh peter's t strikes again he's the you know this guy's the menace and then they're like he brought down ga he got trump elected it and now he he triggered the banker of of silicon valley bank so peter you know do you think that that's a is there is there is there any truth that and then the other side is mark su who's another vc down in la who basically came out during the process it was like this is like like you should companies you should keep your money there support silicon valley bank it supported us there's you know we don't have to have this hysteria if we don't do the bank there's there won't be a bank run i'm you know keep your money there and if you know for people who listen he could've have caused them to basically you know lose or it lose access to the majority of their money so what do you think about those two people and where do you play place the sort of how much blame or credit do you do you give to those people i do think peter heel has of ton of power he's like this godfather of silicon valley you know we had a tiny cohen we had mark jason on our board and he would never mention what anyone else says except he would constantly mention what peter t says so i think he what's an example and why i think he just mark and i think just looks up to peter till and thinks that peter t has a bunch of good ideas so for example one idea of what one thing he i remember him saying was peter t says the best startups have one source of revenue not eight sources of revenue i'm sure you've seen this and start up pitch decks where they're like we're gonna generate revenue from ads plus we're gonna generate revenue from businesses plus we're gonna generate revenue from these customers having like eight different revenue streams is much worse than where facebook we're gonna re generate revenue from ads one single clear revenue source in the beginning and and do you think that i mean i don't think he's the bad guy in the situation because basically what happened with him was it'd be like if just a normal person went to the bank account and they tried to or the atm they try to withdraw money and the atms glitch and they're like this doesn't feel right hey family i think he should bounce and go get your money out of this this is like glitch this is not look good because i believe peter till he did a i think silicon valley invested in founder fund or something like that is that the story or he did a some type of capital call and silicon valley could didn't pay up right away is is that right i didn't see anything about that and yeah i i don't know what that is what i know is that he basically peter t was the was one of the people in s valley that was like this is not good everybody take your money out and then you know all the other venture firms heard that and sent emails to their portfolio companies saying the same thing like on thursday you know i'm a investor a bunch of venture funds a bunch of them emailed their lps and said hey this is our exposure to silicon valley bank as a fund we're talking to all the portfolio companies and trying to get them to remove all their money out of valley bank so really they caused the bank run you're in you're an lp in like you're an investor in a bunch of funds like maybe what like fifteen or so big venture funds yep not did they have their money tied up and i'll ask i don't tell you why i think this was something was a little fishy here so on that thursday friday when he was all going down vcs were simultaneously telling their portfolio companies hey get safe but at the same time we're basically saying hey the fed needs to come in and ensure that all the deposit deposit is gonna be made a whole and they were saying it anytime somebody uses the like what i call like the single mother story it like makes me very suspicious and what i mean by that is they were like you have to do this because jobs are at stake these companies have to make payroll and if they can't make payroll next week you know this is gonna cause jobs to be lost and you know who works those jobs single mothers and like they basically was all about payroll small businesses jobs saying all the political like buzz words to get like washington to do something because you know nobody wants to go be like hey i'm a venture fund we had ninety million dollars in silicon valley bank because they gave us lines of credit and we were we had to keep our money in there and we're stuck you know we're way above that fdic limit and if we're not made whole we're we're screwed was that the case or is that just my conspiracy so should i take off the conspiracy hat or or is that do you think was that a part of it yeah i mean i i saw a bunch of videos of david sacks and jason cal and stuff saying that kind of thing i might i'm skeptical that any of that matters i think the way that jay powell and janet yell look at this is there is a systemic systemic risk to the banking system so you know taking a step back from silicon valley bank like the met the american financial system is this amazing black magic that exists and it is a source of tremendous amounts of prosperity in america and in the world like if you go in places like pakistan where i was born you don't have a you don't have access to a credit card you don't have a fico score you don't have the ability to go get buy a piece of property and get a thirty year mortgage on it that the government backstop stops you are constantly worried about the your currency being inflated because you're not sure that the the government is gonna isn't gonna just print so much money that your rupee that's worth a hundred worth yeah your life savings basically disappears because of inflation and you're not worried when a company that's a publicly traded company reports earnings that those are lies in the united states like there is so much stuff that is amazing in america from a financial infrastructure perspective that the rest of the world does not have and the federal reserve coming in and bailing out silicon valley bank and doing it without using any taxpayer money making all the deposit whole wiping out all the equity holders wiping out all the unsecured debt holders like that's the right thing and why where did the money come from yeah if it didn't come from taxpayers what is that twenty five billion back from and and also bail out i don't think it's the right term because they didn't bail out the bank the bank is out of business or or it's dead but they bailed out the deposit right the customers yeah and and you know what people were saying on the internet build single mothers yeah yeah because i need that third home in trucking yeah what people were saying on twitter which i agree with is that hey when you put money into a bank you're not thinking of this as buying a risk asset you're just thinking of it as i literally have cash i could store it under the mattress but that would be silly i'm gonna store it with the bank and the bank is gonna do a better job of taking care of my money than me by storing it under my mattress and that's an important american value yeah like that is a super important american value my product that the banks sell yeah is safety and security trust faith that you are your money is safe and if that product if they if people start to question that product the banking system doesn't work in your one step from people dude who cares about this little green piece of paper i don't know if anyone's gonna care about this or if this is gonna be they have any buying power tomorrow right money money also has the same thing where the the only attribute that matters is belief in its value and and banks have the same thing it's belief in the safety