0:00:05 So that’s my advice is every day, every day, you should be in ChatGPT.
0:00:07 I don’t care what your job is, right?
0:00:10 You could be a sommelier at a restaurant and you should be using ChatGPT every day
0:00:12 to make yourself better at whatever it is you do.
0:00:20 Can I ask you about the story really quick?
0:00:23 And you have like a list of stuff here that’s like all amazing.
0:00:24 It’s actually a lot of it’s very actionable.
0:00:27 But the reason I want to ask you about the story is for the listener.
0:00:29 Dharmesh founded HubSpot, $30 billion company.
0:00:30 You’re the CTO.
0:00:34 So you and you’re an OG for Web 1.0, Web 2.0.
0:00:39 And your first round or one of your first rounds was funded by Sequoia.
0:00:42 Your partner, Brian, is an investor at Sequoia.
0:00:44 So you are in the insider.
0:00:45 You’re an insider, I believe.
0:00:47 You may not acknowledge it.
0:00:47 I don’t know if you do or do not.
0:00:48 You are an insider.
0:00:51 The cool part is that you’re accessible to us.
0:00:55 When did you first see what Sam was working on?
0:00:58 And how long have you felt that this is going to change everything?
0:01:02 So I actually have known Sam before he started OpenAI.
0:01:06 And I got access to the GPT API.
0:01:11 It was a toolkit for developers to be able to kind of build AI applications, right?
0:01:12 Effectively.
0:01:17 And so I built this little chat application that used the API.
0:01:19 And so I could have a conversation with him.
0:01:20 So I actually built that thing that night.
0:01:22 It was a Sunday.
0:01:25 I had the full transcript two years before ChatGPT came out.
0:01:26 So that’s four years ago?
0:01:28 It was 2020.
0:01:29 So five years ago.
0:01:30 Wow.
0:01:30 Okay.
0:01:31 This summer.
0:01:36 And so even then, it’s like, and as soon as I, like, you sort of have that moment.
0:01:38 It’s the same that all of us have with ChatGPT.
0:01:40 I just had it two years earlier.
0:01:43 And then I’m showing everyone, like, Brian, you are not going to believe.
0:01:46 Like, I have this thing, you know, through this company called OpenAI.
0:01:49 And watch me, like, type stuff into it and see, like, see what happens.
0:01:52 And we would ask it, like, strategic questions about HubSpot.
0:01:54 It’s like, how should it, like, who are the top competitors?
0:01:59 And they were, even then, two years before Chat, it was shockingly good, right?
0:02:03 But the thing you sort of have to understand about the constraints of how a large language
0:02:08 model actually works is that you type and you have a limited, just imagine this, if we’re
0:02:13 going to just use the physical analog sheet of paper can only fit a certain number of words
0:02:14 on it.
0:02:20 And that certain number of words includes both what you write on it, that says, I want
0:02:23 you to do this, and the response has to fit on that sheet of paper.
0:02:28 And that sheet of paper is what, in technical terms, would be called the context window.
0:02:30 And you’ll hear this tossed around.
0:02:33 It’s like, oh, this, you know, ChatGPT has a context window of whatever, or this model has
0:02:34 a context window of whatever.
0:02:35 That’s what they’re talking about.
0:02:37 All right, so why is that?
0:02:39 Why does anybody care about the context window?
0:02:45 It’s like, well, sometimes you want to provide a large piece of text, let’s say, summarizes
0:02:45 for me.
0:02:48 Well, in order for you to do that, it has to fit in the context window.
0:02:52 So if you want to take two books worth of information and say, I want you to summarize this in 50
0:02:57 words, those two books worth of information have to fit inside the context window in order
0:02:58 for the LN to process it.
0:03:03 Most, the frontier models are roughly 100,000 to 200,000.
0:03:06 They measure it in tokens, which is like 0.75 of a word.
0:03:07 That’s like a book.
0:03:08 So yeah, is that a book?
0:03:09 I think it’s an average.
0:03:13 I think the average book is like 240,000 words, I think, but I’m not sure.
0:03:13 That’s not a lot.
0:03:19 So when I, the way that I use ChatGPT is I’ll like, let’s say a fun way is I’ll, I’ll put
0:03:22 a historical book that I loved reading and I’ll be like, summarize this so I remember
0:03:23 the details.
0:03:28 So you’re telling me that if it’s a thousand page book, it’s not even going to accurately
0:03:29 summarize that book?
0:03:30 It won’t fit.
0:03:35 You’re like, if you pay something large enough into ChatGPT or whatever AI application you’re
0:03:38 using, it will come back and say, sorry, that doesn’t fit.
0:03:41 Effectively, what they’re saying is that does not fit in the context window.
0:03:42 So you’re gonna have to do something different.
0:03:44 All right.
0:03:50 A few episodes ago, I talked about something and I got thousands of messages asking me to
0:03:51 go deeper and to explain.
0:03:52 And that’s what I’m about to do.
0:03:57 So I told you guys how I use ChatGPT as a life coach or a thought partner.
0:04:01 And what I did was I uploaded all types of amazing information.
0:04:07 So I uploaded my personal finances, my net worth, my goals, different books that I like,
0:04:09 issues going on in my personal life and businesses.
0:04:12 I uploaded so much information.
0:04:17 And so the output is that I have this GPT that I can ask questions that I’m having issues
0:04:18 with in my life.
0:04:20 Like, how should I respond to this email?
0:04:21 What’s the right decision?
0:04:25 Knowing that you know my goals for the future, things like that.
0:04:29 And so I worked with HubSpot to put together a step-by-step process, showing the audience,
0:04:35 showing you the software that I use to make this, the information that I had ChatGPT ask me,
0:04:36 all this stuff.
0:04:37 So it’s super easy for you to use.
0:04:40 Like I said, I use this like 10 or 20 times a day.
0:04:41 It’s literally changed my life.
0:04:43 And so if you want that, it’s free.
0:04:44 There’s a link below.
0:04:47 Just click it, enter your email, and we will send you everything you need to know to set
0:04:49 this up in just about 20 minutes.
0:04:52 And I’ll show you how I use it again, 10 to 20 times a day.
0:04:53 All right.
0:04:54 So check it out.
0:04:55 The link is below in the description.
0:04:57 Back to the episode.
0:05:03 I usually use projects and I have like, let’s say a health project and I’ll upload tons and
0:05:05 tons of books or tons of blood, blood work.
0:05:09 And I hope I’m hoping that it’s going to pull from all those books in my project.
0:05:10 Is that true?
0:05:11 That that is true.
0:05:13 So here, and this is a perfect segue, right?
0:05:15 Because this is the next big unlock.
0:05:19 So number one thing to like understand in our heads is there’s this thing called a context
0:05:19 window.
0:05:20 Here’s why it matters.
0:05:24 So let’s, we’re going to take a, we’re going to pop that on the stack and we’re going to
0:05:26 push on the stack and we’re going to come back to it.
0:05:27 So the thing we have to remember is two things.
0:05:31 Number one, it doesn’t know what it’s never been trained on.
0:05:33 That’s one of the limitations, right?
0:05:38 So if you ask it something that only you, Sam, have in your, in your files and your email,
0:05:42 whatever, that the training model was, I mean, the LLM was never trained on, it’s not going
0:05:43 to know those things.
0:05:44 It doesn’t matter how smart it is.
0:05:46 It’s just information it’s never seen.
0:05:47 So it’s not going to know that.
0:05:48 That’s kind of problem number one.
0:05:50 Problem number two.
0:05:56 So let’s say your website for Hampton was actually on, um, uh, in the training set,
0:05:56 right?
0:06:00 Because it’s on the public internet or whatever, but the training happened at a particular point
0:06:01 in time.
0:06:04 Like they ran the training, ran the training, ran the training and said, okay, we’re done
0:06:05 with the training now.
0:06:07 The machine is done.
0:06:10 Let’s let the customers in right now.
0:06:14 If the website changes, it’s not going to know about those new updates that you’ve made
0:06:17 to your website because the training was done at a particular date.
0:06:19 If completed, it’s kind of training course, right?
0:06:22 So those are the two things we sort of have to remember is that it doesn’t know what it
0:06:23 doesn’t know.
0:06:27 And number two, that the things that did know were frozen at that particular point in time,
0:06:27 right?
0:06:28 So it has a seen new information.
0:06:32 And those are relatively large limitations, right?
0:06:35 So especially if you’re going to use it for business use or personal, it’s like, well,
0:06:39 I’ve got a bunch of stuff that I want it to be able to answer questions about or whatever
0:06:42 inside my company or inside, uh, my own personal life.
0:06:44 How do I get it to do that?
0:06:46 Um, and so here’s the hack.
0:06:48 And this is, this was a brilliant, uh, brilliant discovery.
0:06:54 So what they figured out is to say, okay, let’s say you have a hundred thousand documents
0:06:56 that were never on the internet.
0:06:57 That’s in your company.
0:07:00 It’s all your employee hiring practices, your model.
0:07:01 Here’s how we do compensation.
0:07:02 All of it, right?
0:07:03 It’s like, oh, you have a hundred thousand documents.
0:07:06 And obviously you can’t ask questions about those hundred thousand documents straight
0:07:07 to chat GPT.
0:07:09 It doesn’t know anything about those, never seen those documents.
0:07:14 So this is, and we talked about this two episodes ago, um, this thing called vector embeddings
0:07:17 and RAG retrieval augmented generation.
0:07:20 Um, and I’ll, I recommend you folks go listen to that.
0:07:23 I think it’s a, it’s a, it’s a fun episode, but I’ll kind of summarize it, which is what
0:07:24 you can do.
0:07:27 And what we do is to say, we’re going to take those hundred thousand documents and we’re
0:07:31 going to put them in this special database called a vector store, a vector database.
0:07:36 And what we can do now is when someone asks the question, we can go to the vector store,
0:07:41 not the LLM, go to the vector store and say, give me the five documents out of the hundred
0:07:45 thousand that are most likely to answer this question based on the meaning of the question,
0:07:48 not keywords based on the actual meaning of the question.
0:07:51 So it’s called a semantic search is what the vector store is doing.
0:07:53 So it comes back with five documents.
0:07:58 Let’s just say now, as it turns out, five documents do fit inside the context window.
0:08:01 So effectively we said, okay, well, yeah, it would have been nice.
0:08:04 Had you trained on the hundred thousand documents, but that was not practical because I didn’t
0:08:05 want to expose all of that.
0:08:07 I’m going to give you the five documents that you actually need.
0:08:10 I can just say, give it to you in the context window.
0:08:16 And now, as you can imagine, it does an exceptionally good job at answering the question when it knows
0:08:17 the five documents that should be looking.
0:08:18 You just gave it to them.
0:08:18 Right?
0:08:21 So it’s having this, uh, so we’ll kind of, uh, jump metaphors here.
0:08:25 It’s like hiring a really, really good intern that has a PhD in everything, right?
0:08:27 They went to school, they read all the things, read all the internet.
0:08:31 The intern knows everything about everything that ever was publicly accessible.
0:08:34 They’re trained, show up for the first day of work.
0:08:35 That’s all they know.
0:08:38 They’re not learning anything new and they know nothing about your business.
0:08:41 Now it’s like, okay, well, I know, you know, everything about everything.
0:08:43 I have this question about my business.
0:08:48 Here are five documents that you can read right now and answer my question.
0:08:50 It’s like, oh, I can do that.
0:08:54 I like that analogy, the intern with the PhD and everything.
0:08:55 That’s so much how it is, right?
0:09:02 It’s as helpful and available as an intern, but it’s as knowledgeable as somebody with a
0:09:03 PhD in everything.
0:09:07 Um, and then like you said, you know, my, the, another analogy for that is like, it’s
0:09:11 a store, you have shelf space, which is kind of limited, but they do have a back and you
0:09:15 can always get, send the employee to the back and see if they can find it in the back for
0:09:15 you.
0:09:15 Right.
0:09:17 That’s kind of like what you’re saying, put it in the database.
0:09:20 They can go fetch the specific thing that you’re asking for.
0:09:22 Uh, because you know, you gave it access to the back.
0:09:24 You gave it a badge that lets it go in there.
0:09:29 Have you uploaded all of hub, like, have you figured, first of all, I want to know what
0:09:30 your chat GPT looks like.
0:09:33 I want to know how you use it on a, like, I just want you to just screen share, just like
0:09:37 show me exactly what you do, but also have you uploaded your entire life?
0:09:42 Like, have you uploaded all of HubSpot to chat GPT where you could just ask it any question?
0:09:43 Yeah, multiple times.
0:09:43 Right.
0:09:46 Um, so, and what format, tell me how you did that.
0:09:52 Uh, so I did, so open AI has, um, called this, uh, it’s called an embeddings algorithm that
0:09:56 takes any piece of text, a document, an email, whatever it happens to be, and creates this
0:10:00 kind of point in the high dimensional space, um, called, you know, called a vector embedding.
0:10:03 And, you know, a point in high dimensional space.
0:10:07 So in three dimensional space, physical space that we know of, we think of points being in
0:10:08 three dimensions, X, Y, and Z axis.
0:10:10 Like, oh, here’s where this point is in space.
0:10:13 Uh, high dimensional space, you can have a hundred dimensions.
0:10:14 You can have a thousand dimensions.
0:10:16 You can describe each document as this kind of point in space.
0:10:22 So what I’ve done, so it used to be, um, in the early kind of GPT world,
0:10:25 the number of dimensions you had access to was roughly like a hundred to 200 dimensions.
0:10:27 And so you would lose a lot of the meaning of a document, right?
0:10:28 They would sort of get it right.
0:10:30 It was sort of captured the meaning.
0:10:33 Uh, and then, uh, then we went to like a thousand dimensions.
0:10:39 It’s like, oh, well now it can much more accurately sort of represent, um, and, and capture, um,
0:10:43 a document of kind of arbitrary length and, and be able to find it, uh, give it a prompt
0:10:45 or given some sort of search query.
0:10:50 Uh, and then recently within the last year, we’ve gone, the, the latest algorithm, uh,
0:10:55 from open AI, uh, embeddings algorithm is like 3072, I think, uh, dimensions.
0:10:57 But, but where, where do you do this?
0:11:01 Do you just literally upload it as a project or you, you had to do an API connection?
0:11:02 What did you, how do you actually do this?
0:11:03 I had an API connection, right?
0:11:05 In fact, I’m running the lease.
0:11:06 Let me see where it is now.
0:11:10 And anyone could do this or you have special access because you’re friends?
0:11:11 No, anyone can do this.
0:11:14 The, the, uh, the API for the embeddings model, they have two versions.
0:11:16 They have the 3000 dimension version.
0:11:18 They have a 1000 dimension version.
0:11:22 And is the results of this, like, are you driving a NASCAR and I’m driving like a scooter?
0:11:23 Like, is that the difference?
0:11:28 Like if I just like, for example, uh, what I will do is I’ll just like download my company’s
0:11:29 financials and I’ll upload it.
0:11:32 And then I’ll like explain what my company does.
0:11:34 But the way that you do it is a lot different.
0:11:38 Now, are we talking a massive gap in results that you get versus what I get?
0:11:41 Um, yes.
0:11:44 The short answer is yes.
0:11:48 Uh, and, and the reason is like, so I do, I do that as well in terms of how I’ll describe
0:11:49 the company or whatever.
0:11:50 I try to provide it context.
0:11:52 And that’s why it’s called the context windows.
0:11:55 You try to provide the LLM, uh, context for what you’re asking it to do.
0:12:01 Um, you know, the difference is that, you know, because I can go through like, and by the
0:12:02 way, the richest, and I’m working on a,
0:12:08 kind of nice and weekends project right now, um, that takes, uh, email, uh, which, you
0:12:10 know, so you would be amazed.
0:12:14 Like if you had to write no other words right now, if you did nothing, but say, I’m going
0:12:19 to take all of my emails I’ve ever written, uh, that are still stored and give it, uh, to
0:12:23 a vector store, use an embedding’s algorithm and then use chat GPT to let me kind of answer
0:12:24 questions.
0:12:28 So if I want to say, Oh, I want you to give me a timeline for when we start first started
0:12:31 using hub to name products or whatever, and how’d that come about?
0:12:35 Or what were the winning arguments against doing that versus whatever?
0:12:41 Like it’s shocking how good the responses are when you give it access to that kind of rich
0:12:42 data, right?
0:12:46 Somebody needs to create just like a $10 a month, a single website.
0:12:48 That’s like, Hey, make your chat GPT smarter.
0:12:52 And it’s a website where it’s like, connect your Gmail, connect your Slack, connect your
0:12:52 everything.
0:12:57 I would pay them happily 20 bucks a month to just set this up for me so that my chat
0:13:03 to, to give my chat GPT, like the extra pill that says, you now have access to my data.
0:13:07 Is this because, because you’re talking about like, I have the API to the vector embeddings
0:13:10 and like, well, I have the flux capacitor too, but I don’t know what to do with it.
0:13:10 Right?
0:13:15 Like I need a button on a website with a Stripe payment button that I could just connect the
0:13:15 stuff.
0:13:16 Is it not?
0:13:18 Is there, is there a caveman version of this?
0:13:22 Oh, there’s, I mean, there are, uh, tools out there do, and there are startups working on
0:13:22 it, right?
0:13:23 Uh, there’s two pieces of good news.
0:13:25 One is there are startups working on it.
0:13:29 The challenge here is, uh, not that they’re doing a bad job.
0:13:34 The challenge actually comes down to, uh, if it were a startup and a startup came to you,
0:13:37 it’s like, Oh, we just started last, last week, but we’ve got this thing.
0:13:38 It really works.
0:13:44 Uh, in fact, Darmection, maybe, uh, investor, how willing would you be to hand over literally
0:13:47 your entire life and everything that’s in your email over to this startup?
0:13:51 Like, so part of the challenge we have is that the access control that let’s say you’re
0:13:56 using Gmail, which, uh, a lot of us use when you provide the keys to your Gmail account
0:14:00 to a third party, uh, there is no degree of real granularity.
0:14:02 You can say, Oh, I wanted to read the metadata.
0:14:04 That’s like level one, level two access.
0:14:05 I wanted to read my full email.
0:14:08 And level three is I want it to be able to write and delete emails on my behalf.
0:14:13 But if you wanted to like read like the actual body of the email, you can’t say, I only wanted
0:14:16 to read messages that are from HubSpot.com.
0:14:19 Or I own, I want to ignore all messages from my wife and my family or whatever in the thing.
0:14:21 There’s no way to control that.
0:14:21 Right.
0:14:22 So you sort of have to have a trust.
0:14:27 Is there any product that you would trust right now or that you can recommend that guys
0:14:31 like Sean and I should use as chat GPT add-ons or accelerators?
0:14:38 No, not that I don’t trust them, but it’s like, I wouldn’t trust really anyone right
0:14:39 now with that.
0:14:42 And it’s one of the reasons I sort of run it locally, even though I know these things are
0:14:42 out there.
0:14:47 Um, I predict what’s going to happen is we’re going to have, uh, any of the major players
0:14:49 and you can see this happening already, right?
0:14:53 We see this with, um, you know, you have the ability to create custom GPTs and open AI and
0:14:55 do projects and quad.
0:14:58 You have Google gems, which are essentially like a small baby version of this, right?
0:15:02 That says, Oh, you can upload 10 documents, a hundred documents that it’ll let you ask
0:15:05 questions, uh, against the, what it’s really doing behind the scenes is creating a vector
0:15:05 store.
0:15:07 That’s effectively what it’s, what’s happening.
0:15:14 Um, my expectation is all the major companies, um, will actually have a variation of this,
0:15:18 uh, starting with Google should be the first one because they already have the data.
0:15:25 There is absolutely zero reason why dual Gemini does not let you have a Q and a with your own
0:15:26 email account.
0:15:28 That’s just like insanely stupid, right?
0:15:30 Like I’ll just go ahead and say it.
0:15:32 It’s just, it’s just, there’s something not right with the world.
0:15:36 Uh, when they already have the data and it’s like, and they have the algorithm, they have
0:15:38 Gemini 2.5 pro, which is an exceptionally good model.
0:15:39 Right?
0:15:43 So there you have all the pieces, uh, but have not yet delivered, but I hope it’s a little
0:15:43 distant.
0:15:48 Then tell me and Sean, we’re early adopters, but neither of us are technical.
0:15:51 What can we do to, I want to get it on this baby.
0:15:52 All right.
0:15:53 So give me, give me two weeks.
0:15:53 Here’s, here’s what I’ll be.
0:15:56 Uh, so that’s the one thing I do trust that I trust myself.
0:15:58 Um, I’m, I’m an honest guy.
0:16:03 Uh, I’ll give you like this internal app that I’m building, let you put your Gmail to it.
0:16:06 It’ll go and it’ll run for a day or two days or something like that.
0:16:07 And then you will be amazed.
0:16:08 You will be able to ask questions.
0:16:14 Um, and by the way, like, and the thing I’m like working on now is once you have this,
0:16:15 this capability, right?
0:16:18 Like step one is just being able to do Q and a, right?
0:16:22 It’s like, Oh, just, I’m going to step to like, imagine kind of fast forwarding.
0:16:23 Like it has access to all of your kind of history.
0:16:25 So imagine you’re able to say, you know what?
0:16:30 I’m not doing this by the way, but if I were, it’s like, I want to write a book about HubSpot
0:16:32 and all the lessons learned and all like everything.
0:16:33 It’s all in my email.
0:16:36 Do the best possible job you can writing a book.
0:16:39 If you have questions along the way, ask me, but other than that, write the book.
0:16:40 I think you would be able to write the book.
0:16:41 Wow.
0:16:43 What else are you doing with AI?
0:16:45 So, uh, give me your day to day.
0:16:50 I like, for example, the CEO of Microsoft had this great thing where he goes, I think with
0:16:52 AI, then I work with my coworkers.
0:16:53 And that really shifted the way I worked.
0:16:57 Cause I used to brainstorm or have a meeting to talk about stuff with my coworkers, which
0:17:00 was honestly always like a little disappointing.
0:17:03 I felt like I’m the one bringing the energy and the ideas and the questions, and I’m hoping
0:17:08 that they’re going to, but dude, just sparring with AI first and then taking the kind
0:17:12 of like distilled thoughts to my team of like, here’s how we’re going to execute has been
0:17:13 way better.
0:17:16 Like that little one sentence he said shifted the way I was doing it.
0:17:19 How are you kind of using this stuff?
0:17:19 Yeah.
0:17:20 So a couple of things.
0:17:23 Um, so I’ll let, let’s start at the high level and we’ll drill in a little bit.
0:17:28 So, uh, what we’re used to with, uh, chat GPT, this is sort of your kind of early evolution
0:17:32 of most people’s use is because it’s called generative AI, use it to generate things, right?
0:17:37 Uh, generate a blog post, generate an image, generate a video, generate audio, all those
0:17:37 things.
0:17:39 That’s kind of the generation kind of aspect.
0:17:41 Uh, and that’s part of what it’s good at.
0:17:45 Then you sort of get into the, Oh, but it can also kind of summarize and synthesize things
0:17:46 for me.
0:17:49 It’s like, Oh, take this large body of text, take this blog post, take this academic paper
0:17:51 and summarize it in this way.
0:17:53 Or like, so a seven year old would understand it kind of thing.
0:17:53 Right.
0:17:57 So that’s the kind of step number, um, step number two, step number three.
0:17:59 And we’re going to get into how this is now possible.
0:18:03 Um, is you can do, um, effectively you can take action.
0:18:06 Um, have the LM actually do things for you.
0:18:10 Uh, and I’ve always kind of put it broadly in the kind of automation bucket, like I can
0:18:12 automate things that I was doing manually before.
0:18:15 Uh, and then the fourth thing is around orchestration.
0:18:20 It’s like, can I just have it manage a set of AI agents?
0:18:22 And we’ll talk about agents in a little bit and just do it all for me.
0:18:24 I just want to give it a super high order goal.
0:18:27 It has access to an army of agents that are good at varying different things.
0:18:29 I don’t want to know about any of that.
0:18:31 I just wanted to go do this thing for me.
0:18:31 Right.
0:18:33 And then that’s sort of where we are on the slope of the curve.
0:18:36 Uh, the first three things are possible today.
0:18:38 And work well today.
0:18:38 Right.
0:18:40 So you can generate, as we know, it can generate blog posts.
0:18:41 It could write really well.
0:18:45 Uh, it can generate great images now, including images with text.
0:18:48 It can do great video now with, uh, you know, higher fidelity, higher character cohesion, all
0:18:49 these things.
0:18:53 Uh, Sean, so the thing, the vision you had three years ago when I was on was around creating
0:18:55 the next Disney, the next kind of media company.
0:18:58 You have the tools now, my friend, uh, to finally start to approach that.
0:18:58 Right.
0:19:02 But then you should sort of move into, and this is what we were just talking about, this kind
0:19:03 of synthesis and analysis thing.
0:19:06 This is, okay, this is where deep research kinds of features come in.
0:19:09 It’s like, okay, well, I want you to take the entire of the internet or entirety of what,
0:19:11 uh, Sean has written about copywriting.
0:19:16 And I want you to write a book just for me that summarizes all of that in ways that I enjoy.
0:19:19 Because I like, I like analogies and I like jokes and I like this and I like that.
0:19:22 Write a custom version of Sean Puri’s book on copywriting, right?
0:19:25 That kind of synthesis, um, I think would be, uh, super interesting.
0:19:27 And then automation is now possible.
0:19:28 So agent.ai is one of those things.
0:19:32 There’s other tools out there that says, Hey, I want to take this workflow or this thing that
0:19:34 I do, and I want you to just do it for me.
0:19:38 Give us a specific, what’s a specific, specific automation that you’ve used.
0:19:40 That’s like, you know, useful, helpful, saves you time.
0:19:42 I’ll tell you a couple.
0:19:44 One is around domain names, which is, okay.
0:19:50 So I have an idea for a domain name, um, and I’m going to type words in and these things
0:19:50 exist.
0:19:52 And I’ll tell you the manual flow that I used to go to.
0:19:56 It’s like, okay, first of all, I can brainstorm myself and come up with possible words and
0:19:58 various other words, whatever, here’s the things that I’ll say.
0:19:58 Okay.
0:19:59 Which domains are available?
0:20:03 Absolutely zero of them, uh, that are good that will pop into my mind are like freely
0:20:05 available to kind of just register that no one’s registered before.
0:20:05 Okay.
0:20:06 Fine.
0:20:08 Then I’ll say, okay, well, which ones are available for sale?
0:20:09 Okay.
0:20:10 What’s the price tag?
0:20:12 Is that a fair approximation of the value?
0:20:15 Is it like below market, above market?
0:20:17 We don’t know because there’s no Zillow for domain names yet.
0:20:18 Uh, so create that.
0:20:23 So I have something that automates all of that and says, oh, so you have this particular idea
0:20:27 for this concept, for this business, business, whatever it is, uh, here are names.
0:20:28 You’re the actual price points.
0:20:31 Here’s the ones that I think are below market value, above market value.
0:20:32 Tell me which ones you want to register.
0:20:34 That’s in chat GPT.
0:20:37 No, it’s an agent.ai is where it lives right now.
0:20:42 But now there’s a connector between agent.ai and chat GPT through this thing called MCP, which
0:20:44 you’ll hear about, uh, a bunch if, if you haven’t already.
0:20:49 Um, one thing I want to kind of get out there, just so we keep connecting the dots, um, because
0:20:52 I want, I want everyone to have this framework in their head.
0:20:54 Uh, so we talked about large language models.
0:20:55 It can generate things.
0:20:56 We talked about the context window.
0:21:00 We talked about faking out the context window by saying, oh, we can do this vector database
0:21:03 and bring in the right five documents, stuff them into the context window.
0:21:06 Uh, here’s the other big breakthrough that’s happened.
0:21:10 Uh, I’ll say recently within the last year, year and a half is what’s called tool calling.
0:21:14 And what tool calling is, is a really brilliant idea.
0:21:18 And the tool calling says, okay, well, the LLM was trained on a certain number of things,
0:21:22 but if we had this intern that came in, it would be like saying, okay, well, whatever you
0:21:24 know, you know, but we’re not going to give you access to the internet.
0:21:27 Like that would be stupid, right?
0:21:28 We would give the intern access to the internet.
0:21:31 It’s like, if I ask you something that you weren’t trained on, go look it up, right?
0:21:34 That, that would be like, like thing number one on the first day of work.
0:21:39 And as it turns out, the LLM world, the intern couldn’t, didn’t have access to the internet.
0:21:43 All it had was whatever notes that happened to take during its PhD training and all things,
0:21:43 right?
0:21:47 And so what tool calling allows, and this is a weird, um, weird approach to it, but this is
0:21:48 because of the way LLMs work.
0:21:54 So remember the LLM, it’s architected such that you give it the context window in, it spits
0:21:55 things out.
0:21:55 That’s it.
0:21:58 It doesn’t have, and you can’t reprogram the architecture.
0:22:00 But now all of a sudden we’re going to give you access to tool calling.
0:22:02 So here’s the hack that they came up with.
0:22:08 They said, okay, in the instructions that we give it in the context window, we’re going
0:22:11 to say you have access to these four tools.
0:22:13 And it doesn’t actually have access to the four tools.
0:22:17 It’s that I want you to pretend like you have access to these four tools.
0:22:19 The first tool is this thing called the internet.
0:22:23 And the way the internet works is you type in the query and it will give you some things
0:22:23 back.
0:22:28 You have this other thing called a calculator and you can give it a mathematical expression
0:22:29 and it gives you an answer back.
0:22:32 And you have this other tool that lets you do this and you can have a number of tools.
0:22:34 And so here’s what happens.
0:22:41 In the context window happening behind the scenes, chat GPT, which is the interface right
0:22:44 now that is interacting with the LL, you’re not talking with the LM directly, right?
0:22:49 It gets a prompt and it says, okay, by the way, LLM, I want you to pretend like you have
0:22:50 access to these four tools.
0:22:56 And anytime you need them, when you pass the note back to me, the results, the output, just
0:22:57 tell me when you want to use one of those tools.
0:22:59 All right.
0:23:00 So we give it a query.
0:23:04 It’s like, okay, well, I want to look up like the historical stock valuation for HubSpot and
0:23:07 when it changed as a result of, is there any correlation to the weather?
0:23:09 Is it seasonal or whatever it is, right?
0:23:13 In terms of market cap of HubSpot versus seasonal changes.
0:23:14 All right.
0:23:17 Well, that’s not something you would have access to, but here’s what actually happens.
0:23:17 This is so cool, right?
0:23:22 So the LM gets it and the LM’s in the context window that we gave it.
0:23:23 We gave it instructions.
0:23:25 It’s a pretend like you have these four tools.
0:23:28 One of which is stock price lookup, let’s say, historical stock price lookup.
0:23:34 It’ll pass the output back to the application, not us, and say, and in the output, it says,
0:23:39 oh, please invoke that tool you told me I had access to and look up this result.
0:23:40 I want you to search the internet for X.
0:23:41 What was the weather?
0:23:42 I want you to do this for the stock price.
0:23:45 And then we do that.
0:23:51 We, the ChatGPT application, fill the context window with whatever it is the LM asked for
0:23:52 and then pass it back in.
0:23:57 So the LM effectively has access to those tools, even though it never accessed the internet,
0:24:01 it never accessed the stock market, but it pretended like it had access to it.
0:24:02 And we never see this.
0:24:03 This is happening behind the scenes.
0:24:07 Now, here is the big, massive unlock, right?
0:24:10 Which is, well, everything can be a tool, right?
0:24:13 Now you don’t have to build this kind of vector store or whatever, because you would never
0:24:16 build a vector store of all possible stock prices from the dawn of time.
0:24:18 Now, I guess you could, but then it’s outdated immediately.
0:24:23 Now it’s like, what if we just gave it 20 really powerful tools, including browser access,
0:24:23 to the internet?
0:24:30 Well, that’s like a 10,000, 100,000 times increase in that intern’s capability, right?
0:24:35 And so that’s where our brain should be headed now, which is exactly where the world is headed,
0:24:40 that says, what tools can we give the LM access to that will amplify its ability and cause
0:24:43 zero change to the actual architecture?
0:24:45 Literally, it doesn’t have to know anything about anything.
0:24:47 It’s like, I just want you to pretend that you have access to these tools.
0:24:49 It doesn’t need to know how to talk to those tools.
0:24:50 It doesn’t need to know about APIs.
0:24:52 It doesn’t need any of that stuff.
0:24:57 Cutting your sales cycle in half sounds pretty impossible, but that’s exactly what Sandler
0:24:59 training did with HubSpot.
0:25:06 They use Breeze, HubSpot’s AI tools to tailor every customer interaction without losing their
0:25:06 personal touch.
0:25:08 And the results were incredible.
0:25:11 Click-through rates jumped 25%.
0:25:13 Qualified leads quadrupled.
0:25:16 And people spent three times longer on their landing pages.
0:25:21 Go to HubSpot.com to see how Breeze can help your business grow.
0:25:28 Do you think that, I mean, this is all mind-blowing, and you have an interesting perspective because,
0:25:33 you know, I think three episodes ago that you’re on, you created this thing called Wordle.
0:25:34 Was it Wordle?
0:25:34 Wordplay.
0:25:35 Wordplay.
0:25:37 That does like 80 grand a month.
0:25:39 It was just like a puzzle that you do with your son.
0:25:39 It was amazing.
0:25:46 But now you have new projects, you have agent AI, you have a few other things, but you still
0:25:47 run a $30 billion company.
0:25:55 Do you think that the majority of value creation, like, am I going to, is my stock portfolio going
0:25:58 to go up because I own a basket of tech stocks?
0:26:05 Or is the best way to capitalize as an outsider, obviously, you start a company, or is it investing
0:26:09 in new startups that are using AI or AI-first startups?
0:26:12 Yeah, it’s a good question.
0:26:15 I’m neither an economist nor a stock analyst, but I will say this.
0:26:21 The thing I’m most excited about with AI, and I actually said exactly this in a talk I gave
0:26:26 well before GPT on the inbound stage, and I said, you know, as AI is starting to kind of
0:26:29 come up, it’s not a you versus AI.
0:26:31 That’s not the mental model you should have in here.
0:26:34 It’s like, oh, well, AI is going to take my job because it’s me trying to do things that
0:26:36 the AI is then eventually going to be able to do.
0:26:40 The right mental frame of reference you should have, it’s you to the power of AI.
0:26:43 AI is an amplifier of your capability.
0:26:47 It will unlock things and let you do things that you were never able to do before, as a
0:26:50 result of which it’s going to increase your value, not decrease it, right?
0:26:55 But in order for that to be true, you actually have to use it.
0:26:56 You have to learn it.
0:26:57 You have to experiment with it.
0:27:02 And the only real way to get a feel for what it can and can’t do is you have to do it.
0:27:03 So I’ll give you the very, very simple.
0:27:04 Everyone should do this.
0:27:05 I do this personally.
0:27:12 is that anytime you’re going to sit down at a computer and do something, research, whatever
0:27:17 it is you’re going to do, you should give chat GPT or your AI tool of choice a shot at
0:27:17 it.
0:27:23 Try to describe and pretend like you have access to this intern that has a PhD in everything.
0:27:26 It’s like, okay, well, maybe it doesn’t know anything about me or whatever.
0:27:26 Fine.
0:27:28 So then tell it a few things about you.
0:27:31 But imagine you have access to this all-knowing intern that has a PhD in everything.
0:27:34 Give it a crack at solving the problem that you’re about to sit down and spend some time
0:27:39 on and what you will invariably find, number one, is you’ll be surprised by the number of
0:27:42 times it actually comes up with a helpful response that you would never have expected
0:27:44 it would be even remotely able to do.
0:27:46 Like, how can it do that?
0:27:48 It’s because it has a PhD in everything, right?
0:27:52 And it’s now actually, we’ll talk about reasoning and whether models are actually doing that or
0:27:52 not if we have time.
0:28:00 But so that’s my advice is every day, every day, you should be in chat GPT.
0:28:04 If you’re a knowledge worker at all, it doesn’t actually, you don’t even have to be a
0:28:04 knowledge worker.
0:28:06 And I don’t care what your job is, right?
0:28:10 You could be a sommelier at a restaurant and you should be using chat GPT every day to make
0:28:12 yourself better at whatever it is you do.
0:28:17 And that might be the introduction of that orthogonal skill to bring it back to the, which I never
0:28:17 explained the word orthogonal.
0:28:19 I’ll do it in 30 seconds.
0:28:23 So orthogonal means a line that’s 90 degree intersection to another line.
0:28:27 And the most common use is when we have an X and Y axis, right?
0:28:31 It’s like, oh, the X axis and the Y axis are orthogonal to each other because they have
0:28:32 90 degrees separating them.
0:28:36 The common usage, when you say, oh, that’s an orthogonal concept, it means it’s unrelated.
0:28:37 It’s completely different.
0:28:40 That’s like the Y and X axis are completely independent of each other.
0:28:43 You can say, oh, you can be here on the X axis, but here on the Y axis and they’re not
0:28:44 related to each other.
0:28:48 So that’s what I mean when I say orthogonal concepts or skills or ideas.
0:28:49 Yeah.
0:28:52 Is there anything you disagree with that’s kind of the consensus?
0:28:55 Because a lot of things you’re talking about, like, hey, AI is going to change everything.
0:28:56 It’s super smart.
0:28:57 Agents are coming.
0:28:59 They can do some stuff now, more stuff later.
0:29:03 These are all probably right, but they’re also consensus.
0:29:06 I’m just curious, like, is there anything you disagree with that you hear out there that
0:29:09 drives you nuts where you’re just like, people keep saying this.
0:29:11 I think that’s either wrong.
0:29:12 It’s overrated.
0:29:13 It’s the wrong timeline.
0:29:14 It’s the wrong frame.
0:29:15 It’s whatever.
0:29:18 Is there anything that you disagree with that you’ve heard out there?
0:29:22 I’ve heard variations, two variations I disagree with.
0:29:27 One that I’ve, I think, spent so much time hopefully kind of talking folks out of, which
0:29:29 is it’s just autocorrect.
0:29:30 It’s not really thinking.
0:29:34 And that’s a matter of, like, what do you think thinking is, right?
0:29:39 It’s like, okay, well, if it produces the right output to which we think would require
0:29:45 thought, so I think that is flawed reasoning to say, oh, well, and this often comes from
0:29:49 the smartest people, the most experts in their field, because, oh, it’s really like a stochastic
0:29:49 parrot.
0:29:53 You’ll hear this phrase, which is, it’s like a Paul Billy-driven pattern matching based.
0:29:57 It just so happens that it’s been trained on the internet, but it’s not really like human
0:29:58 intelligence.
0:30:02 And I agree with that phrasing, which is it’s not like human intelligence, but that does not
0:30:06 mean that all it’s doing is sort of mimicking stochastically all the things I’ve read before,
0:30:11 because in order to do what it does, it is a form of creativity different from what we
0:30:12 normally experience.
0:30:15 That’s kind of thing number one that I disagree with.
0:30:20 Thing number two is people are thinking, I both disagree with the, oh, the scaling laws are
0:30:23 going to continue forever indefinitely, that the more and more compute we throw at, the
0:30:26 more knobs we put on the machine, the smarter and smarter it’s going to get.
