0:00:01 I got to tell you about a YouTube story.
0:00:05 Okay, so this is a story of how a guy
0:00:08 found an underrated opportunity in the YouTube market
0:00:09 and turned it into $3 billion.
0:00:21 So there’s this guy, Rene,
0:00:24 and Rene discovers an opportunity.
0:00:27 Sam, do you know what the most viewed YouTube channel is?
0:00:29 Most views on YouTube, do you know?
0:00:32 The obvious answer would be Mr. Beast.
0:00:33 The second…
0:00:34 Mr. Beast, number 13?
0:00:35 Why are we talking about number 13?
0:00:36 I’m talking about number one, Sam.
0:00:39 Okay, do I do the bro move
0:00:42 where I under guess so you quit?
0:00:44 No, I’m going to say some type of Indian thing.
0:00:46 Probably like an Indian…
0:00:47 Number one is T-Series.
0:00:48 It’s Indian music.
0:00:50 So it’s just like all the famous Bollywood songs.
0:00:51 But do you know what number two is?
0:00:52 I don’t.
0:00:52 No idea.
0:00:53 Cocomelon.
0:00:55 Cocomelon, yeah, God.
0:00:57 Does your kid watch Cocomelon or is too young, maybe?
0:01:00 I refuse to let her watch Cocomelon
0:01:01 because it’s crack.
0:01:03 It’s baby crack.
0:01:08 So by the way, number two, number five, number six, number seven,
0:01:11 those are all just like Cocomelon.
0:01:13 They’re basically kids’ entertainment channels.
0:01:16 By the way, a couple of them are like Russian and Ukrainian
0:01:18 in the top 10 of all views.
0:01:21 So Cocomelon was this channel
0:01:25 that was actually started back in 2006, 2007.
0:01:29 This dad who was like an animator slash filmmaker
0:01:32 and his wife, who I think was like a cartoonist
0:01:33 for children’s books,
0:01:35 they noticed there’s like,
0:01:38 oh, there’s like nothing good on YouTube for kids.
0:01:41 And so they start creating very simple animations
0:01:44 for kids on YouTube.
0:01:47 Just like literally, if you go to their channel
0:01:49 and you click pop, click oldest.
0:01:51 And the very old, the oldest one,
0:01:54 I think it’s like 18 years ago is a video.
0:01:55 That’s like the ABC song.
0:01:56 It’s a 40 second video.
0:01:59 And if you go look at all the old ones,
0:02:00 it doesn’t look like Cocomelon today.
0:02:01 There’s no character.
0:02:03 There’s no like kid, JJ.
0:02:06 There’s no like crazy cracked out animations.
0:02:07 There’s nothing.
0:02:07 There’s just like,
0:02:09 literally they’re just doing nursery rhymes.
0:02:10 So it’s like ABC,
0:02:12 Twinkle, Twinkle, Little Star,
0:02:14 Baba, Black Sheep, all the hits.
0:02:16 And so those start getting a lot of views.
0:02:19 And for like 10 plus years,
0:02:22 it’s just them doing animations,
0:02:25 no sponsors, no merchandise,
0:02:27 no gimmicks, no nothing.
0:02:29 They’re just living off of YouTube ad revenue.
0:02:29 They got a small team.
0:02:31 They get into about 20 people.
0:02:32 10 plus years.
0:02:33 Wow.
0:02:35 So that’s a grind.
0:02:36 They did that.
0:02:37 There’s another story.
0:02:39 Blippi.
0:02:40 I don’t know if you’re familiar with Blippi.
0:02:41 Blippi is sort of like-
0:02:42 Is he the guy who sings,
0:02:43 but it’s like many guys now?
0:02:46 Yeah, they’ve switched out the character,
0:02:49 but basically it’s a dude who wears a blue suit
0:02:50 with orange overalls and a bow tie.
0:02:51 And he’s like,
0:02:53 yeah, it’s me, Blippi, right?
0:02:54 And he’s like,
0:02:56 basically he just goes to like abandoned,
0:02:58 like not abandoned,
0:02:58 I shouldn’t say that.