there and where did the money where the money come from though you you didn't answer that yeah the fdic is basically is funded by other banks so think of it as an insurance fund and banks pay a premium to that fund and the fdic insurance fund has a hundred billion dollars in fees that it's collected from banks and in fact in the federal reserve letter that they printed they released yesterday they said any other fees any other money that we need is gonna come from a special assessment of other banks oh wow so they had this money and they said we're gonna make up to this much available not just to silicon out a bank but any bank that that needs a loan against their their other like their long term assets if they have the same kind of duration mismatch where they have yeah they own like they're good for the money they just can't get it out today it's in thirty years they'll have enough money for sure it's just that today the the value of that mortgage that they owned you know had gone down thirty percent or whatever yeah that's right they said they said we'll give you a loan against that asset in the meantime who are the who are the winners here to me the winners are other community banks and other banks that have this problem so yesterday that the government announced this new brand new program like one sheet of paper it was like a google doc i saw it yeah yeah it's so funny that they release released stuff in the way that they do they create a new program called the bank term funding program and that's basically gonna prevent the silicon valley bank problem that they had with the long duration bonds so basically silicon valley bank had a one point eight billion dollar loss because they sold a bunch of ten year duration bonds and they have to sell them amount for seventy cents on the dollar and what the fed announced is that if you're a bank and you've got a bunch of ten year paper that's worth seventy cents on the dollar you could get a loan from us for all of it you can get a hundred you can get dollar for dollar loan so if you've got ninety billion dollars of ten year paper that's now worth sixty billion dollars we will give you a loan for ninety billion dollars so that you can not have this problem yeah you can basically not have liquidity problem and then the other winners were like there's a lot of like startup banks like mercury it seems like they were like like crushing it i think b was another one like they're just killing it right well i i think the the best thing for them so i think they're the the real winners is first republic because they would have been wiped out today probably and yeah many others like first republic so they got you know the bullet just wiz past their ear and you know luckily that was the last bullet and now there's no more bullets coming today and there's two thousand community banks in america and so like all a bunch of those would have had a bank run today or this week if the fed didn't do what they did mercury and a bunch of these other startup up banks basically when needed to move out of silicon valley bank like who's the fastest what's the next bank name i know that i can open up an account now and mercury and others were were were beneficiaries of that now they got billions of dollars billions and billions of dollars of inflow yesterday or sorry friday now i think that a lot of that would have skipped town this week so i think they would have been a middleman because who the hell is gonna keep their money in a startup up bank when this is your fear right you're not gonna keep ten million dollars or twenty million dollars you had moved it there just because you needed a quick safe haven but you weren't gonna move in there you were gonna still next week go to chase or wells fargo or whatever and he'll put the bulk of the money there so now i think they're in much better shape because instead of being it just a middleman they might keep a lot more of that that deposit or you know those those deposit relationships now and is it possible that other than the equity holders and the people directly impacted by this that just like the average american might be impacted positively by this in the next six to twelve months because maybe the fed won't be doing more rate increases so then you know maybe you can get a mortgage in for four and a half percent or four percent in six or twelve months because the you know the government is like oh hey we kind of like a achieve our mission because these guys screwed up like inflation might not be as bad not because of of this big losses is that accurate or is that too much of a reach i personally think that's too much of a reach i definitely see people saying that on twitter and cnbc but i think inflation is rampant and is has nothing to do with the silicon valley bank problem and basically in two weeks people will have forgotten silicon valley bank problem and they'll have all they have all their money as of today so like it's back to business as as usual and business as usual still has massive inflation and the fed is gonna continue to raise in my opinion i this should be how naive i am because i was under the impression if i kept a bunch of cash in the bank that was me doing the safe thing i wasn't investing this money or trying to get yield on it i was saying look you know i just wanna keep this in the bank so that you know just in case and the the two three k fdic thing was this like idea that existed i had never heard it ever coming to play like in two thousand eight i was a sophomore in college like i didn't care or no i didn't have a bank account you know like i didn't do anything at that time yeah you thought le and brothers was look where you like buy khaki pants like he thought a been for the company i thought like know you had new parent in le exactly i was like are they hosting thursday thursday this week but so it's like yeah this is kind of my first time for this coming into play did you like i was like who the hell is gonna take if you have five million dollars are you really gonna go open up twenty bank accounts each with the two fifty k limit like that sounds so inconvenient and outrageous that's what a lot of people do but then yeah gia does this gia the greek freak announced that he has fifty bank accounts at different banks each with up to two hundred and fifty thousand dollars that's how he kinda secures against us well i saw jared kushner when he when jared kushner became whatever his role was in the government what sector i forget forgot what he was but he had a release like his his income and i remember or his his net worth and i remember looking through it all and he had dozens of bank accounts and it just said two and fifty thousand dollars in each account and i was like why and and did do do this i mean this seems is is this normal and i you know i'm just the only guy i didn't do this i try not to go above too much above two hundred and fifty thousand but for my business i did but personally no i try not to go above two fifty so you spread it across you know how many accounts exactly then sam what would that be yeah give us the account this is our new way to treat people to telling us they're they're like yeah where liquid and worth is you're an fdic right right yeah i was surprised that gia only as fifty banks i was like no because stories from his rookie here so he came over from greece where greece was like having the banking crisis and yeah greece and so that was his rookie year that that his he he and his agent did that now he's worth like hundred million dollars there's no way he could be doing that at this point he's got some other you know but rich people have this right like if