0:30:29 I think there’s going to be a limit to that at some point.
0:30:30 It’s like nothing goes on forever.
0:30:33 It’s going to asymptotically move towards, we’re going to have to come up with new algorithms.
0:30:36 So that’s GPT can’t be the do all end of all things, right?
0:30:39 There will be a new way, you know, discovered.
0:30:40 So I think that’s going to happen.
0:30:46 But I think the smarter, and I did not say this, other people have said it, the best way
0:30:53 to kind of think about AI right now is as you use it, it’s the kind of truly find, find a
0:30:55 frontier of what it’s incapable of.
0:30:59 It’s like, okay, it can sort of do this thing, but not very well.
0:31:04 If, if that’s the way you describe its response, you are exactly where you need to be, which
0:31:08 is if you can sort of do it right now, sort of, if you have to squint a little bit, it’s
0:31:12 like, ah, well, it’s kind of something, but wait six months or a year, right?
0:31:15 Like it’s, uh, that’s the beauty of an exponential curve.
0:31:19 It gets so better, so much better, so fast, uh, that if it can sort of do it now, it will
0:31:20 be able to do it.
0:31:21 And then it’ll be able to do it really well.
0:31:24 That’s the inevitable sequence of events.
0:31:24 That’s going to happen.
0:31:25 Stan, have you heard this about startups?
0:31:30 There’s like a kind of the smart money in startups believes that the right startup to build is
0:31:33 basically the thing that AI kind of can’t do right now.
0:31:39 That’s the company to start today because you just have to stay alive long enough.
0:31:44 Give it the 12 to 18 month runway that it needs for the thing to go from, eh, didn’t really
0:31:46 work very well to like, oh my God, this is amazing.
0:31:50 But you’ve built your brand, your company, your mission, you’ve, your customer, but you’ve
0:31:54 been building that all along the way and you’re basically just betting you’re going to be able
0:31:56 to surf the improvement of the model.
0:31:57 Dude, by the way, that’s, that’s how I feel about my company.
0:32:02 My company is not related to this, but at all, but in terms of like our operations, we’re like
0:32:07 things are very manual and I’m like, oh my God, once I’m able to finally implement AI
0:32:10 when it can work for this purpose, my profit margins are going to go through the roof.
0:32:14 I mean, that’s how I, that’s how I feel about it, but it, which isn’t entirely related
0:32:19 that Sean, but a little bit, one, one, one thing I’ll plant out there since, uh, this
0:32:20 is my first million.
0:32:23 We, we like talking about ideas at a macro level.
0:32:28 Here’s the entirely new pool of ideas that I think are now available, um, on a trend that
0:32:32 I think is inevitable, which is ad agents get better and better, right?
0:32:37 Um, right now, most of us, when we use, uh, use AI, use chat TPD, uh, we use them as tools,
0:32:38 which is great.
0:32:38 Perfect.
0:32:39 Uh, fine.
0:32:43 Uh, over time, you need to shift your thinking and think of them as teammates.
0:32:46 Think of them as that intern that just got hired, right?
0:32:51 Uh, and, and as a result of that, so let’s, let’s assume for a second, let’s stipulate that
0:32:52 I I’m right.
0:32:55 All we don’t know is how long is it going to take for me to be right is that we’re going
0:32:59 to have effectively digital teammates that are part of all of our teams.
0:33:05 Every company is going to someday have a hybrid team consisting of carbon-based life forms and
0:33:07 these kinds of digital AI, um, AI agents.
0:33:07 Okay.
0:33:12 So if you accept that, the way that’s going to happen is not going to be like, all of
0:33:15 a sudden we one day wake up and every organization now starts kind of mixing them.
0:33:18 What’s going to happen is it’s going to slowly introduce this way.
0:33:21 It’s like, oh, I have this one task, whatever that an agent is better at is real.
0:33:23 It’s reliable enough for the thing.
0:33:24 And the risk is low enough.
0:33:24 I’m going to have it do that.
0:33:25 Right.
0:33:28 Well, we already see elements of that, but here’s, what’s going to happen as a result of
0:33:31 that kind of gradual kind of infusion and adoption of that technology.
0:33:37 Uh, the way to win and the opportunities that get created is like, how do I help the world
0:33:40 accomplish this end state that I know is going to come?
0:33:42 So here, I’ll give you some examples.
0:33:48 Uh, if we were to hire, if you, uh, Sam were to hire a new employee, uh, tomorrow, here’s
0:33:48 what you would do.
0:33:52 You would say, oh, well, I’m going to onboard that employee, spend a couple of days.
0:33:55 I’m going to tell them about the business, uh, whoever’s managing that employee, let’s
0:33:59 say with a direct report of yours, maybe you’ll have a weekly one-on-one or every other week
0:34:04 or whatever that one-on-one will consist of, uh, looking at the work they did, whatever’s
0:34:05 like, oh, over here, you did this or whatever.
0:34:06 And it could be copy editing.
0:34:08 It could be anything, whatever the role happens to be.
0:34:09 You’re going to give them feedback, right?
0:34:11 That’s what you do for a human worker.
0:34:18 All of those things have a direct, literally a direct analog in the agent world, right?
0:34:21 And what we’re doing right now is we’re hiring these agents and expecting them to do
0:34:27 magic, just like if we hired an exceptionally smart, uh, has a PhD in everything employee
0:34:30 and expected them to do magic with no training, no onboarding, no feedback, no one-on-one, no
0:34:31 nothing.
0:34:33 Well, your results are not going to vary.
0:34:37 They’re going to be crap, uh, because you did not make the investment in getting that agent.
0:34:40 Now the, the, the big unlock here.
0:34:43 So whether you’re an HR person or whatever, it’s like figure out, well, what does employee
0:34:45 training look like for digital workers?
0:34:48 What do performance reviews look like for digital workers?
0:34:50 How do we do, how do we do recruiting for digital workers?
0:34:53 How do we like, what, what are all the mechanisms that need to exist?
0:34:55 What is a manager of the future?
0:34:58 What are the new roles that will be created as a result of having these hybrid teams?
0:35:01 It’s like, okay, well now maybe we’re going to need someone.
0:35:06 That’s like the agentic manager, human that knows all the agents that are on their team
0:35:10 or whatever, and has kind of built the skillset, uh, how to do recruiting for their team, uh,
0:35:12 how to do performance reviews, how to do all of that.
0:35:16 But for agents or hybrid teams, um, you know, versus just purely human ones, uh, that, that’s
0:35:19 just a whole other, and we’re going to need the software.
0:35:20 We’re going to need the onboarding.
0:35:20 We’re going to need training.
0:35:21 We’re going to need books for it.
0:35:23 And we’re going to need all of it to kind of adopt.
0:35:26 And it’s going to take, uh, it’s going to take years, right?
0:35:32 It’s not, uh, two years ago, I asked you, is it going to be as bad?
0:35:35 Or I think you said, I asked, is it going to be horrible or is this going to be amazing?
0:35:38 And you said, uh, I saw this with the internet.
0:35:41 Nothing is as extreme as the most extreme predictions.
0:35:44 I listened to you and I trusted you.
0:35:49 Then I actually think knowing what I know now, I’m actually more fearful, uh, than I was
0:35:52 a couple of years ago where I’m like, oh, this is actually going to put a lot of people
0:35:53 out of work.
0:35:56 And, um, it’s maybe not good or bad, but things are going to change.
0:35:58 drastically more than I thought.
0:36:04 And my, so I don’t remember how I phrased the question, but is this going to change the
0:36:09 future more than you thought two years ago or less than you thought two years ago?
0:36:11 Um, has your opinion on that changed?
0:36:14 I still think they’re going to be unrecognizable.
0:36:19 My, my kind of macro level sense, and this is maybe just my inherent, uh, optimism about
0:36:24 things is that it’s going to be kind of a net positive for humanity.
0:36:27 And this is the other thing that, um, you know, lots of people would disagree with me
0:36:27 on this.
0:36:31 Like, oh, well, is this an existential crisis to the species?
0:36:37 Um, and I’ve not said this before, but I’m going to see how it sounds as the words leave
0:36:38 my mouth.
0:36:38 I’m probably going to regret it.
0:36:43 But in a way we are actually, and Sammy, um, Sean, you said this earlier, we’re sort
0:36:45 of producing a new species, right?
0:36:50 So that’s like saying, okay, well, homeo sapiens as they exist, absent AI is likely not going
0:36:50 to exist.
0:36:55 So the way we know the species as it exists today with where we have a single brain and,
0:36:57 and, and, in natural form, you know, four appendages or whatever, maybe that’s going
0:36:58 to be different.
0:37:03 Uh, but I think of that as an extension of humanity, not the obliteration of humanity, right?
0:37:08 That’s the, that’s, you know, human 2.0 or n.0, uh, of the way we kind of think of the
0:37:08 species right now.
0:37:12 So I’m, uh, I think things are still moving very, very fast.
0:37:16 And this is the, this is why I think humans have, uh, issues with exponential curves.
0:37:20 We’re just not used to them when something is kind of doubling or, uh, you know, um, every
0:37:25 end months, it’s hard to wrap our brains around how fast this stuff, uh, you know, can move
0:37:31 things that we thought were like the things we have today, Sam, um, if we had just described
0:37:36 them to someone a year and a half ago, there’s like, ah, well, chat CPT is cool or whatever,
0:37:37 but it’s never going to be able to do that.
0:37:41 And now we’re like, those are like par for the course, right?
0:37:45 Like we can do like, um, things that were literally like, oh, there’s no way, no way.
0:37:48 It’s like, yeah, it’s good at like texts and stuff like that, but that’s because it’s been
0:37:48 trained on text.
0:37:50 Now I can do images.
0:37:53 Well, I can do images, but like video is like 30 frames a second.
0:37:58 That’s like third and generating 30 images per frame of like per second of videos, like all
0:37:58 of that.
0:38:02 It’s like, yeah, but you know, diffusion models, the way they work is because you’re
0:38:03 not going to get, you get a different image every time.
0:38:04 So how are you going to create a video?
0:38:07 Because it requires the same character, the same setting in subsequent frames.
0:38:09 That’s not how the thing is arched.
0:38:10 That’s not how image models were.
0:38:12 And we solved all of those things, right?
0:38:15 Now we have character cohesion, setting cohesion, video generational.
0:38:15 Anyway.
0:38:23 So my answer is it’s exactly, not exactly, but it’s close to like, yep, this is what exponential
0:38:25 advancement looks like.
0:38:28 I’m still of the belief that we’re going to have more net positive.
0:38:31 That is not to say that in the interim, there’s not going to be pain.
0:38:34 And there’s two things I’ll put out there as cautionary, cautionary words.
0:38:40 One is in the interim, anyone that tells you that there’s not going to be job dislocation,
0:38:43 there’s not going to be roles that get completely obliterated, is lying to you.
0:38:44 That is going to happen.
0:38:46 It’s already happening, right?
0:38:49 It’s that there is no world in which that does not occur.
0:38:50 That’s kind of thing number one.
0:38:56 Thing number two, and we didn’t talk about this, but we should have, is that because of
0:39:00 the architecture of how LMs currently work, maybe they’ll figure out a way to do that,
0:39:01 they produce hallucinations.
0:39:05 And that’s just a fancy way of saying it makes things up, right?
0:39:10 And that’s sort of okay, but not okay, because it doesn’t know it’s making it up.
0:39:15 Because of the way the architecture works, it’s like the intern that thinks it’s been
0:39:16 exposed to all there is to know in the world.
0:39:17 It’s like, I know all the things.
0:39:18 You’re asking me a question.
0:39:19 I know I know all the things.
0:39:21 So I’m going to tell you the thing that I know.
0:39:23 It was like, well, yeah, but you didn’t know this.
0:39:27 And what you said is actually, factually, like provably, demonstrably wrong.
0:39:33 And it has absolutely zero lack of confidence in its output, which is fine for some things
0:39:36 if you’re writing a short fiction story or something like that.
0:39:40 It’s not great at all for other things like healthcare related where you need kind of
0:39:41 predictable, accurate responses.
0:39:44 So I think we need to be aware of the limitations around it.
0:39:46 when we’re doing research and things like that.
0:39:52 And the problem is when we have relatively, I’ll say naive, I don’t mean this in a disparaging
0:39:58 way, folks that are naive to a subject area asking ChatGPT for things where it can’t judge
0:39:59 the response, right?
0:40:04 We’re sort of taking it on faith that it’s ChatGPT and our Mesh said it’s got a PhD in everything.
0:40:05 So of course it’s going to be right.
0:40:07 Well, no, it’s often not right.
0:40:12 And it’s kind of up to us to figure out what our kind of risk tolerance is.
0:40:14 It’s like, what is it okay for it to be wrong?
0:40:18 How would I test it for my domain, for my particular use cases?
0:40:23 So you guys know this, but I have a company called Hampton.
0:40:24 Joinhampton.com.
0:40:26 It’s a vetted community for founders and CEOs.
0:40:27 Well, we have this member named Levan.
0:40:32 And Levan saw a bunch of members talking about the same problem within Hampton, which is that
0:40:35 they spent hours manually moving data into a PDF.
0:40:37 It’s tedious, it’s annoying, and it’s a waste of time.
0:40:40 And so Levan, like any great entrepreneur, he built a solution.
0:40:42 And that solution is called Molku.
0:40:47 Molku uses AI to automatically transfer data from any document into a PDF.
0:40:52 And so if you need to turn a supplier invoice into a customer quote or move info from an application
0:40:57 into a contract, you just put a file into Molku and it autofills the output PDF in seconds.
0:41:00 And a little backstory for all the tech nerds out there.
0:41:03 Levan built the entire web app without using a line of code.
0:41:05 He used something called Bubble.io.
0:41:09 They’ve added AI tools that can generate an entire app from one prompt.
0:41:09 It’s pretty amazing.
0:41:13 And it means you can build tools like Molku very fast without knowing how to code.
0:41:18 And so if you’re tired of copying and pasting between documents or paying people to do that
0:41:20 for you, check out Molku.ai.
0:41:23 M-O-L-K-U dot A-I.
0:41:24 All right, back to the pod.
0:41:31 What do you think about this situation where Zuck is throwing the bag at every researcher?
0:41:36 A hundred million dollar signing bonuses, even more than that in comp.
0:41:39 And he’s poaching basically his own dream team.
0:41:41 He’s like, okay, you’re not going to, I can’t acquire the company.
0:41:43 Well, why don’t I go get all the players?
0:41:45 If you can keep the team, I’ll keep the players.
0:41:49 And he’s going after them with these crazy nine figure offers.
0:41:54 A hundred million signing bonus and 300 million over four years, I think is what I saw.
0:41:54 Is that true?
0:41:56 I think that was like the higher, yeah.
0:41:56 So the higher end.
0:42:00 And some people have said there’s even like billion dollar offers to certain people that are
0:42:00 out there.
0:42:02 This is like job offers.
0:42:04 So Dharmesh is like, were you shocked by this?
0:42:07 Because I mean, my reaction to this was that’s bullshit.
0:42:08 First time I heard it.
0:42:10 Then I was like, wait, the source is Sam Altman.
0:42:10 Why would he say that?
0:42:13 And then I was like, okay, that’s insane.
0:42:16 And then an hour later, I was like, wait, that’s actually genius.
0:42:20 Because for a total of 3 billion or something, he can acquire the equivalent of one of these
0:42:23 labs that’s valued at 30, 40, 50, or $200 billion.
0:42:25 What a power play.
0:42:29 I know, obviously, you’re an investor in OpenAI, so maybe you don’t like this.
0:42:31 Maybe you have a different bias here.
0:42:36 But I’m just, from one kind of like leader of a tech company to another, like what’s your
0:42:37 view of this move?
0:42:39 I think it’s one of the crazier moves.
0:42:45 If I had to use one word, I would say diabolical, not stupid, not silly, but diabolical.
0:42:46 And here’s why, right?
0:42:48 This is the, like in the grand scheme of things.
0:42:52 So this is not just a, oh, can we use this technology and build a better product that will
0:42:56 then drive X billion dollars of revenue through whatever business model we happen to have.
0:43:01 There’s a meta thing at play here that says whoever gets to this first will be able to
0:43:05 produce companies with billions of dollars of revenue or whatever, right?
0:43:09 Because that’s, it’s like kind of finding the secret to the universe, the mystery of life
0:43:09 kind of thing.
0:43:14 It’s like, okay, well, whoever wins that and gets there first will then be able to use
0:43:19 the technology internally for a little while and be able to just kind of run the table for
0:43:20 as long as they want.
0:43:22 So there’s, it’s got incalculable value, right?
0:43:27 The upside is just so high that no amount of, like if you can increase your probability even
0:43:31 by a marginal amount, if you had the cash, why wouldn’t you do it, right?
0:43:34 So do you think, A, do you think it’ll work?
0:43:36 Do you think this tactic will work for him?
0:43:38 Do you think he will be able to build a super team?
0:43:41 Is he just going to get a bunch of engineers who now have yachts and don’t work?
0:43:45 Like what’s going to happen when you give somebody a hundred million dollars offers, you put together
0:43:49 this, smash together this team of, I think he’s got a hit list of 50 targets.
0:43:53 And I think like, you know, something like 19 or 20 of them have come on board already.
0:43:56 What’s your prediction of how this plays out?
0:43:58 It feels a little bit like a Hail Mary pass, right?
0:43:59 That’s okay.
0:44:00 They’re going to take this.
0:44:01 It’s like, okay, well, there’s not a whole lot of things we can do.
0:44:03 You know, the chips are down.
0:44:04 I’m going to mix metaphors now too.
0:44:07 But that works sometimes.
0:44:09 It works sometimes.
0:44:10 That’s exactly why people do it.
0:44:12 It’s like, okay, what other option do we have, right?
0:44:13 Like everything else hasn’t worked yet.
0:44:15 So let’s try this thing.
0:44:20 But I think the challenge, I still think it’s a dialogically smart move.
0:44:23 I’m not going to use the word ethics or anything like that.
0:44:24 But here’s the challenge though, right?
0:44:28 If we were having this conversation, we’ll call it two years ago, give or take.
0:44:33 Open AI was so far ahead in terms of the underlying algorithm.
0:44:36 And this is even before ChatGPT hit the kind of revenue curve that it’s hit.
0:44:40 Just raw, the GPT algorithm was just so good and they were so far ahead.
0:44:45 It was actually inconceivable for folks, including me, that others would catch up.
0:44:47 It’s like, okay, well, they’ll make progress.
0:44:48 They’ll get closer.
0:44:50 But then Open AI is obviously going to still keep working on it.
0:44:52 And they’re going to be far ahead for a long, long time.
0:44:54 That’s proven not to be true, right?
0:44:56 We’ve seen open source models come out.
0:44:57 We’ve seen other commercial models come out.
0:44:58 There’s Anthropic.
0:45:02 And they have, by most measures, comparable large language models, right?
0:45:03 Within like one standard deviation.
0:45:04 They’re pretty good.
0:45:06 And sometimes they’re better at some things, worse at others.
0:45:09 But it’s not this single horse race anymore.
0:45:12 So the thing that I’m a little bit dubious of is that even if you did this,
0:45:15 you pull all these people together, like it didn’t
0:45:18 really work for Open AI in the true sense of the word, right?
0:45:21 Like they weren’t able to create this kind of magical thing that it’s like,
0:45:23 okay, maybe they end up doing it somewhere else.
0:45:27 But I think there’s more smart people out there.
0:45:30 The technology has kind of deep-seek proved that you could actually,
0:45:34 and they didn’t actually have an actual innovation in terms of reasoning models
0:45:37 and things like that versus kind of the early generation large language model.
0:45:39 So jury’s still out.
0:45:44 How much better is a $300 million over,
0:45:48 so $100 million a year engineer over like a $20 million engineer?
0:45:51 Is it like, I followed some of these guys on Twitter,
0:45:53 and it was, they’re fantastic follows.
0:45:57 And do you think that their IQ is just so much better?
0:45:58 Or is it because they’ve had experience?
0:46:02 Is it really because they just saw how Open AI works,
0:46:03 and they want that experience?
0:46:05 Are they like, is this like espionage?
0:46:10 What is, how good could a $100 million or $300 million a year engineer be?
0:46:12 Well, that’s the thing, though.
0:46:13 This is software, right?
0:46:17 So this is a, you know, a world of like 95% margins.
0:46:19 So let’s say, yeah, I think part of the value is,
0:46:20 yes, they’re super smart,
0:46:24 but even human IQ asymptotically moves towards a certain ceiling, right?
0:46:26 You take smartest people in the world,
0:46:27 however you want to measure IQ.
0:46:30 And so that doesn’t explain away the value, right?
0:46:31 That’s not that.
0:46:33 It’s not that they’ve seen the inside of Open AI,
0:46:35 and they have some trade secrets in their head
0:46:36 that they can then kind of carry over.
0:46:37 It’s like, oh, here’s how we did it over there,
0:46:39 and here’s how we ran evals,
0:46:41 and here’s how we did, you know, the engineering process.
0:46:42 They’ll have some of that,
0:46:46 because we always carry some amount of kind of experience in our heads.
0:46:48 I think the larger thing,
0:46:51 I think kind of primary kind of vector of value
0:46:54 is they sort of have demonstrated the ability
0:46:56 to kind of see around corners and see into the future, right?
0:46:57 They believed in this thing
0:47:00 that almost no one believed in at the time.
0:47:02 They sort of saw where it was headed,
0:47:03 and they were working at it,
0:47:04 tripping away at it, whatever.
0:47:06 And that’s much rarer than you would think.
0:47:09 For really smart people to do this stupidly foolish,
0:47:11 seemingly stupid foolish thing,
0:47:13 it’s like, you’re going to do what now, right?
0:47:16 And we’re still asking ourselves a variation of that question
0:47:17 that we would have asked three years ago,
0:47:19 except now we have ChatGPT,
0:47:20 and we have the things in it,
0:47:21 and we’re still like,
0:47:23 well, you say that we’re going to have, like,
0:47:24 these kind of digital teammates,
0:47:25 and they’re going to be able to do all these things,
0:47:27 and it can’t even do this simple thing right, right?
0:47:29 Like, we sort of keep elevating our expectations
0:47:31 in what we believe is or is not possible.
0:47:33 They sort of know what’s possible,
0:47:35 and they almost think of what many of us
0:47:36 would consider impossible
0:47:37 as actually being inevitable.
0:47:39 Have you guys, as HubSpot,
0:47:40 have you made any of these offers?
0:47:41 I don’t think so,
0:47:43 but that’s not the game we’re in, right?
0:47:45 So we’re not in that league.
0:47:46 We’re not trying to build a frontier model.
0:47:48 We’re not trying to invent AGI.
0:47:49 We’re at the application layer of the stack.
0:47:51 So we want to benefit from it, right?
0:47:55 We didn’t, in any layer of my entrepreneurial career,
0:47:58 I have not been the guy in the center of the universe
0:47:59 or the company in the center of the universe.
0:48:00 But you’re not like,
0:48:01 oh, man, I met this person.
0:48:03 Like, we need to offer, like,
0:48:05 an NBA contract in order to secure this guy.
0:48:07 No, and there’s a reason for this, right?
0:48:09 It’s like, for the kinds of problems we’re solving,
0:48:11 what’s the, there’s a sports term
0:48:12 about the best alternative to the player
0:48:13 or something like that,
0:48:14 the replacement cost?
0:48:15 More, wins above replacement
0:48:17 is the metric they use in sports.
0:48:19 So, yeah, it’s just not,
0:48:20 it’s not worth it,
0:48:21 given our business model,
0:48:21 given what we do.
0:48:24 I have one last thing on the kind of AI front.
0:48:25 This is one of the things,
0:48:27 answering your question, Sean,
0:48:29 in terms of things I disagree with folks on,
0:48:33 is that there’s a group of people,
0:48:35 very smart, that will say,
0:48:37 oh, well, AI is going to lead
0:48:39 to a reduction in creativity,
0:48:40 broadly speaking, right?
0:48:41 Because you’re just going to have AI do the thing.
0:48:42 Why do you need to learn to do the thing?
0:48:44 And I have a 14-year-old, right?
0:48:45 So it’s like, okay, well,
0:48:47 if he just uses AI to write his essays
0:48:48 and do his homework or whatever,
0:48:50 it’s going to kind of reduce his creativity.
0:48:52 And I understand that particular
0:48:54 kind of line of reasoning that says,
0:48:55 yeah, if you just have it do the thing,
0:48:56 you’re not going to.
0:48:58 But I think the part
0:49:00 those folks are missing
0:49:02 is that, you know,
0:49:04 creativity is kind of,
0:49:05 in the literal sense of the word,
0:49:06 is like, okay,
0:49:07 I have this kind of thing,
0:49:08 idea in my head,
0:49:10 and I’m going to express it
0:49:10 in some creative form,
0:49:11 be it music,
0:49:11 be it art,
0:49:13 be it whatever it happens to be.
0:49:15 And the problem right now
0:49:16 is that
0:49:19 whatever creative ideas
0:49:19 we have in our head
0:49:21 are limited
0:49:23 in terms of how we can manifest them
0:49:24 based on our emerging skill set.
0:49:25 So Sean can have
0:49:27 a song in his head right now
0:49:27 that, like,
0:49:29 he may be composing things in his head,
0:49:31 but until he learns the mechanics
0:49:32 of how to actually play
0:49:33 an instrument,
0:49:34 whatever the instrument happens to be,
0:49:35 there’s no real way
0:49:36 to manifest that, right?
0:49:38 We can’t tap into his brain
0:49:38 and do that.
0:49:40 So in my mind,
0:49:42 AI actually increases creativity
0:49:43 because it will increase
0:49:44 the percentage of ideas
0:49:46 that people have in their heads
0:49:47 that they will then be able
0:49:47 to manifest
0:49:48 regardless of what their skills
0:49:49 are or not.
0:49:51 And I love that.
0:49:51 So my son,
0:49:53 he’s a big Japanese culture fan,
0:49:54 big manga fan,
0:49:57 Japanese comic books and anime.
0:50:00 And so he’s an aspiring,
0:50:02 you know, author someday.
0:50:03 And what he can do now, right,
0:50:04 and he’s been able to do this
0:50:05 for years,
0:50:05 which is,
0:50:07 so he’s always had,
0:50:07 again,
0:50:08 he likes fantasy fiction as well.
0:50:09 So he’s had these ideas
0:50:10 for writing things,
0:50:12 but he lacked the writing skills.
0:50:13 He doesn’t know about character development,
0:50:14 doesn’t know about any of these things.
0:50:16 So what he uses ChatGPT for
0:50:17 is he’s got this,
0:50:17 like,
0:50:18 2,000 word prompt
0:50:20 that describes his fictional world.
0:50:21 Here are the characters.
0:50:22 Here’s a power structure.
0:50:23 Here are the powers people have.
0:50:24 Here’s what you can and can’t do.
0:50:27 And then the way he tests the world
0:50:28 is he turns it into a role-playing game.
0:50:29 It’s like,
0:50:29 okay,
0:50:31 I’m going to jump into the world.
0:50:32 Now you, ChatGPT,
0:50:33 I’m going to do this.
0:50:33 Tell me what happens.
0:50:34 Oh, this happened.
0:50:35 Okay, now I’m going to do this.
0:50:36 Okay, well,
0:50:37 now you’ve got this power.
0:50:38 And so it will sort of
0:50:39 kind of pressure test
0:50:40 kind of his world.
0:50:41 And so that’s an expression
0:50:42 of his creativity
0:50:43 because the world
0:50:44 was sitting in his head,
0:50:45 but now he can actually
0:50:46 share that with friends.
0:50:48 Maybe turn that into a book someday
0:50:48 because it’s going to take
0:50:49 the ideas that he has
0:50:51 and hopefully in the meantime,
0:50:53 he will kind of develop
0:50:54 some of those foundational skills,
0:50:54 but he doesn’t have to wait
0:50:56 until like 12 years
0:50:56 of writing education
0:50:58 before he can take this idea
0:50:58 as a child.
0:51:00 He has lots of creativity,
0:51:02 but as a practitioner,
0:51:03 most of those things
0:51:03 that he would love
0:51:04 to be able to manifest
0:51:05 in the world,
0:51:07 he has nothing close
0:51:08 to the skills required,
0:51:09 whether it’s drawing
0:51:10 or writing or anything.
0:51:11 So I think that’s what
0:51:13 AI can help us kind of elevate.
0:51:14 And once again,
0:51:16 we have to use it responsibly,
0:51:17 but it should be able
0:51:18 to elevate our skills.
0:51:19 I want to show you guys
0:51:22 an example of this real quick.
0:51:24 So I had this idea
0:51:25 not long ago,
0:51:25 a couple of weeks ago
0:51:29 of creating a game
0:51:30 using only AI.
0:51:32 So I don’t know
0:51:33 if you guys ever played
0:51:34 the Monkey Island games
0:51:36 from like when I was a kid.
0:51:37 I played Monkey Island.
0:51:38 It was an incredible game.
0:51:39 It’s got basically
0:51:40 this guy wants to be a pirate.
0:51:41 It’s like this very funny,
0:51:43 but like 8-bit art style game.
0:51:45 And so I created a version of that
0:51:47 called Escape from Silicon Valley.
0:51:48 I didn’t create the whole game,
0:51:49 but I create like the art,
0:51:50 but like check this out.
0:51:52 So I go into AI
0:51:53 and I basically start
0:51:54 creating the game art.
0:51:55 And so it’s like the story
0:51:57 is basically like deep in San Francisco.
0:51:58 The year is 2048.
0:52:00 The block is starting
0:52:01 his third term in office.
0:52:04 You know, Nancy Pelosi passes away,
0:52:06 the richest woman on earth.
0:52:07 And then, you know,
0:52:08 Elon is promising
0:52:09 that self-driving cars
0:52:10 are coming really, really soon
0:52:11 for real this time.
0:52:12 And here you are,
0:52:13 you’re this character
0:52:16 and you’re in the opening AI office.
0:52:17 And basically the idea is like-
0:52:18 Oh, Charlie, look at that.
0:52:19 What’s that?
0:52:20 Look at the Charlie bar.
0:52:22 Yeah, yeah, exactly.
0:52:23 I was putting in some references
0:52:24 to like, you know,
0:52:24 stuff that I thought was,
0:52:25 it would be cool.
0:52:27 That is so cool.
0:52:27 What did you use
0:52:28 to make those images?
0:52:29 So that right there
0:52:31 was just ChatGPT
0:52:33 and the Journey mix.
0:52:34 I tried using, you know,
0:52:35 Scenario and a couple other
0:52:36 like game-specific tools.
0:52:37 Like check this out.
0:52:38 So like I created
0:52:39 all these like technical characters.
0:52:40 So it’s like I create
0:52:41 Zuck and Palmer Luckey
0:52:42 and like Chamath
0:52:43 and Elizabeth Holmes in jail.
0:52:44 Oh, that is awesome.
0:52:45 And I had it basically
0:52:46 write the scenes
0:52:47 for the levels with me,
0:52:48 like write the dialogue with me,
0:52:50 create the character art.
0:52:51 Dude, that’s like sick.
0:52:52 Why didn’t you do that?
0:52:55 Well, because I did the fun part
0:52:56 in the first two weeks
0:52:57 where I was like,
0:52:58 oh, the concept,
0:52:59 the levels,
0:53:01 the character art,
0:53:01 the music,
0:53:02 seeing what AI could do.
0:53:04 But then to actually make the game,
0:53:06 the AI can’t do that.
0:53:07 And so I was like,
0:53:08 oh, now I need to like,
0:53:10 I mean, people who build games
0:53:11 spend years building it.
0:53:11 It’s like, oh,
0:53:12 this is like minimum
0:53:13 six to 12 months
0:53:14 doing this like very,
0:53:15 very arbitrary project.
0:53:17 But I still love the idea
0:53:18 and I’m going to like
0:53:20 package up the whole idea.
0:53:22 Darmesh, last question.
0:53:23 Just really quick,
0:53:24 like you,
0:53:26 where do you hang out
0:53:27 on the internet
0:53:29 that we and the listener
0:53:30 can hang out
0:53:31 to stay on top
0:53:32 of some of this stuff?
0:53:33 Like are there,
0:53:34 like who’s a reputable
0:53:35 handful of people
0:53:36 on Twitter to follow
0:53:37 or reputable websites
0:53:38 or places to hang out at?
0:53:40 That’s interesting.
0:53:41 So I spend most of my time
0:53:44 on YouTube,
0:53:45 as it turns out.
0:53:49 And I sort of give into the,
0:53:50 give into the vibe,
0:53:51 so to speak,
0:53:52 and let the algorithm
0:53:52 sort of figure out
0:53:54 what things I might enjoy.
0:53:56 It gets it right sometimes,
0:53:57 it gets it wrong sometimes.
0:53:58 So it’s a mix of things.
0:54:01 But the person that I think,
0:54:03 if you want to kind of get deeper
0:54:04 into like understanding AI,
0:54:05 there’s a guy named,
0:54:06 Andre Karpathy,
0:54:07 I don’t know if you’ve
0:54:08 come across him.
0:54:09 Just search for Karpathy.
0:54:10 Dude,
0:54:10 you don’t want to know
0:54:11 how I know,
0:54:12 like I get so many ads
0:54:14 that says like Andre Karpathy
0:54:16 said this is the best product
0:54:17 or Andre Karpathy
0:54:18 showed me how to do this,
0:54:19 now I’m going to show you.
0:54:20 Like I don’t even know
0:54:21 who Andre is
0:54:22 other than ads
0:54:23 run his name
0:54:24 to promote him.
0:54:25 Yeah, I mean he’s
0:54:27 one of the true OGs
0:54:27 in AI,
0:54:28 but he has that
0:54:30 his orthogonal skill
0:54:30 or one of them,
0:54:31 I think he’s got like nine,
0:54:33 he’s probably like a nine tool
0:54:33 player of some sort,
0:54:35 but he’s able to really
0:54:37 simplify complicated things
0:54:39 without making you feel stupid,
0:54:39 right?
0:54:41 So he’s not talking down to you.
0:54:41 He’s like,
0:54:42 okay,
0:54:43 like here’s how we’re going
0:54:43 to do this.
0:54:44 We’re going to kind of build it
0:54:45 brick by brick
0:54:46 and you’re going to understand
0:54:48 at the end of this hour and a half
0:54:49 how X works,
0:54:49 right?
0:54:51 and he’s amazing.
0:54:52 So that would be one.
0:54:53 So him,
0:54:54 any other YouTubers
0:54:55 or Twitter people or blogs?
0:54:56 On the business side,
0:54:56 actually,
0:54:58 like Aaron Levy from Box
0:54:59 is actually very,
0:55:00 very thoughtful on the,
0:55:01 if you’re in software
0:55:02 or in business
0:55:04 and the AI implications there,
0:55:04 I think he’s really good.
0:55:06 Hiten Shah,
0:55:07 who you both know
0:55:08 now at Dropbox
0:55:09 through the acquisition,
0:55:11 has been on fire lately
0:55:12 on LinkedIn.
0:55:14 So he’s one I would go back,
0:55:15 especially for the last
0:55:16 like three,
0:55:16 four months
0:55:18 and read all the stuff
0:55:18 he’s written.
0:55:19 I think he’s on point
0:55:19 on the app.
0:55:21 Those are awesome.
0:55:21 Darmash,
0:55:22 thanks for coming on.
0:55:23 Thanks for teaching us.
0:55:24 You’re one of my favorite teachers
0:55:26 and entertainers.
0:55:27 So thank you for coming on, man.
0:55:29 My pleasure.
0:55:30 It was good to see you guys.
0:55:30 It was fun.
0:55:31 Likewise.
0:55:31 Thank you.
0:55:32 That’s it.
0:55:32 That’s the pod.
0:55:36 I feel like I can rule the world.
0:55:38 I know I could be what I want to.
0:55:40 I put my all in it
0:55:41 like no day’s off.
0:55:42 On the road,
0:55:42 let’s travel,
0:55:44 never looking back.
0:55:44 All right,
0:55:44 my friends,
0:55:46 I have a new podcast
0:55:47 for you guys to check out.
0:55:47 It’s called
0:55:49 Content is Profit
0:55:50 and it’s hosted by
0:55:52 Luis and Fonzie Cameo.
0:55:53 After years of building
0:55:55 content teams and frameworks
0:55:56 for companies like Red Bull
0:55:57 and Orange Theory Fitness,
0:55:58 Luis and Fonzie
0:55:59 are on a mission
0:56:00 to bridge the gap
0:56:01 between content
0:56:02 and revenue.
0:56:03 In each episode,
0:56:03 you’re going to hear
0:56:04 from top entrepreneurs
0:56:05 and creators
0:56:06 and you’re going to hear them
0:56:07 share their secrets
0:56:07 and strategies
0:56:09 to turn their content
0:56:09 into profit.
0:56:11 So you can check out
0:56:12 Content is Profit
0:56:13 wherever you get
0:56:14 your podcasts.

0:00:03 All right, my friend, I recorded one of my favorite types of episodes.
0:00:05 My friend Howie started a company called Airtable.
0:00:09 They’re worth around $10 billion, so he has seen it all.
0:00:12 He knows what’s going on in the world of AI, and he has an amazing perspective.
0:00:15 And for this episode, I asked him a very simple question,
0:00:19 which is, if he were 21 again today or he didn’t have Airtable,
0:00:23 what companies or business ideas would he want to work on?
0:00:25 And he came with seven.
0:00:28 Seven different ideas that he would work on today.
0:00:32 And so if you are looking for a different business idea or you’re an AI nerd,
0:00:35 which a lot of us are right now, you’re going to love this episode.
0:00:45 Tell me about live shopping with AI avatars.
0:00:47 I personally think this is a really interesting area.
0:00:51 I mean, you think about live shopping, which is a huge thing in Asia.
0:00:56 I mean, there’s probably tens of billions, if not $100 billion plus GMV
0:01:00 in commerce dollars that are getting transacted through live shopping.
0:01:04 This is basically where you have an influencer go and peddle a product.
0:01:05 Is this like on Instagram?
0:01:09 I mean, I pay attention a little bit to Asia, but is there a website I can go to to see this right now?
0:01:14 There’s actually a big chunk of Timu that is powered by this and definitely TikTok.
0:01:24 So TikTok has a huge amount of these kind of like influencers that basically go and, you know, there’s actually a shop tab that you can even click on.
0:01:28 You see these products and it’s a person basically describing the benefits of a product.
0:01:37 So think about like influencer marketing, like taken to the extreme where you just watch, you know, people peddling products and you click it, you buy.
0:01:42 And there’s actually one company that’s doing really well in the U.S. called Whatnot.
0:01:45 Oh, yeah, I like Whatnot.
0:01:46 Yeah, exactly.
0:01:50 And, you know, what’s cool about it is like there’s so much personality, you know, to the content.
0:01:52 Like in a way, it’s almost like watching Twitch.
0:01:55 It’s not just about the actual product.
0:02:04 It’s about like seeing this person like talk about this product and maybe it’s a, you know, like a really cool, like new shoe from Nike or like a vintage shoe.