0:03:00 Like kids like play places when they’re closed
0:03:01 and he goes and he plays in them
0:03:04 and he like films himself playing in the play place
0:03:06 and he teaches you things and whatever.
0:03:08 Slightly educational, slightly fun channel.
0:03:10 Wait, were you going to say Blippi
0:03:14 is recording abandoned warehouses?
0:03:15 Abandoned play places,
0:03:16 like there’s no one there,
0:03:17 but they’re not abandoned.
0:03:17 I thought you’d be like,
0:03:19 today’s special word is tetanus.
0:03:20 Like if you do,
0:03:21 like-
0:03:22 Yeah, exactly.
0:03:26 Can you say rabid?
0:03:27 Yeah.
0:03:28 Rabid.
0:03:31 So Blippi, this guy basically sees that his,
0:03:33 I think his niece or nephew or something like that
0:03:37 is watching these like really low quality videos of tractors.
0:03:39 Like, you know, like kids love trucks and tractors.
0:03:39 I do.
0:03:41 He’s like, oh man, like my kid loves this.
0:03:43 My nephew loves this tractor video.
0:03:44 And so he goes and he makes one.
0:03:45 If you get the same thing,
0:03:46 go to the Blippi channel,
0:03:46 you click oldest,
0:03:50 you’ll see it’s a video of a tractor going through a field.
0:03:53 And his next one is like another tractor video.
0:03:55 And he’s on green screen with it.
0:03:56 He’s not even near a tractor.
0:03:57 He just green screens himself on top of it.
0:03:59 And so he starts creating this.
0:04:00 He starts getting a lot of views.
0:04:02 And so what happens is there’s this guy,
0:04:02 Rene.
0:04:05 And what Rene does is he decides to create a PE rollup,
0:04:08 but around these kids’ YouTube channels.
0:04:12 And the opportunity is that Rene worked at a company called Maker Studios.
0:04:13 Do you remember Maker?
0:04:13 Yeah.
0:04:17 It kind of ended up being like they were the hottest thing going.
0:04:19 And they raised money at billions of dollars of valuation.
0:04:21 And it didn’t exactly live up to that,
0:04:22 but it kind of created like,
0:04:24 it was like so innovative that a lot of the employees were,
0:04:26 went and did amazing stuff.
0:04:26 Is that right?
0:04:28 Kind of.
0:04:28 Yeah.
0:04:31 So basically they were early on to the YouTube professionalization.
0:04:35 And what they were trying to do was they created what’s called an MCN,
0:04:36 a multi-channel network.
0:04:37 And, you know, what does that mean?
0:04:39 It’s sort of like an agency,
0:04:43 like a CAA for YouTube talent.
0:04:44 So for some of them,
0:04:46 they would own the channels and then the talent would operate them.
0:04:47 For others, the talent owned their own channel
0:04:49 and they would do the brand deals.
0:04:51 But like, instead of you,
0:04:53 the one YouTuber negotiating your brand deals,
0:04:55 they would go to, you know, whoever, Coca-Cola,
0:04:57 and negotiate it for all 30 channels on their network.
0:04:58 Right?
0:05:00 So it’s like creating a, like a television channel,
0:05:00 but on YouTube.
0:05:03 And this idea sounded really good.
0:05:05 It just wasn’t a really good idea.
0:05:06 It’s been tried and failed many, many times.
0:05:07 Right.
0:05:11 It was one of these startups you have to be very wary of because they,
0:05:13 it’s reasoning by analogy.
0:05:18 So if you ever hear like Elon talk about like reasoning from first principles,
0:05:22 which is basically you take like solid truths, like logic,
0:05:24 and you build one logic block on top of another,
0:05:28 like a stack of Legos that all click together in a chain of logic.
0:05:30 Reasoning by analogy is to say,
0:05:32 yeah, we’re CAA, but for YouTube.
0:05:37 And you don’t really understand the underlying assumptions about how YouTube works and how Hollywood
0:05:38 works.
0:05:38 It’s totally different.