you're at jpmorgan and you got twenty million plus they'll do an auto like sweep into a bunch of accounts for you i think i'm not sure exactly how works but i'm pretty sure there are there are products that exist that will do this they just seem niche to me and seemed like i don't know a tool for the paranoid it didn't seem like a a thing that i need to worry about personally yeah it's so funny because my father you know immigrant to the us always worried about the banking system and the us dollar is always like let's go by gold bars and bury them under the house just so that we know that the our money is secured and then he's also like let's go open bank accounts in swiss banks because those are the safe banks and they're not gonna have this problem because those also don't do fractional reserve like a swiss bank is i think one for one they don't they don't keep you know just a fraction of your cash in the bank well what's an example of a swiss bank and how do i mean i've only seen like wolf wall street were they like go to switzerland with like cash in hand is that that's not actually how you do i mean do you open a i don't even know how you would open a swiss account you know i think credit su is actually a swiss bank but it also has a bunch of was seen as as dangerous for a while i don't even know the name of a swiss bank but i bet you can just open a bank account online and wire the money without having to attach cash to margo robbie and that hurts us switzerland but that would be cool if you could i can find this client in full have you heard of hubspot hubspot is a crm platform so it shares its data across every application every team can stay aligned no out of sync spreadsheets are doing databases hubspot grow better alright we i think we we did a good job covering the silicon valley bank but sue you actually had a few other things that i thought were interesting one of them being the all birds right what a shit company man they are really it's not working out for them is it yeah all birds is in my opinion the ugliest fucking shoe i've ever seen in my life and i remember seeing these like five to seven years ago in silicon valley all the venture investors that i knew were wearing them around town and i was like use you're ugly you're she was ugly you're ugly this sucks this is not a good looking shoe and i've heard i i saw this tweet that i think is the best way to describe it all birds socially acceptable sweat for your feet yeah i'm not a big fan of them either but basically they've raised two or three hundred million dollars in in funding they've done three hundred million dollars in revenue market cap is down from four billion to two hundred million is that right it's two hundred million right now yep yeah down ninety five percent from their ipo in november of twenty twenty one from forty million to two hundred million how much of the founders do you think how much do they own i didn't look at how much the founders own i bet they owned a lot of it before when it went public and i didn't look at you know kinda how much have they sold off but i got a decent amount so what's gonna happen with that so i think that you know the the problem that they've been having is that their revenue is shrinking and their costs are really high they've opened up a ton of stores like fifty eight stores in the us and abroad and i think that store strategy isn't working because not enough people know what all birds are and walk into the stores and want some so they've they've decided they're gonna stop opening stores they're only gonna open three more stores this year and those are places where they've already signed leases they're gonna stop any international growth by they're not gonna open any more international stores they're gonna just do find distributors internationally to try to grow they're trying to contain costs by stop they're manufactured today in new zealand they're gonna stop manufacturing them in new zealand and move it to one place in vietnam so you know my sense of what's gonna happen to all birds is somebody we're here to bring your own laces from now on we're gonna like like cut every corner you're there's like you know we don't have running water in the office today we're doing that every every other day i tell this thing is profitable now silly what you what do you think of this in the terms of like d so like i think people have basically i think d got hot people started a bunch of brands a bunch of investors came in and funded these companies like they were tech companies but they weren't tech companies casper all birds and then some like war parker and and others that they got that broke out and then you know so on one hand if i if that's all i knew if i was just sitting from a afar i wouldn't have been like this space doesn't make sense then and now it's playing outwards it's like yeah these companies are not profitable they're not doing that well you know i think they're burning a hundred million dollars a year or something like that like they're just they're very mature companies that are still losing a ton of money and i would have just my opinion would have just been that but you and your brother like your brother built native deodorant it was a profit you know basically raised almost no money what did he raised five hundred grand for that business is that is that all he ever raised five hundred thousand yep raised five hundred thousand dollars built it up basically by himself with like you know a very very small lean team you know packing deodorant like you know at their kitchen tape at your kitchen table in your apartment and sold that thing for a hundred million dollars when it was highly profitable that whole way you know then you have that model and you've had a you know you know you we don't talk too much about your businesses but you you've been involved in a very different style of d that is highly profitable lean and mean raise zero capital or very minimal capital and i feel like nobody even knows about those businesses those are like you know more under the radar everybody only hears about the big vc ones you know like away luggage and stuff like that what what is your take are you sort of like that other way is dumb or are they actually just two different games and you know both both are both are valid yeah i think there are two different games the native playbook of raise little capital focus on profitability acquire customers so that your breakeven even on the first purchase or profitable on the first purchase and scale through repeat purchases that are generating a ton of profit using that to either reinvest in the business to launch new products or just take distributions so i think that's a a super valid playbook and i think there is a valid approach to the raise a bunch of venture capital and try to build a business at a much larger scale who who's doing that that you think that they have a good shot yeah maybe yeah fixing my opinion is a great example because they're like one of the problems with all birds is there a fashion brand and at some point the world turns against you and like i believe that all birds are ugly i think other people are gonna arrive at a similar conclusion at some point and then all birds is gonna have to find the next style to get to that place to to kinda continue to succeed figs is basically uniform so it doesn't need to be better looking over time yeah but that's a bullshit i think you're wrong there i think that i think that that strategy is not bad like look at louis vuitton but you know they've been around for three hundred years and and it's always been cool i think that their execution they just picked a lame thing so i