0:02:11 And they’re talking about like their own experience with it and childhood, you know, experiences with like the Jordan brand or whatever.
0:02:14 And so it comes this like really interactive experience.
0:02:22 You know, my pitch for this idea is basically, well, obviously you can have like really rich, engaging experiences in the very near future with avatars.
0:02:26 Right. And if you go to HeyGen.com, it’s a great avatar product.
0:02:29 It’s the easiest, fastest, self-serve avatar product out there.
0:02:30 Are you an investor in these guys?
0:02:34 I am an investor in HeyGen and I really like the team there.
0:02:38 And they just built like the best, easiest to use avatar product.
0:02:39 That was kind of their claim to fame.
0:02:43 They have basically pre-made avatars.
0:02:49 So these are like, you know, trained on or effectively created from like real human actors that they’ve licensed from.
0:02:52 So, you know, you can use one of their pre-made avatars.
0:02:54 Or you can create your own.
0:02:56 You know, I think of this as like a really fundamental capability.
0:02:59 Like you think about all the things you can do with avatars.
0:03:07 You know, sending a sales video where you’re pitching each target customer, you know, in a personal way.
0:03:07 Right.
0:03:12 So a CEO sending a thank you note via video to every single attendee of our last event.
0:03:13 That kind of thing.
0:03:20 In this case, like I think applying the avatar concept to live shopping where you can now have this one-on-one interaction with.
0:03:21 And it could be a celebrity.
0:03:26 Like maybe you get some like real influencers to sign on to this.
0:03:31 And, you know, it’s like Kim Kardashian type who’s actually like represented in avatar form.
0:03:38 And each person shopping gets to have a one-on-one interaction with her about Skims and, you know, the Skims products that they want to try out.
0:03:41 Are you guys using any of this at Airtable?
0:03:44 We actually do have an internal setup where it’s all powered by Airtable.
0:03:50 We use our own Airtable web agents to go in and research different target customers.
0:03:56 We’ve learned a lot about them and then we can actually generate customized email pitches for each of them.
0:03:57 So right now it’s just email.
0:03:59 But we are experimenting with more of the video stuff.
0:04:08 We actually have a setup internally where we can now generate an avatar video powered by HeyGen automatically from content in a row of Airtable.
0:04:10 So it could be a list of different event attendees.
0:04:17 And that use case I just described, like I may actually do it for thank you notes for different events that I host in the future.
0:04:27 Like if I host a dinner with some of our customers, I could actually now go and automate creating a video that looks like it’s me.
0:04:33 And I would probably be upfront about it and say like, hey, like here’s an avatar version of Howie, like saying thank you for coming.
0:04:36 And like the novelty of it itself actually would tickle people’s fancy.
0:04:43 But like to send a personalized thank you video from me to every attendee for all of our events.
0:04:44 Can you do that now?
0:04:46 Like if I wanted to implement, I mean, that sounds awesome.
0:04:49 If I want to go and do that right now, how would I set that up?
0:04:50 So you can do it today.
0:04:53 It just requires a little bit of scripting in Airtable.
0:04:55 And that itself you can actually generate with AI.
0:05:03 So the idea is like you would go and create like a list of different people you want to send the video to or even a list of topics you want to create a video for.
0:05:08 And then we already have an Airtable, a scripting layer where you can define any arbitrary code.
0:05:10 It’s hosted in our infrastructure.
0:05:14 And in this case, you would just define the code to go and talk to the HeyGen API.
0:05:17 A lot of these AI products have APIs.
0:05:28 And so you can go and create your own kind of orchestration layer and Airtable to go and automatically for each row ask HeyGen to generate a video program programmatically for you using this avatar.
0:05:34 And then you get a link to a HeyGen video that you could then go and directly send to a customer or download it and then attach it, etc.
0:05:40 Cutting your sales cycle in half sounds pretty impossible, but that’s exactly what Sandler training did with HubSpot.
0:05:48 They use Breeze, HubSpot’s AI tools to tailor every customer interaction without losing their personal touch.
0:05:50 And the results were incredible.
0:05:52 Click-through rates jumped 25%.
0:05:54 Qualified leads quadrupled.
0:05:58 And people spent three times longer on their landing pages.
0:06:02 Go to HubSpot.com to see how Breeze can help your business grow.
0:06:05 What’s this AI personalized news thing?
0:06:15 When I think about, like, my news reading habits, you know, it’s like I do sometimes appreciate reading just, like, the front page of, like, the journal or the Financial Times, right?
0:06:19 And there’s something very valuable about, like, that curated experience.
0:06:21 Like, everybody sees the same front page.
0:06:30 So, ironically, like, I actually do get the print edition of newspapers because I like that, like, physical and consistent experience.
0:06:34 Like, I know I’m seeing the exact same paper as, like, millions of other people out there.
0:06:46 But for anything else, like, if I’m reading something online or if I see a link, like, I end up usually just taking all of the contents and copy-pasting it into Chachkati or Claude and then asking it to summarize, right?
0:06:49 And say, like, hey, like, pull out, like, the key information, et cetera.
0:06:51 And I even have some save props to do this.
0:06:56 But what I really want is not just to do that manual summarize for each article.
0:07:01 I want it to go and, like, automatically look for all of the articles that are interesting to me.
0:07:03 Like, there are certain topics that I care about.
0:07:08 And I just want, like, an AI news aggregator that goes out and knows what I care about.
0:07:14 And more importantly, like, it doesn’t just summarize the news for me into, like, here’s the summarized articles.
0:07:17 It actually becomes this interactive agent that I can talk to.
0:07:22 So, like, you know, your friend who is the super news expert, they’re always reading all the articles.
0:07:27 Like, Nick, our mutual friend, as an example, like, he knows everything that’s happening in the world.
0:07:31 Like, you go to Nick and you get 30 minutes with him and you learn about any topic you want.
0:07:32 Like, I want that.
0:07:37 I want Nick in, like, AI form where I can just ask it, like, tell me more about this.
0:07:39 And it can go and give you more info.
0:07:46 Dude, so my company that used to own this podcast before we sold it was The Hustle.
0:07:48 It was a daily newsletter.
0:07:49 This was our pitch to our customer.
0:07:51 We were like, we are your smart.
0:07:56 I think our tagline was, we’re your smart, no bullshit friend who will tell you what you need to know every morning.
0:07:59 And I had a team, it was crazy.
0:08:03 We had a team of three people who would reach almost 3 million people a day writing this newsletter.
0:08:05 And we actually were tinkering with this idea.
0:08:11 And it was so manual where we were like, what if a user tells us what they care about?
0:08:19 And we write tons of different bits of news and we plug it into someone’s email based off of what their interests are.
0:08:20 And then we’ll even go.
0:08:21 So you can mix and match.
0:08:22 Yeah.
0:08:26 And I was like, we’ll even go and get, like, an expert, like Howie, to, like, comment on some of the stuff.
0:08:29 And we’ll put some of the comments in the thing, in the newsletter.
0:08:32 And it was like, I was like, oh my God, this is so manual.
0:08:38 And what you’re describing is, like, whenever I’m thinking about newsletters, I’m like, this just changes everything.
0:08:42 And I actually think, you know, it could still be a great business.
0:08:44 I would just use AI for all of it.
0:08:44 Totally.
0:08:54 And maybe, like, you could take it to the next level, which is, like, it actually becomes a platform where, like, Substack, you allow creators to actually create their own branded newsletters.
0:08:57 And they push the distribution promo of each one.
0:09:04 But because you’re powering this, like, kind of white label AI, you know, powered platform, like, they can very easily spin up their own custom newsletter.
0:09:09 You know, a different direction is, like, you create these, like, different AI personalities.
0:09:15 I think a commonly underappreciated thing is, like, AI doesn’t have to be robotic, right?
0:09:23 Like, it doesn’t have to just be, like, utilitarian, summarize this article in, like, a clean, you know, AP, you know, style.
0:09:35 Like, you could actually have it injected with tons of personality and say, like, be like a TMZ gossip reporter who just, like, sensationalizes the crap out of this, like, new celebrity gossip, right?
0:09:38 And I think there’s just so many interesting ways to play around with that.
0:09:44 And, like, news by nature is, like, a very high engagement use case, right?
0:09:48 It’s, like, literally something you read every day or maybe even every hour.
0:09:54 And so, like, the opportunity to, like, change how people interact with, like, finding out about this stuff.
0:09:59 Like, I think that’s a, there’s going to be a very large business to be created there, right?
0:10:01 Like, BuzzFeed, you know, Hustle, et cetera.
0:10:05 Like, you know, all of these were, like, high-growth businesses in that era of news.
0:10:10 And I think now there’s going to be a different high-growth era of AI news.
0:10:12 Hey, I got a quick break because I want to tell you something cool.
0:10:15 So our sponsor for this episode is HubSpot.
0:10:19 But instead of the ad telling you about HubSpot, they just want to do something that’s useful for you.
0:10:24 So they did some research, and they found that a bunch of people in our community have side hustles.
0:10:28 They start a business on the side, they get it going, and then it becomes their main hustle over time.
0:10:33 And so instead of just telling you about the features of HubSpot, they wanted to give you something that would be useful for your side hustle.
0:10:42 And so they have put together a database of AI prompts, so things that you could put into ChatGPT or your favorite AI tool that will help you with your side hustle.
0:10:43 So check it out.
0:10:45 It’s going to save you a bunch of time, I think.
0:10:51 It’s a prompt database that you should be using to make your side hustle more successful.
0:10:57 And you could use this as your little personal little cheat sheet, your tool set, to be a better operator with your side hustle.
0:11:03 So you could either scan this QR code that’s on the screen or get the link in the description to get the AI prompt database.
0:11:04 All right, back to the show.
0:11:06 Are you a personal finance nerd?
0:11:07 Kind of.
0:11:09 You know, I was a very early Mint user.
0:11:18 And I remember, like, really, you know, wanting to let go and more, like, have visibility over my different expenditures and, like, aggregating it.
0:11:27 I will say, like, the tedious act of going and, like, doing a lot of planning is not my forte.
0:11:34 But, you know, I have, like, basically a multifamily office type setup that now helps with a lot of that stuff.
0:11:39 You know, you listed on here, real-time AI avatar products for different vertical applications, like personal finance advisors.
0:11:41 Tell me about that.
0:11:55 So the idea here actually is, like, you know, if you’re a very high net worth client, you can get a very strategic wealth advisor who literally sits down with you, looks at your balance sheet, looks at all your assets, and talks about your goals.
0:12:05 And actually comes up almost with, like, a plan as good as a, you know, a CFO’s plan for a real corporation, but for you as an individual, right?
0:12:14 Like, the business of you, Sam, as an individual, and you can plan it out, you can think about the cash flow needs you have, what kind of assets you want to invest into for near-term, for long-term yield.
0:12:20 And, I mean, the reality is, like, most people don’t get that level of attention, right?
0:12:25 And don’t get that level of, like, you know, thoughtful design to a financial plan.
0:12:32 And, you know, furthermore, like, most people don’t even have access to a live financial advisor to just call up and talk to, right?
0:12:37 Like, there is something very comforting, I think, about, like, getting to, like, literally talk to somebody.
0:12:42 And it’s maybe why a lot of banks still have, like, you know, retail locations, right?
0:12:45 So many of them, even though, like, you know, for most transactions, you don’t really need it.
0:12:47 Like, people want to go in and talk to a person.
0:12:52 So I think the idea here is, like, using the really smart reasoning capabilities of the newest models.
0:13:01 Like, I don’t think you could have done this pre-03, where you actually can come up with, like, a very thought-out, you know, kind of personal financial plan.
0:13:06 And, you know, recommend, like, here’s how much you should invest into equities versus bonds.
0:13:08 And, like, here’s how much you should spend.
0:13:13 But do it, like, with a, you know, an avatar on top of it so that it’s a very human-like experience.
0:13:19 And you get to talk to them and just, like, call them up anytime you’re feeling stressed about your financial situation.
0:13:24 Do you use any consumer-facing personal finance apps at all now?
0:13:30 I don’t because I have this team that I can actually go and talk to.
0:13:35 But, like, I think, you know, to me, it’s, like, if everybody could have that experience, I mean…
0:13:35 It’s awesome.
0:13:37 Everybody would be able to plan better.
0:13:38 Have you seen…
0:13:39 Let me show you one.
0:13:40 It’s called Kubera.
0:13:43 K-U-B-E-R-A dot com.
0:13:45 I have no association with these guys.
0:13:49 But I’ve talked about them so much that I’m actually, like, on their homepage because they, like, quote…
0:13:50 Oh, cool.
0:13:51 They, like, quote…
0:13:51 That’s awesome.
0:13:52 They quoted me.
0:13:52 Oh, yeah.
0:13:53 There you are.
0:13:56 And this doesn’t matter if you’re worth $50,000 or $100 million.
0:14:02 A lot of people use software to aggregate their net worth.
0:14:06 Because even if you only have 50 grand, sometimes you’ll own a couple cars.
0:14:08 You’ll own maybe two bank accounts.
0:14:11 You’ll maybe have some amount of money in Robinhood, whatever.
0:14:15 And then if you’re really wealthy, you have many, many dozens of accounts, right?
0:14:20 You have, like, you have some money with this person, some money with that person.
0:14:21 You have probably…
0:14:22 You have some, like, private investments.
0:14:27 And this just does a really good job of aggregating it, of all of it.
0:14:29 Which a lot of companies claim they do that.
0:14:31 The issue is, is that…
0:14:31 Yeah.
0:14:32 Adapar kind of does that for, like, the high end.
0:14:33 Yeah, dude.
0:14:34 Adapar seems awesome.
0:14:36 But I think you have to have a…
0:14:39 Like, I think, so, like, Morgan Stanley or JP Morgan, I forget who I talked to, you have
0:14:44 to have at least $50 million in liquid net worth with one of those banks in order to get access
0:14:45 to Adapar.
0:14:46 Or something, like, insane.
0:14:47 Like, you have to have…
0:14:51 You have to be a little bit more, even, than an ultra-high net worth client.
0:14:55 So, like, Adapar is crazy, but I’ve never even seen it.
0:14:59 But with Kubera, they do such a good job of aggregating all the stuff because the connections
0:15:01 don’t break.
0:15:06 And so, anyone who’s ever used Mint or who have used Wealthfront or, like, whatever,
0:15:09 the connections to all of your accounts breaks all the time.
0:15:11 And you got to, like, re-enter the password.
0:15:12 Just, like, log in every month.
0:15:12 Oh, my God.
0:15:13 It’s the hugest pain.
0:15:15 And so, these guys have done a good job with that.
0:15:20 But what they do is they have this version where you can export the information.
0:15:21 What’s it called?
0:15:22 Is it called JSON?
0:15:23 Yeah, JSON.
0:15:27 So, you can export it in JSON format, which is what ChatGPT uses.
0:15:31 Or you could just connect your Kubera with your ChatGPT.
0:15:32 Oh, very cool.
0:15:33 It started as an export.
0:15:35 Now, it automatically does it.
0:15:37 And you can ask it questions.
0:15:40 And so, what I’ve done is I’ve used Kubera.
0:15:43 So, I use Kubera to upload all my accounts.
0:15:47 And when you do this, they don’t actually have access to transact, obviously.
0:15:48 They can just view your accounts.
0:15:54 And then I use ChatGPT where I will create a project that has, like, a Warren Buffett book.
0:16:01 Or sometimes I’ll have, like, a more aggressive financial advisor, like, a book of someone who has written something on financial advising.
0:16:04 Because, like, you have different gurus sometimes.
0:16:04 You know what I mean?
0:16:05 Like, different.
0:16:05 Yeah.
0:16:10 And I can use this to ask it questions and have my own personal finance advisor.
0:16:10 Do you know what I mean?
0:16:11 Yeah, yeah.
0:16:16 Like, give me advice using the fundamental investor theory.
0:16:16 Yeah.
0:16:20 And so, you’ll be like, look, my net worth is blank today.
0:16:25 If I want to be at this mark in 10 years, show me what I should do.
0:16:33 Or if I want to buy a house in eight years, what would you suggest is a good budget to have based off of what you know about me now?
0:16:34 You know what I’m saying?
0:16:35 Yeah, yeah.
0:16:37 I’m sure it works great for that.
0:16:37 Dude, it’s awesome.
0:16:39 It’s so awesome.
0:16:46 Now, having a financial advisor is still great sometimes because you still, like, financial advisors, oftentimes, the value is not in the advice that they give.
0:16:48 It’s the fact that there’s a human being that you can trust.
0:16:51 But anyway, this is how I’ve been using AI.
0:16:59 I mean, imagine that, like, that experience that you’re getting, but, like, now, you know, to your point about, like, feeling like you can trust a human more.
0:17:06 I mean, how much of that is based on, like, the fact that it actually is a human versus how much of it is, like, literally just, like, the psychology of, like, talking to a face?
0:17:10 No, I think you and I think that because of our age.
0:17:12 Here’s what I had to bet.
0:17:14 I’m making this up.
0:17:24 I bet that the 18-year-old today, in five years, they’re going to go to the doctor, and when they go to the doctor, they’re going to tell their doctor, this is the illness that I have, and I think it’s this.
0:17:32 Because what you and I would have said five years ago, or your parents would have said five years ago, is WebMD says that it appears as though I have this illness.
0:17:33 Right, right.
0:17:33 Yeah.
0:17:42 No, so the young guys nowadays, they just say, ChetGPT said this, and the doctor is going to say, well, I agree with you, and according to my belief, ChetGPT says blank.
0:17:46 And ChetGPT, I think, is going to be the stamp of approval, or AI.
0:17:49 Like, I think they’re going to trust AI more than a human being.
0:17:50 Does that make sense?
0:17:50 Oh, for sure.
0:18:02 I mean, I think, like, today, it’s already better to, I mean, everybody should be taking all of their, you know, personal, like, health diagnostics, you get a blood test or whatever, and, like, running that through ChetGPT.
0:18:09 Like, upload it, ask 03, like, hey, like, here’s my other symptoms, here’s how I feel, like, tell me what I might have, right, or tell me what could be wrong.
0:18:23 Like, I’ve seen so many stories from, like, both personal friends, as well as, like, on Reddit, Twitter, et cetera, of, like, people who caught diagnoses that their doctor just missed, not necessarily because they’re bad doctors, although a lot of doctors probably are bad doctors, right?
0:18:24 Like, if there’s a curve there.
0:18:25 Dude, they spent 10 minutes with you.
0:18:26 Like, what are they going to solve?
0:18:39 So, like, I got an injury lifting weights, like, two months ago or something like that, and I just used ChetGPT to do PT, and they just told me what to do, and I just followed the routine for three weeks, and, like, my back improved.
0:18:39 Totally.
0:18:43 I mean, it’s literally trained on the best knowledge out there.
0:18:55 Like, you’re getting the, like, wisdom of, like, Peter Atiyah meets Huberman meets, like, you know, all of these, like, you know, health prognosticators to inform, like, you know, ChetGPT is a response to you.
0:19:08 I’ve become the most extreme version of optimist for new disruptive entrepreneurs and startups, meaning, you know, I think the world moves through these different, you know, kind of phases, right?
0:19:21 And in a stable phase where the technology has been pretty stable, you know, that was basically true of the web and web tech for, you know, at least, like, 2018, maybe, until, like, Gen AI hit.
0:19:32 So, for a few years, like, it was very stable, the technology became very mature, and then it really became about, like, how can you go and either leverage your existing distribution if you’re an incumbent?
0:19:44 So, it’s really hard to compete against big existing players like Salesforce or Microsoft, et cetera, you know, in that era, to now, like, it’s like all of the assumptions are off, and every company is kind of up for grabs, right?
0:19:56 And what I mean by that is, like, you can look all the way at non-tech companies, and let’s say if you’re a property management firm, like, you know, half of your cost structure is automatable, right?
0:19:57 If not more.
0:20:01 And in that world, like, the margins on the business are so low.
0:20:06 Like, I actually talked to the founder of a company based in Germany that’s doing exactly this.
0:20:14 They’re buying up different property management firms and basically using their own AI tech to automate a large part of the job.
0:20:15 And actually, they don’t fire people.
0:20:18 They keep everybody employed, but they take on more business as a result.
0:20:35 And so, they’ve quickly become one of the largest property management companies in Germany, if not in Europe, by just going and aggregating these traditional businesses and creating that AI leverage, taking what probably was, like, a low percents margin business to become a, you know, tens of percents margin business.
0:20:38 I mean, you know, from a PE standpoint, that leverage is huge.
0:20:52 So, I think that’s a playbook that we’re seeing a lot of, like, excitement around because I think every traditional business, especially one that has a large, you know, part of their cost structure that could be automated, is kind of up for grabs.
0:21:01 Like, think about, obviously, call centers, BPOs, but really any labor-intensive business process outsourcing companies.
0:21:11 So, that’s basically, you know, there’s a lot of these offshore companies that have, like, literally thousands of employees that you can go and outsource very rote tasks to, right?
0:21:20 So, like, analyst work, like, go comb through these documents and look for, you know, kind of facts or, you know, do research for me.
0:21:23 Support centers themselves are a form of BPL, right?
0:21:28 So, you have these, like, big call centers that are basically client agnostic.
0:21:30 So, it’s not just one company’s call center.
0:21:32 They can take on business from any client.
0:21:36 So, we could go and say, like, hey, like, I want to spin up a call center for Airtable.
0:21:44 And traditionally, that just meant, like, you have a whole bunch of humans sitting in a room somewhere and, you know, you’re basically hiring them on demand.
0:21:47 And now, of course, a huge amount of that can be automated.
0:21:49 Dude, I get so many of those calls a day.
0:21:52 And a lot of times they say that they are an AI.
0:21:53 They’re horrible.
0:21:55 They still suck.
0:21:56 Do you get a lot of those calls?
0:21:57 I do.
0:21:59 Although, I mean, I don’t pick them up.
0:22:00 Dude, I pick them up.
0:22:01 I always pick them up.
0:22:03 Like, I, like, want to get to know these people.
0:22:06 Like, you know, sometimes it’s, like, I could hear, like, where they are.
0:22:07 Like, here’s what I get all the time.
0:22:10 I always get a text message that says, this is Coinbase.
0:22:13 Someone in Serbia logged into your account.
0:22:15 And, like, I know it’s a scam, but I call them.
0:22:19 And I’m, like, let’s, like, figure out how this scam works a little bit.
0:22:21 Like, I do it all the time.
0:22:21 So, I’ll spend, like.
0:22:23 I mean, first of all, you’re totally feeding the bear.
0:22:28 Because if you even give them a response, they know you’re, like, you’re a more likely target.
0:22:30 Dude, I’m so into it.
0:22:31 They’re, like, what’s your name?
0:22:32 I’m, like, oh, it’s Kevin Smith.
0:22:34 And they’re, like, oh, I see your account right now.
0:22:36 I’ll be, like, you do?
0:22:36 What?
0:22:37 Like, tell me about it.
0:22:37 Tell me about this.
0:22:38 How much do I have?
0:22:39 Yeah, this is awesome.
0:22:43 And so, like, they go through these whole scripts.
0:22:46 And I’m, like, this is awesome that you found my account.
0:22:47 That is really cool.
0:22:48 Do you?
0:22:49 You’ve got to figure out how to scam the scammer.
0:22:52 Like, by the end of it, you get them to give you their info.
0:22:54 Have you seen the YouTube channels that do that?
0:22:55 They’re so funny.
0:22:57 No, I haven’t.
0:22:57 Dude, there’s guys.
0:22:58 This is going to be my weekend.
0:23:15 There’s guys on YouTube that have 10 million subscribers, and they’re really, like, sharp guys, and they’ll, like, get, they’ll pretend like they’re old ladies, like they use a voice changer, and they get this scammer to install software where they, the scammer’s web camera will come on, and they can control, like, the, it’s, like, the greatest.
0:23:16 Oh, no.
0:23:17 This is the greatest gen.
0:23:17 That is insane.
0:23:18 It’s the greatest.
0:23:18 That’s amazing.
0:23:23 But these AI call companies, they’re still horrible.
0:23:24 Are you bullish on them?
0:23:35 Well, you know, I think the models have to get better at real-time synchronous interactions for, you know, especially for voice calls to fully get taken over by AI.
0:23:40 I think for chat, like, you’re chatting with somebody, like, it’s already better in many cases, right?
0:23:46 Because, like, you know, those chat experiences are horrible with humans because, like, the human is probably doing, like, 20 different parallel chats.
0:23:50 They don’t really know or care about you, whereas an AI can be fully attentive.
0:23:51 But I agree.
0:23:53 I think the voice is just not quite there yet.
0:24:02 You’ve probably seen that Sesame voice demo where it’s, like, you know, one of the better real-time voice interactions.
0:24:02 What’s it called?
0:24:04 Sesame.ai.
0:24:06 You can literally call it.
0:24:08 Oh, yes.
0:24:09 I did see this.
0:24:12 I absolutely, do you think this is a good product?
0:24:18 You know, it’s a research team, and this is a demo product, but I think it shows where the models are going.
0:24:29 And I think, you know, it could be from this team and this company, but also, I mean, you know that OpenAI and Eleven Labs, et cetera, they’re all working on making that interactivity better.
0:24:36 OpenAI revealed the last voice mode release where you could actually interrupt the AI halfway through a conversation.
0:24:37 Like, that was kind of a big deal.
0:24:40 It’s still not there yet because it doesn’t feel right.
0:24:49 I mean, if you just talk to it, like, it doesn’t feel like a human, but I think that will be a frontier that we just, we pass or across in the next year or two.
0:24:53 So, one of the last things you had on here was AI productivity tools.
0:24:55 You said cursor for email.
0:24:57 What’s that look like?
0:25:05 So, I just generally think this form factor of it’s not about using AI to completely replace the current workflow, right?
0:25:13 So, the cool thing about cursor is it’s not just, like, a chat interface alone that you’re using to generate code or to say, like, hey, you don’t need to code.
0:25:15 Like, it’s actually an IDE.
0:25:20 Like, they forked VS Code, a popular IDE, and then they added this, like, agentic coding experience on top.
0:25:23 But as a developer, you can still be in the code.
0:25:25 In fact, I think that’s the value of cursor.
0:25:39 So, I just think applying that paradigm to a lot of other productivity experiences, one of them being email, it’s, like, you think about email, you go in, and, like, usually you just come in and, like, you know, click on each email, read each one, et cetera.
0:25:48 You can currently go to a separate product like Gemini, or now Claude and OpenAI both have integrations into email, and you can ask questions about your email.
0:25:58 But I think the ideal experience is actually a blended one, where you can actually do agentic workflows, and maybe AI is automatically doing some pre-reading of your emails, telling you what’s important, what’s not.
0:26:11 Maybe even doing some, like, research across your other content sources, like looking up, you know, info in your other accounts, in your calendar, doing a web search to help you decide, like, hey, like, I got this pitch from an entrepreneur who wants to be on my podcast.
0:26:12 Like, is it worth my time, right?
0:26:14 And it can already have a recommendation for you.
0:26:28 So I just think, like, you know, one of the places that you spend a lot of time today, I mean, news, I think email, if you’re a developer, you’re in your IDE, like, I think that’s where I would attack, is, like, start with where people are actually spending a lot of time.
0:26:33 And on first principles, like, a lot of that time could be automated or augmented with AI.
0:26:43 So I’m going to ask you how you’d build this, because from my, I had an email company, I know a little bit about email, but not, I don’t know the tech, I don’t know the technical capabilities of everything.
0:26:48 But, like, email sucks to build on top of, because Gmail owns everything.
0:26:58 And Superhuman did something interesting, where, for listeners, Superhuman was a brand new email client, and you download Superhuman, and you use that instead of Gmail.
0:27:03 They recently sold last week for, I think the rumor was $800 million, or something like that.
0:27:03 Yeah, I saw that.
0:27:05 Yeah, to Grammarly.
0:27:08 And it was a very bold mission.
0:27:12 I think they fell short if they sold, or that’s what I’m guessing, if I had to guess.
0:27:17 But it was pretty magnificent of an effort to, like, get after it.
0:27:26 And my question to you is, if you were going to build something like this, you pretty much would have to start from scratch, I would think, of a new email client, not a Gmail plugin.
0:27:31 Yeah, so interestingly, I also worked in email before Airtable.
0:27:39 So my startup before then was a YC company, Etax, and it was, actually, I think we were the first startup to build a Gmail plugin.
0:27:41 And it wasn’t, like, an official plugin at the time.
0:27:42 There was no plugin framework.
0:27:52 Like, we literally figured out, like, kind of on our own how to hack what’s called the DOM, which is basically the HTML representation from Gmail of the email client.
0:27:57 And, like, literally just injected a UI on top of that with a Chrome extension.
0:28:01 And so, you know, we kind of pioneered this idea of, like, oh, wow, you could be an email.
0:28:08 And then we added our own sidebar to every email that you had to show information about who you’re talking about.
0:28:09 But could they have banned you?
0:28:16 They could have certainly, A, sent us a cease and desist and said, like, what you’re doing is against our TOS as a site.
0:28:21 And then, B, they could do some things to make it annoying for us.
0:28:25 And, like, it’s almost like they could just keep moving the target.
0:28:33 So, like, they could change the layout of the page in the HTML without making it look different, yeah, to the user in ways that would break our integration.
0:28:34 And that did happen.
0:28:35 I don’t think it was intentional.
0:28:39 I think they would just update the page, re-render it, and then it would change the layout.
0:28:42 And then, like, for a day, our extension would, like, be broken.
0:28:45 And we’d have to furiously try to, like, code a fix to it.
0:28:46 And that was, like, kind of the really, really early days.
0:28:55 And, ironically, Superhuman, the founder, Rahul, was actually the founder of a company that kind of competed with us back in that time, like, 2010.
0:28:55 Reportive.
0:28:56 Reportive.
0:28:57 Yeah, yeah.
0:28:58 Oh, man.
0:29:06 For anyone who’s above probably 33 that was involved in technology, Reportive was a game-changing tool.
0:29:07 That was so cool that they created that.
0:29:08 Yeah, yeah.
0:29:18 So, you know, email has been, like, I mean, it’s interesting because from the time that Reportive and eTax existed to now, like, email really hasn’t changed very much at all.
0:29:21 Like, you look at Gmail, like, it’s kind of the same product.
0:29:24 And, you know, the status quo argument is, like, well, it’s, like, good enough.
0:29:25 Don’t fix it.
0:29:30 But I think that, like, you know, to me, Superhuman was, like, an interesting innovation on email.
0:29:32 Like, they did build their own client.
0:29:34 I don’t actually think it’s that hard.
0:29:40 Like, certain things seem really hard to do in theory, but then in practice, like, it’s actually not that hard.
0:29:54 Like, Airtable, I mean, obviously, it’s hard to build Airtable, but, like, you know, we ended up architecting our own proprietary database engine to power it instead of using something off the shelf, like MySQL or Postgres, to power the real-time collaboration parts of Airtable.
0:30:04 And it turned out that, like, it was the right decision, and ultimately, it turned out to be cleaner and better for us to go that route than to try to repurpose something off the shelf.
0:30:05 But it’s harder.
0:30:05 You know, my quick thought.
0:30:12 You have to raise tens, or you did, and someone else would also have to raise a fuckload of money to do that.
0:30:15 But also, getting revenue for that, I think, would be a slog.
0:30:18 I don’t, you guys did it fast, but, like, Superhuman did not.
0:30:22 Yeah, and I think, I mean, Superhuman was an interesting product for a number of reasons.
0:30:35 I mean, one, I think it was a really good product, but it was really hard to articulate, like, what is the killer feature or set of features that make it 10x better than email without, you know, or normal email, right?
0:30:37 And I think it was, you know, it was, like, faster.
0:30:39 They had some nice features, like, tracking emails, et cetera.
0:30:43 But it was hard to say this is, like, clearly a different paradigm.
0:30:45 Like, this is 10x better, right?
0:30:50 And I think that with AI, like, you could now build a product that actually is radically different, radically better.
0:30:58 And so, in fact, like, a former Airtable employee of mine, JBE, is now working on a company that’s doing exactly this.
0:31:01 I did a little funding round into it.
0:31:03 So, chief.so.
0:31:04 Oh.
0:31:05 Is it loading for you?
0:31:06 Okay, there we go.
0:31:06 Yeah.
0:31:09 You have to give them, you have to write a bigger check, though, so they can get, like, a .ai.
0:31:11 Exactly.
0:31:12 Yeah.
0:31:14 I think it’s a really interesting space.
0:31:19 I think, I actually think that you can build this product without a massive team and a massive funding round.
0:31:32 And maybe part of that is because, you know, like, in a very meta way, like, if you’re very AI leveraged in how you build products, like, you can get so much more done as an AI leverage team than you could have done in the past.
0:31:33 Like, Cursor itself.
0:31:36 It’s just hard to build a business when you charge $20 a month.
0:31:42 Meaning it’s, like, that’s not enough or that’s, it precludes too many people.
0:31:43 The first one.
0:31:58 Yeah, and so, actually, one of the premises here is that there is a top 1% audience, and not necessarily meaning, like, 1%, like, richest people, but, like, there’s a 1% power user audience of email for whom email is, like, their life, right?
0:32:02 Probably for you, definitely for me, every VC, maybe even, like, realtors, lawyers, et cetera.
0:32:05 Like, email is everything to them.
0:32:11 Like, and, like, if you can make them 10% more efficient at email, like, they’ll pay not 20, but 200 a month, right?
0:32:12 Maybe even, like, 2,000 a month.
0:32:24 Like, if you gave me an awesome email product that even saved me, like, call it 5 hours a week in time, and, like, not only that, but allowed me to not miss key opportunities.
0:32:30 Like, sometimes, like, I mean, I get, like, literally hundreds of real emails every day that Gmail considers important.
0:32:33 Frankly, with that many coming in, like, I miss some, and sometimes they’re really important.
0:32:40 I have a full-time assistant, and it feels like a large chunk of her job is just categorizing my emails.
0:32:41 Yeah, for sure.
0:32:52 And, you know, some people have, like, you know, a full-time EA who, like, literally doesn’t just categorize the emails, but, like, goes through and does research on each one and tells you, like, hey, I did some research.
0:32:53 This is how you should respond.
0:32:56 So I think it’s a huge, huge space.
0:33:01 And, I mean, one of my lessons learned from Cursor, actually, and I remember…
0:33:02 Did you invest in them?
0:33:03 You know, first looking at Cursor.
0:33:04 What’s that?
0:33:05 You invested in Cursor?
0:33:20 I did, and actually, I was introduced to them by Peter Fenton from Benchmark, who’s our investor at Airtable, and, you know, just one of the most, like, phenomenal pickers of talent and opportunity spaces that I’ve ever met.
0:33:23 And just, you know, brilliant in every way as an investor.
0:33:28 But I remember having this discussion with him of, like, what is the TAM for something like Cursor?
0:33:30 And you have to factor in, like, of course, like, Microsoft exists.
0:33:34 They actually literally own VS Code, even though it’s open source and you could fork it.
0:33:35 They already have GitHub.
0:33:37 They have this massive developer audience.
0:33:40 Like, how big can an upstart get?
0:33:43 And this was when, like, Cursor was probably, like, low millions in revenue.
0:33:52 And, you know, my argument, actually, was that, like, the developer audience for AI-augmented coding is so large.
0:33:55 I mean, today, you might have, like, call it 30 million developers.
0:33:57 That’s the number that Stripe always quotes.
0:34:01 Maybe that actually will expand to, like, 50 to 100 million developers.
0:34:02 Yeah, no brainer.
0:34:03 Because it gets easier to develop.
0:34:15 And then on top of that, like, it would be perfectly rational for every single one of those people to pay at least $1,000 a year for an AI, like, a coding agent that makes them way more productive.
0:34:17 Like, not, like, 10%, but, like, 2x, right?
0:34:20 And maybe even rational for them to pay $10,000.
0:34:24 Okay, now you’re talking about, like, a 30 to $300 billion TAM.
0:34:31 Like, carving off even a small few percent niche of that, especially when, like, coding itself is so fragmented.
0:34:35 You’ve got, like, different types of coding and different languages, front-end, back-end, et cetera.
0:34:41 Like, all you have to do is win, like, a sizable 5% niche, and you’ve built, like, a multi-billion revenue business.
0:34:46 Is that the framework for how you think of what’s interesting for starting companies?
0:34:46 I think so.
0:34:55 I mean, I think there’s, like, you can either go really broad, like, in this, you know, cursor example or cursor for X.
0:34:58 So pick a market that’s just so big.
0:35:02 Like, there’s so many potential target users, like, tens of millions at least.
0:35:07 And for whom the value is significant enough that they will pay for it.
0:35:10 It’s not a freemium, or it’s not purely, like, a free ad-driven product experience.
0:35:11 It’s not a consumer product.
0:35:18 Pick something that’s, like, broad enough and deep enough where there’s just a very large pie to capture value out of.
0:35:28 And then, even if you end up only capturing a niche of that pie, like, you have a really large business on your hands, I think the alternate path is go really deep and narrow.
0:35:37 So this is more like the property management example where it’s, like, you’re probably never going to have, like, 100 million users who need property management software.
0:35:40 But, like, if you go into that vertical and you attack it.
0:35:41 You might have 5,000.
0:35:42 Yeah.
0:35:42 Yeah.
0:35:47 And if you go and attack it very deeply, and for each one, you can extract even more revenue out of them.
0:35:58 Because in this, I mean, the most leveraged way you can extract revenue out of that space is, like, not just to sell white-label software that you charge a property management firm X dollars per month.
0:36:04 You actually take the entire cake by buying them out outright, running the PE playbook, and getting leverage on there.
0:36:06 And what’s Airtable, the first one?
0:36:07 Airtable is definitely the first one.
0:36:15 So, you know, we’re in a space where, like, especially now that we’ve relaunched the product as basically an agentic first product.
0:36:20 So you can literally come in and talk to our agent, Omni, to ask it to build any app, right?
0:36:24 So, like, it’s very much akin to the Vibe Coding products out there.
0:36:33 But the difference is, like, ours is backed by the reliable no-code components that we’ve spent the past 10 years building and making scalable and real-time collaborative, et cetera.
0:36:39 And so if you want to build any business app, I mean, for you guys, for instance, for your business, like, if you want a CRM, right?
0:36:45 If you want a way to track, you know, people who are coming on your show, if you want, like, a content pipeline, any of those things.
0:36:50 Like, we want to be the best way to spin up a reliable business app for internal operations.
0:36:55 Like, we’re not trying to be, like, an external consumer-facing prototype tool.
0:37:01 Like, if you want that, go to, like, you know, the Replets and the VZeros, et cetera, of the world to spin up, like, a consumer-facing hobby app.
0:37:11 But, like, for a business app, like, you know, the need for that definitely is at least tens of millions of people out there who want to build apps for their own business.
0:37:21 And every single business should be creating apps this way and probably replacing, you know, over the next few years, like, old legacy software with this.
0:37:22 All right, listen up.
0:37:25 Turn the volume up because it’s your boy, Sean, and I got a little message for you.
0:37:32 I talk to hundreds of founders a week, and when I talk to founders, everyone says the same thing, that the one thing they need the most is not funding.