0:05:41 There actually doesn’t need to be a CAA for YouTube,
0:05:44 or it wouldn’t be that valuable if you were the CAA of YouTube,
0:05:45 but it raised money.
0:05:47 And it was a very hyped thing at the time.
0:05:49 They actually ended up with a good exit to Disney.
0:05:51 I think Disney bought them for $709 or a million dollars,
0:05:52 something like a big exit.
0:05:56 But it was a kind of a failed company and it failed inside of Disney.
0:05:59 But it like could be an okay business,
0:06:02 just not a good business that requires hundreds of millions.
0:06:05 Yeah, not hundreds of millions in funding good business.
0:06:06 There are plenty of these like agents,
0:06:09 creator agencies on TikTok and Twitch that are like bootstrapped.
0:06:11 That’ll do like a few million dollars a year of profit.
0:06:12 Good for them.
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0:06:44 So what happens?
0:06:46 So Renee, he’s at Maker.
0:06:47 He didn’t start it, but he works there.
0:06:50 And when Disney acquires it, he goes to Disney
0:06:53 and he becomes like the head of like digital content internationally.
0:06:55 So I’m like, you know, some title there.
0:06:58 And what he realizes, he says, here’s the opportunity.
0:06:59 He goes, when I was at Maker,
0:07:02 I realized that kids’ YouTube videos were getting tons of views,
0:07:05 but they were overlooked by traditional PE and media companies
0:07:06 because they, you know,
0:07:08 basically they look too janky to be taken seriously.
0:07:12 He said, of the top hundred most viewed children’s bands online,
0:07:14 none of them were owned by big studios.
0:07:15 So he’s at Disney.
0:07:19 He’s like, look at the top hundred channels, kids’ channels on YouTube.
0:07:24 None of them are owned by Disney or Pixar or like any of the major studios.
0:07:28 And his co-founder, who was at Paramount at the time, goes,
0:07:30 yeah, also none of those,
0:07:33 none of those YouTube channels that are getting all these views have streaming deals
0:07:37 because the streamers say we need the content to be exclusive.
0:07:38 And the YouTubers are like exclusive.
0:07:40 I mean, YouTube’s my bread and butter.
0:07:41 Why would I take the content off of YouTube?
0:07:43 So they were just like, wow, we’re not doing a deal.
0:07:46 So they get together and they started stack ranking
0:07:48 and they basically made a simple criteria.
0:07:54 So they said, I want something that has high views and has like a quality IP.
0:07:55 So like it has a brand name.
0:07:59 It has a character that people might associate and love.
0:08:01 Something you might buy a plush doll of someday.
0:08:03 Like you’ll buy a toy of this, this thing.
0:08:06 He goes, if they have both of those, I’m interested.
0:08:09 And straight out of the gate, they’ve raised about $150 million.
0:08:14 And they raise all this money saying, we’re going to do this roll-up.
0:08:15 And they do three deals.
0:08:20 So shout out to the Roll-Up Europe Beehive newsletter
0:08:22 because he had the details on this.
0:08:26 No, but all the traditional media, they only have the surface level details.
0:08:29 Some guy on Beehive has like a really detailed breakdown of this
0:08:31 because these companies are based in Europe.
0:08:34 And so they’re all listed in companies house.
0:08:37 So he was able to like go see literally how much did the CEO make?
0:08:40 And the headline of this story is they take that $150 million.
0:08:42 They start buying up these channels.
0:08:46 And four years later, they exit this to Blackstone for $3 billion.
0:08:47 What?
0:08:49 Technically, they exit to Candle.
0:08:51 Candle’s backed by Blackstone.
0:08:52 That’s where Candle got the money.
0:08:54 But they sell for $3 billion.
0:08:57 How much revenue was it making?
0:08:59 So let me break it down.
0:09:02 They go and they buy Cocomelon for $103 million.
0:09:05 92 million up front, 11 million contingent.
0:09:06 Okay.
0:09:08 So 100 million on Cocomelon.
0:09:11 70 million on Blippi, of which only 26 million was up front.
0:09:13 45 million was contingent.
0:09:16 And then Little Baby Bum was the third big one that they bought.
