#166 – Why a Sudoku Company Sold for $640m, “Opendoor for X” & Franchising Tech Companies

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Sam Parr (@TheSamParr) and Shaan Puri (@ShaanVP):

• (1:42) Chess.com is huge, what’re other similar opportunities?
• (9:23) Misspelled domain opportunities
• (13:40) Sam’s angel investing update
• (18:55) Brainstorming “Opendoor for X”
• (32:03) Franchising but for tech companies

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#165 with Jack Butcher – Selling a $76m NFT, How to Research Wealthy People & How BitClout Went Viral

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Support the pod by spreading the word, become a referrer here: refer.fm/million

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Sam Parr (@TheSamParr), Shaan Puri (@ShaanVP) and Jack Butcher (@JackButcher) discuss:

• (1:37) How Jack Butcher went from struggling founder to listing an NFT for $76m
• (13:38) How Sam researches wealthy people and discovers profitable businesses in the process
• (32:44) Why it pays to be early on new platforms
• (47:30) Jack explains why he’s listing his art for sale for $76m
• (57:40) BitClout’s incredible growth strategy
• (1:09:12) The reputational problem NFTs/Bitcoin/Bitcloud pose and are they just fads

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#164 with Ryan Begelman – BitClout Explained, How To Successfully Angel Invest & A Police Sting?

Want to be featured in a future episode? Drop your question/comment/criticism/love here: https://www.mfmpod.com/p/hotline/

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Sam Parr (@TheSamParr), Shaan Puri (@ShaanVP) and Ryan Begelman (@RyanBegelman) discuss:

• (0:30) Shaan and Sam talk about getting blocked on Twitter
• (6:50) A carbon offset credit card raises millions
• (9:50) The guys talk about their angel strategies
• (11:00) Ryan’s guide to how he makes investments
• (17:20) What is BitClout
• (46:33) Family offices and “entrepreneur-in-residence”
• (1:03:00) Why angel invest
• (1:21:40) Shaan is going to run a sting operation?

Find Ryan at https://www.ryanbegelman.com/

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#163 – Plugins Making Millions, Gumroad’s Crazy Valuation & Why a Studying App is Going Viral

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Sam Parr (@TheSamParr) and Shaan Puri (@ShaanVP) discuss:

• (3:38) Shaan talks about his CNBC appearance
• (6:45) The opportunities and riches in Chrome plugins
• (33:03) MFM is upping its social game
• (37:34) Gumroad is raising at a $100m valuation — crazy?
• (49:55) Is studystream.live the future of remote studying?
• (57:01) The post-show

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#162 – Why Clubhouse Will Fail

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Sam Parr (@TheSamParr) and Shaan Puri (@ShaanVP) discuss:

• 0:45 Shaan breaks down why and how Clubhouse will fail (although he wishes it won’t)
• 17:10 How to go viral and also improve your writing
• 27:07 How to win (and make millions) in the content game
• 36:22 How ‘The Hustle’ finds its talent
• 38:44 A simple startup idea with huge potential
• 50:38 How Shaan’s tweet became a meme

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Editing thanks to Jonathan Gallegos (@jjonthan)

#160 – Paid Communities Making $20m+ (and How to Build One), Fighting Inertia & An Interview With Dave Selinger of Deep Sentinel

MFM #160

The guys breakdown paid communities

Why paid communities are good businesses:

• You can make them kinda fast (much faster if you have an audience)
• Fun to run if you like the interest
• Don’t need a lot of start-up capital and can have a lean team
• Quite profitable

Cons:

• Churn can be high
• Likely can’t scale to me huge
• Won’t get better with size necessarily (if user content-driven, deal-driven, or otherwise, more can be better. If connection related, less is better)
• Seem challenging to sell if there’s a leader
• To make a successful community:
• The amount of money you’ll make is directly proportional to the amount of revenue the members will make being connected to each other multiplied by the amount of people who’d sign up.
• Enthusiasts of RC cars? Likely don’t make much value from it, so you can’t charge a lot. But if it’s huge (and get better with size) then can work
• Underdog, us vs them, united interests, info that wants to be private, highly disjointed online, 

Communities the guys like:

Tiger21: A peer group for people above with a net worth of at least $10m. 