0:37:34 It’s not more resources.
0:37:36 It’s just having more time.
0:37:41 The goal here is to win, and the way you win is you get yourself free time to do stuff that’s high impact.
0:37:42 How do you do that?
0:37:43 Well, I’ll tell you my solution.
0:37:45 The answer is Gabby.
0:37:47 Well, you might be wondering, who is Gabby?
0:37:48 Gabby is my assistant.
0:37:50 She is my wonderful assistant.
0:37:54 Gabby lives in Latin America, and she helps me save about 20 hours a week.
0:38:03 So what she’s doing for me is every morning, my inbox is sorted and triaged, and the most important stuff is right at the top with draft replies ready for me.
0:38:04 So I’m never behind on email.
0:38:09 And then as I’m on the go, I’ll just send her voice notes saying, hey, can you find my kids a soccer class?
0:38:11 Hey, can you take care of this car registration thing for me?
0:38:16 All these little tedious BS things that would take up time in my day, she takes care of for me.
0:38:18 And so that’s free time I’m getting back.
0:38:22 So if you are a CEO who’s serious about growing your company, you need to get yourself an assistant.
0:38:24 The best place to go is somewhere.com.
0:38:28 Somewhere sources the best assistance from low-cost areas for you.
0:38:36 So you can get an amazing executive assistant who’s got business experience and has supported other CEOs for $7, $8, $9, $10 an hour.
0:38:42 And so go ahead, go to somewhere.com, tell them I sent you, they’ll hook you up with a good deal, and get yourself an assistant, and you can thank me later.
0:38:43 All right, back to this episode.
0:38:45 What’s the last question?
0:38:49 What’s this, all you wrote on the sheet, you just wrote, exotics, question mark?
0:38:53 Exotic ideas for AI.
0:38:56 So it’s more off the beaten path stuff.
0:39:02 I think there’s some really interesting new niches that will be created.
0:39:07 An example would be, what’s the next consumer social app that’s AI native, right?
0:39:14 And I don’t think that just means like, you know, it looks like Instagram, it looks like TikTok, and it’s got some like AI features to help you like write posts and so on.
0:39:25 Like, I think it might mean like, I mean, there are a few startups that are trying to do this where, you know, it’s like you actually have like social networks or chat groups where half the participants are actually AI avatars, right?
0:39:27 And like, what does that look like?
0:39:39 And I think what’s interesting about this space is that like, unlike the PE AI approach, where it’s like, take a known problem and do something that’s very like solvable, right?
0:39:42 Like automate support costs, automate property management costs with AI.
0:39:45 It’s like, you can very clearly visualize what that looks like.
0:39:52 I think what’s really interesting is that like, we don’t know what the consumer behaviors are going to look like in an AI native era.
0:39:58 Like, you know, we saw the transition from like, linear TV to internet, to mobile, etc.
0:40:06 And at each point, I think there were there were some surprises about like, that the way that the content and the engagement patterns actually changed, right?
0:40:09 It’s not like we just took people watching linear TV, right?
0:40:11 And then gave them YouTube, like do the same thing.
0:40:13 We somehow went from TV to watching video games on my phone.
0:40:14 Exactly.
0:40:15 Yeah.
0:40:17 I mean, like, nobody would have guessed like Twitch, right?
0:40:19 Like, how’s that like the big thing?
0:40:33 And so I just think like there’s, when you have people who are not just technologists, like the first wave of post-Chat2P innovation was very much driven by like technologists who were very close to the models and the model research and understood what the models were capable of.
0:40:47 I think we’re going to see more and more people who are actually more artists than technologists and think about like the artistry of like, what is consumer psychology and behavior look like when you have this this new paintbrush, which is like AI powered experiences.
0:40:58 In some cases, I think you can create like hyper-engaging consumer engagement, consumer experiences that like actually could be even more addictive than, than, you know, social media is today, right?
0:41:07 Imagine like you have, you know, people have like the perfect girlfriend or boyfriend avatar, you know, people are already kind of doing this right with even Chat2PT or Grok, et cetera.
0:41:08 Grok unhinged.
0:41:10 I don’t know if you played with that, but like, it’s, it’s pretty interesting.
0:41:25 Like it’s Grok, the Elon AI product, but unhinged mode is where, and they also have a sexy mode, which you can guess what that is, is basically where they’ve taken off all of the, the PG and safety features that Chat2PT and Claude have, right?
0:41:41 So like, you could have a very explicit conversation with, with this AI and it will happily engage, which just kind of shows you like most of the AI experiences we’re getting, especially from the big model companies have been very like cleaned up.
0:41:44 Dude, I ask my, my Chat2PT controversial questions all the time.
0:41:48 Like, yeah, like it, it’s like, it refuses, it refuses.
0:41:55 And sometimes I ask it things where I’m like asking on a, like, like, for example, I love history and I’ll like, if I’m reading about World War II,
0:42:05 I’ll ask it about very sensitive topics, but I’ll just like explain to me this topic, but I’ll be like, but anyway, it, it won’t even touch some of these things.
0:42:06 Yeah, exactly.
0:42:13 And, and, you know, that’s the whole debate is like, you know, it’s a little bit like free speech censorship, but like applied to AI, right?
0:42:32 It’s like, you know, at, at like, how much can you actually, you know, sensor AI for safety and, and for, um, like moral clauses, uh, how much of that is, is even like globally applicable versus like what’s moral for one, one, uh, one culture, maybe immoral for another, et cetera.
0:42:41 And, and I think it’s interesting to see Grok be, uh, not like completely on, uh, unfiltered, but like, it is a lot more pushing of the boundaries.
0:42:41 Right.
0:42:42 So I had never heard of this.
0:42:44 I don’t think there’s, yeah, yeah, yeah.
0:42:45 No, I mean, you should try it today.
0:42:50 Like, like, like, like I was trying to learn about the Israel Palestine conflict.
0:42:55 Like, I’m just trying to understand the background and like chat GPT won’t even like touch some of the topics.
0:42:57 And I’m like, oh, I’m just trying to learn controversial.
0:42:58 Like, exactly.
0:42:59 Yeah.
0:43:05 Like, um, and, and so I think that’s, that’s gonna be really interesting when, when you start to see like people really push the boundaries.
0:43:14 I mean, you know, they say, um, uh, a lot of great, uh, tech is like always, always, uh, pioneered for like the, uh, the salacious, the black market, you know, I mean, Silk Road type stuff.
0:43:15 Right.
0:43:18 Like, and, and so like, what is, what does that look like in the AI era?
0:43:20 Well, you’re the man.
0:43:21 I appreciate your, your insight.
0:43:22 I like, uh, I enjoyed this.
0:43:23 This was awesome.
0:43:26 It’s fun because, uh, you have a really interesting perspective.
0:43:32 You’re a young guy, but you’ve been in the game for like so long and you have such breadth because of the size of your company.
0:43:41 And so it’s really cool to just see your thinking and, uh, how you, uh, how you, uh, are gonna like somewhat predict the future and, and, and all that stuff.
0:43:42 But, uh, dude, you’re bad-ass.
0:43:43 I appreciate you doing this.
0:43:44 Oh, thank you.
0:43:47 Well, really enjoyed the combo and, uh, happy to chat anytime, bud.
0:43:47 All right.
0:43:48 That’s it.
0:43:48 That’s the pod.
0:44:13 All right, my friends.
0:44:16 I have a new podcast for you guys to check out.
0:44:21 It’s called content is profit and it’s hosted by Luis and Fonzie cameo.
0:44:31 After years of building content teams and frameworks for companies like Red Bull and orange theory, fitness, Luis and Fonzie are on a mission to bridge the gap between content and revenue.
0:44:38 In each episode, you’re going to hear from top entrepreneurs and creators, and you’re going to hear them share their secrets and strategies to turn their content into profit.
0:44:43 So you can check out content is profit wherever you get your podcasts.

0:00:05 The stock has grown in the last year from a $7 billion company to now a $44 billion company.
0:00:06 $44 billion.
0:00:07 You know what I mean?
0:00:09 That’s what Elon bought X for.
0:00:12 This guy’s selling LaBooBoo.
0:00:13 It’s insane.
0:00:14 It’s crazy.
0:00:16 I feel like I can rule the world.
0:00:18 I know I could be what I want to.
0:00:21 I put my all in it like my days off.
0:00:22 On the road, let’s travel.
0:00:23 Never looking back.
0:00:26 Dude, Sam, do you know what one of these are?
0:00:28 Oh, my gosh.
0:00:31 Ramon will not quit talking to me about these things.
0:00:34 Okay, so for the listener, Sean is showing me.
0:00:35 What am I holding up?
0:00:38 They look like dolls, basically in the same vein as a troll.
0:00:43 But I have gotten texts from my friend, our friend Ramon, who says,
0:00:44 Have you heard of this thing?
0:00:44 It’s worth.
0:00:45 And he says the number.
0:00:48 And I’m like, oh, it must have been a typo.
0:00:50 So what’s the deal with these things?
0:00:52 Do you know what they’re called?
0:00:54 Super something?
0:00:57 No, this is a LaBooBoo.
0:01:00 All right, Sam, get yourself educated.
0:01:02 This is a LaBooBoo doll, okay?
0:01:04 Does it have a Prada sign on it?
0:01:07 Yeah, that’s part of the shtick here.
0:01:09 Okay, so what’s the story with these things?
0:01:12 This is basically the most viral toy in the world.
0:01:17 It’s one of the biggest crazes since, you know, Beanie Babies and things like that.
0:01:20 And so the story behind this thing is pretty crazy.
0:01:23 I just wanted to tell you some of the things that I know about it.
0:01:32 Of course, my wife put me onto this months ago, and I just ignored it as the stock of this company is up like 7x in a year because this thing is going crazy.
0:01:33 Chinese company, right?
0:01:35 Chinese company, yeah.
0:01:39 So this is made by – these dolls are produced by a Chinese company called Popmark.
0:01:44 And the maker for this guy, Wang Ning, he is now the 10th richest man in China.
0:01:44 What?
0:01:49 And, like, he’s adding, like, a billion dollars to his net worth in the last, you know, few months.
0:01:50 But he’s, like, 30, right?
0:01:51 Or, like, he’s –
0:01:53 He’s really young.
0:01:54 Like, dude, look at this picture of him.
0:01:57 Yeah, but Chinese guys always look really young until they don’t.
0:01:59 Until they don’t.
0:02:03 Yeah, haven’t you ever heard, like, all of my Asian friends, they’re like, we always look young and then we fall off a cliff.
0:02:04 All right.
0:02:05 Can you see this guy?
0:02:07 Yeah, yeah.
0:02:09 I mean, he could be 12 or 50.
0:02:09 I don’t know.
0:02:14 Yeah, so this guy is behind this company, Popmart.
0:02:19 But it’s kind of fascinating what’s going on with this craze, right?
0:02:21 Like, it’s really taken over.
0:02:25 So somebody gave these to my kids as, like, a gift.
0:02:27 And I didn’t really understand the significance of it.
0:02:28 I was like, oh, cool, thanks.
0:02:34 I didn’t realize that we were just gifted, like, a really important thing.
0:02:36 This is, like, one of the more valuable items in my house right now.
0:02:38 Like, these things sell for thousands of dollars.
0:02:41 The top ones can sell for six figures.
0:02:43 That’s how crazy the craze is for this.
0:02:44 Okay.
0:02:45 So tell me the story.
0:02:48 Because this sounds like a good stock to short.
0:02:51 Because that’s typically how these, like, collectibles kind of tend to go, right?
0:02:52 We’ll get to that.
0:02:53 Yes, I agree with you.
0:02:53 We’ll get to that.
0:02:54 All right.
0:02:58 So the story of the LeBooBoo dolls is there’s a guy who’s an artist around 2015.
0:03:01 He’s in the Netherlands.
0:03:05 He gets inspired to create, like, a kind of, like, a toy world.
0:03:09 So, like, a character world based on where he’s at in the Netherlands.
0:03:11 And he designs these dolls.
0:03:13 These kind of, like, look at their teeth.
0:03:15 Like, the little, like, gremlin-looking doll.
0:03:18 And there’s hope for us, okay?
0:03:22 Because the experts are describing this as ugly cute.
0:03:24 And it’s succeeded because it’s ugly cute.
0:03:31 And I just thought, like, our podcast, I just feel like that just gave us, like, some wind in our sails for what we could do as well on YouTube.
0:03:35 It’s worse for us because we’re not particularly ugly, but we’re not particularly good-looking.
0:03:37 Is there, like, a, eh, cute?
0:03:40 What the kids call mid.
0:03:41 Yeah.
0:03:44 All right, so he creates these in 2015.
0:03:46 Not a lot happens from there.
0:03:50 But in 2019, so four years later, he partners with this company, Popmart.
0:03:58 And Popmart was started about a decade ago because this guy, Wang Ning, had this insight, which is he thought that this kidult trend.
0:04:00 We talked about this before because you’re into Legos.
0:04:06 So he’s, like, this kidult trend, this, like, kids’ toys for adults is going to be a thing.
0:04:22 And so he creates this store, and the store really takes advantage of this, like, style, this business mechanic called blind boxes, which I don’t know if you’ve seen LOL dolls or mini brands where you buy the box, but you don’t know what’s inside.
0:04:24 Similar to, like, Pokemon card packs.
0:04:25 You buy the pack, you don’t know what cards are inside.
0:04:31 And so this mechanic, which I think they call, like, the gacha mechanic, creates a lot more spending, right?
0:04:37 People will keep buying because it’s a little bit like a treasure hunt, and you want to see what you can find, what you can get.
0:04:38 And this used to be a scam.
0:04:48 Like, I remember Logan Paul or Jake Paul was sponsored or did business with a company called Mystery Box, and that was, like, a rage, like, a very trendy thing for, like, three months.
0:04:49 Do you remember that?
0:04:50 Like, 10 years ago.
0:04:56 Yeah, like, these loot boxes are in games, and people know that, okay, this is kind of, it’s not a scam per se, but it’s basically manipulative, right?
0:05:05 It gets people to buy a lot more, people get addicted to this thing, and especially when you’re targeting kids, which is why Logan Paul and those guys got in trouble, was, hey, this is targeting kids.
0:05:07 The beauty of this is it’s not targeting kids.
0:05:10 So the way these blew up is through celebrities.
0:05:12 Wait, can I ask a question about the company Popmark?
0:05:19 So he had a, Popmark, he had just a, it was a toy company for a long time, or what was the origin?
0:05:27 So the story is, 2010, he opens up a small designer store in Beijing, and he’s trying to build it off this adult collectibles brand.
0:05:28 He starts selling blind boxes.
0:05:30 This, Labubu is not in play at this point.
0:05:32 There’s other blind boxes that he’s trying to sell.
0:05:43 And in 10 years, they grow from one store to, you know, 300-plus stores, 2,000 vending machines where you could just, like, it’s just, you know, you just buy one of these boxes right out of a machine.
0:05:45 It ends up going public in 2020.
0:05:47 Stock doubles on the first day.
0:05:53 The stock has grown in the last year from a $7 billion company to now a $44 billion company.
0:05:54 $44 billion.
0:05:55 You know what I mean?
0:05:57 That’s what Elon bought X for.
0:05:59 That’s so insane.
0:06:06 So before it became, when it was just a $4 or $7, I think you said, $1 billion company, they just sold, like, dolls that people liked.
0:06:11 And so, which, a $7 billion toy company is, that’s already a mega success.
0:06:12 So they sold other people’s stuff.
0:06:13 That was over four years.
0:06:17 But yeah, yeah, they’re selling collectibles of different brands, different IP.
0:06:19 And this is one of the IP that they have.
0:06:25 And this doll alone, like, these Lububus did, like, $700 million last year.
0:06:31 So they’re, like, now, like, almost, it’s getting close to about half of the revenue of the company overall because the trend has exploded.
0:06:33 And then they connect with this artist.
0:06:35 And so that brings us to where we are now.
0:06:36 Yeah.
0:06:38 So the question is, how did this explode?
0:06:43 Where does a – the thing that fascinated me is, like, where does a trend like this even come from?
0:06:44 How does this happen?
0:06:48 Because it’s totally irrational, right?
0:06:49 Like, why this doll?
0:06:49 Why not another doll?
0:06:50 Is it the teeth?
0:06:51 Is it the outfit?
0:06:53 Is it what – what is it behind it?
0:06:58 So there’s some, I guess, learnings to have from this about, like, the psychology of a winning product.
0:07:00 So I just want to tell you a little story about how this happens.
0:07:00 All right.
0:07:01 So check this out.
0:07:04 Exhibit A, 2023.
0:07:06 Okay.
0:07:13 So this is a photo that you clearly can tell it’s just Rihanna, like, getting coffee or leaving a hotel.
0:07:14 She’s going to an airport.
0:07:14 Yeah.
0:07:17 And she just looks like she’s – it’s not sponsored.
0:07:18 She’s just being a lady.
0:07:23 And she has one of the toy bebops or boo-boos or whatever they’re called hanging off of her book bag.
0:07:25 Book bag?
0:07:27 Is that what it is?
0:07:27 It’s a purse.
0:07:28 It’s a Louis Vuitton purse.
0:07:28 Okay.
0:07:31 It looks like a – I’m looking from far away.
0:07:31 It looks like a book bag.
0:07:32 Okay.
0:07:33 So she’s spotted with it.
0:07:34 Hmm.
0:07:34 Interesting.
0:07:38 At the same time, another trend is happening in Thailand.
0:07:45 In Thailand, people are starting to see these le-boo-boos, for whatever reason, as possible good luck charms.
0:07:46 And in Thailand, people are quite religious.
0:07:51 And they started to view these as like almost like a spiritual – like a little guardian that they could have with them.
0:07:53 And so that rumor starts to spread.
0:07:58 And then what happens is – do you know the band Blackpink?
0:07:59 Have you ever heard of this band?
0:08:00 No.
0:08:01 It’s like a Korean pop band.
0:08:04 It’s like one of the most popular pop bands in the world.
0:08:07 So it’s a girl band, like Spice Girls.
0:08:07 Oh, I know it.
0:08:08 Yeah.
0:08:09 I like those guys.
0:08:10 I see their music videos.
0:08:11 They’re very eye-catching.
0:08:11 Yeah.
0:08:12 I know what you’re talking about.
0:08:14 Well, it’s just like – it’s a sensation.
0:08:19 You’ll go on YouTube and you’re like, what is this thing with a billion views on YouTube?
0:08:21 It’s sort of like the sensation of – like the BTS thing.
0:08:24 Yeah, exactly.
0:08:24 Okay.
0:08:27 So this is right here.
0:08:30 This is – now we’re talking about Blackpink.
0:08:34 So Lisa from Blackpink goes to Thailand to visit her friend.
0:08:37 Her friend says, hey, what do you want to do today?
0:08:39 They decide, let’s go shopping.
0:08:41 She thinks, okay, we’re going to go shopping.
0:08:42 Clothes, bags, what are we going to go buy?
0:08:45 But no, she wants to go to Popmart.
0:08:48 And she says, I don’t know what Popmart is, but they go to a Popmart store.
0:08:52 At the Popmart store, the friend really wants a LeBubu.
0:08:56 And Lisa says, honestly, not into it.
0:08:57 I don’t get it.
0:08:58 Don’t care about it, blah, blah, blah.
0:09:02 But the friend gets super disappointed because they’re all sold out.
0:09:05 And the lady at the store is like, listen, it’s impossible.
0:09:06 You’re not going to get one.
0:09:11 And that little mimetic monster inside Lisa starts to roar, the one in her stomach.
0:09:12 And she’s like, you know what?
0:09:14 If I can’t have it, I must have it.
0:09:18 And she decides, actually, I think I do like LeBubu’s.
0:09:19 And I think I do want to go get LeBubu’s.
0:09:21 And she starts to collect these.
0:09:23 Now, she starts getting obsessed with Popmart.
0:09:26 She goes, she buys my boxes, and she starts collecting these.
0:09:32 This becomes her de-stress type of thing she does from the stressful life of being a world
0:09:33 famous pop star.
0:09:33 Yeah.
0:09:37 Now, she gets caught having a LeBubu.
0:09:37 Why?
0:09:39 Because she posts it on her Instagram.
0:09:41 So now we’re fast forward to 2024.
0:09:44 This is the photo that created the craze.
0:09:48 It went from just like, you know, how a hurricane starts.
0:09:53 And there’s like some sweeping winds, maybe a casual storm, a casual rainstorm.
0:09:55 And then comes the hurricane.
0:09:58 And this Instagram story started the hurricane.
0:10:00 And it’s her hugging her LeBubu.
0:10:01 Can I say something?
0:10:03 I kind of get it.
0:10:04 That looks pretty cool.
0:10:06 It looks pretty cool.
0:10:07 This one did it for you, too, this photo?
0:10:08 Yeah.
0:10:11 It’s like an old white guy in overalls.
0:10:11 It’s kind of what it looks like.
0:10:12 It looks like a farmer.
0:10:12 Yeah.
0:10:15 This does look like a Midwest farmer, actually.
0:10:16 This guy kind of like.
0:10:18 And it’s big.
0:10:20 It’s about two feet tall.
0:10:21 I kind of think that’s neat.
0:10:22 I understand that.
0:10:22 This is a big one, yeah.
0:10:24 So they come in different sizes.
0:10:27 The one that sold for over $100,000, that was like a human-sized one.
0:10:27 Okay.
0:10:28 Okay.
0:10:31 So this is the stock since that photo was taken.
0:10:35 And you can see the stock is up 7x since then as it’s just been crushing.
0:10:37 And so the LeBubu craze starts.
0:10:41 And what’s interesting about this is why.
0:10:41 Okay.
0:10:43 So celebrities started posting about it.
0:10:44 That’s it.
0:10:44 Okay.
0:10:45 I get that.
0:10:45 But what else?
0:10:50 So here’s some of the other things that I found kind of interesting from a, I don’t know,
0:10:51 behavioral psychology point of view.
0:10:55 The first is the lipstick effect.
0:10:56 Have you ever heard of the lipstick effect?
0:10:57 I don’t think so.
0:11:02 So there’s an economic theory that basically says that whenever people are under financial
0:11:09 pressure, so maybe the economy is a little bit choppy, maybe there’s inflation, there’s
0:11:14 wage pressure, whatever it is, people think that you’ll stop spending.
0:11:16 But what actually happens is you shift the spending.
0:11:19 And so instead of buying a new bag, you’ll just buy some lipstick.
0:11:20 They’ll buy a new lipstick.
0:11:26 And so lipstick sales will explode at a time during economic pressure because you take away
0:11:29 from bigger luxury purchases and they go into smaller luxury purchases.
0:11:35 So instead of a $200 outfit or a bag, you’re going to buy a $20 item instead.
0:11:41 And so people think that this is part of what’s behind LeBubu, which is that this thing, you
0:11:45 know, initially started where these are like, you know, a $20, $25 box that you buy and you
0:11:46 get a LeBubu.
0:11:51 But the thing with these, the smart thing of these is I showed you the doll.
0:11:57 And this is the most important part, this little ring, because most stuffed animals, you just
0:11:58 keep them at home.
0:12:00 So there’s no virality to it, right?
0:12:01 You just have it at the comfort of your own home.
0:12:02 Nobody sees it.
0:12:04 You don’t get to show it off.
0:12:05 It’s not a status symbol.
0:12:11 By just having the bag clip attached to these things, they suddenly became like luxury accessories.
0:12:14 And so that’s why Rihanna had it attached to her bag.
0:12:15 And this Blackpink lady had hers.
0:12:17 And then David Beckham is posting that.
0:12:19 And Kim Kardashian posts that she has 10 of them.
0:12:21 And she starts clipping them to her bags.
0:12:26 And it becomes this add-on to your luxury bag, this cute little add-on that you could put
0:12:26 on your bag.
0:12:29 And then each one of these has an outfit.
0:12:34 So I can take this off and I can buy new clothes for this and I can upgrade my LeBubu.
0:12:36 So now you have all…
0:12:37 Can you spell LeBubu?
0:12:39 L-A-B-U-B-U.
0:12:40 Oh, okay.
0:12:40 I see.
0:12:44 By the way, LeBubu is actually only one of the characters, but that’s just what it became
0:12:44 called.
0:12:48 The character structure is called The Monsters, but nobody…
0:12:48 That didn’t stick.
0:12:50 Oh, my gosh.
0:12:51 I’m on their website.
0:12:53 I think it’s kind of cool.
0:12:54 Yeah, exactly.
0:12:55 I’m in.
0:13:00 And so what I think is interesting here is that you have this kind of what Charlie Munger
0:13:02 calls the Lollapalooza effect.
0:13:06 So maybe you have the lipstick effect causing people to look for little luxuries.
0:13:13 Then you have the kidult effect where you have adults looking for maybe comfort and pleasure
0:13:19 because that’s another economic theory here, which is that when adults face stress from
0:13:25 work and global events like wars and whatnot, they find emotional relief in collecting toys
0:13:26 and things that connect with their childhood.
0:13:28 So you have that effect kicking in.
0:13:29 You have the lipstick effect kicking in.
0:13:33 You have the status symbol effect of this where you can attach this to your bag.
0:13:38 You have the ugly cute effect, which we are just crushing with right now.
0:13:41 And so all these come together to create the phenomenon that is LaBooBoo.
0:13:43 Great, great, great job.
0:13:45 Good find.
0:13:48 I’ve been hearing about this, but I didn’t exactly dive deep.
0:13:49 So that’s cool that you did this.
0:13:52 This is not sustainable.
0:13:55 And this is definitely going to go away in the next five years.
0:13:57 But let’s get it while the getting’s good.
0:13:59 All right.
0:14:03 So I’ve built a few companies that have made a few million dollars a year.
0:14:07 And I’ve built two companies that have made tens of millions of dollars a year.
0:14:11 And so I have a little bit of experience launching, building, creating new things.
0:14:16 And I actually don’t come up with a lot of original ideas.
0:14:21 Instead, what I’m really, really good at, what my skill set is, is researching different ideas,
0:14:25 different gaps in the market in reverse engineering companies.
0:14:26 And I didn’t invent this, by the way.
0:14:27 We had this guy, Brad Jacobs.
0:14:28 We talked about him on the podcast.
0:14:32 He started like four or five different publicly traded companies worth tens of billions of dollars each.
0:14:35 He actually is the one who I learned how to do this from.
0:14:43 And so with the team at HubSpot, we put together all of my research tactics, frameworks, techniques on spotting different opportunities in the market,
0:14:52 reverse engineering companies, and figuring out exactly where opportunities are versus just coming up with a random silly idea and throwing it against the wall and hoping that it sticks.
0:14:55 And so if you want to see my framework, you can check it out.
0:14:57 The link is below in the YouTube description.
0:15:01 So I started thinking, how do I make money on this?
0:15:01 All right.
0:15:07 So the first way I should have made money on this was when my wife started telling me about this, which was, I don’t know, six to eight months ago.
0:15:09 I should have either brought the stock.
0:15:09 I should have looked.
0:15:11 I didn’t even think it was going to be a stock.
0:15:12 I just thought it was like a stuffed animal.
0:15:13 I didn’t think it was a public company.
0:15:17 Should have bought the stock or, you know, you could have tried to collect and flip.
0:15:17 Okay.
0:15:18 That’s too much effort.
0:15:19 So what’s the play here?
0:15:20 So I went and looked up.
0:15:21 I asked AI.
0:15:29 I said, tell me the last five toy crazes as crazy as La Boo Boo over the last 50 years and compare them.
0:15:31 What were some of the other ones?
0:15:34 So it would have been Cabbage Patch was the first one that it came up with.
0:15:35 Beanie Babies.
0:15:37 Beanie Babies was the second.
0:15:40 I think Trolls were popular for a minute, but I don’t know if they were a craze.
0:15:44 Then it gave me Pokemon, Pokemon cards, which had two bumps.
0:15:51 There was the one when we were kids where buying and collecting packs reached about the same revenue, about $2 billion a year.
0:15:54 And then it died down for about 20 years.
0:15:57 And then recently with like kind of Logan Paul started collecting them again.
0:15:58 Yeah, the video game.
0:16:03 Another peak and it had $1.6 billion in its sales on the cards recently.
0:16:05 So Pokemon.
0:16:10 And then the last one it gave me, which was I thought kind of interesting as AI, but actually is a good point.
0:16:12 Because I was thinking maybe Furbies or Tamagotchis.
0:16:14 I didn’t know what it was going to give me.
0:16:15 Those were smaller.
0:16:21 It gave me Stanley Cups, which actually makes total sense because it’s the same thing.
0:16:23 It’s the exact same thing.
0:16:24 And so it gave me those.
0:16:29 And the funny thing about these is on the scale, Labubu is actually still small.
0:16:32 So this dollar did about $700 million.
0:16:37 Those all at their peak were kind of like $1.6 to $2 billion in sales.
0:16:43 So I actually expect that over the next year, this thing goes even, the star kind of goes viral.
0:16:47 It burns out and it hits a $2 billion or $3 billion in revenue.
0:16:50 And then it’s going to crash.
0:16:54 Because the funny thing with all of these is they all had about a two to three year peak tops.
0:17:06 And so I think the actual play, if you want to make money on this thing, is to short PopMart stock starting around end of 2026 and maybe through 2027.
0:17:12 Now, shorting is dangerous because you can lose your shirt because shorting has sort of asymmetric downside.
0:17:20 But if you, I think if you were a betting man, the odds are that, you know, by 2027, this thing is not a $44 billion company anymore.
0:17:22 What was the name?
0:17:25 Okay, so you had a friend, Michael, Michael Smith, Michael Acton Smith.
0:17:39 He had a, the guy who created Calm.com, before he created Calm.com, the meditation app, he actually had a toy, a stuffed animal toy company called like Minnow Monsters or something like that.
0:17:39 Yeah, that’s right.
0:17:41 What was the name of this?
0:17:44 And so his company was called Mind Candy and it was Moshi Monsters.
0:17:45 Moshi Monsters.
0:17:46 Minnow Monsters was a mobile game.
0:17:48 Moshi Monsters was his.
0:17:52 If I remember correctly, this is all 15 years ago, so it’s hard to remember everything.
0:17:57 But he raised lots of money as a technology company almost, or at least from tech VCs.
0:18:00 And he was like, I’m going to build a massive toy business.
0:18:03 And I remember reading at the time, this is insane.
0:18:04 You’re stupid.
0:18:08 But now that I think about it, there’s been many examples of where that is not stupid.
0:18:12 And this is yet another one of them, where you could actually build a really cool IP toy company.
0:18:15 And he was, sounds like he was on the right track.
0:18:16 It didn’t work out.
0:18:16 He was, dude.
0:18:17 It was big in the UK.
0:18:23 So in the UK, it was like, I don’t know, one out of every three kids is playing Moshi Monsters.
0:18:24 It was like insane.
0:18:26 It was like 90 million users globally.
0:18:34 And I remember meeting him, I think it was still during the kind of like, it was kind of like the tail end of the peak.
0:18:38 So it was big, but it was, it had stopped exploding.
0:18:40 And he was like, that’s okay.
0:18:42 We’re going to like try to turn this into a thing.
0:18:46 And he was telling me they’re making Moshi shampoo and body wash.
0:18:49 And, you know, it’s going into every category.
0:18:50 But unfortunately, that one didn’t work out.
0:18:52 We have to get Michael on, by the way.
0:18:52 I was going to say that.
0:18:54 We have to get Michael in the pod.
0:18:55 Have you met him?
0:18:57 He is one of the coolest guys I’ve met.
0:18:59 He’s such a nice guy, first of all.
0:19:02 Like total, genuine, good dude.
0:19:04 Super creative.
0:19:05 Really creative genius.
0:19:09 And then also like a rock star, kind of.
0:19:13 Like when you meet him, you’re like, oh, I’m talking to Russell Brands, like, you know, cooler brother.
0:19:15 You should, everyone should Google him.
0:19:16 His name is Michael Acton Smith.
0:19:22 And I remember back in 14 or 13 or 12 where, I mean, I’m still interested in this.
0:19:26 But I was like, I want to be like, I was like looking for a person I wanted to be like.
0:19:27 And it was like him.
0:19:27 He would be.
0:19:32 Because there was like photos of him, like holding hands with like Paris Hilton.
0:19:36 Or like, he was like, if you Google like Michael Acton Smith, like he was.
0:19:37 But they’re not even dating.
0:19:38 That’s the best part.
0:19:39 Just hold their hands.
0:19:42 He was like, he had like paparazzi photos of him.
0:19:45 Because he would have this like tech angle, even though he wasn’t exactly in tech.
0:19:47 But if you guys Google him and see what he looks like, you’ll understand.
0:19:52 The Daily Telegraph described him as a rock star version of Willy Wonka.
0:19:53 That’s his Wikipedia page.
0:19:55 It’s great.
0:19:56 This guy was so cool.
0:19:59 And now he has since started Calm, which I have no idea how big it is.
0:20:02 But it’s hundreds or hundreds of millions or billions.
0:20:03 A multi-billion dollar company.
0:20:04 He’s the man.
0:20:06 This guy’s absolutely the man.
0:20:07 And he’s been the man for 20 years.
0:20:08 He has.
0:20:09 He has.
0:20:10 He’s amazing.
0:20:13 Okay, I’m going to call him after this and be like, I will fly to you.
0:20:13 Let’s do it.
0:20:15 Where does he even live now?
0:20:17 I think he was in the UK.
0:20:20 He was kind of back and forth between like, you know, US and UK.
0:20:21 I think he’s in the UK now.
0:20:22 He’s just like a rich guy now?
0:20:23 He just like does what he wants?
0:20:25 Well, I don’t know.
0:20:26 I think he always did what he wants.
0:20:28 That’s why he was our hero.
0:20:30 That’s the difference between…
0:20:31 I don’t think I had anything to do with being rich.
0:20:34 That’s the difference between guys like me and guys like him, I guess.
0:20:35 Yeah, exactly.
0:20:39 We chased money and money chased him.
0:20:40 Yeah.
0:20:43 He didn’t run very fast.
0:20:45 This guy’s the man.
0:20:51 Cutting your sales cycle in half sounds pretty impossible, but that’s exactly what Sandler
0:20:52 training did with HubSpot.
0:20:59 They used Breeze, HubSpot’s AI tools to tailor every customer interaction without losing their
0:21:00 personal touch.
0:21:02 And the results were incredible.
0:21:05 Click-through rates jumped 25%.
0:21:07 Qualified leads quadrupled.
0:21:10 And people spent three times longer on their landing pages.
0:21:14 Go to HubSpot.com to see how Breeze can help your business grow.
0:21:17 Okay, I have another one for you.
0:21:18 Can I give you another one?
0:21:19 So we did kids toys.
0:21:20 I have another one.
0:21:21 You might know the story of this one.
0:21:23 Have you ever had one of these before?
0:21:23 Okay, what’s this?
0:21:26 Oh.
0:21:28 I’m holding up…
0:21:29 No, it looks like…
0:21:29 What is that bubblegum?
0:21:31 A box of Tony’s Chocoloni.
0:21:33 Hell yeah, brother.
0:21:35 I love Tony’s Chocoloni.
0:21:37 Do they have some that have pop rocks in them?
0:21:39 By the way, I’ve been saying it wrong for a long time.
0:21:41 It’s not Tony’s Chocoloni.
0:21:42 It’s Tony’s Chocolonely.
0:21:43 Do you know that?
0:21:44 I just call it Tony’s.
0:21:45 I love Tony’s.
0:21:46 I learned…
0:21:47 I have always bought them.
0:21:51 And then when we hung out with Mr. Beast, I kind of…
0:21:52 He told us the backstory.
0:21:54 I didn’t realize how amazing they were.
0:21:55 I love Tony’s.
0:21:56 Yeah, yeah.
0:21:59 And their backstory is even better than I thought.
0:22:01 Because when we were hanging out with Jimmy, he was like, oh yeah, I…
0:22:07 You know, he, for Feastables, really wanted to get Feastables to have a supply chain that
0:22:08 had no child labor.
0:22:11 He’s like, you know, most of the cocoa farms in Africa have child labor.
0:22:15 All the big chocolate brands, you know, Hershey’s, et cetera, they all buy from them.
0:22:18 When I learned that, that was effed up.
0:22:20 I went over there and we try…
0:22:24 And we’ve basically been spending, you know, a couple of years now trying to fix the supply
0:22:26 chain so that that doesn’t have to be the case.
0:22:30 He was like, every company, I don’t like this or that thing about them.
0:22:33 But there’s one company that I really admire that seems to be doing something well.
0:22:34 And I think that’s how he phrased it.
0:22:35 And he said, Tony’s is the one.
0:22:37 They do things right, is basically what he said.
0:22:41 And he actually called the founders of this and learned from them of like, okay, what do
0:22:41 I need to do?
0:22:46 Which is cool because they were the ones who initially made the push.
0:22:48 But do you know the backstory of why they made the push into doing this?
0:22:53 Wasn’t it started by an actor or a famous person in Holland or something like that?
0:22:53 A journalist.
0:22:54 A journalist.
0:22:55 Okay.
0:22:57 It was like a non-business person who started it.
0:22:58 And they started it with…
0:23:01 It’s one of these cool stories where they didn’t so much care about chocolate.
0:23:04 They cared about like helping the earth or human rights or something.
0:23:06 And we’re just so happy to be doing it via chocolate.
0:23:08 Like it was something like a story like that, wasn’t it?
0:23:15 So the story is these, I think there was two Dutch journalists, but these two Dutch journalists,
0:23:18 they’re covering the chocolate industry on their TV show.
0:23:25 And they hear about, you know, that the chocolate companies are all the chocolate, all the cocoa
0:23:30 comes from West Africa and that there’s a lot of child slavery and child labor.
0:23:31 So two separate things, right?
0:23:46 And they put, you know, they put out a story to try to help.
0:23:53 And I think the exact story is that at one point, all the big chocolate companies signed like a treaty.
0:23:56 They signed like a pact to say, we’re going to stop this.
0:24:01 And I guess like years later, they had gone back and they had gone to investigate.
0:24:03 And it was like the exact same situation.
0:24:05 They saw that it kind of nothing had really changed.
0:24:07 And so these guys were pretty disheartened by it.
0:24:12 So they decide like, this is where the story gets crazy because a normal person, even a normal,
0:24:20 a great journalist would just report the story, maybe use some choice language when they talk about it.
0:24:23 And then they would shake their finger at them and move on.
0:24:29 But these journalists went and did like, you know, took the exit off of high agency Avenue.
0:24:30 And we’re like, no, no, no, watch this.
0:24:35 And so the guys, they come back and they do, they decide to do a publicity stunt.
0:24:41 So he eats the chocolate and he calls the police and the police come and they’re like, what are you doing?
0:24:46 And he goes, I’m eating chocolate that was made with slave labor and child labor.
0:24:48 And they’re like, that’s what?
0:24:50 That’s not a, you’re eating chocolate.
0:24:50 That’s not a crime.
0:24:55 He goes, no, no, no, actually, according to statute, blah, blah, blah, knowingly consuming
0:25:00 this product, knowing what I know that this is the product of child labor and slave labor,
0:25:01 that’s actually illegal.
0:25:02 Arrest me, boys.