don't think i don't think it's a bad strategy i think they just it's a stupid shoe or at least that's what that's what a lot of people think yeah i mean nike is a great example of a business that has scaled to you know more than a a hundred billion market cap i wanna say and they're a fashion brand that serves you know the super high end as well as the low end so they they figured out how to do it so i think there is a playbook to go raise venture money or private equity money and get to scale i just think a lot of the the companies that have raised money have been un they've hired too many people like grove collaborative what do they do grove collaborative is a san francisco based startup up that's ten years old it's also publicly traded they started out being this marketplace of kinda natural product so i've saw them as i saw so i would see ads for them saying get free missus myers kit and i would click on those ads because i was like free stuff sign me up and they're basically trying to give you get you involved in a get you enrolled in a subscription of buying a bunch of home products got it okay cool idea cool idea yeah great idea and it went public through a spa and it has the same problem as all birds and away luggage although way is private g collaborative stock is down ninety six percent and has a market cap of seventy million dollars it's worth you know way less than the cash that they've raised that's crazy yeah and the stock is sub one dollars if the they have to do a reverse stock split to avoid being deli listed and yeah they basically have to fire a bunch of people and stop spending as much money on marketing so that they can be profitable and have the basically to accept declining revenue to get to profitability and that's a grove cal just in the third quarter of last year it was the first profitable quarter ever so what companies do you like they're saying all the companies you hate on here you have wish you have grove you've talked about all birds you don't like box yeah which is like how going online yeah what do you like i think there's a bunch of companies that are awesome businesses that are worth less than they were in march of twenty twenty so they're trading at less than pre covid valuations and i love those companies but some of them are the ones you hear about all the time which is facebook amazon i think those are two great businesses and they're great you and i were walking in in soho in new york and after some meetup and i i i won't say the amount you can say the amount if you want but you said i just bought blank amount of stock in squarespace and my jaw i kinda dropped it was like what did you really why and you're like told me how much you love that company and it was a very large amount and so are you still at to squarespace yeah i bought a million dollars of squarespace stop i still own it i don't know if i made any money on it i at some point it turned into like two hundred and fifty thousand dollars because squarespace stock went down so i'd lost seven hundred fifty thousand dollars but i think it has since turned around you know it's up fifteen percent year to date i think squarespace is super undervalued as a business but i'm not sure it's a great stock to buy yeah you have like a long history with squarespace let me ask you different different question at one point you tweeted out something like hey if we you know the the guy happened to have fifty million liquid and wanted to double it you know what's your best idea and you got like a hundred replies i remember going through them and being pretty uni impressed with most of the ideas it didn't seem like i i i thought you know you some some great stuff would come out of there but i but maybe in something like this a hundred people reply and it's really three interesting ideas did you get anything interesting or what would people saying when you tweeted that out and did you get any interesting ideas on what to do with your money from that i got one interesting idea which was try to go by all of wish or you know fifty one percent of wish wish has seven hundred million dollars in cash and its market cap is two hundred and eighty six million so it's trading at less than cash so you know buy enough stock that you can convince management to distribute the stock distribute the cash and shut the company down right and can you and and i remember seeing that why doesn't that happen in practice right companies got seven hundred million in cash it's trading at three hundred million why doesn't you know it seems like the the the the like the video game move is you buy the three hundred million dollar company you shut it down tomorrow so it stops burning cash if you can distribute seven hundred million out you profit four hundred million why doesn't that happen in practice or does it happen in practice so there are people like bill lac man carl icon that are activist investors that do this kind of thing you know they do it with apple even netflix like carly icon we'll basically go by five percent of a company and then call up management and say hey we want you to do x y z and if you don't we're gonna just keep being a thorn in your side and so and we're gonna try to remove your board directors and put our board directors in we're gonna threaten to fire us ceo they do a bunch of this kind of stuff and generally what will happen is the ceos will just listen to carl icon and do what he says or do something else that makes their stock price go up ten fifteen percent twenty percent that and then carl icon will sell us position make billions of dollars and be like great that was fun with something like wish it's if you tried to go buy up wish stock it's so thinly traded that you would basically drive the price up and you'd would never be able to buy fifty one percent you'd have to you'd have to pay you know hunt seven hundred million eight hundred million dollar market cap to basically own fifty one percent of it dude it seems like most of the companies that you've mentioned or a lot many of the companies you mentioned went public via spa has there been one spec that has worked out that's a great question i have no idea and for the like i remember cha off was all about spec i don't pay attention to the public market so i'm a little i'm definitely out of my depth here but i i know enough to know that he was big on specs what are these guys what's their reputation right now which is they got and did they make money they made money at going up making it happen and so now are they just like fuck y'all like you know what i mean like they just like they don't care yeah the way this specs work is if you're the sponsor which is what cha mouth was in a bunch of these like he took open door public through spa so public spa you end up getting a percentage of the company without taking any real risk so cha off has made out like a bandit in i think he's done five to ten specs he's made money in each one of those specs and i think every how much more than a billion dollars across all of those for sure wow and so how how does the math work so i remember i think i had heard at one point you have to put up three percent of the capital to own but you own twenty percent of the company when it goes public is that right or did i that misunderstand yeah i don't remember the math but it's something along those lines which is for taking the company public you get it's probably not seventeen percent but you get something like five percent or ten percent of the company stock for basically taking it public and you don't take any risk you basically raise money from a bunch of institutions you hold that money for up to eighteen months you have