• Numbers: It boasts ~850 members. They generate revenue through a $30,000 membership fee and also run ads to its members. Do an estimated $24m at least in sales
• Sold to private equity recently
• Why join?: Learn and make connections.

Evanta

• Was known as CXO Acquisition Co. and Sports Leadership Acquisition Co…so maybe started in sports?
• Evanta derives most of its revenue from event sponsorship. Event sponsors pay a fee to advertise at each event with pricing dependent upon the quality and level of executive attendance.
• 121 Unique communities worldwide 6,500 Participating organizations 253 C-level programs across 10 countries 83% of Fortune 100 represented 18,000 Participating C-level executives 87% companies with revenue of $1B+
• Sold for $275m in 2016 to CEB and then Gartner
• Had $17m in cash when bought
• 12x income…so made $23m in profit!

SoleSavvy

• A SoleSavy membership provides you the tools and resources you need to successfully purchase the products you want for retail (starting with sneakers)
• Raised $2m
• Started as a Slack group (the waitlist for the group grows by 400 people per day)
• 5,000 members. They charge $33 a month so $160k MRR
• Cook groups. AK Chef is a big one. 2000 ish members at $50.

NurseLifeRN

• Instagram meme page with 1.2m followers
• BALA (a shoe for nurses company) uses this as the main advertising channel.
• Shaan predicts these niche communities can launch brands and hold equity in companies who need their captive audience to grow.

Inertia

• Shaan explains inertia:
• Are you doing what you are doing just because or does it make you happy and are you chasing what you actually want

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Editing thanks to Jonathan Gallegos (@jjonthan)

#159 – Update on Michael Jordan’s House, a Nine Figure Sex Toy Company & the Man with a Million Acres

MFM #159

MJ house update

• Recap: Last episode the guys spoke about buying MJ’s house. The plan was to potentially turn it into a museum or Airbnb.
• Problem: zoning and parking — but those might be overcome 
• Shaan: Spoke to Rally Rd and Nifty Gateway founders 
• Now what: What’s going to happen now?
• Sam thinks nothing’s going to happen — the guys are too busy. Shaan: you’re afraid to fail

Collecting old Apple computers

• Opportunity: Old Apple computers like the Macintosh II and Apple II sell for a premium on eBay. There is still demand for these because of their cool aesthetics, and retro look.
• At Monkey Inferno, visitors would often ask about their old Macs over the expensive paintings that hung on the walls.
• Sam bets these will continue to appreciate. Can make for a good investment opportunity as retro style becomes more and more in demand. 
• Idea: Creating products from old Macs, such as https://inhabitat.com/wp-content/blogs.dir/1/files/2012/03/Macquarium-jake-harms.jpg 

Sex talk

• Steve Shubin – founded Interactive Life Forms: https://en.wikipedia.org/wiki/Fleshlight
• Origin: Steve started creating sex dolls, but eventually realized most guys wouldn’t order sex dolls. He pivoted and created the Fleshlight. He scaled the company with his kids.
• Does an estimated $50-$100m in revenue
• Sidenote: One of Fleshlight’s factories in Spain uses its excess capacity to manufacture prosthetics elephant legs for Southeast Asia
• Opportunity: Creating the new fleshlight
• There is a growing demand for male sex toys, especially in countries like India and China. Even in areas where it’s taboo, new discreet packaging has made it easier. 
• Idea: Fleshlight marketing through channels like Onlyfans. Molds can even be made from the Onlyfans creators themselves.