0:25:03 And so they lock them up.
0:25:04 They take them to jail.
0:25:09 And that becomes this viral sort of news stunt that brings even more attention to this.
0:25:13 Now, prosecutors end up dismissing the case because they’re like, we’re not going to prosecute
0:25:17 this, but they decide to go in and create their own ethically made chocolate brand.
0:25:23 And they decide to call it Tony’s Chocolate Lonely because they’re like, the guy’s name is Toon.
0:25:26 But that’s his Dutch name.
0:25:31 But the like Americanized, westernized version of Tone, I guess is his name, would be Tony.
0:25:33 So they go, Tony’s.
0:25:39 And instead of, and he said, it’s going to be very lonely to build a chocolate company that’s actually trying to be like ethically sourced.
0:25:41 So he called it Tony’s Chocolate Lonely.
0:25:41 Okay, great.
0:25:45 And that’s how they felt in their fight against the cocoa industry.
0:25:50 And it becomes a hit pretty much right away.
0:25:54 They sell 20,000 bars in two days because of the public like resonance with their story.
0:25:59 And it becomes the best-selling chocolate brand in their market, which is the Netherlands.
0:26:01 They get like 20% share in the Netherlands.
0:26:06 It passes up Mars and Nestle and other competitors there.
0:26:08 And then they start expanding and they keep expanding.
0:26:10 And then they start finding like-minded brands.
0:26:17 So they’re, you know, I don’t know if you know about Ben & Jerry’s, but Ben & Jerry’s is also one of these like very sort of like strong, ethical, moral.
0:26:18 Yeah, opinion-driven.
0:26:20 They stick to what they want to do.
0:26:21 Good people corporations.
0:26:27 I actually saw Ben or Jerry, I forgot which one, talk at an event I was at like 15 years ago.
0:26:33 And I remember being pretty blown away by the like, how genuine it was for them and how the extent that they had gone, right?
0:26:38 So for example, I don’t know if you know, it’s like, they have this one flavor that’s like their brownie flavor.
0:26:41 I forgot, like, you know, I’m so fucking fit now.
0:26:42 I can’t even remember the name, dude.
0:26:43 It’s insane.
0:26:45 It’s chocolate fudge brownie.
0:26:46 It’s not something fat people eat.
0:26:52 So, that’s so my past.
0:26:53 I just can’t even remember.
0:26:56 You’re like, I barely remember how that felt last week.
0:26:59 By the way, meanwhile, I’m holding up this Tony Sacco Lonely.
0:27:00 Three bars are missing from this pack.
0:27:02 Blame it on the kids.
0:27:08 My wife gets pissed off at me because whenever we bring like a treat to like a friend’s house, we bring dessert.
0:27:11 They cook dinner and like, it’s like already open.
0:27:11 A mouse.
0:27:13 She’s like, what the hell?
0:27:16 You can’t like give like a pack of ice cream when there’s like one.
0:27:17 I’m like, why not?
0:27:19 We’re going to open it anyway, like half an hour.
0:27:20 Why can’t I open it now?
0:27:23 That’s sort of what, that’s sort of what happened.
0:27:34 She’s like, she’s like, she always compares me to like a bear looking in the cabinets for honey.
0:27:35 And I get my fingers stuck in the jar.
0:27:36 Dude, my brother-in-law is like this.
0:27:41 My brother-in-law, Aaron, he’s one of these people that like, you know, doesn’t, you know, doesn’t eat a ton in general.
0:27:43 Like food’s not a big, he’s not a big foodie.
0:27:43 Yeah.
0:27:45 But if you leave like a snack, he’s like a bear.
0:27:49 Like if you leave a treat in their house, it’s gone by the morning.
0:27:50 And you’re like, did you wake up?
0:27:53 And so like, he’ll eat the whole bag, right?
0:27:53 Of anything.
0:27:59 And so my sister calls it like with Oreos, like, like we got a pack of Oreos, right?
0:28:02 And she’s like, oh my God, Aaron’s doing a line right now.
0:28:07 And doing a line to her meant you eat the entire row of Oreos.
0:28:08 Like he did a whole line.
0:28:10 And I just thought that was so funny.
0:28:11 Aaron likes to party.
0:28:13 Exactly.
0:28:15 We got to have him back on.
0:28:17 Brother Aaron, the OGs, the real OGs now.
0:28:21 He had two guest cameo experiences like way back in the first 30 episodes.
0:28:22 It’s hilarious.
0:28:24 Anyways, Chocolate Company.
0:28:25 So Tony’s Chocolate Lonely, what did they do?
0:28:28 Or Ben and Jerry’s, to finish the Ben and Jerry’s thing.
0:28:32 They opened up a factory, I think somewhere like in upstate New York or something like this.
0:28:41 And they, it was after they met, what’s it called when you get out of jail and like you’re in a program, but you like don’t want to go, recidivism.
0:28:43 Like they wanted to reduce recidivism.
0:28:45 Like people go back, end up back in jail.
0:28:47 Which is traditionally incredibly high.
0:28:48 It’s really high.
0:28:56 And one of the big drivers of why do people who after a long sentence get out and go back, it’s not because they’re like kind of morally corrupt at their core.
0:29:00 It’s like they couldn’t get a job and then they didn’t have any money and they didn’t have a social life.
0:29:04 Previous friends were losers or they left prison without knowing anyone but only had $50.
0:29:05 Exactly.
0:29:10 And so a big, one way to decrease recidivism is if people can get a job, but nobody wants to give them a job.
0:29:12 So they created a whole factory.
0:29:15 Their brownie factory is all brownies made by ex-cons basically.
0:29:17 The Ben and Jerry’s flavor.
0:29:22 They like wanted to, they met some guys who had a good recipe and they like built a factory around them essentially.
0:29:24 So they’re do-gooders.
0:29:29 So Tony’s Chocolate Lonely to break into the U.S. starts partnering with Ben and Jerry’s.
0:29:32 And the revenue has just grown and grown and grown.
0:29:35 And so like last year, I think they did $200 million in revenue.
0:29:43 And they made this like a legit chocolate company that started with two journalists just basically trying to make a stand against the man.
0:29:43 How cool is that?
0:29:45 This is awesome.
0:29:46 This is so cool.
0:29:48 Do they run the company now?
0:29:50 No.
0:29:51 So they’re out now.
0:29:52 There’s like a CEO.
0:29:57 It’s just kind of run by like, you know, normal suits basically at this point.
0:30:02 And they get some flack because like their supply chain is still not perfect.
0:30:05 And, but they’re very transparent about it.
0:30:12 So the crazy thing is like they’ll report that they had like, you know, 11 issues this year of like child labor discovered in their supply chain.
0:30:15 And people are like, see, you’re not totally free.
0:30:16 And they’re like, what?
0:30:21 We’re trying to like, we’re trying to be transparent and say, you know, we’re way less than anybody else.
0:30:24 And we’re also honest about this and we’re reporting it so that we can keep improving this.
0:30:31 But they get some flack as like, you know, I guess like skeptics say that maybe they’re just greenwashing at this point since the founders left.
0:30:36 And even I think the founder has sort of alluded to like, it’s not the same since we left.
0:30:37 I don’t know the exact story.
0:30:42 It’s like, I’m trying to read these like Dutch translations of articles and decided that like I’d rather just eat the chocolate and chill.
0:30:46 So I’m not sure the exact story, but I think there’s maybe a little controversy around that.
0:30:57 Yeah, I’ve known about this brand for a while and I didn’t know the, I only knew what Jimmy had said, which wasn’t in this depth, but that makes me like them way more.
0:30:59 The product’s awesome.
0:30:59 I mean, I love the brand.
0:31:02 They also, and I eat the shit out of them.
0:31:05 I mean, it messes me up, but that’s cool.
0:31:08 Maybe you could be the influencer that blows them up even more.
0:31:11 Sam Parr, I eat the shit out of them.
0:31:22 It’s just like most of my like guilty evenings start with a bar of Tony’s and the problem with that jar of honey.
0:31:23 Let’s not even know how much time we got.
0:31:27 The issue is they would sell their candy.
0:31:30 Like it used to come in like the extra huge size.
0:31:31 It was a huge bar.
0:31:32 They only sell in bulk.
0:31:36 By the way, did I ever tell you about the time we were talking about recidivism?
0:31:39 This is not entirely related to business, but I think you’ll get a kick out of this.
0:31:40 Did I tell you about the time?
0:31:43 Do you know that I’ve been to like, I think we’ve talked about this.
0:31:45 I’ve been to San Quentin a few times in Indiana State Prison.
0:31:48 You’ve mentioned that you did, but I don’t know the exact story.
0:31:49 What’s the story?
0:31:50 I have to tell you the background of this.
0:31:53 So I’ve gone to, I have a friend who I’m going to, this is the story.
0:31:54 It’s going to be about him.
0:31:57 But I’ve been to Indiana State Prison a couple of times or once.
0:31:59 I went to San Quentin a few times.
0:32:01 One time I went to Indiana State Prison.
0:32:05 So we go because my friend has this charity called The Last Mile.
0:32:10 And the idea is like, when you commit a crime, particularly murder, you’re not always sentenced
0:32:11 to life.
0:32:12 You’re inevitably going to get out.
0:32:17 And it’s better for that person if they get out and have a job.
0:32:18 It’s better for society if they get out and get a job.
0:32:20 And it’s better for the taxpayer if they get out and get a job.
0:32:24 Because you don’t want them to go back to prison because that’s bad for everyone.
0:32:29 And so we are all incentivized, it’s totally bipartisan, to get this person to be trained
0:32:30 and to get a job.
0:32:35 And so this company, The Last Mile, started by my friend Chris, they help you learn.
0:32:37 I think when I went, I think they were learning WordPress.
0:32:40 I don’t know what they learn now, but this was a while ago.
0:32:44 They were learning WordPress or they were learning some front-end development so you can get a
0:32:46 job at an eBay or a huge company.
0:32:46 They’re just vibe coding now?
0:32:48 Yeah, I don’t know what they do now.
0:32:49 Yeah.
0:32:53 They have some weird hot or not app.
0:32:55 They’re just minting NFTs.
0:32:55 Yeah.
0:32:58 I don’t know what these guys are doing.
0:33:03 But my friend Chris started it and he was a prominent venture capitalist.
0:33:06 He was the first investor in Wish.
0:33:07 He was an early investor in Snap.
0:33:09 He did Boom.
0:33:10 He did all these other cool startups.
0:33:15 And for some reason, one day he went and volunteered at San Quentin at a prison.
0:33:20 And he was like, I think this is my life’s mission to help reduce recidivism.
0:33:24 Meaning when you get out of prison and you don’t go back.
0:33:26 And so he created this thing called The Last Mile.
0:33:28 They now have hundreds of employees.
0:33:31 They’ve had thousands of people who have gone through their program.
0:33:36 And up until recently, he told me this stat a couple years ago.
0:33:37 So I don’t want to jinx someone.
0:33:38 I don’t know the update.
0:33:44 But of the 1,000 or 2,000 people who graduated, not one had ever been back to prison.
0:33:46 And that’s like a huge thing.
0:33:51 And so it’s really interesting that this tech person has, like he quit.
0:33:52 So he doesn’t invest anymore.
0:33:53 This is all he does.
0:33:56 And I talked to another guy, Mike Novogratz.
0:33:58 He was on the pod two weeks ago.
0:34:02 And that’s his thing now, too, is reducing recidivism.
0:34:04 So reducing the rate that you go back to prison.
0:34:08 But I know a bunch of people who have given up their careers to go pursue this.
0:34:10 I’m on their website right now.
0:34:11 Pretty crazy stats.
0:34:19 So it says, since the 70s, the prison population in the U.S. has increased by 700%, which is not what you would expect.
0:34:22 That’s not just like, oh, that makes sense.
0:34:23 It should grow every year.
0:34:24 It’s like, no, no, no.
0:34:26 The prison population should not necessarily grow at that rate.
0:34:39 It says that every person in prison has an annual cost to the American taxpayer of $70,000, which means we pay about $50 billion a year is spent on state and federal prisons.
0:34:41 Isn’t that crazy?
0:34:43 It’s amazing, right?
0:34:51 The last miles, participants in the last mile who go through their, I guess it’s like an education program as they get out, have a 75% employment rate when they come out.
0:34:52 Which is great.
0:34:55 I wonder what the baseline is.
0:34:57 It’s got to be half that or less.
0:35:00 Well, so basically what happens, and I talked to some of these guys when they were in there.
0:35:04 They were like, look, when I got out, I had been in for 10 or 15 years.
0:35:05 I was a thug.
0:35:07 I didn’t want to associate with my old people.
0:35:09 And my family had either died or wasn’t around.
0:35:12 And they basically gave me a bus ticket and $50.
0:35:14 And I was like, sir, where do I go?
0:35:16 I’m not sure where I go to right now.
0:35:16 What do I do?
0:35:20 And so they’re like, that’s why I came back here is I just started going back to how I used to behave.
0:35:26 By the way, why does he have a, this guy Chris looks awesome, Chris Redlitz.
0:35:28 Why does he have a serious radio show?
0:35:31 Does that get broadcasted in the prisons in some way?
0:35:32 Or like, is that just an external thing?
0:35:33 Both.
0:35:35 So he had, so Chris is interesting.
0:35:37 So we had Michael Harris on the pod.
0:35:39 Michael, Harry O is his nickname.
0:35:41 Harry O is the founder of Death Row Records.
0:35:45 Chris is kind of, I joke, he’s an OG.
0:35:46 He’s an original gangster.
0:35:48 So he knows all of these guys.
0:35:54 So he’s friends with Dr. Dre, Snoop, the founders of Death Row, all these cool guys.
0:36:00 And they all have this like blend of like hip hop, but also like crime, like interests.
0:36:06 And so he decided to have a show with Sirius where he would get some of these cool guys on the radio show.
0:36:09 And they would talk about what his issue is.
0:36:14 But also it was like wrapped up in like kind of cool stories because it’s kind of like hip hop and like celebrity.
0:36:16 And so he had a show for Sirius where he would talk about it.
0:36:17 Dude, this guy’s living the dream.
0:36:17 Got rich.
0:36:21 Decided to do good in the world.
0:36:22 Has a great podcast.
0:36:24 The Triple Threat.
0:36:24 I love it.
0:36:25 He’s cool.
0:36:28 And so he actually, so I became really close with him.
0:36:32 He invested in my company when I was a 25-year-old or 26-year-old in San Francisco.
0:36:38 Very coincidentally, we both moved to this small town in Westport, Connecticut together.
0:36:39 And we hang out all the time.
0:36:41 And his wife, her name is Beverly.
0:36:43 She’s a 95-pound woman.
0:36:44 And I’ve been to San Quentin.
0:36:49 And we were walking on the yard with these guys doing like bench press and sit-ups and whatever.
0:36:53 And I walked with this little lady through the yard and the Red Sea parted.
0:36:55 And she just walked through it.
0:36:56 She’s like, Tyrone, how are you?
0:36:59 And she would go, Miss Bev, nice to see you.
0:37:02 It was the craziest thing that I’ve ever seen.
0:37:07 It was like, I’m telling you, she like ran this prison yard.
0:37:08 She was the only woman there.
0:37:10 And it was the craziest thing I’ve ever seen.
0:37:13 And they have a joke that says, if it glow, you may go.
0:37:17 When you walk in to San Quentin, they stamp your hand.
0:37:23 And so when you leave, you have to show them your stamp underneath a black light in order to get out.
0:37:26 And they would do jokes where she would wink at the guy when I’m walking in.
0:37:27 And he didn’t actually stamp me.
0:37:28 He just pretended.
0:37:30 And I would go to scan my hand to leave.
0:37:31 And my hand didn’t glow.
0:37:32 And they’re like, sir, you cannot leave.
0:37:33 We have to get this figured out.
0:37:35 And I was like, I’m not staying here.
0:37:40 So they would pull tricks on you when you go and see this place.
0:37:40 It was wild.
0:37:41 That’s amazing.
0:37:44 But Chris and Bev are two people.
0:37:46 When I think of how to live life, it’s them.
0:37:48 That’s the way to go.
0:37:49 That’s dope.
0:37:50 Can I tell you a related story?
0:37:54 So my buddy Trevor was writing a book.
0:37:57 And he did this great, very smart move, which I never really heard anybody else do.
0:37:58 But I thought it was a good idea.
0:38:02 He goes, hey, man, check your email.
0:38:02 I checked my email.
0:38:03 And there’s like a plane ticket.
0:38:05 And it’s a plane ticket to go see him.
0:38:09 And he’s like, I’m going to do, I want to write this book.
0:38:10 And I want it to be great.
0:38:13 And I could sit here and brainstorm this on my own.
0:38:17 But I really want to do something that I’m calling a book storm.
0:38:22 And he basically decided to fly out the five kind of smartest, most interesting people he knew
0:38:27 to hang out with him for a day and just help him flesh out and brainstorm the book together.
0:38:29 And he’s like, I will owe you one for life.
0:38:31 But I just really respect you, trust you.
0:38:33 And I really want your help with this because I’m trying to make this great.
0:38:37 I go and in the room is basically my buddy, Trevor, his brother.
0:38:43 And then there’s the head of like the women’s volleyball, the U.S.
0:38:49 women’s volleyball team, which is like way outperformed in the Olympics and won like a bunch of gold.
0:38:50 And there was one other person.
0:38:52 And then there was this guy, Larry.
0:38:55 I’m like, oh, I’m a professional brainstormer.
0:38:56 This is literally what I do.
0:38:58 I’m like just ready to rock and roll.
0:39:00 But I’m just blown away by this guy, Larry.
0:39:05 Every time this guy, Larry, opens his mouth, he says something that’s super wise, super smart, on the nose.
0:39:08 Just a few words, but he’s always on point.
0:39:13 And so after about an hour of the brainstorming around the book, I was like, dude, I got to ask Larry.
0:39:14 I missed the intro.
0:39:16 What’s your story, dude?
0:39:17 Because you’re incredible.
0:39:23 And Larry tells the story where Larry’s like, you know, my name’s Larry, blah, blah, blah.
0:39:27 And he goes, I was incarcerated for the past 22 years.
0:39:29 And I think he had just gotten out.
0:39:32 I don’t know how long it had been, maybe a year or two, something like that.
0:39:35 And he goes, yeah, from the age 18, he’s now 40.
0:39:40 He’s like, at age 18, I was arrested and I was in for, you know, whatever, 22 plus years.
0:39:44 And I was like, Larry, no offense, but you just got out a couple of years ago.
0:39:46 How are you so smart?
0:39:47 How do you know all this stuff?
0:39:52 Because he would have these amazing polls or whatever we’re talking about, he would reference this thing in this book.
0:39:55 And this quote, he could just recite by memory.
0:39:57 So Larry, I’m like, Larry, how do you know all this?
0:40:01 And he goes, I was incarcerated at age 18.
0:40:03 They lock you up and throw away the key, right?
0:40:06 Like you’re basically like the lowest man on the totem pole for society.
0:40:08 They don’t, nobody invests in you at that point.
0:40:09 You’re a sunk cost.
0:40:15 And so he’s like, I was, you know, getting in trouble and it was a rough place and it was not a good time.
0:40:17 And he’s like, I made a decision.
0:40:19 I’m no longer in prison.
0:40:20 I’m in university.
0:40:23 And he’s like, so every day I just studied.
0:40:26 I just decided to go to university for the past 20 years.
0:40:30 He’s like, I decided to read all the books and learn and write and better myself.
0:40:33 And he’s like, I would literally change what I saw.
0:40:36 I would walk in the prison yard and I wouldn’t see the barbed wire.
0:40:38 He’s like, I saw roses.
0:40:42 He’s like, I literally just brainwashed myself that I am not in prison.
0:40:43 I am in university.
0:40:45 And I carried myself like that.
0:40:46 And I acted like that.
0:40:49 He made the most of what was, you know, otherwise a very bad situation.
0:40:54 I just remember being so blown away and inspired by this guy, Larry, when I heard that, heard that story.
0:41:04 Because I was like, you know, if Larry can do that at a life sentence in prison, this sounds stupid, but like, then I can be bored in a line at Starbucks for an hour or, you know, whatever.
0:41:06 Like, you can change where you are.
0:41:10 You don’t have to be in the situation that it looks like you’re in.
0:41:13 Like, you can literally just decide, no, no, I’m in university right now.
0:41:15 No, no, I’m in a spa right now.
0:41:17 No, I’m in the brainstorming session right now.
0:41:19 I mean, I am where I want to be.
0:41:20 That’s so cool.
0:41:25 Yeah, it’s really challenging because on one hand, for some reason, you start, you feel like sad for someone.
0:41:32 Like, because you meet someone, like a lot of the guys I met, they, I think they kind of had a tone for their sins a little bit where like they’ve changed.
0:41:35 But you’re like, oh, I feel so bad for you.
0:41:35 Like, that sucks.
0:41:36 You don’t deserve this.
0:41:38 And then you like learn about what they did.
0:41:41 And you’re like, ah, actually, no, like consequences exist for a reason.
0:41:43 Like, that sounds fair to me.
0:41:47 And it creates like a, you get, whenever I’ve done these things with these guys,
0:41:49 I get so many mixed emotions.
0:41:50 It’s a very challenging thing.
0:41:52 It’s a very hard thing to be part of, too.
0:41:54 But it is a no-brainer, right?
0:41:56 You want someone to like, not go back.
0:42:00 So you guys know this, but I have a company called Hampton.
0:42:01 Joinhampton.com.
0:42:03 It’s a vetted community for founders and CEOs.
0:42:04 Well, we have this member named LaVon.
0:42:09 And LaVon saw a bunch of members talking about the same problem within Hampton,
0:42:12 which is that they spent hours manually moving data into a PDF.
0:42:15 It’s tedious, it’s annoying, and it’s a waste of time.
0:42:18 And so LaVon, like any great entrepreneur, he built a solution.
0:42:19 And that solution is called Moku.
0:42:24 Moku uses AI to automatically transfer data from any document into a PDF.
0:42:27 And so if you need to turn a supplier invoice into a customer quote,
0:42:30 or move info from an application into a contract,
0:42:34 you just put a file into Moku, and it autofills the output PDF in seconds.
0:42:37 And a little backstory for all the tech nerds out there.
0:42:40 LaVon built the entire web app without using a line of code.
0:42:42 He used something called Bubble I.O.
0:42:46 They’ve added AI tools that can generate an entire app from one prompt.
0:42:51 It’s pretty amazing, and it means you can build tools like Moku very fast without knowing how to code.
0:42:54 And so if you’re tired of copying and pasting between documents,
0:42:57 or paying people to do that for you, check out Moku.ai.
0:43:01 M-O-L-K-U dot A-I.
0:43:02 All right, back to the pod.
0:43:05 Did I tell you my embarrassing prison story?
0:43:07 No, but that sounds so awesome.
0:43:10 It’s very embarrassing.
0:43:12 This could go so many ways.
0:43:14 So I go with this.
0:43:16 What, are you making dad jokes at your first day in?
0:43:21 So I moved to Silicon Valley, and I’m working with this guy, Michael Birch.
0:43:23 And Michael Birch is this wonderful guy.
0:43:26 Michael’s built a successful career in Silicon Valley.
0:43:27 He’s basically like a billionaire.
0:43:28 So one day he messages me like,
0:43:33 pack a bag with enough clothes for a day, like two days,
0:43:37 and meet me at whatever.
0:43:39 Meet me at 8 a.m. at this spot.
0:43:40 You’re not going to work today.
0:43:42 I’m like, all right, I don’t know what’s going to happen.
0:43:44 So I go, and we start driving.
0:43:45 You had no idea where you were going?
0:43:49 I think he tells me on the drive that we’re going to,
0:43:51 he’s a part of this group called the Inside Circle.
0:43:55 And Inside Circle was where they take guys from the outside
0:43:57 to go meet guys on the inside.
0:44:02 And it was at the prison, Folsom, what was it called?
0:44:02 Folsom Prison?
0:44:03 Yeah, Folsom.
0:44:05 And so we go drive there.
0:44:07 It’s a maximum security prison.
0:44:09 And I’m basically just a huge wuss, right?
0:44:10 So I don’t know what I’m getting into.
0:44:11 I don’t know.
0:44:12 I didn’t actually sign up for this.
0:44:14 Michael’s just kind of like, trust me, you’ll like this.
0:44:14 This is good.
0:44:15 You should do this.
0:44:17 I still don’t really understand what we’re doing.
0:44:22 I think it’s like a, you know, like dare, where they like scare you.
0:44:23 They like take you in.
0:44:24 Yeah, like you’re just scared straight.
0:44:25 Yeah, I thought it was scared straight.
0:44:30 I thought we were just going to observe from like behind this like really thick glass.
0:44:32 I’m like, oh, cool.
0:44:33 We’re going to like watch.
0:44:36 And I’m going to be like, wow, I learned so much today from observing.
0:44:38 It’s happening on the glass.
0:44:40 And then they open the door and they’re like, all right, guys, come on in.
0:44:41 And I’m like, what?
0:44:47 And so we go in and they’re like, all right, you know, pick a buddy, pick a partner.
0:44:54 And so I’m like, uh, and I like pick this guy and, and the, the program starts.
0:44:56 It basically, it’s like a men’s group.
0:44:57 So you sit in a circle, you talk about your feelings.
0:45:04 Oh, and by the way, when I walk in immediately, my eyes are drawn to one person because it was
0:45:07 so obvious to me, like, this was the hardest guy in the prison.
0:45:12 Somehow this guy had sunglasses and I don’t know why he was allowed to have sunglasses.
0:45:15 He had a walking, he had a cane, which I thought like, you’re not allowed to have like a,
0:45:18 like something that could be like a weapon.
0:45:21 Uh, he’s, but he’s got a cane and he’s got sunglasses, but he’s not blind, by the way.
0:45:24 He has the sunglasses like up on his head sometimes.
0:45:26 And he’s like a black guy, black guy.
0:45:27 And he had like an entourage.
0:45:31 Like he had like two guys with him who were really big and like, but they deferred to him
0:45:32 and he was kind of older.
0:45:35 And I was just like, I don’t know who this guy is, but I’ve seen enough.
0:45:38 Was he a somebody to know that this guy is somebody here.
0:45:40 And maybe somebody on the outside.
0:45:41 I don’t know, but he’s somebody in here anyway.
0:45:45 So he’s in my group and his two like entourage guys.
0:45:49 So we get in the circle and I’m like, okay, I don’t know what I’m supposed to do.
0:45:50 Am I giving advice?
0:45:51 Is this a mentorship test?
0:45:51 What is this?
0:45:52 And it’s like, no, no, no.
0:45:55 You’re here to talk about, you know, it’s a, this is a safe space.
0:45:56 Unpack your feelings.
0:45:57 I’m like, oh God.
0:46:03 And so first guy starts and he starts talking about how he’s feeling pissed off.
0:46:04 He’s feeling pissed off.
0:46:10 Cause like, I mean, crazy story, but like he’s locked up in here and his sister outside is
0:46:12 having, she’s being abused by her boyfriend.
0:46:14 He just wants to kill this guy, but he’s on the inside.
0:46:15 He can’t get to this guy.
0:46:16 She, he feels powerless.
0:46:21 And he’s sharing this heavy, emotional, real life problem.
0:46:21 Yeah.
0:46:23 Like a grade A real life problem.
0:46:28 And I’m, I, of course, cause I’m horrible.
0:46:29 I stopped listening.
0:46:32 I’m just like panicked thinking of what am I going to say?
0:46:36 You know, when you’re like supposed to be listening, but you just actually just planning what you’re
0:46:37 supposed to say.
0:46:40 I start doing that because I’m like, are you going to like retell a fake movie?
0:46:41 So you sound hard.
0:46:42 Like, yeah.
0:46:45 So I’m like, my, my startup doesn’t have product where I fit.
0:46:46 It’s just really grinding my gear.
0:46:48 What the hell am I going to say?
0:46:50 I don’t have real world problems, right?
0:46:51 Like my life’s pretty good.
0:46:57 And the cert, we’re going around the circle and it’s just one crazy, like real problem after
0:46:57 another.
0:47:03 And then, um, and then it’s getting to me and I’m just like, what am I going to say?
0:47:07 And so I’m like, all right, I guess I go deep in the bag.
0:47:11 I’m like, all right, I do have, you know, there is something that’s like pretty heavy.
0:47:15 I don’t really talk about this normally, but like, I guess, thank God I have this.
0:47:17 Cause this is the time and place to unpack this story.
0:47:19 And so I started unpacking this story.
0:47:23 And in my mind, I’m, and also I’m like, I’m talking kind of slower and dramatically.
0:47:27 Cause I’m like, let me really ham this up a little bit.
0:47:30 Like, let me not, let me not be me and laugh during this.
0:47:32 Let me, uh, you know, try to be serious here.
0:47:35 And I think I’m doing a great job.
0:47:40 And the guy with the glasses just midway through is like, man, I don’t believe none
0:47:41 of that shit.
0:47:44 I’m like, I’m like, no.
0:47:45 And I immediately, I’m like, no, it’s true.
0:47:47 He goes, I know it’s true.
0:47:49 And I’m like, so what?
0:47:53 Just to clarify, you said still, are we cool?
0:47:54 What’s going on?
0:47:57 And he was like, and he was like, man, that ain’t your truth though.
0:47:59 And so he’s like, it’s true, but that ain’t your truth.
0:48:01 And I’m like, what is this puzzle?
0:48:02 What is this riddle?
0:48:03 I don’t know what this means.
0:48:11 And then, um, this creates this like really intense moment where I had to stand up and
0:48:14 he’s like, they’re like, all right, it’s time to do the work.
0:48:14 I’m like, what?
0:48:17 And I’m like, I’m going to get beat up.
0:48:22 And so he’s like, he’s like, what’s your truth?
0:48:23 And I’m like, what?
0:48:28 I just feel, uh, and I’m like, I’m like, I’m like, no, but that is a real situation
0:48:30 that has happened to me.
0:48:33 And they were like, no, what’s your truth?
0:48:38 And I was like, all right, the truth is I’m just trying to say what I think you guys want
0:48:38 me to say.
0:48:40 Cause I just want you to like me.
0:48:43 And I put the guy, I was like, I just want you to not hate me.
0:48:46 And he looks at me, just stares at me.
0:48:47 He stands up, he gets in my face.
0:48:49 He goes, that’s your truth.
0:48:52 He gives me a big hug.
0:48:55 And then we sat down and then for the next hour, I was like, I don’t know what the hell
0:48:58 just happened, but I think I’m in a prison gang and this is awesome.
0:49:00 I think I’m accepted.
0:49:02 This felt amazing.
0:49:03 That’s called a breakthrough.
0:49:05 Yeah, I had a breakthrough.
0:49:07 So that was my amazing prison story.
0:49:08 That’s great.
0:49:10 Did you, uh, how did it end?
0:49:13 Did you guys like exchange information?
0:49:13 What do you do?
0:49:15 Dude, have you ever taken ecstasy?
0:49:18 I haven’t, but I assume that’s what it felt like.
0:49:21 Cause for the rest of the time, I was just like the weight of the world was off my shoulders.
0:49:28 And I just enjoyed myself and I, and I realized like, oh, I could just be my insecure neurotic
0:49:28 self.
0:49:30 And that’s fine here.
0:49:30 Okay, cool.
0:49:31 I don’t have to pretend.
0:49:31 Great.
0:49:32 And then they were like, cool.
0:49:33 He ain’t pretending anymore.
0:49:34 We like this guy.
0:49:37 Uh, whatever you say, whatever you say now, we don’t really care, but we just know that
0:49:39 you’re not pandering to us.
0:49:41 What value do these guys get?
0:49:42 What a lesson learned.
0:49:43 What value do these guys get?
0:49:48 Well, I think, you know, they live a pretty hard life.
0:49:52 No, I think it just in general, they live a pretty hard life and they go to this meeting
0:49:53 every week.
0:49:57 So they have this kind of like two hours a week where they get to go and kind of like,
0:49:59 as they would say, like, take the mask off, put the armor down.
0:50:03 In fact, like it would be a mix of like the Hispanic guys, the white guys and the black guys
0:50:04 in this session.
0:50:09 But then they would like openly say like, yeah, but like he, his friend, like shanked
0:50:10 my friend.
0:50:12 And so it’s on, but here it’s not on.
0:50:13 But as soon as we get out, it’s on again.
0:50:17 And I was like, this is like a pretty bizarre dynamic, but they all agreed.
0:50:18 Like, all right, when we’re here, it’s whatever.
0:50:20 But when we’re out there, it is what it is.
0:50:22 That’s the way, that’s just the way things are.
0:50:24 I remember being like, that’s insane.
0:50:27 Um, but you know, understandable in a way.
0:50:31 So they have this as a space where they can like deload kind of emotionally, mentally,
0:50:35 which is important and feel like a human being and be able to like express themselves.
0:50:38 I think it’s a pretty dehumanizing feeling, right?
0:50:41 When you’re again, locked up, throw away the key and you know, anybody who comes in, they
0:50:42 just see you as your label.
0:50:42 Right.
0:50:47 But like in that environment for those three hours that we were there, you know, nobody
0:50:48 was, there was no status.
0:50:51 Nobody was better than anybody else or like, yeah, there was this, but I was worse than
0:50:51 everybody else.
0:50:55 I guess it’s probably the more accurate way of saying it, but like there was no, they got
0:50:59 to like be treated well and be helped and be just talked to one man to another man.
0:51:03 Um, at least again, these are my, my, this is like my interpretation of it.
0:51:06 I’m sure that people who do this more have like a more sophisticated way and a better way
0:51:07 of saying it.
0:51:11 By the way, now that we’re talking about this and we can wrap up, but Jack Smith, I forgot.
0:51:13 This is his big philanthropic cause as well.
0:51:17 So Jack Smith, if you ask him what he’s doing on a regular basis for a long time, I would say,
0:51:17 what are you doing?
0:51:23 He’s like, oh, I’m, I’m pen pals, uh, with like people who are locked up and they, I have
0:51:25 a system where they can order any book and I’ll get it for them.
0:51:27 Isn’t he giving books?
0:51:29 Isn’t it a book program?
0:51:30 Yeah.
0:51:31 Where he created a website.
0:51:36 I forget how he did it, but, uh, where they can order a book and he’ll buy them any single
0:51:37 book that they want.
0:51:39 Dude, most generic name, Jack Smith.
0:51:42 You can’t find anything when you Google for Jack Smith.
0:51:43 Like, yeah.
0:51:43 Okay.
0:51:45 Well, maybe we do this.
0:51:47 So there’s the last mile, which you could donate to.
0:51:49 So go to last mile, the last mile.org.
0:51:50 You can donate there.
0:51:53 There’s inside circle foundation where you could donate there.
0:51:55 Um, so maybe we do a little good.
0:51:59 So if there’s anybody who’s listened to this and inspired either to start your own, uh, thing
0:52:02 or to attend one of these or to donate, uh, go do it, man.
0:52:05 Cause it’s a scene at firsthand does a lot of good.
0:52:09 And, um, I think doesn’t get the type of attention that it would ever want.
0:52:13 By the way, the inside circle guys, they also made like a movie, uh, a documentary about
0:52:14 the program.
0:52:21 And, uh, Chris Redlitz is the guy who, um, who I, who’s kind of my mentor and someone I
0:52:22 look up to and you could find him on Twitter.
0:52:28 He’s, um, he’s super low key, but he’s been the seed investor of like probably five to 10
0:52:30 different unicorns, hugely successful.
0:52:31 And now it has dedicated his life to that.
0:52:35 So just DM him if you’re want to do whatever he’s, he’s pretty open.
0:52:36 Do you think you’re going to do something like this by the way?
0:52:38 Yeah.
0:52:39 I haven’t found my cause for a long time.
0:52:45 Do you have like a career arc in mind where you’re like, cool, I achieve, I climb success
0:52:50 mountain and then I, uh, you know, parachute over to like, you know, save the world.
0:52:56 I told Sarah that at the age of 40, I’m going to stop the getting of money.
0:53:03 So I said by, by 40, I will no longer pursue any money and we will have a cause.
0:53:04 And that’s what we will dedicate ourselves to.
0:53:06 That’s what I, that’s, that’s.
0:53:08 You’ve also told me that you’re going to disappear off the internet.
0:53:11 I think this is badass and you should talk more about this.
0:53:16 I said at the age of 40, yeah, I want to get off the internet and I want to not pursue any
0:53:17 money making things ever again.
0:53:24 I don’t want it to like ruin my perspective and just be a shallow capitalist and only care
0:53:29 about that and just delete the internet and just focus on like doing something good.
0:53:31 That’s, that’s what, that’s the current, that’s the current plan.
0:53:32 How old are you now?
0:53:35 I turned 36 a month ago.
0:53:38 So, uh, I’m, uh, 36.
0:53:39 Four years away, dude.
0:53:41 Do you think that’s a crazy plan?
0:53:44 Of course it’s a crazy plan, but it’s a pretty cool plan.
0:53:45 I think it sounds pretty cool.
0:53:47 I said by, I said by 40.
0:53:49 Are you, I mean, what’s your level of seriousness about this?
0:53:50 Is this like, that’s what’s happening?
0:53:55 Or like, I’m just testing this out, seeing how these words sound in my mouth.
0:54:01 No, I just think that, I think that, um, I think if you only pursue making money, I think
0:54:03 that you become a very shallow person.
0:54:04 I think that there’s more to life.
0:54:08 I think that there’s been so many times where I’ve seen something inspiring and beautiful.
0:54:11 And in my head, I think, oh, and then we could do this and turn it into this.
0:54:14 And then like optimize by doing this, as opposed to saying, this is beautiful.
0:54:15 This is wonderful.
0:54:17 I want to experience, let’s keep it small.
0:54:20 Uh, and so I want to like force myself to appreciate that.
0:54:22 One of my heroes is this guy named Felix Dennis.
0:54:24 He wrote the book, How to Get Rich.
0:54:28 Felix Dennis was a publisher in England where he founded a bunch of companies, a bunch of
0:54:32 publishing companies, eventually was worth six or seven hundred million dollars.
0:54:36 And he wrote that he was diagnosed with cancer, something like at the age of 60.
0:54:40 And then at the age of like 61, while he was like learning about his cancer or something,
0:54:44 he got into poetry and he was like, I’m obsessed with writing poetry.
0:54:47 Why on earth did I not discover this sooner?
0:54:51 And he quit business partially because he was dying and because he fell in love with poetry.
0:54:55 And he wrote in his book that if I could do it all over again, I would have quit at the
0:54:59 age of 40 because I had enough and I would have pursued poetry because that was my calling.
0:55:04 And I always found that to be amazing because I think that oftentimes when we’re doing what
0:55:09 we’re doing every single day, we get caught into the make more, do more, optimize more when
0:55:13 it’s like, kind of, I want to be in the present and I want to enjoy the things that I want to enjoy
0:55:14 regardless if they make money.
0:55:19 Because how many hobbies have you had where you’re like, well, I would only do it if I could
0:55:23 like make like, oh, I want to like buy these toys and like maybe I could buy like 10 of them
0:55:24 and turn into a money making thing.
0:55:26 Now what you’re doing is actually pretty cool.