0:09:19 And Little Baby Bum had also nursery rhymes and whatnot.
0:09:20 And they did that for 65 million.
0:09:26 So that basically, and at that point, they had raised more money of equity and debt.
0:09:31 And so they raised about $400 million in total equity and debt to create the $3 billion exit.
0:09:36 So like a 10x return roughly on the capital that they used to buy these channels.
0:09:36 Wow.
0:09:41 And in four years, literally through M&A, they were able to create $3 billion of value.
0:09:42 Here’s what they did.
0:09:43 So here’s the revenue.
0:09:46 So their company is called, the holding company is called Moonbug.
0:09:51 So Moonbug, basically 2019 is sort of like a $20 million a year business.
0:09:54 2020, it’s about a $50 million a year business.
0:09:55 Then it goes to $150 million.
0:10:00 Then it goes to $230 million with $100 million in EBITDA before they got taken out.
0:10:01 Holy shit.
0:10:04 It was doing $100 million in EBITDA in only four years?
0:10:05 Exactly.
0:10:08 And the founders of this thing, so each of them cleared.
0:10:12 Rene makes $300 million for this four years of work.
0:10:14 His co-founder makes $300 million.
0:10:20 The head of M&A made $60 million and the CFO made like $20 or $30 million in the roll-up
0:10:21 and the rest went to the investors.
0:10:27 When they bought these companies, did they need to be great at operating YouTube or was
0:10:32 the, they were so good at incentivizing Blippi or whatever that they’re like, just keep going.
0:10:33 You’re doing fine.
0:10:38 You get this much of your payout if you hit this and that.
0:10:42 So these businesses are simple and complex at the same time.
0:10:42 What do I mean by that?
0:10:45 One, a lot of the views are just going to come on the back catalog.
0:10:49 So, you know, it’s, it’s still wheels on the bus.
0:10:52 It’s twinkle, twinkle, little star that is racking up views every single month.
0:10:54 You don’t have to do anything on those videos.
0:10:57 I’m not sure if you’re saying wheels on the bus as analogy of running a company or you’re
0:10:59 literally referring to the song, wheels on the bus.
0:11:05 And so they, the back catalog gets a lot of views.
0:11:06 What they did, which is smart.
0:11:09 So Cocomelon wasn’t originally called Cocomelon.
0:11:14 It was originally called Checkgate, which sounds like a baggage company.
0:11:16 Dude, it reminds me of, it sounds like the cult.
0:11:18 Remember the, the cult that where they all killed themselves?
0:11:20 It was like Heaven’s Gate, Checkgate.
0:11:21 Okay.
0:11:23 So yeah, not familiar with that.
0:11:25 Not, I need to brush up on my cults.
0:11:25 Yeah.
0:11:30 So Checkgate, and then they rebranded to ABC Kid TV, which if you watch the videos, it’ll
0:11:32 still start ABC Kid TV.
0:11:33 And then it starts the song.
0:11:38 Then they rebranded to Cocomelon, but that’s like in 2017 or something like that.
0:11:39 Like it was like a long time.
0:11:42 It was like 10 plus years into the company that they rebranded.
0:11:45 And that’s when they introduced JJ and the characters and the colors.
0:11:48 And then, so basically that’s where you get the characters.
0:11:49 Same thing with Blippi.
0:11:50 They had Blippi.
0:11:51 They take out the main guy.
0:11:55 They replace him with a, like a rotate, like a, like an actor basically.
0:11:57 Because he’s ready to move on.
0:12:04 And they also introduced Mika, this like diverse character who could come in and like appeal
0:12:04 to a wider set of audience.
0:12:07 So they’re doing like moves in the content.
0:12:08 Yes.
0:12:10 But the other moves they did was they got it on the streamers.
0:12:11 So they got it onto Netflix.
0:12:15 It’s now the most watched kids thing on Netflix is Cocomelon.
0:12:20 Then they go into the toys business and they’re doing, you know, millions and millions in toys
0:12:20 and licensing.
0:12:25 And so, you know, you, they built out the full like suite of business basically around
0:12:26 these.