Billy of the week

• Brad Kelley
• Started out renting space for factories and warehouses. When he noticed lots of customers using his warehousing space to store tobacco, he pivoted. 
• He founded Commonwealth Brands in 1991 and sold it in 2001 for $1B
• “I’ve never defended [smoking]. Hopefully, it will be phased out of society.”
• He’s bought a ton of land since then and is now the 4th largest landowner in the US.
• In January 2020, Kelley put up for sale many of his West Texas ranches, offering roughly 500,000 acres with a listing price of $404 million.
• He also bought Lonely Planet installing a 24-year-old CEO at the helm
• The purchase was a failure when he sold the company in 2020 for $50m having had bought it for $70m
• Sam’s a fan
• Keeps to himself and has done “boring” businesses. In contrast to Silicon Valley’s flashy hype-machine

Indie VC

• Indie VC was a venture firm backing mostly bootstrapped founders. The idea was to give founders a little bit of money to help them grow instead of the traditional model of flooding a company with cash and taking a massive stake.
• The company closed its doors, and Shaan and Sam are critical of how founder Bryce Roberts announced the closing (didn’t take the blame hard enough). https://medium.com/@bryce/the-end-of-indie-6e1b92d90b09

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Editing thanks to Jonathan Gallegos (@jjonthan)

#158 – Buying Michael Jordan’s House (and Making a Profit), Investing in Athletes & Successful Startup-Studios

MFM #158

Andrew Chen story

• University of Washington has a program for gifted high schoolers who want to do college early. Andrew took part and graduated at 19.
• He met some pretty cool people doing this including emmit of twitch, and head of hedge funds.
• Shaan got into a Duke program as a teenager via TIP program by scoring high on PSAT. Shaan: This is a great marketing trick — he’ll do this when he starts his school
• For athletics, the opposite is done.

MJ’s house

• Michael Jordan’s Chicago home went on sale for $30m many years ago, but hasn’t sold. Today it’s on sale for $14m.
• Idea #1: Buy the house using crowdfunding and through NFTs, any fan can own a fraction of the property. From there, the property can be turned into a museum.
• Idea #2: Instead of turning the house into a museum, turn into a great Airbnb. Obama’s Hawaii house (the Plantation Estate) rents for $6k a night or $180k a month.
• You have to make it the dream “man cave”/sports fan getaway. Make it an alternative to Vegas for bachelor’s parties. Fill the house with Jordan memorabilia, and make it an incredible experience for fans to come to.
• Famous homes: There’s a precedent for taking famous homes and turning them into museums. 
• Graceland: Elvis’ former home receives 600k visitors each paying ~$30
• Painted Ladies: Painted Ladies and “Full House” house are mainstay attractions. “Full House” house sold for a premium above market price. 
• Counter: Sam is sceptical of crowdfunding on Rally Road because of the difficulty in liquidating. Shaan counters by saying fractional ownership makes liquidity less of an issue. Also many aren’t concerned about selling. Would rather wait and hold.

Big League Advance

• BLA: Offers cash to minor league baseball players with the promise of making money if the baseball player hits it big.
• Fernando Tatis Jr: Took cash when he was in the minors from BLA, but now has to pay out ~$30m after signing a $300m+ deal
• Opportunity: Baseball is the easiest to model, but the NBA presents a great opportunity because of guaranteed contracts. If a player gets a $100m, 5 year deal, you can offer them $80m upfront for the contract. Instead of 
• Counter: This is a risky business. The business only works if you can model properly and get big hits to cover the losses.

Startup studio

• Instead of investing in companies or starting just one company, startup studios invest and incubate several businesses at once.
• Shaan: Historically very tough and didn’t work. Garret Camp, Mark Pincus, Kevin Rose, and Michael Birch (Monkey Inferno where Shaan worked) all had studios which had no big winners.
• Successful studios: The tides may be shifting as a few studios have begun getting hits. Thrive Capital by Josh Kushner (Oscar), Atomic by Jack Abraham (Hims), Prehype (Barkbox and Ro)
• Atomic: Only works at one project at a time and the team has 9 months to raise a series A or else may be out of a job. Also focused more on B2B than consumer.
• eFounders: European studio that only does SaaS. They’ve been able to make the model successful
• Kevin Ryan: Part of DoubleClick when it was sold. Made about $20m and created AlleyCorp which incubated companies like MongoDB, Business Insider, Zola and Guilt.
• Good: It’s a dream job because you work on multiple ideas. Unlike a traditional startup, when failure happens you can just move onto a new project as a team
• Bad: For a startup to work, you need laser focus. Often what happens, when a startup hits a plateau, you can pivot to an area that’s working. At studios, the team is more inclined to move onto another project altogether. No do-or-die, back-to-the-wall mentality as with startups.