0:55:29 You, but you still have a capitalistic mindset to it.
0:55:33 You are playing the piano and you are live streaming it, which I think is amazing.
0:55:36 But in my head, I’m like, I want to do that too.
0:55:39 It’s like, well, I only want to do that because I want people to see me learning a hobby.
0:55:40 Do you know what I mean?
0:55:42 And I like, that’s like tainting.
0:55:43 Well, I only live streamed it once.
0:55:45 No, I’m not criticizing you.
0:55:46 I’m criticizing.
0:55:49 I was inspired to do it because I want glory.
0:55:50 Do you know what I mean?
0:55:50 Yeah, yeah, yeah.
0:55:57 Well, I learned pretty quickly when I started playing the piano that nobody gives a shit if
0:55:58 you can play the piano, by the way.
0:56:00 It’s not like a thing.
0:56:03 Like if somebody plays the piano well, it’s like, oh, cool.
0:56:04 You can play the piano well.
0:56:07 They don’t want to listen to even one song.
0:56:10 Nobody wants to listen to somebody play a five-minute song on the piano.
0:56:14 That’s a very like clear thing to me since learning to play piano, but it doesn’t matter
0:56:16 because playing a five-minute song is incredibly fun.
0:56:18 In fact, I sent Ben a text message.
0:56:21 I’m going to read you this text message because I think it’s very relevant to what we’re talking
0:56:21 about.
0:56:24 So Pomp did a SPAC recently.
0:56:24 Did you see this?
0:56:28 Yeah, I saw it, but I don’t entirely know what that means.
0:56:29 But yeah.
0:56:32 So our friend Pomp, Anthony, they SPAC’d a company.
0:56:36 And the company’s goal was to do the kind of Michael Saylor playbook, which is it’s a Bitcoin
0:56:38 acquisition and finance company.
0:56:41 And so what they’re doing is they raised, I think, $750 million.
0:56:44 They SPAC’d it.
0:56:45 It’s now public.
0:56:46 It’s going to be a public company.
0:56:49 And they basically bought $750 million worth of Bitcoin.
0:56:50 Then they’re going to raise debt and buy more Bitcoin.
0:56:52 They’re going to raise…
0:56:57 Because companies or pension funds can own Pomp stock, but they can’t own Bitcoin.
0:56:59 So this is how they get exposure to it.
0:56:59 Is that right?
0:57:02 That’s one aspect to it.
0:57:04 There’s others, which is like it’s levered.
0:57:09 So for every dollar you put in, let’s say you buy Bitcoin directly, you could buy $1 of
0:57:14 Bitcoin, but their thing, they’re going to borrow and buy more than a dollar of Bitcoin
0:57:16 for every dollar of equity, for example.
0:57:21 They also want to eventually turn it into like a full financial services thing.
0:57:23 So essentially like a Bitcoin backed bank.
0:57:24 I think that’s a part of the vision.
0:57:26 Anyways, I don’t know exactly what they’re doing.
0:57:28 There’s, you know, they’re only allowed to say certain things.
0:57:32 But point is, it’s like Pomp, this guy who’s very much like us.
0:57:33 I think he’s the same age.
0:57:36 Similarly, I hang out with Anthony all the time.
0:57:38 creator on the internet, good dude.
0:57:41 And he’s, you know, he’s not like some uber, uber, uber genius.
0:57:43 That’s like, you know, but he’s like relatable.
0:57:44 That’s what I’m saying.
0:57:45 So he’s like, he’s like one of us.
0:57:48 And it’s clear that, you know, this didn’t just happen.
0:57:51 He’s been working on this for, you know, some period of time, maybe six months, maybe a year,
0:57:52 maybe two years.
0:57:52 You don’t know.
0:57:59 So he, it’s like, oh wow, Pomp raised $750 million, has this public company now.
0:58:02 I think he owns 8% of it I saw from the filing.
0:58:06 So like, you know, theoretically Pomp has like $80 million of value from this.
0:58:07 Right.
0:58:08 Some creators make courses.
0:58:12 Pomp’s going to make like, you know, probably hundreds of millions of dollars from this thing
0:58:12 if it goes well.
0:58:13 Okay.
0:58:18 And that’s clearly what he put a lot of energy and focus on and did a great job fundraising
0:58:18 for it.
0:58:19 And I was texting Ben.
0:58:20 I was like, wow, wow, that’s incredible.
0:58:26 I was like, meanwhile, I’ve logged 120 hours on the piano in the last six months.
0:58:28 And I go, honestly, no regrets though.
0:58:29 Fucking love the piano.
0:58:29 Dude.
0:58:34 So listen, you tweeted out, you said, I used to think jealousy was a bad thing, like a sin.
0:58:35 And I try to avoid it.
0:58:37 But jealousy is a wedding crasher.
0:58:38 It shows up uninvited.
0:58:40 And recently I started using jealousy to my advantage.
0:58:42 Jealousy is an incredible signal.
0:58:47 It tells me at a very primal, no logic level what my subconscious wants.
0:58:48 It’s a heat signal for taste.
0:58:52 I don’t obey the signal, but I do observe it and it helps me now.
0:58:55 And so this sounds very strange.
0:58:58 But when I saw what pop was doing, I was like, that’s so badass.
0:58:59 Congrats to him.
0:59:04 But then very weirdly, when I saw you streaming, you played the piano for some reason, I thought
0:59:07 that was oddly one of the cooler things you’ve done in the last year or two.
0:59:09 And I felt stronger.
0:59:10 And I’m like, well, why do I feel that?
0:59:12 Why do I think that that is cooler?
0:59:16 I don’t know why exactly, but it relates to that tweet where I’m like, what’s the signal
0:59:17 there that that’s sending?
0:59:19 So anyway, I thought that was really cool.
0:59:20 I thought that was significantly cooler.
0:59:25 And I said this as well, when you were contemplating making a play or starting a business or something
0:59:26 like that, it’s like, I don’t know.
0:59:28 For some reason, the play is so much cooler.
0:59:32 So I think I would pursue those like artistic things over the money thing.
0:59:37 And this sounds like a very trite, you know, like, not everyone has the privilege to be
0:59:37 able to do that.
0:59:40 But I do think that like, it’s better for your soul that way.
0:59:41 Yeah, exactly.
0:59:43 I mean, you could already, you know, hear the comments.
0:59:44 Oh, it must be nice for you.
0:59:45 You don’t have to work.
0:59:48 Another version of it is tech bros discover hobbies.
0:59:50 There’s more to life than money.
0:59:52 But also, by the way, both true.
0:59:54 Yeah, both, both, both very valid points of view.
0:59:57 I don’t think it’s the important point of view, but I do think they’re valid points of
0:59:57 view.
1:00:01 I think the important point of view is like, try to figure out what you actually want to
1:00:07 do and then pursue it like in a relentless sort of un, unashamed way.
1:00:09 And I think it’s very cool.
1:00:14 When you said that thing, I think you told me like in five, seven years, I plan to delete
1:00:16 my social media, disappear from the internet.
1:00:21 And now you’re talking about like, you know, and, you know, stop, stop pursuing the getting
1:00:21 of money.
1:00:22 Yeah.
1:00:23 I really hope you stick to that.
1:00:26 I don’t know if you will, because I think it’s a very hard thing to do.
1:00:28 It’s like, hey, can you turn down?
1:00:30 Like, it’s like being like, I no longer eat sugar, right?
1:00:32 It’s like those people who like, are like, I’m going to stop.
1:00:33 I’m going to diet, right?
1:00:34 It’s hard to stick to a diet.
1:00:40 But if you actually did that, you would like shoot up in the rankings of like most badass
1:00:40 people I know.
1:00:41 You know what I mean?
1:00:44 You’re already top 10, but you would shoot up.
1:00:45 I’ve got four years to go.
1:00:48 I better get all, I better get all of it while I can.
1:00:51 But I do think that that, it’s also-
1:00:51 Give me a percentage.
1:00:54 How certain are you, you’re going to do that at the age of 40?
1:00:55 I just need to know.
1:00:56 I’m going to hold you to this.
1:00:58 60 to 70%.
1:01:01 I mean, look, I feel this, a lot of it has to do with family too.
1:01:10 Like, I feel like when my little kids start like talking and having personalities, I think
1:01:11 I would fall in love with them even more.
1:01:15 And I just want to like be a good example that there’s more to life than just the getting
1:01:15 of money.
1:01:16 Yeah.
1:01:17 Yeah.
1:01:18 I’m totally washed.
1:01:20 Kids are so cute.
1:01:21 I’m just washed up now.
1:01:21 I can’t do it.
1:01:22 I can’t do anything, dude.
1:01:23 I’m just-
1:01:23 Yeah.
1:01:28 Like the more personality she shows, the more where I’m like, oh, nothing really matters
1:01:30 except our health and being around each other.
1:01:31 Right, right.
1:01:32 I don’t know.
1:01:33 Is that, does that stay linear?
1:01:37 Like, or does it like, like, does it keep getting hired the more they talk to you?
1:01:38 Yeah, it is.
1:01:42 But I think, at least for me, like, there’s a, there is a cap.
1:01:44 It’s not one of these unbounded things.
1:01:45 It’s not like I want to spend every waking moment with you.
1:01:47 I’m like, no, you got, like, you’re too annoying.
1:01:47 I’m too tired.
1:01:48 This is too much.
1:01:56 But it does, I do, I do have like a, it became my favorite thing for like three hours a day.
1:01:59 Like for three hours a day, my kids are my favorite thing in the world.
1:02:02 That’s three hours a day that my favorite thing used to be working.
1:02:04 It used to be, you know, reading.
1:02:10 There’s other things that were in that spot of like, that three hours a day of like, voluntary time.
1:02:11 I could, I could direct towards anything.
1:02:12 And now my kids are that, right?
1:02:15 Like, we just like jumping into the pool with them and doing stuff or playing a game or whatever.
1:02:17 That’s like, it is super, super fun.
1:02:20 But it is capped at like a three to four hours a day.
1:02:24 Beyond that, I’m like, like, how dare my wife make me raise my own children?
1:02:25 This is too much.
1:02:27 I need to be helped and saved.
1:02:28 Who’s, who’s here to save me?
1:02:31 This is the softest episode we’ve ever had.
1:02:34 All right.
1:02:36 We should get off before we start crying.
1:02:37 All right.
1:02:37 That’s it.
1:02:38 That’s the pod.
1:02:41 I feel like I can rule the world.
1:02:43 I know I could be what I want to.
1:02:46 I put my all in it like my days off.
1:02:48 On the road, let’s travel, never looking back.
1:02:53 All right, my friends, I have a new podcast for you guys to check out.
1:02:58 It’s called Content is Profit, and it’s hosted by Luis and Fonzie Cameo.
1:03:04 After years of building content teams and frameworks for companies like Red Bull and Orange Theory Fitness,
1:03:09 Luis and Fonzie are on a mission to bridge the gap between content and revenue.
1:03:12 In each episode, you’re going to hear from top entrepreneurs and creators,
1:03:16 and you’re going to hear them share their secrets and strategies to turn their content into profit.
1:03:21 So you can check out Content is Profit wherever you get your podcasts.

0:00:01 If you’ve ever thought about buying a business,
0:00:03 then this episode is gonna be for you.
0:00:05 Because on the internet, there are a lot of people
0:00:07 telling you about how amazing it could be
0:00:09 to just go buy a business that’s already working.
0:00:11 You just take out a loan, you put very little money down
0:00:13 and boom, you’re cash flowing and you’re working passively.
0:00:14 But those are also people
0:00:16 that are kind of selling you the dream.
0:00:19 Now, my buddy Dan, is one of my best friends from college,
0:00:20 just actually did this.
0:00:22 A couple of years ago, he bought a business,
0:00:25 a very random, unsexy business that he had no experience in.
0:00:27 He didn’t have a lot of money coming in.
0:00:29 He had never bought a business before, but he did it.
0:00:31 And it’s actually worked out pretty well.
0:00:33 And I asked him to come on and tell the real story.
0:00:35 So tell us like, what was it like?
0:00:37 What’d you do the first hundred days?
0:00:38 How did you actually find buying the business?
0:00:40 How much money did you have to put down?
0:00:41 How much money did it make?
0:00:42 What are the downsides?
0:00:42 What are the traps?
0:00:43 All the real stuff.
0:00:46 And I love it because Dan was very honest.
0:00:48 He was very open about all those things.
0:00:50 And then at the end, he actually brainstormed
0:00:52 a couple of business ideas that he saw.
0:00:53 Because when you buy a business,
0:00:55 you look at hundreds of businesses.
0:00:58 He actually saw, has a couple of his favorite spaces
0:00:59 that he thinks people could go into.
0:01:01 And we brainstormed that at the end.
0:01:03 So this episode, I think, is going to be a lot of value
0:01:04 for anyone who’s ever thought about buying a business.
0:01:07 And then we have a fun brainstorm also at the end
0:01:08 for other businesses that people could check out.
0:01:09 All right.
0:01:10 Enjoy this episode with my buddy, Dan.
0:01:12 I feel like I can rule the world.
0:01:15 I know I could be what I want to.
0:01:18 I put my all in it like my days off.
0:01:19 On the road, let’s travel.
0:01:20 Never looking back.
0:01:21 This is a special one.
0:01:23 My buddy, Dan, from college is here.
0:01:26 And me and Dan, we’ve started a sushi restaurant together.
0:01:28 We’ve owned a pet mouse together.
0:01:30 We’ve tried to bring down the house at a casino together.
0:01:33 We have gone through many schemes and dreams.
0:01:36 And then Dan called me a couple of years ago.
0:01:39 And I convinced him to try to buy a business.
0:01:41 And then he has done it now.
0:01:41 He bought the business.
0:01:46 And he’s here to tell the story of that whole journey of going from a guy who never thought
0:01:49 that he would ever buy a business to now owning one of the most random businesses that you’ll
0:01:50 ever hear about.
0:01:53 And then I got Sam here, who doesn’t know Dan.
0:01:54 So it’s me and my college buddy.
0:01:56 And then Sam, you’re sort of the third wheel on this date.
0:01:57 Are you ready for this?
0:01:58 Yes.
0:01:59 Sign me up.
0:02:00 This isn’t the first time it’s happened.
0:02:04 But I’m going to ask questions that usually what I think is what the audience thinks.
0:02:06 So I’ll ask some questions.
0:02:07 Yeah, exactly.
0:02:07 All right.
0:02:09 So Sam, where do you want to start?
0:02:10 Just maybe first question.
0:02:11 Who the hell is this guy?
0:02:11 Who are you?
0:02:12 Yeah.
0:02:13 Who are you?
0:02:14 Sertner.
0:02:14 Dan Sertner.
0:02:17 So I wasn’t his roommate in college.
0:02:18 I was like the next door neighbor.
0:02:21 So for the Seinfeld references, I was like the Kramer.
0:02:23 I’d show up from time to time unannounced.
0:02:26 Live with this guy for four years.
0:02:27 So I go way back with Sean.
0:02:34 And by the way, Sam, the funniest part of meeting Dan the first day of college, I walk in and
0:02:38 Dan, the way he looks now, he looked exactly the same at age 18.
0:02:43 And so Dan is standing there and he used to wear a visor because he’s like, I don’t know,
0:02:44 cool guy from New Jersey.
0:02:45 Cool back in the day.
0:02:47 So I thought he was someone’s dad.
0:02:50 I was like, this guy with a visor, I saw him from the back and he knew everything.
0:02:51 He was like, laundry’s down there.
0:02:52 Yeah, you have to do this.
0:02:55 You know, your meal plan is not going to work until you activate it.
0:02:56 You have to go.
0:02:59 He knew everything about the campus and I was totally clueless.
0:03:01 I didn’t know anything about going to college.
0:03:06 And so he was, and he had a, he had a single, he was like one of the smart guys who like
0:03:09 requested having a single room, didn’t have to have a random roommate.
0:03:11 So Dan’s been ahead of the game for a long time.
0:03:12 And okay.
0:03:14 And what business did you end up buying, by the way?
0:03:17 So I bought a company called Fleet Packaging.
0:03:19 So it’s a packaging distributor.
0:03:25 So effectively we work with large retailers in the U.S. who need any sort of packaging.
0:03:29 So if, you know, you go to a mall, you know, you leave with one of those to-go bags.
0:03:31 We help companies buy those.
0:03:34 And then we help with warehousing distribution.
0:03:37 We make it easy to buy bags overseas.
0:03:41 So he is Dan the bag man now, which is all you really need to remember.
0:03:42 Dan the bag man.
0:03:46 But to get there, I think it’s a fun kind of journey, right?
0:03:48 So we’re going to skip the part about me and Dan in college.
0:03:49 And then the company we tried to start together.
0:03:50 We’re going to skip that for now.
0:03:51 We can go back there later.
0:03:58 I think the buying a business story starts where, in actually kind of a funny way.
0:04:04 So after we kind of try and fail at our first business, we go off and do different things.
0:04:05 I go move to Australia.
0:04:07 Dan moves to San Francisco.
0:04:08 And he goes and gets a job at Facebook.
0:04:11 A few months later, Dan calls me.
0:04:14 And he’s like, oh, yeah.
0:04:19 Sorry, I don’t know what he said, but he was like, yeah, I was just quickly just fixing a bug.
0:04:21 And I was like, fixing a bug?
0:04:22 What are you talking about?
0:04:24 And he’s like, yeah, I’m coding now.
0:04:25 He’s like, you’re coding?
0:04:29 He was like an economics, he was like our finance guy.
0:04:33 Why is our finance guy, what are you doing in code?
0:04:36 And basically what he did was, I don’t know if you know this, Dan, but I guess at Facebook,
0:04:40 they have just like a coding academy internally at Facebook.
0:04:42 Dan, is that how you describe it?
0:04:42 Like a boot camp?
0:04:48 Basically, any non-engineer could go like become an engineer just while on the job.
0:04:48 Is that how it works?
0:04:49 It’s not explicitly.
0:04:51 So it’s actually for the engineers when they show up.
0:04:54 So when you show up, and I actually think they just got rid of this like a few weeks ago.
0:04:55 So this might be old news.
0:05:00 But, you know, for the first 20 years of Facebook’s existence, you know, when you get a job as an
0:05:05 engineer at Facebook, you go to this eight-week crash course on how to be an awesome Facebook
0:05:06 engineer.
0:05:09 And it’s not typically open to non-engineers.
0:05:12 But, you know, why accept the status quo?
0:05:17 Uh, so I was actually one of the few people who early on was able to take classes there.
0:05:19 Um, so I started in fraud.
0:05:21 Do you have a good Farmville fraud story?
0:05:26 What, what does an average person like us not know about like fraud on a farm?
0:05:28 Like Farmville sounds like the stupidest thing in the world.
0:05:30 The fact that there’s even fraud going on.
0:05:33 It’s like, you know, am I stealing crops from Sam’s farm?
0:05:34 You are stealing crops.
0:05:39 Well, what you’re doing is you’re probably, you’re wanting to make a better farm than Sam,
0:05:40 but you don’t have time.
0:05:41 Is this for pride or money?
0:05:44 It’s, well, the fraudsters are doing it for money.
0:05:46 So the, the buyer is doing it for pride.
0:05:50 They’re like, I want a bigger farm than Sean, but I don’t have time to actually spend my time
0:05:51 playing the game.
0:05:53 So I’m going to go online to the black market, wherever that is.
0:05:59 And someone’s going to sell me whatever, 200 mushroom seeds to plant in my farm.
0:06:03 And they’ve procured those illegally because they’ve stolen someone’s credit card.
0:06:06 And there’s this whole world of Facebook games fraud that existed.
0:06:10 So, so Farmville was basically like, I don’t know, is this, is that the laundering part?
0:06:16 Basically the guy steals the credit card, uses it in Farmville, sells the Farmville stuff
0:06:19 to me, which looks harmless and he gets cash out the other side.
0:06:20 Precisely.
0:06:23 This is like a much less cooler version of the wire.
0:06:24 Pretty much.
0:06:28 Well, there was also like real money laundering too, where like people would make their own
0:06:30 app and then launder money through that.
0:06:32 That one was, was a little more intense.
0:06:36 Dude, Sam, one time I was like, dad, what are you even doing at Facebook, dude?
0:06:37 What do you mean fraud?
0:06:38 What is the Facebook fraud?
0:06:41 And he goes, have you ever opened up your timeline on Facebook?
0:06:42 Had you just seen a dick?
0:06:43 And I go, no.
0:06:44 He goes, you’re welcome.
0:06:45 No, that was it.
0:06:47 Oh no, that, that, that was the later iteration.
0:06:54 I moved on to community, uh, community tooling, but effectively preventing porn on Facebook.
0:06:56 So that, that was my go-to line.
0:06:58 And, uh, what’d you do after Facebook?
0:07:05 So after Facebook, um, I all of a sudden, you know, had transitioned into engineering.
0:07:07 I went to a startup, uh, called Namely.
0:07:12 Uh, it was a payroll company and I joined as an engineering manager, eventually worked my
0:07:14 way up to be CTO of that company.
0:07:19 You got to tell Sam the, uh, the brilliant, uh, so Dan’s, Dan’s actually a marketer at
0:07:19 heart.
0:07:25 He just never worked in marketing for some reason, but the way he, uh, framed himself in the job
0:07:26 market was amazing.
0:07:29 So he’s, he’s, he’s at Facebook, he becomes an engineer there, right?
0:07:32 So it’s not like he’s like MIT computer scientist, right?
0:07:37 Like when you think about like, who would be a Duke Spanish major, he’s a Duke Spanish major.
0:07:40 When he was at Duke, he kept, he kept taking this class called lemurs where he’s going to
0:07:42 the zoo and looking at lemurs all day.
0:07:43 Like Dan was, that’s what Dan was doing to do.
0:07:45 But then he trains himself to be an engineer.
0:07:50 And then when he goes into the job market, he has this brilliant way of framing himself so
0:07:53 that he ended up becoming a CTO of this like fast growing startup.
0:07:54 All right.
0:07:55 So I leave Facebook.
0:08:00 Um, as you will see, most of these things are schemes that Sean and I have done in our lives
0:08:04 that slowly elevated to good ideas, but I left Facebook, um, you know, basically the
0:08:08 best of the best at the time, like it was, you know, still is, you know, one of the best
0:08:09 technology companies.
0:08:12 Um, but I’d say, you know, I was, I was, I joined Facebook.
0:08:12 There were 3000 people.
0:08:14 I left when there were 60,000 people.
0:08:18 So I saw a lot of things and I’m not like old school Facebook rich.
0:08:18 I missed that.
0:08:20 And I wasn’t an engineer in the beginning.
0:08:21 So just want to clarify that.
0:08:25 But I left and I had, you know, kind of this weird amount of experience.
0:08:29 Like I had whatever, four or five years of coding experience, which is cool.
0:08:33 Maybe enough to make me like an eng one or eng two at a normal company.
0:08:38 Um, but you know, I had moved into management while I was at Facebook and the way that I
0:08:42 positioned it was, you know, I am a Facebook manager.
0:08:44 I know how things work at Facebook.
0:08:49 Let me come into your startup and let me whip your team in shape.
0:08:52 Let me help your team run like a Facebook engineering team.
0:08:54 All right.
0:08:59 So I’ve built a few companies that have made a few million dollars a year and I’ve built
0:09:02 two companies that have made tens of millions of dollars a year.
0:09:06 And so I have a little bit of experience launching, building, creating new things.
0:09:11 And I actually don’t come up with a lot of original ideas.
0:09:16 Instead, what I’m really, really good at, what my skill set is, is researching different
0:09:20 ideas, different gaps in the market in reverse engineering companies.
0:09:22 And I didn’t invent this, by the way, we had this guy, Brad Jacobs.
0:09:23 We talked about him on the podcast.
0:09:27 He started like four or five different publicly traded companies with tens of billions of
0:09:27 dollars each.
0:09:30 He actually is the one who I learned how to do this from.
0:09:35 And so with the team at HubSpot, we put together all of my research tactics, frameworks, techniques
0:09:40 on spotting different opportunities in the market, reverse engineering companies, and figuring
0:09:45 out exactly where opportunities are versus just coming up with a random silly idea and throwing
0:09:47 it against the wall and hoping that it sticks.
0:09:50 And so if you want to see my framework, you can check it out.
0:09:52 The link is below in the YouTube description.
0:09:58 But Sam, isn’t that great to just be like, how to rebrand yourself to be like, I’ll make
0:10:00 your engineering team run like a Facebook engineering team.
0:10:04 And if you’re a startup founder who’s, you know, sitting, like namely who’s in New York,
0:10:04 right?
0:10:09 That’s kind of aspirational to have somebody say that versus just, I have five years of
0:10:09 experience, right?
0:10:10 Yeah, man, that’s great.
0:10:11 Yeah.
0:10:12 It’s all about storytelling.
0:10:16 So the story is so far is like, you know, whatever, pretty good.
0:10:17 You’re stumbling into things.
0:10:18 Just a smart guy.
0:10:21 A smart guy with a smart guy with a dream and a little bit of scheme.
0:10:25 And now you’re in a position where you’re like, I’m at this startup.
0:10:27 We just raised a bunch of money at a good valuation.
0:10:29 I’m the CTO.
0:10:30 I got these shares.
0:10:30 I’m going to be rich.
0:10:31 Going to be rich.
0:10:32 What happens?
0:10:34 Didn’t get rich.
0:10:35 Second time.
0:10:36 Facebook.
0:10:36 Cool.
0:10:37 Really didn’t get rich.
0:10:38 This time didn’t get rich.
0:10:44 You know, so, you know, long story short, we found ourselves in a place where in order
0:10:48 to do what we needed to do, we needed to sell the company.
0:10:50 Or in order for the company to do what it needs to do next, we need to sell the company.
0:10:56 And it became very clear that this wasn’t going to be kind of this massive windfall that
0:10:57 I had been expecting.
0:10:59 Long story short, the company sells.
0:11:03 I find myself out of a job because as part of the transition, the acquiring company was
0:11:04 like, we have a CTO.
0:11:05 So we don’t need you.
0:11:11 So it’s like five years of hard work and kind of that dream of like, hey, we’re going
0:11:15 to take something and turn it into something else kind of goes away pretty quickly.
0:11:19 And that’s kind of where things start to get interesting because, you know, I have Sean on
0:11:20 speed dial.
0:11:23 So I had a fortuitous conversation with him that day.
0:11:25 Was he the one who inspired you to do this?
0:11:26 Or did you listen to the MFM?
0:11:28 Or how did that insight come to be?
0:11:36 Because like, it’s not normal for a Facebook, a Duke Facebook unicorn startup guy to buy business.
0:11:37 Correct.
0:11:41 So no, it was, it wasn’t even like a, hey, Sean, I need advice.
0:11:43 It was just like a random, like, let’s catch up.
0:11:44 Catch up call.
0:11:44 Yeah.
0:11:44 Yeah.
0:11:45 Let’s just catch up.
0:11:46 It’s been a while.
0:11:46 Wait.
0:11:48 So Sean, did you say like, I use this bag company?
0:11:50 No, no, no.
0:11:52 We’re on this college catch up call.
0:11:52 What’s going on with you?
0:11:53 What’s going on with you?
0:11:55 Dan tells us this story.
0:11:59 We got acquired, you know, there can only be one CTO.
0:12:00 They already have one.
0:12:01 So great.
0:12:01 I’m going to be.
0:12:04 And so he was just saying like, if you know any cool companies, let me know.
0:12:05 I’m going to be looking.
0:12:09 And then I kind of just mentioned to him, I was like, dude, Dan, you’re so like, like ever
0:12:11 since I’ve known you, you’ve been entrepreneurial.
0:12:15 And I think like Naval said this once, he goes, you know, other people sometimes see your gifts
0:12:17 easier than you can see them.
0:12:20 So he was saying for Naval, he also used to think I’m going to be a scientist.
0:12:21 And his mom was like, no, no, no.
0:12:22 You’re going to be a business person.
0:12:22 He’s like, what?
0:12:23 Oh, science.
0:12:24 Right.
0:12:27 And she’s like, oh, like every time we walk by a pizza shop, you’re telling me all the
0:12:30 three different things that they should be doing to run their business better.
0:12:31 Like you’re always doing that.
0:12:33 You’re naturally, you’re a natural fit for a business person.
0:12:34 Like that’s what you’re good at.
0:12:36 And so Dan, same thing.
0:12:39 Dan was always somebody who was like shooting his shot.
0:12:43 Like when our freshman year at Duke, all of a sudden there’s like this huge package and
0:12:46 Dan has like a lifetime supply of stride gum.
0:12:48 And I’m like, damn, why did you buy this much gum?
0:12:49 He said, I didn’t buy it.
0:12:50 I want it.
0:12:52 And he would always be entering contests.
0:12:59 I went, you know, one day with Dan, I go to, I go to work and Dan goes, hey, I got to get
0:12:59 off early.
0:13:00 I got an audition.
0:13:01 I’m like, what?
0:13:02 What are you doing?
0:13:05 He’s like, I’m going to try to get on wheel of fortune right now.
0:13:09 And so we, I went with them and we both got casted onto wheel of fortune.
0:13:10 Well, yeah, you, you leave out the point.
0:13:13 We like, we came, we were doing the sushi restaurant at the time.
0:13:16 So we like, we’re both like been working all day.
0:13:17 We have the bright green headbands.
0:13:20 Like we have not, like we came in with knives.
0:13:21 Like we had our sushi knives on our belt.
0:13:22 We come into this interview.
0:13:24 Like, no wonder we got cast.
0:13:25 It was like, this is good TV, man.
0:13:29 These clowns, but he was always doing this.
0:13:34 He was always like, he, early on, he started recording like product review videos for like,
0:13:36 I don’t know, two cents a pop or something like that.
0:13:39 Like he was just doing random shit all the time.
0:13:42 So it just seems strange to me that he was like going to get a corporate job.
0:13:44 Like this didn’t, it’s not like the vision I had.
0:13:46 So I was like, Dan, you ever started, thought about starting a business?
0:13:48 He’s like, ah, I don’t really have like a killer idea.
0:13:50 I feel like I need like a killer idea.
0:13:53 If I’m going to like put my whole life on the line for something, I go, oh, that’s fair.
0:13:57 I said, you know, I’ve been doing this podcast and it’s not something I was doing a lot
0:14:00 of, but like we’ve met a few people who go and buy businesses.
0:14:03 And it’s honestly seems like a little bit of a cheat code.
0:14:08 Like, um, as in the business, if you find a business, it’s already working, you don’t
0:14:09 have to come up with a genius idea.
0:14:10 It’s already validated.
0:14:11 It’s already working.
0:14:12 It’s got years of profitable history.
0:14:14 You can buy it at a fair price.
0:14:17 And then if you’re good at executing, like you can grow it over time.
0:14:20 And, you know, there’s retiring business owners, like there’s reasons these are up for sale.
0:14:22 And so I just kind of like planted that seed.
0:14:25 It’s like, would you, I don’t know, like consider that?
0:14:30 And Dan, I don’t know what your first reaction was, but I bet it was probably just like lukewarm.
0:14:30 I don’t know.
0:14:31 It was lukewarm.
0:14:35 I mean, it was two part one, you know, I, in the beginning I said, Sean, you know,
0:14:36 always knows what he’s talking about.
0:14:38 Seems to, seems to have his life figured out.
0:14:40 My first response, like Sean has no idea what he’s talking about.
0:14:41 He’s never bought a business before.
0:14:45 Uh, to this day, that is still my first, you know, my, my main thing.
0:14:46 It’s like, you don’t know, man.
0:14:50 Um, but the second one was like, but Sean is a pretty smart dude.
0:14:53 Like, and he, you know, if he’s saying this is a good idea, it’s a good idea.
0:14:58 But, you know, my real, my second reaction after that was with what money am I buying
0:14:59 this business?
0:15:02 Cause let’s recall, missed the boat on the Facebook riches, missed the boat on the namely
0:15:07 riches, but it actually turned out and, you know, we’ll, I’ll get into this more later.
0:15:09 Like you don’t need that much money to buy the business.
0:15:10 That’s the crazy part.
0:15:14 And I think it, it took a little bit of digging initially, um, to figure that out.
0:15:16 And I’ll, I’ll talk more about that in a minute.
0:15:18 Let’s do a quick Tarantino.
0:15:19 So let’s give the ending first.
0:15:26 So let’s say you, you buy, you, you ended up buying a bag business as in like, literally
0:15:31 if you go to a shopping store and you buy something and they have a custom branded bag when they
0:15:34 check out, like, there’s a decent chance I made that bag.
0:15:36 So it’s, it’s, it’s, it’s that big.
0:15:37 It’s that big.
0:15:40 I unfortunately can’t, I like, I’m under confidentiality agreements with most of my
0:15:44 clients, but if you go to a mall, there’s a pretty decent shot that you’re going to touch
0:15:44 one of my bags.
0:15:46 We’re going to get it out of you somehow.
0:15:48 We’re going to, we’re going to get it out of you.
0:15:49 I mean, I’ll tell you after.
0:15:51 I’m not bound by any confidence.
0:15:53 Maybe I can say some things.
0:15:53 All right.
0:15:55 So, but, but Dan, let’s give the headline.
0:15:57 So you buy a business.
0:16:00 Let’s, we’re going to, we’re going to work backwards for like, cause it’s going to sound
0:16:00 cool.
0:16:02 And then we’re gonna be like, here’s the crazy journey of how I got there.
0:16:02 All right.
0:16:04 So how much did you buy that business for?
0:16:07 I bought the business for $3.4 million.
0:16:10 So he buys a bag business for $3.4 million.
0:16:14 That business had been around for how long and about how much money was it making when you
0:16:14 bought it?
0:16:14 Yep.
0:16:17 So it was about 15 years old.
0:16:23 Uh, the business had been making anywhere from, and it was right after COVID.
0:16:29 So it was a weird few years, but it had been making anywhere from eight to $11 million a
0:16:29 year.
0:16:36 in revenue and it was doing on average about $800,000, um, in profit.
0:16:38 And what’s the URL?
0:16:39 What’s the URL?
0:16:41 Fleet, fleet packaging.com.
0:16:42 Best bags in the business.
0:16:43 Best bags.
0:16:45 Do you have like a, do you have like a slogan yet?
0:16:47 So we’re, we’re working.
0:16:50 Oh, maybe we could come up with it later on the brainstorm later.
0:16:56 It’s like, uh, no, we’re working on a rethink your packaging partner or rethink packaging
0:16:57 partnership.
0:17:00 Cause what we’re trying to do is, you know, there’s a lot of people that sell packaging,
0:17:02 but what we’re trying to do is just do it better than everybody.
0:17:07 Just kind of go that extra level of like, let’s make your life easy as a packaging.
0:17:07 So Dan explain.
0:17:12 So you said you bought this business this about 18 months ago, it was doing 11 million in
0:17:17 revenue, about 800,000 in profit that the seller, that the, the guy who owned it was able to,
0:17:18 that was his living.
0:17:20 He’s making $800,000 a year.
0:17:23 And now, uh, last year, how much revenue did it do?
0:17:24 You grew the business.
0:17:26 Last year, uh, we had a record year.
0:17:33 I think we did, we did about 13, 8 million, uh, in, that was, that was pretty easy to
0:17:34 get the information out of them.
0:17:36 Didn’t he just say, he can’t, I just thought I can’t share a client.
0:17:38 I just thought I can’t share client names.
0:17:38 I’ll share everything else.
0:17:43 How much money did you put down to buy this business?
0:17:45 Cause again, you talked about like, dude, I didn’t, most people assume if I’m going to
0:17:47 buy a business for three and a half million dollars, cool.
0:17:49 Where am I going to get three and a half million dollars from?
0:17:49 Yep.
0:17:51 And really quick, how much profit does it do now on the 13?
0:17:56 On the 13, we did like $1.7 million profit last year.
0:17:58 So you, you, you’ve creamed it.
0:17:59 I mean, you crushed it.
0:18:00 You, you, yeah.
0:18:03 Last year was, I killed it from the, suck on that Zuckerberg.
0:18:04 I don’t need you anymore.
0:18:05 There you go, man.
0:18:05 Got it.
0:18:10 So you bought a business that made 800, uh, K and profit to, uh, you’ve more than doubled
0:18:10 it.
0:18:11 Yeah.
0:18:15 And there were lots of, and you know, was it every, you know, things that I did that
0:18:15 doubled it.
0:18:16 Certainly that was part of it.
0:18:21 A lot of it was getting out of COVID and figuring out how we position it.
0:18:25 Um, and it turned out, you know, the business had not kind of reached its potential yet.
0:18:28 And back to what Sean said, you bought it for 3 million or so.
0:18:29 Where’d the money come from?
0:18:30 3.4 million.
0:18:32 So we did it through an SBA loan.
0:18:38 Um, and we ended up putting 200,000 down.
0:18:41 I say we, cause I say me and my wife, cause we put our house.
0:18:41 On the line.
0:18:43 Like we went, we went all in on this business.
0:18:47 Uh, we spent, uh, 150,000, uh, from our savings.
0:18:50 And then my wife took a loan off her 401k for the other 50.
0:18:55 Um, so that was the, again, house on the line, 401k on the line.
0:18:55 Like this was it.
0:19:00 Was she just down from day one to do this or what did you, did it take a lot of persuasion?
0:19:03 How did you position this with the wife to, to make that happen?
0:19:04 She was down.
0:19:10 I mean, she has a similar kind of philosophy on, you know, we should do something that’s going
0:19:12 to be kind of a step change in where we’re at.
0:19:16 You know, if we’re going to bet on someone, we should bet on us.
0:19:20 And, you know, she knows, Sean, she knows what we’ve been up to for the past, you know,
0:19:21 however long.
0:19:23 She knows she married a stallion who just needed to run.
0:19:27 So this wasn’t like a, oh my goodness, where did this idea come from?
0:19:28 This guy’s crazy.
0:19:30 It’s like, no, that, that sounds about right.
0:19:31 That this is what you’re doing.
0:19:32 How much of a loan have you paid back now?
0:19:33 But, but the same.
0:19:36 So he put, he put down to 200 K, he got an SBA loan.
0:19:39 And then he had a seller note also, which I think is a key part of this.
0:19:42 So do you want to explain where the rest of the money came from?
0:19:44 So 200,000 from you, where’d the other 3.2 come from?
0:19:45 Sure.
0:19:47 So 1.8 came from the bank.
0:19:50 200,000 came from me.
0:19:56 And then the other 1.4 came from the seller, which effectively we said, hey, like, you know,
0:20:00 we’re not going to pay this upfront over the next five years, assuming the business continues
0:20:04 to do well, you know, we’ll pay this second part of the business, or sorry, second part
0:20:04 of the debt.
0:20:09 So it’s a forgivable seller note, which means effectively, if the business doesn’t do what
0:20:13 it’s supposed to do, that debt’s forgiven on any given year.
0:20:16 So that was part of what made me feel better about the deal.
0:20:19 You know, because you run all these scenarios when you first buy it, it’s like, all right,
0:20:21 we’re going to put our life savings and house on the line.
0:20:23 What happens if things go bad?
0:20:28 And it’s like, all right, at least half of this debt, if things go bad, we’ll go away.