eighteen months to find a target that you wanna take public you find a target you make a deal with them to take them public all those investors that have gave you money eighteen months ago they can either keep their money in the deal or sell it and get their ten dollars back and so a bunch of people will sell because they're like oh this isn't gonna work sell i wanna sell my stock so oftentimes the spec which is publicly traded we'll be trading at ten dollars and then it'll get an the target will get announced we're gonna take grove collaborative public and then the stock will drop immediately when the target gets announced because everyone is selling and is like this isn't gonna this is a good target so what's his reputation then i mean is or is he just like so i mean so rich shouldn't give a fuck about his reputation well did you did you guys say the thing that's on this stock which was the reverse robinhood hood steal from the poor and give to make himself rich no not yeah i was waiting for you because i i know i don't i mean i don't know enough to know about him and like those whole stick but sean you have a strong opinion about it i i mean i wanna hear his opinion but i don't think i have that's wrong with opinion yeah you get them a hard time dude you you give him a really hard time you know i think cha is super smart super successful i love his you know those cashmere sweaters that he wears on the all in podcast they looked up i gotta buy me some but what he's done with the specs is literally the opposite robinhood hoodie he's stolen from the poor and given himself and i'm surprised that his reputation is not tarnish in the public markets or in well is cnbc i ask your question is it that he ended up you know dumping on retail because it was always designed it was kind of designed that way it was gonna be that way or oh well the market's just turned and everything's down you know like i don't fault jeff bezos because my amazon stock is down you know like that's out of their control it's a good business blah blah blah versus no the way these were set up it was a bit of a house of cards you know he was gonna make money and at some point this was gonna happen because these fundamentally did sense which one which one is it more yeah you're asking is the what what's the intention do think do you think he'd view and that the the intention was had this is probably how it's gonna play out but let's just see to me these are pump and dump schemes like makes in wolf of wall street if the company is sound and gonna go public generally the companies will go public on their own using the traditional ipo path or a direct listing you know that's what squarespace spotify slack all these companies that went public during the same era that he was doing these specs the companies that go public through specs are trying to rush to get public and it's not the airbnb bs of the world it's the grove collaborative of the world and so far of the world that are doing it yep because this is that that are not as sound now what they would say was like the very first one i think you he did was virgin and it was look this is a company that you'd have to be a real like you know tech investor to understand it's got a really long term huge vision and you know they needed somebody who believed and they didn't wanna you know take their chances with the with the short term minded stock you know you know ip stock market so some version of that was like you had to be a true believer in technology innovation and you had to be smart enough to understand how big this business could be that's why i'm taking it public and so it kinda made sense on the first one and then pretty soon it was like just putting lipstick on the pig and selling it and that's how it felt to me at least and so i'm kind of the same opinion which is i think obviously he's smart and obviously he's he's successful i don't think those are arguably i think that he's also very purpose you know i don't love his personality i also think that what he did with the specs i think you know seems to be more like like more like the puppet and up or putting lipstick on a pig like you know these weren't great businesses it was what can i do to just you know can to get something to to cash here because he again he had a free role in a lot of these exactly and so you know and i i i and i find him to be you know someone dis discontinuous what he what he talks like you know i remember before he took metro mile public it was buffett had geico i have metro mile and here's why it's better blah blah blah fast forward like less than a year at metro mile is you know sold for thirty cents on the dollar to lemonade because it was whatever not in good shape at that time and then you know no mention of it ever again yeah it's like onto to the next yeah the the thing you know there's a bunch of people that were pumping bitcoin or other crypto products and when they tweet there's a ton of people that reply to their tweets saying fuck you i lost my life savings because of your because i took your financial advice when sham tweets i look to see what the responses are there aren't many people that are like hey you screwed all the you know the public moms and single moms and i anomalies on on these specs dude i was with your brother one time sue and we were hanging out and someone was talking about a get rich quick scheme and how like here i think i someone they like saying like you know no no one likes a great get rich quick scheme and your brother goes whoa whoa whoa whoa whoa getting rich quick it's the best way to get rich and and your brother's is pretty funny because sometimes they'll say funny stuff but it's like oh yeah you're right that is like that's way better and sean was talking about sham ahmad and virgin he's like you know we don't care about the short term it's it's for the long term and a lot of times when i when i read about this these public markets and they talk about long term i'm like yeah i think you're i i i kinda care about the short term i definitely care about the short term a bit too so and and they like use that word long term to disguise like bad shit like you know it's about the long term it's not about the short just hold it's a long term i'm like i don't know getting rich quick and in a short amount of time that's that sounds nice too i would like it not to fail in the short term that would be nice there there's this warren buffett quote where somebody is like some reporters like hey what you talk about is pretty simple and sounds like anyone can do it why aren't more people applying the warren buffett strategy and and becoming billionaires and his response was everyone wants to get rich quickly i'm about getting rich slowly and nobody has a patience to do it yeah but here's my issue with that when he talks about that he keeps talking about the long term and he's ninety five it's like bro there they're there ain't a long term have some fun like there's no long you don't have long term anymore stop talking about long term maybe long term stops in your sixty it's like enjoy it yeah i was talking to these twenty five year olds and i was like two million dollars when you're twenty five is more valuable than twenty million dollars when you're forty five because you can basically do awesome stuff at twenty five that you're not gonna be able to do at forty five yeah dude i agree i agree sean what are you gonna say i was gonna say you had shared this blog post about a good the a good quest which is i think a a guy from founder fun i think wrote it while a while back i remember reading it at me like this is actually pretty interesting it seemed like something that