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Editing thanks to Jonathan Gallegos (@jjonthan)

#157 – Instagram Food Drops Making $200k a Week, Chrome Extensions That are Crushing It & Open Salaries

MFM #157

• Rewarding hustle: MFM is hiring two kids to do video production because they took the job without permission. They heard Sam complain about needing a recording studio and offered to do the work https://twitter.com/DylanJardon/status/1366274333858017282?s=20. 
• This is how you get the job you want. Don’t send a resume. Do the work instead. Don’t ask for permission.

Food topics

• The food companies of Instagram: Companies mycookiedealer.com, 1-900-Ice-Cream, and Allie’s Banana Bread are crushing it on IG with food drops that sell out in seconds.
• Why it’s big: These work because it’s at the intersection of many trends: cloud kitchens (no need for expensive restaurant infrastructure), DTC (no need to get costly distribution deals and shelf space) and have virality baked into them.
• My Cookie Dealer is estimated to be doing $200k per weekly drop. This is a potential $10m business today.
• Formula: Sam breaks down how these companies are going viral, and how you can copy.
• Make a side ingredient the main thing (cheese, cookie dough)
• Make it in an unusual color (rainbow bagel, rainbow kettle cork, green ketchup, cloud bread)
• Make it huge (huge sundae, massive pizza cookie, sushi-rito, massive KitKat)
• Frankenfood: combine two different foods (cronut, pancake cereal, donut cereal, cream cheese, bell pepper, desert burger, ramen burger, spaghetti donuts, fairy bread)
• Food allergy or remove stuff from it (vega ice cream, Banza)
• Make junk food or simple food ultra-fancy (tater tots, mozzarella sticks)
• https://www.youtube.com/watch?v=2IFYt20QON8 

Tiller money

• Spreadsheet plugins: The guys have talked Chrome plugins and browser extensions in the past, but an overlooked niche is spreadsheet plugins.
• Plugins are great businesses because they are sticky and capitalize on an existing platform and user base. They can be light, simple tools that can gain huge adoption quickly. 
• Tiller Money (https://www.tillerhq.com/): Personal finance nerd Sam loves the simplicity of this plugin. Most people already manage their money on a spreadsheet, Tiller Money just makes it easier to do so.
• Supermetrics (https://supermetrics.com/): Marketing data plugin Sam uses. He predicts the business does 8-figures in revenue.

Open salaries

• Open salaries: Should companies publish employee salaries? Open salary data is becoming a legal requirement, starting with 🍃 Colorado: “From 2021 employers must disclose pay rates or ranges in job postings for jobs that could be worked in Colorado (including remote)” Source
• Open salaries is part of the culture of some companies. Buffer used it as a growth hack. The company continues to publish a lot of it’s financials and all employee salaries.
• Companies doing it now:
• Glassdoor shows average and anonymous salaries but can be inaccurate They were acquired for $1.2B in 2018. At the time did $170m in revenue with 700 employees 
• Founded by Rich Barton (we’ve spoken about him a few times before). Famous for saying “Information wants to be free”. Started Zillow, Expedia, and Glassdoor off this principle.
• Levels.fyi: A helpful guide to understanding what employees at top tech firms should be making. They even help you negotiate a salary. 
• Take: Open salaries tend to benefit employees (more transparency means higher, more equal pay) and is more detrimental to employers.
• Apple stopped doing it. Buffer has also said it’s not helpful anymore and was only good for initial growth.
• Pat Flynn published his income for several years, but eventually stopped as he started getting hate. 

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Editing thanks to Jonathan Gallegos (@jjonthan)