0:20:29 Why’d they want to sell the company?
0:20:31 That seems like a…
0:20:31 He was retiring.
0:20:32 He just wanted out.
0:20:33 He wanted out.
0:20:39 And that’s kind of the, what I loved about kind of this world, once Sean kind of turned me
0:20:45 on to it is, like, the baby boomers are retiring, like, the past few years, the next 10 years,
0:20:46 I forget what the window is.
0:20:49 But, like, a lot of them don’t have kids, or they have kids that don’t want it.
0:20:50 This guy had three kids.
0:20:51 None of the kids wanted the business.
0:20:55 Dan had told me, he goes, anytime I ran into a business that looked really cool, and the
0:20:59 guy who owned it was 26, he’s like, I don’t want to buy this off a 26-year-old.
0:21:00 Why are you selling this business?
0:21:02 He’s like, I want to buy from a boomer.
0:21:03 That is my goal.
0:21:06 I want to buy from a guy that wants to move to Florida and play golf.
0:21:11 Like, that to me is, like, this business has been great to me, and now I’m done.
0:21:12 I’ve made my money.
0:21:12 I’m ready to go.
0:21:14 Like, that’s the type of business I want.
0:21:17 And he would probably still answer your phone calls when you had questions.
0:21:18 Exactly.
0:21:21 Like, and, you know, spoiler alert, I found, like, the nicest buyer in the history of the
0:21:21 world.
0:21:23 Like, I got incredibly lucky.
0:21:28 Cutting your sales cycle in half sounds pretty impossible, but that’s exactly what Sandler
0:21:30 training did with HubSpot.
0:21:36 They used Breeze, HubSpot’s AI tools, to tailor every customer interaction without losing
0:21:37 their personal touch.
0:21:39 And the results were incredible.
0:21:42 Click-through rates jumped 25%.
0:21:44 Qualified leads quadrupled.
0:21:47 And people spent three times longer on their landing pages.
0:21:52 Go to HubSpot.com to see how Breeze can help your business grow.
0:21:56 So, to me, there’s two kind of good things out of this episode.
0:21:58 One, I get to hang out with my best butt.
0:21:58 All right.
0:22:02 The second would be for other people who are listening to this, that they hear what
0:22:05 I’ll call, like, the real-life take of this.
0:22:06 Because Dan’s not selling courses.
0:22:08 He’s not telling you, you should do this.
0:22:13 He’s not, like, a business-buying guru who’s got a book and a mastermind.
0:22:14 None of that.
0:22:17 I think he’s got good opinions and, like, a real story of, like, all right, where do you
0:22:17 start?
0:22:19 So, to me, this episode would be interesting.
0:22:22 Because if I’m interested in buying a business, I kind of want to know, what is it like from
0:22:29 a person who’s smart but came in with no experience, no money, and no, like, kind of clue where
0:22:29 to start?
0:22:32 Because even though I was like, hey, you should do this, it’s not like I was there helping
0:22:33 you every day.
0:22:37 Or, you know, you were wandering around figuring this out, you know, by yourself.
0:22:41 So, he told me this, I called Dan, like, last week to be like, all right, what do you want
0:22:41 to talk about?
0:22:42 He had said something great.
0:22:47 He goes, all right, I started, and I was high excitement and low knowledge.
0:22:49 So, I bought the book.
0:22:50 Oh, you ever heard this framework?
0:22:51 Like, D1 through 4.
0:22:58 It’s like, you start high excitement, low knowledge, and then you become, you know, you kind of go
0:23:00 up in knowledge and down in excitement.
0:23:05 You kind of enter into the pit of despair, which is low knowledge, low excitement, and then
0:23:09 you learn more, and you slowly kind of get out of this pit.
0:23:11 His quote was, this is great.
0:23:12 It’s going to be great.
0:23:13 This is going to be easy.
0:23:14 I’m going to be rich.
0:23:18 And he goes, then I started, and I realized, this is not easy.
0:23:21 This is not going great, and I might not be rich.
0:23:26 And so, do you want to talk about, like, how you actually, like, what’d you do?
0:23:28 Yeah, first, maybe 100 days, what’d you do?
0:23:30 Well, first, how’d you find the company?
0:23:33 So, I ended up finding the company through a broker.
0:23:34 Got it.
0:23:38 So, a lot of what I started to do, and I’ll go back to the beginning in a second, but,
0:23:41 you know, there’s a ton of business marketplaces out there.
0:23:44 Acquire.com, probably the most known for tech.
0:23:48 Biz Buy Sell, for kind of more of those main street businesses.
0:23:52 But there are these brokers that effectively represent buyers and kind of put together these
0:23:54 packets of, like, hey, I have this bag business.
0:23:55 Here’s what it does.
0:23:59 And most brokers, I was telling this to Sean, hate searchers.
0:24:03 Because they just assume, like, you know, people are, you know, they just saw a Cody
0:24:04 Sanchez video.
0:24:06 They’re about to buy a business.
0:24:06 Like, they’re pumped.
0:24:09 You know, this morning, they saw the video, and now they’re ready to buy the business.
0:24:10 So, they reach out to the broker.
0:24:13 This one broker actually, like, understood.
0:24:14 He’s like, I get it.
0:24:16 I understand this jump from tech to this.
0:24:20 And then, like, several months later, he calls me back, which is rare.
0:24:21 Like, most people didn’t.
0:24:22 He’s like, I got this business.
0:24:24 You know, check this guy out.
0:24:26 So, it ended up happening through a broker.
0:24:28 And to go back to Sean’s thing, the first 100 days.
0:24:31 So, the first thing, you know, hate Google.
0:24:33 Started reading books.
0:24:34 Started watching videos.
0:24:36 Started to just learn, like, what is a search fund?
0:24:38 That was something that, like, Sean didn’t use that word.
0:24:42 But eventually, I found it, where effectively, there’s kind of a few models to do this.
0:24:49 One of them is kind of a search fund where someone will actually, you know, you get someone to finance you looking for a business.
0:24:53 And then, you take a small piece of it, and they effectively own most of it.
0:25:00 Like, there’s lots of courses now in business schools, you know, teaching entrepreneurship through acquisition.
0:25:02 It’s kind of the fancy way of talking about it.
0:25:06 And then, there’s kind of, like, this other model of, you know, you just do it yourself.
0:25:10 You know, you effectively bootstrap it, find the money yourself, do it through an SBA loan.
0:25:13 So, first, it was kind of, like, educating myself on the different models.
0:25:17 You know, I thought a little bit about getting the funding.
0:25:21 But at the end of the day, it’s like, no, if I’m going to do this, like, it’s going to be me.
0:25:23 I don’t want to answer to anybody.
0:25:25 And then, it was really, like, finding this community.
0:25:28 And there’s a really cool community in search.
0:25:32 It’s been growing pretty steadily over the past, you know, call it five-ish years, I think.
0:25:36 But there’s a website called searchfunder.com.
0:25:39 Like, those were my people during the time.
0:25:41 Because search is, like, it’s a very lonely process.
0:25:44 When you guys say, look at 100, what does that mean?
0:25:46 Does that mean browse a website with 100?
0:25:48 Or does that mean actually due diligence on 100?
0:25:49 So, it’s something in the middle.
0:25:51 So, you basically see kind of, like, the headline on the website.
0:25:54 It’s, like, laundromat for sale, you know, $4 million.
0:25:58 Like, usually, you’ll get, like, the flashy headline and not much more information.
0:26:01 Then, you kind of got to double-click in and request information.
0:26:03 And so, you usually sign kind of an NDA.
0:26:08 And you’ll get something called a SIM or a confidential information memorandum.
0:26:10 So, it’s kind of look at, like, 100 of those.
0:26:13 Because that’s really going to show you, like, here’s the finances of the business.
0:26:15 Like, here’s kind of the story that they’re putting together.
0:26:18 It’s like a summary of the business today.
0:26:22 And so, that’s the one where it’s, like, you know, I think a mistake is people think,
0:26:26 like, you fall in love with the first few businesses you see.
0:26:27 Like, oh, this is great.
0:26:28 Yeah, I can buy this.
0:26:32 And you kind of really, like, I mean, you’re just like a teenager that just went through puberty.
0:26:35 And you just fall in love with the first, you know, the first set you see.
0:26:37 And you’re like, well, no, that’s probably not the right way to do this.
0:26:43 Let me actually just plan that it’s probably going to take me over 100 to even find one good one.
0:26:46 And let me have that mental expectation.
0:26:50 And let me start counting how many I’m looking at and not just, like, being desperate to find,
0:26:51 you know, the one right away.
0:26:54 And then you’re saying, like, you know, you’re looking at an HVAC company.
0:26:55 You’re like, I don’t know what HVAC is.
0:26:57 You’re looking at the financials.
0:26:58 You’re like, I don’t know which number to look at.
0:26:59 It’s overwhelming.
0:27:04 But you kind of got to go through those reps and figure it out before you even have any idea
0:27:04 of what you’re looking at.
0:27:09 I kind of liken it to looking for a house because I think that’s a, you know, or an apartment
0:27:12 even because that’s something that most everyone goes through, even if they’re renting.
0:27:16 You know, usually the first time you see it, you have nothing to compare it to.
0:27:22 So you end up kind of getting to a place where you can spot the winners from the losers faster.
0:27:26 But like Sean said, when I first started, it was like super exciting because it’s like
0:27:27 the ultimate career fair.
0:27:28 It’s like, oh, cool.
0:27:30 I’m going to be a landscaper.
0:27:35 I’m going to be, you know, I’m going to own, you know, a scrap metal recycling center.
0:27:37 It’s like you just get so excited.
0:27:42 And again, the business brokers, especially like they make these things sound amazing.
0:27:43 It’s like, of course I want to buy this business.
0:27:46 So what were some of the cool businesses you saw?
0:27:49 Like what’s one, what, give us an example of one that you kind of like, but you didn’t
0:27:50 end up pulling the trigger.
0:27:56 So my favorite example is I got pretty close to buying a sausage company.
0:28:00 It did about like $10 million a year in sausage.
0:28:02 You know, my favorite, my favorite anecdote on this one.
0:28:04 Sam is also a fellow sausage man, actually.
0:28:06 I know, I know that.
0:28:09 If we held an event, it might also be a sausage fest.
0:28:09 We don’t know.
0:28:13 You’re, you’re almost a purveyor of fine wieners.
0:28:13 That could have been.
0:28:14 I could have been.
0:28:15 And still maybe.
0:28:18 So you went, but you didn’t just like look at, you didn’t just read the same.
0:28:19 You’re like touring.
0:28:19 No, I went there.
0:28:24 I went to this, I went to this, I’m like walking through, like pretending to know what I’m talking
0:28:24 about.
0:28:26 Like, you know, how hot does this oven get?
0:28:28 Like, it’s like, that’s the biggest thing.
0:28:29 You gotta like figure out what questions to ask.
0:28:30 This is a really common.
0:28:33 Have you guys heard of the secretary problem?
0:28:33 Yeah.
0:28:35 Somebody, explain it.
0:28:36 Somebody told us that on the pod.
0:28:40 So I used it when I was looking for an apartment the other day, and it was actually pretty
0:28:40 magical.
0:28:45 And so the thing is, is that, so I’m repeating from memory, so I might get it wrong.
0:28:48 But basically, if you have, it started with the secretary.
0:28:55 If you’re hiring a secretary, you’d want to interview, let’s say you had 10 interviews lined
0:28:55 up.
0:29:02 You wouldn’t want to pick who to hire until you saw at least 37% of the applicant pool.
0:29:09 And so for example, if you saw 10, or if you had 10 to see 10 interviews, you’d want to go
0:29:10 through the first four.
0:29:15 And then after the first four, you would select the first person who you met that was of equal
0:29:19 value to or close to the highest person you saw in the first four.
0:29:19 Does that make sense?
0:29:26 So if you see an apartment, let’s say you go and see 100 of them, the first 37, you don’t
0:29:26 do.
0:29:32 But the next one after the first 37 that you see that is as good as the best one that you
0:29:34 previously saw, that’s the one you select.
0:29:36 And that’s called the secretary problem.
0:29:38 So you can’t go back and buy that first one?
0:29:38 You can’t go back.
0:29:39 You cannot go back.
0:29:44 But you need to spend time exploring the first third to see what all is out there.
0:29:46 That’s fair.
0:29:48 I bought the house that I found on the first day of touring.
0:29:51 So I just want to make sure I didn’t violate the secretary problem.
0:29:51 But I did.
0:29:52 You did.
0:29:54 But you didn’t with the business.
0:29:55 I didn’t with the business.
0:30:00 And so of the 100 or so that you saw, were there any that looking back, you’re like,
0:30:00 that was a winner?
0:30:09 No, it wasn’t until we saw and, you know, there were a few close ones where like, I think
0:30:12 I was under LOI, maybe three or four times.
0:30:16 For example, that sausage company had like one huge client.
0:30:17 They had one huge client.
0:30:18 And no contract.
0:30:18 No contract.
0:30:20 But you thought they were amazing.
0:30:24 That’s kind of my point is you thought of some were so good that you’re under LOI.
0:30:28 Yeah, but then you get, you know, you’re under LOI and then you get, you know, the full amount
0:30:30 of information and then you very quickly see like.
0:30:34 LOIs are also in this business is like a very, it’s kind of like.
0:30:38 Agreeing to a first date more than it is an engagement.
0:30:40 People, people make LOIs.
0:30:42 They’ll have three LOIs out at the same time.
0:30:44 And it just says it’s an agreement.
0:30:46 We agree to look more, right?
0:30:49 We agree to take this seriously to show you some interest here.
0:30:53 But it’s not like, it’s not binding in the way that you would, that you think when you
0:30:54 first go into this.
0:30:57 Or if you’re the seller, you’re like, oh, we got an LOI.
0:30:58 It’s like, well, hang on.
0:31:03 I would bet the LOI to close ratio is probably, I have no idea, but I would guess it’s like
0:31:07 under 20%, you know, in terms of just LOIs received during a process.
0:31:11 Yeah, because, you know, you’re not giving the, a lot of the information you’re not even
0:31:13 getting until that point anyway.
0:31:15 So, you know, you’re checking all the boxes up until there.
0:31:16 Like, this seems good.
0:31:18 I think this is going to be good.
0:31:22 And then, you know, you get their financials or you go tour it and you find kind of that,
0:31:24 oh, this is why, you know, you’re selling it.
0:31:26 Or this is why it hasn’t been bought yet.
0:31:27 That’s another thing.
0:31:29 One thing you did that, that was great.
0:31:33 I think, I think I kind of was like, the one piece of advice I think I was pushing on you
0:31:36 was like, hey, write a memo for every one of these deals that you like.
0:31:40 Basically, he would, he would write me like a one page notion memo that was basically
0:31:41 like, what is the business?
0:31:44 Why does it, you know, like how, like, what is the current state of it?
0:31:46 Just speak in numbers only, right?
0:31:47 Why is the seller selling?
0:31:50 You know, what’s the one reason that you would buy this business?
0:31:52 What’s the one reason you would not buy this business?
0:31:56 You know, what are the kind of, and you would just go there and you would write these memos.
0:32:01 And I feel like that was key because I remember you would call, you were like excited about,
0:32:04 let’s say, like, I don’t know, what was an example of one you were excited about that?
0:32:06 But then after the memo, we talked it, we beat it up.
0:32:08 And then we were like, no, this is not worth doing.
0:32:10 It was a Clover app.
0:32:11 I remember the conversation.
0:32:15 So basically, like, so the Clover point of sale system, like when you’re like checking
0:32:18 out of a restaurant, it’s like, you know, they flip it and you’re like, what’s your tip?
0:32:20 This guy made different apps for it.
0:32:23 So like, you know, like when you round up for charity, for instance, I think that was one
0:32:24 of his apps.
0:32:26 So it was actually pretty interesting.
0:32:28 It was like, hey, Clover’s a growing super niche.
0:32:29 Yeah, very niche.
0:32:31 But he owned 20 of these things.
0:32:34 It was, you know, more up my alley in terms of tech.
0:32:38 But, you know, when I actually hashed it out with Sean, you know, it was kind of like at
0:32:42 the end of the day, it was very niche, very small.
0:32:47 And there wasn’t necessarily a good path to grow that business.
0:32:51 It was just something that like was interesting now, but probably didn’t have the longevity
0:32:54 of, hey, you’re, you’re about to swing.
0:32:57 You know, this is going to, that’s another thing you said to me, Sean, you were like, this
0:33:02 is going to be, you know, don’t, don’t listen to all those like blogs out there of like, yeah,
0:33:03 you’re going to buy this, flip it.
0:33:05 And the next year you’re going to buy two more businesses.
0:33:08 Like, no, you’re probably going to be working in this business for, for a little bit of time.
0:33:10 Make sure it’s good.
0:33:11 Make sure it’s lasting.
0:33:15 And I think that first one was an example of like, for sure, if I was going to buy 10
0:33:16 businesses, maybe that was one of them.
0:33:18 But like, that’s not the game we’re playing right now.
0:33:20 A couple other, I thought like key points.
0:33:23 One was don’t buy a job.
0:33:27 So I think early on when you go to search, you see big price tags and you get scared a
0:33:29 little bit because it’s like, how am I going to afford this?
0:33:31 And like, this is too risky.
0:33:36 And so you gravitate towards things that feel like kind of safer and more achievable, but
0:33:39 it’s actually a bit of a trap because it’s like, yeah, this is safer, more achievable.
0:33:41 It nets a hundred grand a year of profit.
0:33:47 I can buy it for only, you know, he only wants 180 or something like that.
0:33:50 And so you get excited because it seems cheap.
0:33:54 But the problem is it’s still going to take all of your time to own, to buy this business,
0:33:55 to run this business.
0:34:00 And you basically bought a job versus the thing you bought, which was like $11 million in
0:34:03 revenue, doing a million dollars a year, almost a profit.
0:34:04 Real dollars.
0:34:04 Yeah.
0:34:05 That’s not a job anymore.
0:34:06 Now that’s like an asset.
0:34:07 That’s like a real business.
0:34:10 And yes, it took more risk and it took more time to find a good one of those, but it was
0:34:11 like well worth it.
0:34:13 So I feel like that was another kind of like key learning.
0:34:17 I think we both had during this process, like became blatantly obvious.
0:34:17 Yeah.
0:34:22 Not rushing the search and you want to trust me, like call it like five months in, you know,
0:34:25 when you really hit this pit of despair of like, I’m never going to find anything.
0:34:30 Everything under $5 million is trash, you know, private equity scooping up, scooping up all
0:34:34 the good stuff and anything that’s left, you know, under this point, like there’s a reason
0:34:35 it’s there.
0:34:38 You kind of just get to this place like you’re never going to find it.
0:34:42 It’s easy to want to just grab one and say like, those things are fine.
0:34:45 Like we’ll kind of ignore those, those holes in the business.
0:34:49 I’ve made so many bad decisions, like most all bad decisions that I’ve made.
0:34:54 It was, I could like, it’s like I had principles leading into this and I got fatigued and I didn’t
0:34:55 stick to my principles.
0:34:57 Yeah, exactly.
0:35:01 There was one that was like an SEO business as it was actually like a good business, but
0:35:03 what was the situation with that one?
0:35:03 Yeah.
0:35:07 So that one was, it was like a competitor for like a SEM rush.
0:35:09 You know, it was a solid business.
0:35:14 It made, I think it did like a million, it was like half a million to a million a year in
0:35:14 profit.
0:35:16 Like it was, it was a nice business.
0:35:22 But this was right as, you know, AI was really starting to becoming kind of the center point
0:35:25 of the conversation, especially as it relates to search.
0:35:28 I helped a friend buy a company that was in the SEO space.
0:35:33 And anytime an SEO company wants to sell, it’s sort of like at a time, do you guys remember
0:35:34 Bitcoin miners?
0:35:40 like the, it’s like, so if these are so good, why are you selling a money printer?
0:35:41 Like a literal money printer.
0:35:41 Yeah.
0:35:47 And SEO is sort of the same way where it’s like, wait, so if you’re just getting like a
0:35:50 fountain of traffic and customers, why would you want to get rid of this?
0:35:51 Well, that’s the same thing.
0:35:55 It’s like when you meet a 30 year old selling a business, it’s like, you know, why?
0:35:56 And that, that was exactly that.
0:36:00 And I think going into, you know, let’s call it the AI headwinds.
0:36:03 It was like, there’s a lot of reasons this business might be completely different.
0:36:08 And I think Sean said, like, unless you feel like you’re the best suited to take this SEO
0:36:13 company into the, you know, the next five years, there’s more risk than upside.
0:36:14 And it’s like, that is not my background.
0:36:16 You know, that’s not the game I want to play.
0:36:22 And funny enough, I was actually in LOI with this SEO company when I found fleet.
0:36:25 And I, I was, I almost wrote off fleet.
0:36:26 Like it seemed really interesting.
0:36:30 And I like, there was some part of me that, you know, didn’t have me rejected, even though
0:36:33 I was kind of in very late stages with this other company.
0:36:35 Thank goodness.
0:36:36 I, you know, I made that pivot.
0:36:38 So let’s tell the story.
0:36:41 So you, you, the broker calls you, says, check out this business.
0:36:42 What happens from there?
0:36:48 So from there, um, I think this was before I was under LOI, but, you know, effectively fleet
0:36:52 looked very different than a lot of these other companies.
0:36:55 Like the finances at first glance, like we’re super clean.
0:36:59 Um, you know, the story made a lot of sense.
0:37:03 Like a lot of these Sims and a lot of these brokers, like, you know, yes, they’re padding
0:37:08 things and trying to make things sellable, but, um, there was always like a blatant
0:37:11 gotcha in a lot of these, like, let’s take the sausage example.
0:37:13 They’re like, Oh yeah, this makes half a million a year.
0:37:13 Oh.
0:37:17 And by the way, he also makes another 400,000 in cash.
0:37:19 Um, but we don’t pay tax on that.
0:37:20 So like, you can’t see that anywhere.
0:37:23 And it’s like, a part of me is like, that’s kind of cool.
0:37:27 It also sounds a little dangerous, like selling $400,000 worth of sausage on the side of the
0:37:27 road.
0:37:32 Um, but like, there’s always something like that, uh, with a lot of these businesses, but,
0:37:34 but fleet was like very clean.
0:37:36 Like everything was kind of buttoned up.
0:37:40 The story was really tight and it kind of checked all the boxes of like, this is a recurring business.
0:37:43 Like people are rebuying the bags several times a year.
0:37:45 They have these amazing clients.
0:37:49 They have these amazing factories that like, it looked very different than, than these other,
0:37:50 than these other companies.
0:37:51 It sort of sounds like Denner Mifflin of bags.
0:37:52 Exactly.
0:37:52 Yeah, exactly.
0:37:54 I am Michael Scott.
0:37:59 Um, you know, it’s, it’s, it’s a, it’s a necessity that these companies need.
0:38:00 Um.
0:38:01 So what’d you do?
0:38:02 You go, you meet the guy?
0:38:04 I was actually going to say no to the broker.
0:38:08 Um, because again, this SEO thing was heating up.
0:38:11 I hadn’t had my, you know, come to terms talk with Sean yet.
0:38:12 He’s like, Hey, the seller wants to meet you.
0:38:14 You know, let’s all go out for lunch.
0:38:16 Um, I was like, all right.
0:38:17 I’m like free lunch.
0:38:17 That’s cool.
0:38:20 Um, so we meet for lunch.
0:38:24 Um, and like my goal was like, you know, entertain this business.
0:38:26 But at the end of the day, like I’m under LOI.
0:38:28 So I really shouldn’t, uh, free lunch.
0:38:28 Yeah.
0:38:29 Free lunch.
0:38:30 I should, I should break up with him.
0:38:36 After this lunch, but we start talking and like, you know, just had this instant connection
0:38:36 with this guy.
0:38:38 Like he was the most standup guy.
0:38:43 Uh, I had met in, in the past few months, especially when it comes to like the business ownership,
0:38:49 you know, he wasn’t trying to, um, you know, pull something over my eyes.
0:38:50 Like he wasn’t trying to spin the story.
0:38:51 He’s like, this is the story.
0:38:54 Like a lot of people like, you know, put lipstick on a pig.
0:38:58 Uh, this guy was like selling a rabbit or selling a different animal.
0:39:01 Like it wasn’t like, he kind of said it as it is.
0:39:02 And it was, it was very refreshing.
0:39:07 Um, and like in that moment, it was like, I kind of abandoned the, like, I’m going to break
0:39:08 up with you.
0:39:09 And like, we kind of went the other way.
0:39:11 We started talking about like, okay, well, how are we going to work together in the transition?
0:39:12 And how are we going to grow this?
0:39:19 Um, and then my favorite part is they, uh, you know, they asked if we wanted any dessert
0:39:22 and he’s like, oh, do you want to share a tartufo?
0:39:24 And I was like, yes.
0:39:26 And we shared a tartufo.
0:39:30 I don’t think I’ve shared dessert with my wife ever, but I shared a tartufo with this guy.
0:39:35 And like, I remember calling my wife after and I was like, you know, I didn’t do what I was
0:39:36 supposed to do.
0:39:39 Like I was supposed to break up with this company, but like we shared a tartufo and
0:39:41 like, I think we’re going to buy a bag business now.
0:39:44 Um, and it was just like this, like complete 180.
0:39:47 Um, but in hindsight, literal Michael Scott, right?
0:39:48 Isn’t there even a scene at Chili’s?
0:39:49 That’s like exactly this.
0:39:50 Yeah, exactly.
0:39:53 It would be like a lava cake or something like that.
0:39:55 A tartufo.
0:39:59 A tartufo is very, I don’t, I don’t think that was my first tartufo I’ve ever had too.
0:40:01 Who knows what a tartufo is?
0:40:02 I had to Google it.
0:40:05 You’re, you’re my type of people, Dan.
0:40:06 I’ll tell you that.
0:40:07 There we go.
0:40:11 And then, you know, from there, I, you know, I broke it off with the SEO guy.
0:40:13 You know, we ended up like diligence took a while.
0:40:17 That’s like the second part was like, okay, like now you’re committed to buying a business.
0:40:19 How are we going to do this now?
0:40:22 Um, and like, it actually took four months.
0:40:26 Um, cause again, like I’m signing my house away, signing my life savings away.
0:40:30 Um, like I needed to be damn sure that this thing was going to be solid before I did that.
0:40:34 Um, and then like the world of search, like took on kind of like that next chapter of like,
0:40:38 all right, well, how do you actually like figure out, you know, are the assumptions you’ve made
0:40:43 in this quick few week period of dating, like, are they correct?
0:40:46 And we kind of transitioned to that, uh, that phase of the process.
0:40:52 What, uh, what, uh, what, what was wrong and what was right for your assumptions and what
0:40:55 was the difference in his asking versus the paying?
0:41:00 So we actually negotiated the price of it pretty early.
0:41:05 Like that part actually happened during the LOI for the most part, or like 99% of it.
0:41:09 And there were actually five bidders, which I thought was a lie.
0:41:15 Like I kind of assumed this was, um, them bluffing because they were like, yeah, we got four
0:41:18 people in the packaging industry that want to buy and then there’s you.
0:41:21 So, you know, it’s going to be competitive, blah, blah, blah.
0:41:24 But again, I just figured that was a tactic to try to drive the price up.
0:41:27 Um, but to this day, the, you know, the seller maintains that that was the case.
0:41:30 So at this point I have no reason not to believe it.
0:41:36 We ended up taking, I think they wanted three, five or three, six for the company.
0:41:38 So we ended up, uh, agreeing to three, four.
0:41:42 The part that took the most negotiation was that forgivable seller note.
0:41:50 Uh, so the biggest kind of, uh, red flag in the business, uh, was that one client was over
0:41:52 50% of their revenue.
0:41:57 So my biggest fear, rightfully so was, you know, everything’s great today.
0:41:59 They’ve been a client for 15 years.
0:42:03 You know, what happens if next year they leave all of a sudden is a very different business.
0:42:09 So what we did was, you know, kind of ran the numbers of the bank and said, Hey, in order
0:42:13 for us to finance this, like this is, this is the number that we’d have to have if for whatever
0:42:14 reason we lost that client.
0:42:20 So that part was probably the, you know, the most intense of the negotiations, but for better
0:42:23 or worse, like most of what he said ended up being true.
0:42:24 Like there weren’t any of these.
0:42:26 And then he said that in the sim, like that, that wasn’t news.
0:42:34 What was surprising to you or what was different than the dream that gets sold on social media?
0:42:39 So if you watch the videos and you see Cody Sanchez telling you to buy, just buy a laundromat,
0:42:42 it’s going to, you’ll be rich, whatever, that, that type of shit.
0:42:44 Like, was it in line with that?
0:42:45 Was it different than that?
0:42:47 What was the difference if there was one?
0:42:52 Yeah, it’s not nearly as easy as a Cody Sanchez makes it seem.
0:42:55 And I, I probably went a little more overboard.
0:43:00 I think like when I think about the amount of time I spent in diligence, the amount of money
0:43:06 I spent in diligence, you know, I like, I’m a risk taker for sure, but I’m a calculated risk
0:43:06 taker.
0:43:12 So it’s like, before I make this gigantic gamble on the rest of my life, I want to make sure I’ve
0:43:14 done everything humanly possible.
0:43:17 And I think when you watch a lot of these videos about buying the business, like they
0:43:22 make it seem like, you know, you can just find one and then kind of transition right away.
0:43:23 And the whole process is really easy.
0:43:28 Like the process of getting the loan, like some people liken it, actually, I think Cody Sanchez
0:43:29 likens it to this.
0:43:33 So maybe, maybe she actually isn’t setting unrealistic expectations, but it’s like, it’s a financial
0:43:34 colonoscopy.
0:43:36 Like they want to know everything about you.
0:43:39 And like that part’s tough.
0:43:44 And then you give the company a colonoscopy to try to figure out everything about it, quality
0:43:45 of earnings, that sort of thing.
0:43:49 And one of the things that I did, I think that I’m happiest that I did because it got me the
0:43:53 most comfortable outside of, you know, paying for accountants and lawyers to scour things
0:43:56 was I shadowed the guy.
0:43:57 So every week.
0:43:59 Cause he, he happened to live in New York city too.
0:44:00 Oh, the whole thing was serendipitous.
0:44:03 Like he lived 20 minutes from my house.
0:44:03 Wow.
0:44:08 And I, the, the, the, you know, before I signed the SIM, it was like packaging distributor in,
0:44:09 in the Northeast.
0:44:11 So like, you know, it could have been in Boston, could have been wherever.
0:44:13 Uh, this guy lived 20 minutes for me.
0:44:15 That’s how the Tartufo was so accessible.
0:44:21 But I literally went to, I went to the office every week, sat with the guy, um, for several
0:44:23 hours and just, he walked me through packaging.
0:44:27 He walked me through his day to day and it just gave me it, you know, it started
0:44:29 my training of like, okay, well, how am I going to run this business?
0:44:33 But it allowed me to really kind of take what was on that paper and figure out, you know,
0:44:37 okay, this is, these are the skills that I will need to run this business.
0:44:39 This is how I might be able to grow it.
0:44:40 This is where I might need more help.
0:44:42 Um, it made it more real.
0:44:46 And I think I was lucky in that I was able to do that because I’ve talked to other searchers.
0:44:48 I was like, you know, let’s go back to the laundromat.
0:44:49 You know, you buy a laundromat.
0:44:53 I would imagine day one, you kind of walk in and the machine breaks and you’re like, oh crap.
0:44:54 Like, what do I do?
0:44:56 I know nothing about these machines.
0:44:57 Now I need to find a mechanic.
0:45:02 Like everything is a little more complicated and nuanced, uh, with regards to even like
0:45:04 how laundromats are, you know, I went down the laundromat path.
0:45:06 Like I spent a while thinking that was going to be my destiny.
0:45:10 And it’s like, well, no, like valuing a laundromat, like actually has a number of facets and you
0:45:12 need to kind of really get into the weeds there.
0:45:17 So, you know, I’d say like the biggest takeaway is like, it is hard and it takes time.
0:45:20 It’s not something that you can just do, you know, for a few minutes a day.
0:45:24 Um, like you really got to invest in making this happen if that’s what you want to do,
0:45:27 or you’re going to end up, you know, with some surprise down the road.
0:45:31 I think that’s probably my biggest relief is like, I’ve been waiting for, you know, the
0:45:32 shoe to drop somewhere.
0:45:33 And like, this is what I missed.
0:45:36 And like, you know, knock on wood, haven’t had that yet.
0:45:38 How many hours a week are you working on it now?
0:45:39 And how many hours a week was he working on it?
0:45:47 He was probably working, let’s call it 25 to 40.
0:45:49 I think he definitely was working less.
0:45:51 He kind of had it on autopilot.
0:45:57 I think he had started to, you know, kind of tune out a little bit, but not in a way that
0:45:58 like he neglected the business.
0:46:00 It was just like, he’d been in packaging all his life.
0:46:01 Like he could run it in his sleep.
0:46:07 He wasn’t as focused on kind of doing the growing or renegotiating things with suppliers,
0:46:08 building the supplier base.
0:46:13 You know, I’m probably working on, you know, 50 to 60 hours.
0:46:15 Like I spend like a bunch of time on this.
0:46:18 How much were you able to take home?
0:46:21 So that’s the million dollar question.
0:46:22 It’s like, okay, cool.
0:46:24 Your business is making all this money.
0:46:30 You know, at the end of the day, two years in, I’m still only making, you know, 150 a year.
0:46:36 Like I take the minimum amount that I need to for, you know, IRS compliance because I’m
0:46:38 saving the rest in able to finance growth.
0:46:42 Like I, like I’ve made enough to pay back the loan, but I’m not paying back the loan because
0:46:43 I need that cash to fuel the growth.
0:46:49 It’s a very cash intensive business and I’m not in a place quite yet where I can take as
0:46:50 much off the table.
0:46:54 Although Sean has been giving me some other frameworks saying like, Hey, you actually should
0:46:54 be doing this.
0:46:58 What’s that framework, which is like, if you want to replace yourself, you have to pay yourself
0:46:59 the replacement costs.
0:47:01 No, not that.
0:47:04 But basically I did this in one of my businesses.
0:47:09 It’s not right for everybody, but I think it’s easy to go into rainy day mode as a business
0:47:09 owner.
0:47:13 When you play like two conservatives, you know, several of our businesses right now have just
0:47:17 like, like one of our businesses has just like two, $3 million just sitting in the bank
0:47:17 account.
0:47:20 And the bank, like it goes up every month.
0:47:24 It’s not like we have this like wild swings where you need this big cash reserve buffer.
0:47:26 It’s not like a heavy inventory business.
0:47:29 It’s like, you know, your, your, all of your operating expenses is a salary and you know
0:47:30 your salaries.
0:47:32 So there’s no surprises coming next month.
0:47:36 And even if there was like one of my friends, uh, our buddy, so we told me this, I was like,
0:47:37 how much do you keep in there?
0:47:39 Like three months of working capital, six months, 12 months.
0:47:43 Like, I think I have like 12 months of working capital sitting in the bank right now.
0:47:45 He’s like, no, I just take it all out.
0:47:46 I’m like zero months.
0:47:46 He goes, yeah.
0:47:48 He goes, I own this business myself.
0:47:51 So if I ever need the money, I just lend it back into the business.
0:47:53 Like I just, I can always write the check back.
0:47:55 It forces you to make a profit as well.
0:47:56 Yeah.
0:47:59 And so Andrew Wilkins, I came on this podcast and had this book, he was talking about profit
0:48:00 first.
0:48:04 And I really liked the philosophy of it, which is basically with normal business, you have
0:48:06 your revenue, then you have all your expenses.
0:48:11 And then it’s like, surprise, here’s how much profits left over after all that.
0:48:15 And usually what actually happens is there’s not as less profit than you would have guessed.
0:48:17 And it’s why, because expenses were a little higher, blah, blah, blah.
0:48:20 And you’re always in this profit comes last.
0:48:22 Profit first was basically you decide upfront.
0:48:24 You say, okay, I want to have a 20% profit margin.
0:48:29 So you take your revenue, you set aside money for taxes, which you know is going to be,
0:48:34 so you take your revenue, you take your profits, you set aside amount for taxes.
0:48:37 What’s left is your expenses budget.
0:48:41 So instead of making profit, the thing that comes last, you make the expenses come last.
0:48:42 And then you have to say, all right, cool.
0:48:47 Then my marketing budget can only be this much because I’ve decided to take this much as a
0:48:50 as a profit, a set profit margin out of my business.
0:48:53 And I don’t adhere to it 100%.
0:48:55 I don’t think it’s right for every business.
0:49:00 But I do think that, you know, Dan, in this case, I think he’s being a little overly conservative
0:49:01 as to how much cash he’s leaving in the business.
0:49:02 I did that too.
0:49:07 And the longer I delayed it, I took away one very valuable thing, which is if you have,
0:49:11 if you pay yourself every month out of the business and one month that’s light or another
0:49:14 month that’s heavy, the body just reacts to it.
0:49:15 If it’s light, you’re like, yo, what the hell?
0:49:18 And you will go fix a part of your business that was broken.
0:49:22 If you just leave it in and it’s just like a P&L, it’s just numbers on a spreadsheet.
0:49:23 It’s not money you actually receive.
0:49:27 You know, you’ll wait 15 months before you end up correcting that problem because it’s
0:49:29 all fictitious money anyways.
0:49:30 It’s not money you’re actually getting.
0:49:35 And so I think that actually getting that check every month creates this feedback loop that’s
0:49:37 actually quite valuable to a business owner.
0:49:42 It’ll cause you to scrutinize unnecessary expenses or like go after it.
0:49:44 Because once you taste a big month, like Sam, we have this with MFM.
0:49:48 If we have a big month in the next month, I’m kind of like, well, I kind of like the
0:49:49 feeling of that one.
0:49:50 Yeah, let’s do that again.
0:49:50 What do we need?
0:49:51 One extra episode too?
0:49:52 Should we go get a guest?
0:49:54 What’s Monish doing today?
0:49:55 Let me see what’s going on over there, right?
0:49:59 Like you start to think about what you could do to go drive it back up.
0:50:02 And I think there’s an unhealthy version of that, but there’s some healthy components to
0:50:02 that.
0:50:03 Yeah.
0:50:07 So I think that’s a lesson learned for me.
0:50:10 I think I’m still in the very conservative, you know, what if I need this money?
0:50:16 And I do have high working capital costs, especially around now, kind of pre-holiday.
0:50:17 I’m about to have to write a bunch of checks.
0:50:25 But very soon I should get to a place where I can take more out and or start paying back
0:50:26 some of the debt a little faster.
0:50:29 All right, listen up.
0:50:32 Turn the volume up because it’s your boy, Sean, and I got a little message for you.
0:50:34 I talk to hundreds of founders a week.
0:50:36 And when I talk to founders, everyone says the same thing.
0:50:39 That the one thing they need the most is not funding.
0:50:41 It’s not more resources.
0:50:43 It’s just having more time.
0:50:44 The goal here is to win.
0:50:48 And the way you win is you get yourself free time to do stuff that’s high impact.
0:50:49 How do you do that?