maybe made resonated with you you explain the idea of a good quest and then i wanna hear you guys talk about it yeah it's kinda like the this guy basically was like who done some guy founder responded stevens i think here's basically like a bunch of the brightest minds in silicon valley and in america and in the world are focused on bad quests so kind of in a game you can in the game of life you're either focused on something that is noble and honorable and makes the world a better place or in his language you're focused on short term things that are gonna make you rich quickly even if they're incremental improvements so a slightly better mouse trap and he basically is like there is we're wasting society and people are wasting their energy brilliant people are wasting their brilliance on dumb problems and we should be trying to solve the greatest problems that we have in our lifetimes and that is the noble work and everything else is bullshit and he points out he's like most i don't know man but this he's i look but through our pro his former job he he he used to work at mike's hard lemonade i don't know if i trust this guy didn't he really that's how he knows dude that's that's the experience he did the total opposite he works at adderall a defense company but like i don't know man this guy worked for a nerf like sorry go ahead i'm an idiot yeah he's a c founder of andrew so he he points out this thing which is like you know the average person is not capable of going on one of these good questions so if you're brilliant if you really are in kinda like top one one percent of talent and motivation and ability it's kinda like you're moral imperative like you you kinda gotta be the ones doing this because who else if not you then who it is sort of the the mindset that he has and so i would say that like you know i think you're awesome but you you yourself are like i wanna go in a good question you've been telling me this for like five years yes and you're like i spent my whole life building these like mouse traps that make a bunch of money because i can them they're i just see them they're obvious this widget and i could sell this widget and make a bunch of money and you've done that are you did this blog post tip you over the edge to do a good quest or did it have the opposite effect and turned you off and say actually you know f this guy and f this whole like noble quest bullshit maybe next week you know i went to this sv the angel event in san francisco last week and i've been to san francisco in a really long time because i was having this like existential question myself of should i be going on good and hard quests versus easy quests and you know easy quests are great because you have great quality of life like you don't work that hard you can go play tennis in the middle of the day or workout at noon like my brother every day at noon we'll go work out for two hours in the middle of the day we could have a sick pad and in in new york and maybe a place in la and and travel all over the place i mean you guys have a pretty nice life yeah yeah like he's gonna go to japan next week just for fun to look at chair go to the cherry blossom festival so you know he's it's very easy to be seduced by like quality of life and easy quests in my i like how you're using your brother here instead of yourself you do all the same things you're just yeah using him as like this guy way easier to use him then kinda look at the mirror look at the mirror more closely and so you know i went to that event and sam alt spoke and he was basically like everyone thinks open and overnight success i've been working on this for seven years god damn it and so have all of these other ai scientists and ai engineers and it took us seven years to make chat gp what it is today that's not that long it's not that long but it's it's a really long time like basically they didn't launch a product for maybe five years or something along those lines spend you know now he he had every quest at his disposal could have just simply sat back and an angel invested and and done you know become you know as proficient at pickle ball as one can be right like he had he was running yc c at the time and he left probably you know the the best job in silicon valley which is running yc yeah be the highest paid lowest effort job you could have like it's up to you how hard you wanna work there but exposure to new people new entrepreneur you get the first you can you get to do all the fun shit you get to see all the smartest people you get to be the king maker you know you have the infinite money glitch if you're her if you're doing everyone in so while he's coming to kiss your ring hey he quick to go and do this nonprofit ai thing and i remember at the time i remember literally at the time this was like what did you do this like twenty sixteen or twenty nineteen or something like that he he he left he had been funding it as his own like you know personal passion project basically up up till then then he left why i to do and i remember thinking at the time i probably just gonna follow of sam alt like if he is gonna do this with his time there's really no better signal in the world that that's is this is like the right place to be unfortunately i didn't act on that but i remember having that thought in back in you know twenty eighteen twenty nineteen yeah it's it's funny to me that you say that like seven years is not a long time because yeah i guess in a sense it's not but seven years at the same time seems like infinity when you're working on a startup up and you're there's no immediate gratification like i can't think of the last time i was able to work on something for seven years without some form of immediate gratification i mean there was there was there was milestones look at this guy the did did tracy teammates who start andrew like funding rounds winning certain contracts some type of press i mean that's like pretty cool you know that you you can get your yourself you can get your dopamine hit but what you're gonna do are you're gonna quit doing this small boy shit that makes a lot of money you're gonna start doing something like legitimate that like actually matches your iq yeah i wanna try and do a hard quest but one what's what's the what of the handful of ideas or industries that tickle your fancy i think doing something in health care would be really amazing and transformative i i think healthcare care in america is so bad it's shocking to me like you know my mom had a bunch of medical problems last year and just getting access to doctors is insane like if you wanna get see a specialist you have to wait sixty or ninety days to go see it a special specialized doctor and a friend of mine who's a doctor was like here's how you solve this here's the concierge medicine practice you paid them thirty thousand a year yeah i had one it was twenty five grand a year yeah you pay them twenty five grand thirty grand a year whatever it is and all they do is they are able to get your appointments faster because they're able to text the doctors because they know the doctors personally because they used to work with them and say hey can you do me a favor i'll my guy next week instead of three months from now it's kinda like gangster a little bit like it's like it's like the doctors are it's run by the streets you know what i mean it it is pretty weird it's not cool yeah it's not cool it's broken and then the other really fucked up thing is if you have a medical problem and a neurologist will be like this is a cardio cardiologist problem and the cardiologist will be like this a neurologist problem and the two of them are like superman and clark kent