0:12:27 They do Blippi the musical.
0:12:29 It’s a live tour that’s going around the nation.
0:12:33 And that’s, you know, selling out, you know, basically tickets, me and my family, we all
0:12:35 went and this, you know, there’s not an empty seat in the house.
0:12:41 And so like these things are like, they turned them into, you know, rocking and rolling businesses.
0:12:42 They kind of use the Disney playbook, right?
0:12:48 Which is like create massively loved IP and then monetize it through everything except for
0:12:49 they just didn’t do theme parks.
0:12:55 Have you seen on South Park where Mickey Mouse is, you know, comes off as this nice guy,
0:12:58 but behind the scenes, he’s trying to convince the Jonah brothers that they better wear their
0:13:02 virginity rings or their chastity rings because they’re wanting to like have sex.
0:13:06 And he’s like, you better put that fucking ring back on.
0:13:12 First of all, incredible impression.
0:13:18 How did you feel three seconds before you did that, before you committed?
0:13:23 You know, there is no, when you’re taking a risk, you cannot paint a world where it’s only
0:13:24 upside.
0:13:26 You have to accept that there is potentially downside.
0:13:30 These are the things I tell myself before I’m ever taking a big risk.
0:13:31 And I thought about that.
0:13:34 I’m a risk taker.
0:13:35 Yeah, I’m a risk taker.
0:13:38 I do impromptu impressions sometimes that I’ve never done before.
0:13:41 But that’s what I imagined Rene to be.
0:13:45 He’s like, listen, Blippi, I need you to put that fucking tie on and I need you to get out
0:13:45 there and dance.
0:13:49 Blippi’s like asking for a raise.
0:13:52 What’s the hard part about this business?
0:13:54 Is it convincing people to sell?
0:14:01 No, I don’t think that was that hard because they had a huge check and the huge check helps.
0:14:07 You know, like I think at the time, I think Cocomelon had done like 80 million in revenue
0:14:08 or something like that, that year.
0:14:10 And then they bought them for 100.
0:14:14 So they bought them, you know, probably like at a 5x multiple or 6x multiple of profits or
0:14:14 something like that.
0:14:19 I don’t know exactly the multiple, but I’m guessing they offered them like, hey, here’s a bunch
0:14:21 of money that you could have.
0:14:25 And like, you’ve been running for like, you know, years doing this on this treadmill.
0:14:26 And like, what if we could help?
0:14:28 And what if we could take you to the next level?
0:14:29 You don’t know those people?
0:14:31 Oh, I golf with the guy from Netflix.
0:14:32 Oh, I used to be at Paramount.
0:14:33 Oh, I was at Disney.
0:14:35 I can help you get to the next level.
0:14:37 Break down doors that didn’t seem like they were open.
0:14:40 The hard part was picking up the gold on the ground.
0:14:43 So this happens a lot in business.
0:14:44 It’s like these ideas are just sitting on the ground.
0:14:49 And it’s the hard part is somebody taking a very simple idea very seriously.
0:14:56 So to say, yeah, you know, that silly like nursery rhyme channel, I’m gonna go raise $150 million
0:15:01 from like whoever Goldman Sachs to go and acquire these.
0:15:06 And you have to say that with a straight face when there’s no track record of that.
0:15:09 You know, you have to really pitch a strong case.
0:15:13 And I also wonder and you would actually have good insight to this because you worked at Twitch.
0:15:16 I wonder what opportunity looks like.
0:15:25 So for example, when you explained Renee’s inner dialogue of like, hey, look at all the top 100 channels.
0:15:30 None of them are owned by PE or they all are just kind of like these mom and pop shops.
0:15:40 This seems so obvious, but I wonder what that inner dialogue actually was with uncertainty in the same way where I don’t know anything about streaming,
0:15:41 but you used to work at Twitch.
0:15:45 And then I know that like there was that there was like two new video get kick streamer.
0:15:46 I forget.
0:15:51 But like I wonder if a Twitch employee could have looked at me like these.
0:15:52 There’s an opportunity here.