0:50:50 Well, I’ll tell you my solution.
0:50:52 The answer is Gabby.
0:50:54 Well, you might be wondering, who is Gabby?
0:50:55 Gabby is my assistant.
0:50:57 She is my wonderful assistant.
0:50:58 Gabby lives in Latin America.
0:51:01 And she helps me save about 20 hours a week.
0:51:06 So what she’s doing for me is every morning, my inbox is sorted and triaged.
0:51:10 And the most important stuff is right at the top with draft replies ready for me.
0:51:11 So I’m never behind on email.
0:51:15 And then as I’m on the go, I’ll just send her voice notes saying, hey, could you find my
0:51:16 kids a soccer class?
0:51:18 Hey, could you take care of this car registration thing for me?
0:51:22 All these little tedious BS things that would take up time in my day.
0:51:23 She takes care of for me.
0:51:25 And so that’s free time I’m getting back.
0:51:29 So if you are a CEO who’s serious about growing your company, you need to get yourself an assistant.
0:51:31 The best place to go is somewhere.com.
0:51:35 Somewhere sources the best assistance from low cost areas for you.
0:51:39 So you can get an amazing executive assistant who’s got business experience and has supported
0:51:43 other CEOs for seven, eight, nine, $10 an hour.
0:51:47 And so go ahead, go to somewhere.com, tell them I sent you, they’ll hook you up with a good
0:51:48 deal and get yourself an assistant.
0:51:49 And you can thank me later.
0:51:50 All right, back to this episode.
0:51:54 So Sam, I’m curious, what’s your reaction to this whole thing?
0:52:01 So I think that for people who have your personality type, which is you, you’re a very serious person,
0:52:07 I think like, like you’re a person like if I was a broker and I met you, I would not think
0:52:07 you were kicking tires.
0:52:09 I’d be like, oh, this guy’s for real.
0:52:11 Like it’s, you have the very obvious for real energy.
0:52:16 And if you have that very obvious for real energy, we’re like, no, I’m going to do this.
0:52:17 This makes sense.
0:52:20 I think that the path that you’re taking is so wonderful.
0:52:24 And I, my assumption is that you’re going to be wildly successful.
0:52:27 And so I think it’s very wise to do.
0:52:34 I think that if you, if you are an unserious person where you are not willing to put your
0:52:39 house up or something like that, that’s kind of like the, one of the tells, like if, so if
0:52:43 you’re like not serious like that and you are not willing to do the diligence and say, I’m
0:52:46 willing to look at 100 things, I would say, do not do this.
0:52:47 Yeah.
0:52:49 I think there’s also one, I think you said it perfectly.
0:52:54 There is one more thing to it, which is what situations do you shine the most?
0:52:59 And so like for Dan, I think he always had an entrepreneurial streak that was used as like
0:53:00 random side quests in life.
0:53:04 Like we would go try to win the McDonald’s monopoly game every year.
0:53:05 Like we tried to like actually win it.
0:53:06 Not just like hope.
0:53:08 We thought we were going to win it.
0:53:10 We were like dumpster diving, trying to, trying to win this stupid thing.
0:53:10 Right.
0:53:15 Like, or, you know, we started a blackjack club at, on campus and we’re running simulations
0:53:16 to see how much money we can make.
0:53:21 If we started a blackjack club, like we were always trying to come up with ideas.
0:53:26 It was more fun to come up with our own idea versus just like, go get a job and do the
0:53:26 thing.
0:53:33 And so I feel like if you know that you actually turn up the most, you’re the most version of
0:53:36 you when you’re doing this type of shit, when you’re like in control of your own fate and
0:53:41 you have your own project as arbitrary as like, you know, bags are, doesn’t matter.
0:53:42 It’s like, I’ll take bags super seriously.
0:53:46 I took, he took gum seriously, blackjack seriously, sushi seriously, like all those things.
0:53:51 I think that that’s the other part, which is not the part you said, but then also if you
0:53:56 really are like at your core, more entrepreneurial and you’re more switched on doing that, then you’re
0:54:00 going to have a better result doing this than you are if you, you know, stay in a more
0:54:01 traditional job.
0:54:05 That’s my, I think, I think people, you know, when I tell them about, you know, first
0:54:09 it’s always like the unbelievable way you do what, but then the second, like their mind
0:54:14 goes like, oh, I should do that because, you know, it sounds great in hindsight, right?
0:54:17 Like when everything works out, it’s like, cool, of course, this is easy.
0:54:18 Of course, anyone can do it.
0:54:24 But I think people miss the point that there’s a lot of ways that this doesn’t go like that
0:54:26 and it’s not necessarily the most glamorous.
0:54:28 I also think most people shouldn’t do this.
0:54:32 So for example, this is not something I like, this does not fall within my skill set.
0:54:38 So my, like, uh, if I had to guess you, when you were buying the company, like you guys were
0:54:41 negotiating over 10, 20, 30, $40,000 things.
0:54:47 Like if I had to guess you were incredibly anal about the paperwork, you were asking, you’re
0:54:50 like, what’s this 300, what’s this $3,000 charge?
0:54:51 What’s this?
0:54:53 That is not what I do.
0:54:54 I do not do that.
0:54:55 That kills me.
0:54:56 That does not fit my personality type.
0:55:01 So I have bought and invested and done a bunch of real estate stuff in my time.
0:55:06 And, uh, I lose on all of it because you make your money when you’re buying it.
0:55:10 And when you sweat the details up front, which is not, that is not what I do.
0:55:12 I don’t think necessarily that is what Sean likes to do.
0:55:17 And I think that if you are the type of person who plays a board game and you memorize all the
0:55:23 rules and you like sweat the details, um, and you have that attribute, then this, uh,
0:55:26 buying a company is, it could potentially work well for you.
0:55:30 I’m the guy that takes the rule book out of the box and reads it to explain to everybody.
0:55:31 Exactly.
0:55:34 If you have that trait, this could be awesome.
0:55:34 Life-changing.
0:55:35 Yeah.
0:55:40 So Dana, one of the other cool things about doing a search for a business is you realize
0:55:43 how big the universe of businesses is.
0:55:46 And I asked you, I said, you know, usually we try to brainstorm business ideas with people
0:55:47 like what opportunities do you see?
0:55:50 Um, you said you would come up with a couple ideas.
0:55:53 Give us a couple of your ideas of what you think other people could go do.
0:55:55 Um, this is just like the, the sort of random section.
0:55:56 Yeah.
0:56:00 I think the, I mean, the biggest takeaway, like from buying a business before I get into,
0:56:03 into the ideas, like everything’s a business, right?
0:56:07 Like you walked, you know, go look at any store, you know, every little piece of that
0:56:11 business is something that someone sells, like that display that says for sale, like someone
0:56:15 sells that, like the, the holder for the gum on the store, like that’s a business.
0:56:21 It’s like, I don’t think I really appreciated how random and how basic some of these businesses
0:56:21 can be.
0:56:24 And people make really good money doing it, uh, even packaging.
0:56:26 It’s like, you don’t really think about that.
0:56:31 Um, by the way, I’m pretty sure Robert Kraft, the owner of the Patriots, the, he owns the
0:56:32 Kraft group.
0:56:33 I think that’s a packaging company.
0:56:36 It could be, there are so many packages.
0:56:38 They make corrugated cardboard.
0:56:41 One of our best episodes ever.
0:56:45 If you want to go listen to a great episode is the Sarah Moore episode on this podcast.
0:56:48 And she’s the, I think it’s called the egg carton queen.
0:56:50 And her thing was, she, she did the same thing you did.
0:56:55 Basically she went and found a retiring guy who owned a business that sold, that sold egg
0:56:56 cartons.
0:57:00 Like not the eggs, the carton, they come in and you don’t even think that’s a business.
0:57:02 Like you, when you go look at, you’re like eggs.
0:57:03 Yeah.
0:57:03 Okay.
0:57:05 There’s a farm that sells eggs.
0:57:08 You don’t even realize that the farm has to then buy egg cartons.
0:57:12 And there’s somebody whose job is to make egg cartons and they sell it at the best price
0:57:13 and the best value, blah, blah, blah.
0:57:16 And so her episode, I think is amazing.
0:57:19 And you see that the other example, Sam, that I always give when I explain what this podcast
0:57:26 is to people is I talk about like, everything you see is there because someone sold it.
0:57:29 Like nothing gets there by accident.
0:57:34 And so I was like, you know, even in the workplace, if you go to your break room and there’s a poster
0:57:36 on the wall, that’s like the labor code.
0:57:38 There’s a guy in Minnesota that sells that.
0:57:41 He makes a million dollars a year selling you the poster every year.
0:57:43 Once I heard that, I was like, oh shit.
0:57:48 It’s like a physicist when he learns about string theory or some shit, you know, it’s
0:57:49 like, oh, it’s everywhere.
0:57:49 I get it.
0:57:51 Oh, the waves are particles.
0:57:52 You see the world of the components.
0:57:52 Yeah.
0:57:56 All the components themselves are businesses too.
0:58:01 And then you realize like, if you’re not making it in business, it’s mostly because of a lack
0:58:03 of creativity and effort.
0:58:07 It’s not because of a lack of opportunity because literally every item everywhere is itself,
0:58:10 you know, a business that somebody is running to get it there.
0:58:12 And so, you know, there’s no lack of opportunities in that sense.
0:58:12 Yeah.
0:58:16 So now I’m like hardcore on the other end of the spectrum of like, as unsexy as possible.
0:58:18 I want to do that.
0:58:21 Like, I want to, I want to be the guy that has like the most random thing.
0:58:22 I like packaging is pretty random.
0:58:26 Like, you know, in a, in a future world, once I, you know, if, and when I’m done with
0:58:27 this, like, I want to go even further.
0:58:28 Yeah.
0:58:31 By the way, do you have, when you lay, when you’re laying in bed at night, what do you
0:58:31 think?
0:58:33 Like in 10, 20 years, we’re going to, we could be this.
0:58:37 Like, do you have, do you, do you think this could be a hundred million dollar company?
0:58:39 Do you think you’re, you could sell it for a certain amount?
0:58:42 What’s your sort of North star that excites you?
0:58:47 So, you know, at this point, I don’t have any plans to sell it.
0:58:51 I do think it could be a hundred million in sales company easily.
0:58:57 Like there’s so like some of these big packaging players are huge and we’re able to compete
0:58:57 with them.
0:59:00 That’s kind of the, you know, we’re small in the scheme of things.
0:59:02 Like it’s a, it’s a nice size business, but we’re small in the scheme of things.
0:59:06 But what I’m finding is as we, as we work with these brands, like we actually do have a pretty
0:59:11 differentiated offering because we are small, we’re scrappy and people love that.
0:59:16 And, you know, as we’ve been able to kind of add clients I’m like, oh, this thing can
0:59:21 really take, like we can really scale this up and, and, you know, start to gain more
0:59:22 traction with these large brands.
0:59:27 And, you know, the crazy thing is people spend 10, you know, these big companies spend tens
0:59:28 of millions of dollars on their packaging.
0:59:33 So you could easily get like five clients to get you to a hundred million like, like that,
0:59:34 if, if it’s the right five.
0:59:37 So my goal is to grow it.
0:59:40 I do think in a few years I’ll, I’ll hire an operator to run it.
0:59:44 One of my biggest pieces of advice to people searching is like, don’t assume you’re going
0:59:47 to hire the operator day one, especially if you’re putting your house on the line.
0:59:51 Cause there is not a single person that I trust to run this business when I’m going
0:59:52 to get kicked out on the street.
0:59:57 If it fails, when I get to the place that I feel better about that, like only then will I
1:00:01 then decide, okay, well maybe I’ll hire someone and just do more strategic work.
1:00:04 But yeah, the, like I’m loving doing what I’m doing now.
1:00:07 So I think it’s eventually scaling my time.
1:00:09 So it’s not like I’m very involved in all the processes right now.
1:00:13 And I designed it that way because that’s how I learned, you know, I’d love to be able to
1:00:17 go away and not have to take a call because the blue isn’t blue enough.
1:00:19 Like, you know, I got a lot, I do a lot of color matching.
1:00:24 When we were doing the sushi restaurant, Dan was not only sweating the details in the finance
1:00:29 side, but we were like, dude, we don’t really know how a restaurant works.
1:00:31 None of us have ever worked at a restaurant.
1:00:36 So Dan went and got a job at noodles and company and he studied them from the inside and we treated
1:00:37 it like it was like oceans 11.
1:00:40 Like every day he’d come home and we were like, what did you write a report?
1:00:40 Yeah.
1:00:41 Yeah.
1:00:45 And he’d like draw the workflows or he’d like, what did you learn?
1:00:45 And what did you bring me?
1:00:47 Give me the pesto cavatappi.
1:00:47 Yeah.
1:00:52 Then he’d bring the pesto cavatappi and he’d be like, trust me, do not eat the tomato basil
1:00:52 soup.
1:00:53 We’re like, why?
1:00:54 It seems just tomato soup.
1:00:56 He’s like, don’t eat the tomato basil soup.
1:00:58 And so he was like, went undercover.
1:00:59 And he was like willing to go to that.
1:01:03 And then I had like the big reveal, like the big undercover boss reveal at the end when
1:01:03 I quit.
1:01:04 Yeah.
1:01:08 By the way, were they blown away by the fact that you’re like, I am creating a sushi chain?
1:01:13 I think I tried to hire the GM and she’s like, all right, like that sounds better than what
1:01:14 I’m doing here at Noodles & Company.
1:01:17 Like she was like, like, I thought you’d be like, you betrayed me.
1:01:18 It’s like, cool.
1:01:20 You’re like, oh, you’re trying to move next door.
1:01:21 Great.
1:01:23 Like we can trade food at lunch.
1:01:30 So Dan, you, um, let’s do, uh, let’s do, actually, do you have that, the business plan
1:01:30 that we made?
1:01:31 Do you still have that binder?
1:01:32 Yeah.
1:01:32 One sec.
1:01:33 Let’s find it.
1:01:39 So the story here is that, uh, not only did Dan work undercover at Noodles & Company
1:01:40 at some point.
1:01:43 Also, this was not a, I didn’t just put that there.
1:01:46 Like that’s lived there behind, behind me.
1:01:46 You just keep that there?
1:01:47 I don’t have one.
1:01:48 I need to get a copy of this.
1:01:48 All right.
1:01:48 I have this.
1:01:51 I also like our Sabi sushi hat is right there.
1:01:52 Oh, nice.
1:01:53 Yeah.
1:01:56 So basically the first business we, me and Dan, uh, and our buddy Trevor had out of
1:01:59 college was to create, it was a brand called Sabi sushi.
1:02:01 The idea was to create the Chipotle for sushi.
1:02:05 So go get, go get sushi the way you eat Chipotle, where you can just walk down the line, you pick
1:02:07 your ingredients and you get the thing.
1:02:08 This is our big idea.
1:02:09 And, um.
1:02:11 Which was, I maintain a good idea.
1:02:12 Uh.
1:02:12 At the time.
1:02:13 I think it’s been proven.
1:02:17 It’s been proven it’s a bad idea, but like I still want it.
1:02:17 Okay.
1:02:23 So, so we, not only did Dan work undercover at noodles and company, we then go in, I don’t
1:02:26 know how we get a meeting with the founder of noodles and company and we show up to this
1:02:27 meeting with this binder.
1:02:29 This binder is our business plan.
1:02:33 We had been working on this for months while we were searching for a location.
1:02:37 And can you just hold up the thickness of this binders as people see it?
1:02:37 Oh yeah, it’s thick.
1:02:38 Uh, let’s see.
1:02:39 Yeah.
1:02:44 Like this is probably a couple hundred pages of a business plan in there and there was stupid
1:02:44 things.
1:02:46 So part of it is what you would expect.
1:02:47 Like here’s the startup cost.
1:02:51 But part of it was dumb stuff like the uniforms and how we’re going to like progress people
1:02:54 from, from entry level to manager and what their values are and all.
1:02:59 We had not sold a single role to a single customer and we’re worried about all this other shit.
1:03:03 So, but what we think we’re tricking ourselves into thinking that planning equals productivity
1:03:06 and you know, spoiler planning did not equal productivity.
1:03:09 Uh, we’re basically doing a very fancy form of procrastination.
1:03:12 And so we get to this meeting with this guy from noodles and company.
1:03:15 I think his name’s Aaron, if I remember correctly.
1:03:16 And he, um.
1:03:17 I forgot that guy’s name.
1:03:18 He’s like, all right.
1:03:19 So like, what’s the plan?
1:03:23 And we think we’re about to wow this guy.
1:03:24 And we’re like plan.
1:03:24 Oh, funny.
1:03:25 You should ask.
1:03:27 Whip out that binder.
1:03:29 Slam it on the table.
1:03:31 It’s basically like, here’s our plan.
1:03:33 Look how great this is.
1:03:34 And I remember he looks at it.
1:03:36 And first of all, it looks like a kid’s project.
1:03:41 Even the cover is like, we inserted this colorful thing in the front plastic thing.
1:03:44 And then he flips through and he’s like, realizes pretty quickly.
1:03:48 Oh, these idiots wrote a 250 page business plan for their sushi restaurant.
1:03:50 And they don’t even have a location.
1:03:51 They don’t have any customers.
1:03:53 They’re starting on, you know, from scratch.
1:03:57 And I remember the look on his face.
1:04:01 And then I remember like the moment that was rock bottom for me in the whole sushi journey,
1:04:04 which was that he should have just ripped us and be like, guys, what the hell are you doing?
1:04:06 And this is so ass backwards.
1:04:10 Like, why don’t you get out there, start testing your concept, see if people actually want this.
1:04:12 And then like, you know, you’ll learn by doing.
1:04:16 And instead, he kind of took pity on us and didn’t say that.
1:04:18 I could tell he wanted to say something.
1:04:23 And then he was like, and then he just tried to be nice about it.
1:04:27 And I was like, oh, my God, we’re so bad that he feels like he needs to be polite about this.
1:04:30 That means we’re even worse than just being bad.
1:04:34 And I just remember realizing like, well, I don’t know what the right answer is,
1:04:35 but whatever we’re doing is dead wrong.
1:04:38 I could tell you that right now after that meeting.
1:04:43 I just remember years later, years later, someone did tell us that, though, in Boston.
1:04:47 You know, we were talking about, we were about to sign a 10-year lease.
1:04:50 And we literally just met this guy like 10 minutes ago.
1:04:55 And he, oh, he was, it was a guy, he like owned a bunch of Boston markets.
1:04:56 I don’t know if you remember that.
1:04:57 Yeah, John Prendergast.
1:04:58 Prendergast.
1:04:58 Oh, my goodness.
1:04:59 Nice call.
1:05:00 That’s his name.
1:05:04 He was doing a tech company now, but he was like,
1:05:08 you know, early in my career, I own 20 or 30 Boston markets.
1:05:12 And so he’s like, so I know a little bit about the quick service industry.
1:05:13 Let me, you know, be your mentor.
1:05:14 Yeah.
1:05:17 But he basically just tore the whole thing to shreds, like within five minutes.
1:05:19 It was like, this is wrong.
1:05:20 Don’t sign that lease.
1:05:24 And like Trevor, like wasn’t in Massachusetts with us when we were doing this.
1:05:25 We like, he was like about to sign the lease.
1:05:25 We like called him.
1:05:26 We’re like, wait, no.
1:05:28 Um, well, this guy, this guy was great.
1:05:32 Cause he’s like, you know, so like he asked us a question and we gave him the answer we’d
1:05:33 been giving everybody else.
1:05:37 So I think he was something like, you know, so what makes you think that there’s like, there’s
1:05:38 demand for this?
1:05:40 And we were like, well, you know, sushi has been on the rise.
1:05:42 We gave him this like spiel.
1:05:44 He’s like, all right.
1:05:45 So is this going to work or what?
1:05:48 And he basically cut through the nonsense and he’s like, how do you know?
1:05:49 Are you testing this?
1:05:53 You’re just going to sign a 10 year lease with a personal guarantee with no clue if this, if
1:05:56 the market actually even wants this, like, doesn’t that seem insane to you guys?
1:06:01 And he gave us real talk and I’ll forever be grateful for him, uh, for giving us that real
1:06:01 talk.
1:06:03 Cause he saved our ass from signing that, that lease.
1:06:04 And he gave us a different plan.
1:06:08 And he was like, why don’t you test this rent out a commissary kitchen, like bakers and
1:06:10 caterers use there.
1:06:12 What turned out there were like $20 an hour.
1:06:13 It was like super cheap.
1:06:14 No, and no long-term commitments.
1:06:18 And he’s like, rent those out, do a delivery only validate the demand.
1:06:21 See if people like your recipes, people like the price points.
1:06:22 You’ll learn so much by doing that.
1:06:25 And then you’ll know what you need out of your first location.
1:06:26 If you’re going to go there.
1:06:29 And, um, that saved our ass, that advice saved, saved us.
1:06:35 And you know, that if I, whenever somebody asked me for like any advice or help, um, I just
1:06:40 remember like, can I, can I give them one 10th of the value John gave us is the new like
1:06:42 North star for that, that situation.
1:06:42 Yeah.
1:06:47 I remember he introduced us to like lean startup and, you know, actually figuring out, um,
1:06:52 you know, we, we used to pull people were like, you know, would you eat sushi once a week?
1:06:53 Like how many times a week would you eat sushi?
1:06:55 Which is a bad, badly phrased question anyway.
1:06:56 Yeah.
1:06:59 Uh, in hindsight, they’re like, Oh, I’d come two to three times a week.
1:07:05 And it’s like, we, we did this proof of concept, um, on the cheap, um, as, as quickly as we
1:07:05 could.
1:07:11 And like, the answer was like, not even once a month, um, like night and day, right?
1:07:16 Outside of, outside of like LA SF, New York, the answer is like, if I eat sushi at all,
1:07:17 like, right.
1:07:20 To make a concept like this work, it needs to work in Texas, Colorado, you know, it needs
1:07:21 to work everywhere.
1:07:25 And the answer was, if I eat sushi at all, I eat it about once a month and I’m happy with
1:07:25 that.
1:07:26 I’m not trying to eat it three times a week.
1:07:28 And I’m going to go to the nice restaurant to do it.
1:07:29 Right.
1:07:33 And we were looking for like the three people who validated us rather than, and ignoring the
1:07:35 97 people who were saying no, we were like, yeah, see those three.
1:07:43 Um, he also did one other amazing thing that as an entrepreneur, I now see like this pattern
1:07:44 over and over again.
1:07:47 So he suggested to us, he’s like, do it delivery only.
1:07:51 And we were like, ah, but he like saw the look on our face.
1:07:51 He’s like, what?
1:07:53 And we were like, delivery just sucks.
1:07:56 And we, we started, you know, he’s like, why?
1:07:57 So we’re like delivery.
1:08:00 I mean, you order food, you don’t even know when it’s going to come.
1:08:01 This is before DoorDash, by the way.
1:08:06 I think the biggest thing is we, we probably invented DoorDash, uh, and didn’t know it.
1:08:10 And we were fixated, we were fixated on the sushi, but we really, you know, came up with
1:08:10 a better model.
1:08:11 Exactly.
1:08:15 So, so this is before all those, we were like, you, you know, you call in an order, you
1:08:16 don’t know when it’s going to come.
1:08:17 It shows up an hour later.
1:08:19 The packaging is all shitty.
1:08:20 The food is cold.
1:08:23 It’s leaking out the bottom and just feels cheap.
1:08:26 And, uh, we’re like, that’s why, like, it sucks.
1:08:29 And our takeaway was, therefore, no.
1:08:34 And his was, wow, looks like you found all the things to improve to make this a 10x better
1:08:35 experience.
1:08:37 And like, since then, now I see this all the time.
1:08:41 If you talk to entrepreneurs, it’s like, you think about a space and you’re like, oh, that’s
1:08:42 horrible.
1:08:43 That’s horrible for these reasons.
1:08:47 And like the entrepreneurial response, the customer response is it’s horrible.
1:08:49 The entrepreneurial response is, wow, what an opportunity.
1:08:53 Because if I just change those four things, I’ve now have created this huge, like, you
1:08:55 know, level up in the customer experience.
1:08:59 And so we ended up doing it where our delivery times were sub 30 minutes.
1:09:01 You knew exactly when it was going to come.
1:09:03 We stamped on the food when we made it.
1:09:04 So you knew it was fresh.
1:09:07 We put a webcam in our kitchen so you could see us working on your order.
1:09:11 We did like all these other things to try to make delivery actually a cool experience.
1:09:16 And the bar was so low by basic delivery standards that that kind of actually worked.
1:09:19 And so I thought that was the other like really brilliant thing that John did for us.
1:09:19 Yeah.
1:09:25 Rethinking, rethinking what, you know, everyone kind of assumed we would make with a restaurant
1:09:26 and kind of flipping it on its head.
1:09:29 And it allowed us to fail faster.
1:09:32 So back to the business ideas.
1:09:33 You had a few here.
1:09:35 Are there any that you think are cool or interesting that you think somebody could go to?
1:09:39 I am very into what I’m calling fun to run businesses.
1:09:42 So I actually looked at a few of these towards the end.
1:09:46 I think I found Fleet when I saw some of these like laser tag, bowling alleys,
1:09:49 like kind of these family entertainment businesses.
1:09:52 And I have kind of two hypotheses around them.
1:09:54 One is like I think I saw like one or two P&L.
1:09:56 Again, do your own research.
1:09:58 Don’t just blindly accept that this is a good space.
1:10:03 The one or two I saw like wildly profitable, very low cost.
1:10:08 There’s probably a high startup cost in the beginning, but like climbing gym or something
1:10:08 like that.
1:10:11 It’s like once you get it set up, they have like these autonomous ones now, too.
1:10:12 You don’t even need that much labor.
1:10:15 But also as a dad, I have two kids.
1:10:18 Like I’m always spending money on these things.
1:10:21 Like my son had a laser tag birthday party.
1:10:24 There’s like one person working at this laser tag thing.
1:10:26 They like own the laser tag game in town.
1:10:30 They charge you for the adult standing at the birthday party.
1:10:32 And I’m like, wow, like I could do this better.
1:10:33 I want, you know.
1:10:34 And they have you hostage.
1:10:34 Have you hostage.
1:10:35 All the arcade games.
1:10:36 You got to buy their food.
1:10:43 Kind of these very easy to run, like almost a single person.
1:10:45 But, you know, let’s call it like a teenage business.
1:10:46 You hire teenagers to work there.
1:10:48 Like anything that they’re not going to mess up.
1:10:50 Yeah, like a bowling alley.
1:10:50 A bowling alley.
1:10:53 And then how do you find things that like have multiple purposes?
1:10:54 Like there’s a bowling alley in my town.
1:10:57 And, you know, it’s, you know, during the day it’s for kids.
1:11:00 Like they have the kids activities and like after school activities.
1:11:03 And then at night it’s the bowling league for the adults.
1:11:04 And they have a bar.
1:11:05 So it’s the local dive bar.
1:11:08 It’s like, you know, then there’s like five, you know, five vending machines in there.
1:11:09 Again, teenager working.
1:11:11 Like the no frills.
1:11:17 But I have to imagine if you can find the right business like this, kind of great to be able to just go bowling at your bowling alley.
1:11:19 I can’t do much with my paper bags.
1:11:20 Like I go and I check them out.
1:11:21 I maybe walk around with them.
1:11:22 But like not much to do.
1:11:25 Like why family entertainment?
1:11:26 Why this out of home entertainment?
1:11:27 Why now?
1:11:29 Like is there anything that’s changed in the market?
1:11:29 Why?
1:11:31 Because, you know, these have been around forever.
1:11:33 Laser tag, public golf, bowling alley, whatever.
1:11:35 My hunch is they’ve been profitable for a while.
1:11:39 Like I think a lot of these are like sneaky businesses that you don’t think of.
1:11:42 You know, I think there’s also kind of more of a trend.
1:11:43 I was reading about this.
1:11:45 Like, you know, millennials like don’t drink as much.
1:11:47 They want more like sober events.
1:11:53 I think this idea of doing more like games is starting to take on.
1:11:56 Again, you know, small sample size of things in my town.
1:12:00 But like, you know, you go to these like unlimited, you know, there’s an arcade in my town.
1:12:02 It’s like you pay like eight bucks for an hour.
1:12:03 You can play unlimited arcade games.
1:12:04 This place is packed.
1:12:07 You know, that sort of thing never really existed.
1:12:11 But I think there’s like this desire to like leave the house and do things.
1:12:12 Maybe it’s a post-COVID thing.
1:12:13 I’m not sure.
1:12:18 The thing that I think is really interesting about this is like, and this is probably true
1:12:18 across the country.
1:12:24 Like if I think about like I always drive by like these large commercial real estate, you
1:12:26 know, old malls, these big buildings that no one wants to buy anymore.
1:12:32 And then when I see one, when I see what people put in them, like it tends to be kind
1:12:37 of like these newer things, you know, more interesting things like pickleball courts.
1:12:38 Like I think I read something.
1:12:41 It’s like, oh, they’re taking all the old bed baths and turning them into pickleball courts.
1:12:46 So it’s like to like take something that maybe you can get that’s not being used and, you
1:12:48 know, make a climbing gym, make it a ninja course.
1:12:54 Boy, I think is like the most incredible marketing where they like just marketed gymnastics to
1:12:55 boys.
1:12:59 And now all of a sudden they’ve doubled, they’ve doubled the amount of like demand for this.
1:13:03 And then there’s like the climbing team and like this place is packed all the time.
1:13:06 So that one is one.
1:13:12 So, so one of my biggest investments over the past two years has been in my brother-in-law’s
1:13:13 commercial real estate.
1:13:19 So he does what everybody thinks is dying, but is actually like thriving.
1:13:23 So for example, these kind of like mall, like strip mall locations, not like a mall, like
1:13:28 an indoor mall, but basically a shopping center and a shopping center with a grocery store,
1:13:33 you know, maybe a, so there’s got a Trader Joe’s, there may be like a crunch fitness.
1:13:35 There’s like, whatever, there’s a bunch of these types of locations.
1:13:37 And then how do you fill up the rest of the boxes?
1:13:43 And people think that shopping centers are probably dead because e-commerce or whatever, everything’s
1:13:44 on Amazon now or whatever.
1:13:48 These things have like 97% occupancy.
1:13:51 It’s like really, it’s like higher than multifamily and office.
1:13:52 Like it’s a really great category.
1:13:57 And even the few concepts that are like kind of going out of business, like a Bed Bath & Beyond
1:14:03 or like Joanne’s Fabric, he’s replacing them with trampoline parks and pickleball and Tesla
1:14:04 charging networks.
1:14:06 He’s like, there’s just new tenants that are always there.
1:14:11 And he’s like, the best part of this entire model, because the returns are bananas for
1:14:11 this thing.
1:14:15 Like it’s like, it is by far like the thing I’ve been most bullish on in the last 24 months
1:14:17 has been investing into this.
1:14:19 I basically took all my spare cash, put it over here.
1:14:25 And the reason why was A, he’s a good operator, but B, there’s no supply.
1:14:27 So nobody builds any new cyber shopping centers.
1:14:33 Like even though, um, like, you know, every, everything else people build more, they build
1:14:34 more condos, they build more stuff.
1:14:36 Nobody builds new shopping centers.
1:14:38 And so it’s all just retrofitting existing centers.
1:14:43 You buy them usually like below the actual build cost of the, of the center themselves.
1:14:48 And so I’ve seen this, my kids go to this thing called, uh, little kickers.
1:14:52 It’s in, uh, San Ramon, like a little town, like, you know, in the Bay area.
1:14:54 And it’s exactly what you’re describing.
1:14:55 A teenager runs it.
1:15:00 Like I asked to speak to the manager and, um, the manager was 17 years old.
1:15:04 He was just like, yeah, like a chain on and like the F boy haircut.
1:15:06 And I was like, what are you in charge of this?
1:15:11 And he was great, by the way, he was actually like a really good, uh, good manager, but everybody
1:15:13 who works there is young.
1:15:14 Like he’s young.
1:15:18 He’s like, you know, probably, he’s definitely like, I don’t know, under 23 years old and
1:15:21 all the coaches, there’s two coaches per class that they’re all, they’re all also like
1:15:23 just kind of soccer players who are high schoolers probably.
1:15:28 And, but this thing is packed and it’s just like one large venue for kids soccer.
1:15:31 And, um, this thing has to be printing.
1:15:33 Like I just doing the rough math of it.
1:15:34 This thing has to be printing.
1:15:36 They have, you know, definitely over a thousand members.
1:15:39 It’s like 200 to $300 per month.
1:15:42 Um, you know, this is, this is a very big business.
1:15:44 That’s basically, like you said, sort of like a fun business.
1:15:44 That’s teenager.
1:15:45 Yeah.
1:15:47 And it’s, you don’t need to, and it’s AI proof, right?
1:15:49 Like, so like, if you’re looking for, where do I do business?
1:15:53 If I know the whole world is changing with AI, well, AI is probably not going to like
1:15:58 do a trampoline park or, you know, do a kid’s soccer center.
1:16:00 You know, like those are, those are pretty safe businesses.
1:16:01 Yeah.
1:16:01 And they’re predictable.
1:16:03 I mean, like their kids are always going to want to jump.
1:16:07 It’s not like you’re buying a product that, you know, all of a sudden you don’t know if
1:16:08 it’s going to last.
1:16:09 Right.
1:16:12 You put a bullet point on here, the least sexy business as possible.
1:16:13 Touch the taboo.
1:16:14 What do you, what do you mean by that?
1:16:18 So this is, I start again, when in the pit of despair, you start to, you start to go crazy
1:16:21 with ideas where they’re like, all right, well, what are what, you know, I started looking
1:16:25 at like medical ambulances, which I still think could have worked, but effectively, you know,
1:16:31 the government subsidizes medical transport for disabled and elderly from, you know, nursing
1:16:32 homes to their medical appointments.
1:16:35 So it’s actually government contracts.
1:16:42 If you have a fleet of, you know, these special handicap accessible vans, you know, you effectively
1:16:44 can immobilize this fleet every day.
1:16:48 You kind of fill up your appointments with the people and you just transport them to and from
1:16:49 super simple.
1:16:53 You don’t really think about it, but like the demand is, is there, especially as, as the
1:16:53 population is aging.
1:16:56 That’s a, that’s a good example of an unsexy one.
1:17:01 I would love to buy a funeral home, like something that’s just like, oh man, like you work in that.
1:17:03 It’s like, how do you, I mean, all of the deal, like,
1:17:07 if you want to find a deal that’s kind of like, you know, punching above your weight,
1:17:11 if you will, like, there’s going to be some hair on the deal, like at the lower end of
1:17:11 the market.
1:17:14 Like, like I said, like private equity is going to scoop up the easy ones.
1:17:19 There’s going to be something like, if that something can be that it’s just like weird
1:17:23 and like, no one really wants to touch it or, or think about it.
1:17:26 Like to me, that’s a great, a great reason to buy it.
1:17:26 Right.
1:17:31 Cause it, cause it might mean that, you know, let’s say there’s a really sexy business on one
1:17:31 side, right?
1:17:35 There’s a business that’s like, uh, maybe it’s like software only.
1:17:37 You don’t have to run it.
1:17:40 Um, you know, you know, it’s, it’s low operations, blah, blah, blah.
1:17:43 And it’s, it’s about whatever party planning or something fun.
1:17:48 The hair on that deal might be, it may be just that the valuation is extremely high.
1:17:50 So it’s going to take you a long time to get your cash back.
1:17:54 Or it might be some other, something else like, you know, users are very fickle.
1:17:55 The competition is very intense, whatever.
1:17:57 There’s going to be hair in every deal.
1:18:01 The good thing about what you’re saying is that if you choose the hair that it’s not the
1:18:02 most fun thing to run.
1:18:03 Well, yeah.
1:18:05 Or the hair is going to be like, you got to cremate someone.
1:18:07 It’s like, I actually, like, I don’t actually know if I want to do that.
1:18:08 Like now that I’m saying it out loud.
1:18:11 Like, that’s, I mean, I’ll hire a teenager to do it then.
1:18:13 Uh, but like, that’s a better hair.
1:18:14 That’s about a better amount of hair.
1:18:16 Like you kind of know what it is.
1:18:17 It’s like the hair is the thing.
1:18:17 Right.
1:18:22 Versus like the P and L has hair or the, there’s a lot of debt on the business already.
1:18:23 There’s other problems in other areas.
1:18:24 Exactly.
1:18:28 So if there’s something that like, yeah, like if 20 people are going to flock to the
1:18:31 software only party planning one, but only like two crazy enough people are like, well,
1:18:36 let me roll up these funeral homes, try to like, I’m sure people do this.
1:18:38 Like the, you know, I’m not the first one to think about this.
1:18:40 Um, but I like that.
1:18:42 The other thing I really like right now, party city just went out of business.
1:18:44 Who’s buying, where are you buying balloons?
1:18:48 Um, there’s a guy, like 20 minutes from me, he had a firework store.
1:18:51 His firework store happened to sell balloons.
1:18:55 The day party city went out of business, he rebranded, man.
1:18:56 Now his store is called balloons.
1:18:58 Uh, it used to just be called fireworks.
1:18:59 Now it’s called balloons.
1:19:02 He’s taking out all the ads on the street.
1:19:07 Um, and we went there, uh, you know, for my, for my son’s birthday and he’s doing awesome.
1:19:11 So it’s like, how do you like kind of, and don’t copy party city that clearly didn’t work.
1:19:11 Right.
1:19:15 But the demand for balloons still exists and will continue to exist.
1:19:15 Exactly.
1:19:17 The supply just shrank like a whole lot.
1:19:17 Right.
1:19:23 And I imagine as things change, like the landscape for better or worse is changing very rapidly
1:19:23 these days.
1:19:28 Um, you know, maybe something goes out of business cause they can’t compete cause of tariffs or
1:19:28 whatever.
1:19:33 Like, how do you think about being, you know, opportunistic in that sense and doing it?
1:19:34 And you can do it.
1:19:38 Um, like you don’t even need, like you could start selling balloons, like get a permit and
1:19:39 start doing delivery only balloons.
1:19:42 Like that, I actually saw a truck doing that.
1:19:47 When I went to Monish Pabrai’s house, he’s a great investor and he, on his desk, there’s
1:19:49 a, like where you have a name placard.
1:19:51 Normally you just have your name engraved on it, engraved on it.
1:19:53 It just said, trouble is opportunity.
1:19:55 And he just had it on his desk.
1:19:59 So, cause at all times, you know, he’s reading the news or he’s hearing something as a reminder.
1:20:00 Trouble is opportunity.
1:20:01 Uh, I love that.
1:20:02 Yep.
1:20:02 That’s awesome.
1:20:03 Cool.
1:20:05 Well, Dan, dude, awesome hanging out with you as always.
1:20:08 I’m glad you got to tell your story and congrats, man.
1:20:12 I’m blown away by what you did with the, with the business that you bought.
1:20:13 You are officially Dan, the bag man.
1:20:14 Thanks for telling the story.
1:20:15 Yeah.
1:20:15 Thanks for having me on.
1:20:18 It’s, uh, exciting to, uh, to be here.
1:20:18 Cool.
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