which is they're never in the same room at the same fucking time so you can't actually get real information about what the problem is and they never talk to each other they talk to each other through like handwritten notes in the dark of night and so doesn't work and do you have a tangible idea on this or you're just like health care so health care is just too big of a word doesn't mean anything yeah it is too big of a word one idea that i've been thinking around with is like remote monitoring of patients so you know my mom lives in dallas sometimes there are sometimes traveling and i wanna have some device that she has that is like monitoring her blood pressure her blood sugar her heart rate and reporting that to me and to all these other doctors in you know real time so that if there's a problem you know it faster and so that you can go track this stuff right now when you go to the doctor and if you have blood sugar problems or high blood pressure problems they're like what was your blood pressure last week versus what is it right now what was your blood sugar last week versus what it is right now that we it's always supported yeah it's always yeah yeah it's self reported and it's just so broken and i think being able to track this stuff in a more automated seamless seamless way with be registered interesting device yeah like i got a whoop and you know that's doing some extra tracking but yeah some kind of embedded device that's like continuous low glucose monitor plus some way to measure your blood pressure and kinda keep in one one place the other thing that i think is a really interesting idea is that i went to georgia tech in two thousand three and at the time they're working on building a smart home and one of the ideas they had for a smart home was a smart toilet so imagine when you're using the toilet every time you use the toilet it text you and says dude you're eating too many french fries right stop stool sample basically yeah stool and urine sample and are measuring in real time what's up wasn't there a company that was doing that san francisco that was totally a fraud was it you by is that what they're doing wasn't a smart toilet though i think you had to send it to them okay wow fuck that that's that's kinda weird right i kidding even how do you get a well i don't know but no those are interesting i've seen people like tinkering around with this idea i do think it's very fascinating i have no idea how you do it are you shit in the net and it like takes a little strain i don't know i don't know what the mechanics are but i think it's an interesting idea that like let's put it let me ask you a different way i think you have a very good way of thinking about problems i don't way what i think by that is every time i've come to you with the idea like two things happen that that are different with you than with both people one is you're like i'm not you don't sit there and ask like is this feasible how would we do it you know like that question comes late later it's like first let me decide on like the big idea and you know how how could you know would this be amazing if it happened okay then i'll go find a way to make it happen like you know your brother when he started the deodorant company i remember somebody was like moist do do you know anything about deodorant he's said no i know nothing about deodorant but in six months i know everything there is to know about deodorant and sure enough you know built a a very big deodorant man so like the kinda like not being limited by what i know today is like you know i would say one factor and the other is like you're not one i at least from what i could tell like you don't really consider like plan b's or like if this fails or why would this fail you i remember when we started a think together you were like yeah i just i was trying to do that and you were like i don't know man i don't really think that way i just sort of i decide to win and then i do it and i just plan to win and i don't really focus on the rest i am i am i correctly understanding that or no yeah i think i think starting with starting with is if can this work and or like you know what are so many people when they're evaluating an idea are immediately are like no this is not gonna work for reason x y and z actually my brother is like this and so i hate talking to him about new ideas because he's always just like shitting on them i just kind of a skeptic by nature so i definitely start with the if this works what does the world look like and can this be a big deal if it actually works so when i think about the smart toilet i'm like cool right now have to figure out if you of colon cancer they do a you have to poop in an envelope and send it to a lab what happens if this is automated right now like there's all these medical things that i should probably be doing differently i just have no idea what they are and even if i knew them i didn't i don't have a good way to like have somebody enforce it in an automated way if that happened across america we could solve diabetes because oftentimes diabetes is a disease that you choose instead of a disease that you're forced with so yeah definitely start with the if this works is it gonna be a big deal and then then i'm kinda like cool could i get customers for this and if i could then i'm kinda like that's all you really need to start you don't really need and any more information about like how to build a toilet or any of the science like i think you can figure that out later but can this be big would this be big if it worked and can i get customers yeah yeah those are the two and often what you know one thing that happens i'd i look at a lot of startup up like investment deals with su and it'll be like here's these great people there's is great technology great product blah blah and he'll be cool so how are you gonna get customers and like you you think like this like appears to be like a baffling question to somebody founders or they'll say something and he'll be like okay so like you mean so what you mean like what what do you where are you gonna go or like you know have you done that tell me about three times in your life that you've done that and and then he's sort of like you know i'm in or out based on their ability to get customers and i it's like the i told you that my meme of the year is that mid wit meme it's like the genius and the idiot the way they think is aligned and the analyzer who's taking into account seventy five variables actually ends up with the wrong answer more often than not and like this idea of like can it be big you know if it worked would it be big and can i get customers is the sort of the mid with meme like you know in real life yeah i don't think you need to know more of that in fact sam and i were on this call where this guy was pitching i think it's the company is called firefly it was pitching ads on top of uber and taxi cab in like this physical device that was on top of the in the they're around now but i think that time he wanted a hundred million dollar or maybe sixty million dollar valuation and it was crazy i remember being off that call and i was like yeah sam messaged was like this is bananas can you leave this guy this guy's valuation and the audacity and he was i think at the time losing money on each individual device for years so yeah there there are times where people i i'm shocked by how many people are like cool i figured out what the product is but i have no idea how to get customers i have no idea what the economics of that look like and that's where companies go to die how that company end up by the way it did it your it still will exists but i have no idea got it i'm drinking the of water this water here this is a twenty five dollar bottle of water because it's like pure water that's been filtered did it i'm in la right now turns out that if you drink tap water in la supposedly according to this guy it has pharmaceuticals in the water that or or wine or something yeah i think this system or one and this water is basically pure in a way that like you can't get water anywhere else these days and so it cost twenty five dollars a bottle this is insane it tastes just like water and your point so so it's a yeah so you know super interesting idea i i didn't talk to this guy or anything but i wonder what their distribution strategy is because i think putting twenty five dollar water at or one or whole foods is like an inadequate distribution strategy to get to that meaningful stuff for that well i'll give you the counter example i was doing some research on the milk boys who and i won't do the full thing about the number boys in their kind of business at empire but one thing that stood out was i was watching this clip and it was john s who you guys might know because he's like kinda came he's like in silicon valley then he transitioned into like hollywood influencer stuff when he had his like mobile app shots get popular from like a bunch of vine stars and does john their manager with and he's now their manager so like shots didn't work out he didn't build the next snapchat even though he had every influencer and justin bieber in floyd with and like all these people using it and investing in him but he was like cool i can help these influencers out so he started managing influencers and now he just is the manager of the note boys and they were like so they're there's hard seltzer brand happy dad which is basically like it looks literally like a bud light like just like the it it looks like the right product it's towards the right market and they value the company i think a two hundred fifty million dollars right now they're doing like i forgot how much i'll pull it up it's it's getting close to a hundred million in revenue yeah it's close to a hundred million in revenue so somewhere between fifty and a hundred million in revenue so the brand's is doing really well and it's very young it's like it's like a very new brand but if they were like oh so for happy to add like you know what's what's the next product are you coming out with a new flavor or like a hard alcohol like what do you can do do because no we have basically foot sold we've done all the hard work to get full soldiers to get into gas stations seven eleven and whatever and so rather than compete with ourselves and like the fiercest competition in the drink market in those we just looked around the store we just sent people into the stores that we're like doing these like gas station sales for us and they looked around and we're like what's the easiest category we can win and they're like so we're doing beef jerky they're like beef jerky is like a really stale category we already have this distribution channel into these gas stations in some in convenience stores like hundreds if not thousands of these stores across the country that is the edge only if you do is work backwards from that like we have the we have the front end sales now we just need to figure out the back end product that should go into that into that sales channel and when i hear that i'm like the ne boys run a more sophisticated business operation than like ninety five percent of silicon valley in just that one way of thinking yeah it's amazing yeah there's this justin quan con quote first time founders are obsessed with products second time founders are obsessed with distribution now i think there's this concept of i just focus on distribution the product comes after i have distribution yeah that's what like what we did with the audience right it's like cool i'm gonna build up a a big podcast we didn't sort of intentionally go about it this way we just wanted to do a podcast but once you realize oh cool i could just build up a huge audience i can come up with great products after i don't even need to like know what product it would be joining in yeah i didn't understand that with the hustle i was like why are you guys investing and they're like because building an audience is really hard i was like that's not that hard to just do this this those be up boop and you got it and then i kinda later on i realized that to build an audience that's engaged it's kinda is a little formulaic but it's also a lot of luck and kinda catching lightning in a bottle where and then once you have it it's very very very very valuable now that i don't have it anymore i'm like i get it that was hard yeah it's amazing to see people all around the world doing this now and all these verticals like you know doug did this then got an audience then started cars and biz dude that was early sean i was telling you doug mu that that cars and biz it's gonna be big now his competitor was just in the new york times last week for selling a billion dollars with the cars congrats on investing on that when you called it yeah yeah about that yeah did you try to invest in doug embarrassing maybe like a dm on twitter was about the extent of it but all so no it was most i just it was i talked the talk i didn't walk the walk and also i didn't have a lot of money at the time i think he it's it's about four years old but no i i i i talked to talk that's about all i did it's also amazing because these guys will are often boots strap right because they basically start with no audience they just start making an audience and then once they have an audience they're generating so much profit from the audience or youtube videos or whatever so they don't even need outside capital so i think even if you chase them down he might have been like i'm already making money i don't need to raise money so it just turns a lot of silicon valley stuff upside down of like you know distribution first that generates profit then use that profit to make product silly did you look at the feedback from your last episode people loved you they like your voice they say that you're calming and i agree right alright i i only listen to feedback that like sean or ben levy texted me you had very positive feedback people liked you they said that you're calming that they would do anything that you'd say things like that very gotta do yeah thanks for choosing this people thanks for doing this hopefully people enjoyed the silicon valley bank breakdown a few other things and if you made it this far we're doing a meetup actually shot tomorrow you're not gonna make it we had we have it it like sold out like right away five hundred people but we'll be doing another one april twenty eighth ish and we'll announce that more info in that soon yeah i got one quick thing i wanna plug which is you know sean has this guy who's his right hand guy who helps him on all these different projects i wanna find a right hand guy to help me with a bunch of projects so like source and diligence investments research random business ideas i have come work for me full time for the next five or ten years and let's go do something amazing and what do they find you you can find me on twitter dm alright and is your hint what's your handles it's s u l i just it's my full name s u l e m a n a l i alright that's good you're one of the very few people that has taken advantage of this to actually promote something but you did it at the end you could have done in the beginning but that's alright fuck only the strong made it here that's it he filtered that's right he filtered out the week the week people alright we're out of here that's the pod cool