0:15:54 Here’s a gap because I could see the data.
0:15:55 Therefore, we should support this other thing.
0:15:56 What was the other one called kick?
0:15:58 There’s Mixer.
0:15:58 There was to kick.
0:15:59 Yeah.
0:16:00 YouTube has their own Facebook.
0:16:06 Actually, you know, there was a time where we were before Twitch acquired us.
0:16:08 We were building like a tool in the ecosystem.
0:16:10 We were getting to know a bunch of the streamers who were using our tool.
0:16:16 And we were like, look, this tool, like the hard part is this tool like kind of caps out at like 100 million.
0:16:20 If we do, if we win, if we win, the size of this is like 100 million, we think.
0:16:24 And the problem is that the platform’s worth like 5 billion.
0:16:27 How do we do the 5 billion thing?
0:16:29 And we’re like, we’d have to create another platform.
0:16:31 It’s like, okay, well, there’s the technology part of it.
0:16:32 That’s hard, but doable.
0:16:36 The hard part is getting the streamers and getting the network effect to go.
0:16:38 Like, how do you break the network effect of something like Twitch?
0:16:44 And what you realize is that a very small number of streamers drive a huge amount of the viewership.
0:16:49 So in theory, you could get those streamers together and you could say, hey, we’re coming over here.
0:16:52 And so I actually went and pitched my investor.
0:16:57 Now, I shouldn’t say pitch because it wasn’t, I wasn’t fully committed.
0:16:59 I wasn’t sure that this is a swing worth taking.
0:17:02 But I was like, I think what we would need to do.
0:17:04 Wouldn’t it be neat if we did this?
0:17:10 I was like, we need to throw some sort of event where we get a hundred of the, we get all the top hundred streamers in a room together.
0:17:13 And basically we need to make them an offer they can’t refuse.
0:17:13 We need to make that.
0:17:15 We need to basically overpay the top hundred.
0:17:24 And, you know, the thing is with the top hundred, even if they’re making $5 million a year and you’re offering them 3x that, 4x that, whatever it is.
0:17:27 Okay, you’d need $500 million to do this.
0:17:30 And they need to say yes, which is hard.
0:17:35 But if you had $500 million, you could create a platform that’s going to be worth $5 billion.
0:17:38 Like, it’s not that much more complicated.
0:17:40 Like, once you have the streamers, you’ve got the hard part.
0:17:41 You could build all the other stuff.
0:17:41 You could build the chat.
0:17:42 You could build the streaming technology.
0:17:44 You could build the bits.
0:17:45 You could build the subscription feature.
0:17:46 You could build all the other stuff you would need to build.
0:17:49 But you’d have to get the main creators to come over.
0:17:51 You have to have the sentiment be, this is where you need to be, not Twitch.
0:17:53 Really, that’s the really, really hard part.
0:17:58 And so we were like, I don’t know, that’s kind of a crazy idea.
0:17:58 We didn’t end up doing it.
0:18:04 When we got acquired, Emmett takes me out to drinks the night the deal closes.
0:18:06 And we go meet in this bar in the mission and we’re talking.
0:18:10 And I was like, yeah, like, you know, it’s kind of like you could put your cards on the table now.
0:18:11 The deal’s done.
0:18:14 And I was like, yeah, you know, actually, we were talking about something.
0:18:19 I said, you know, one of the things that I thought about doing was I realized, like, you know, we did the math.
0:18:20 We realized these streamers matter the most.
0:18:25 If we paid them this much, I think we could have got them, you know, 70% of them maybe to come over.
0:18:27 And like that could have caused like some waves.
0:18:30 And he’s like, yeah, actually, we’ve thought about that.
0:18:38 So what we had done was we, we made it so that none of their, all their, they’re on contracts with us, unlike YouTube.
0:18:42 So like on Twitch, they actually have like multi-year agreements with Twitch.
0:18:45 And he goes, we just made it so that they don’t expire at the same time.
0:18:57 So we always aligned it where for the top streamers, they’re all ending at different times so that nobody would ever feel safety in numbers to move to another platform as a giant group because they could never get their contracts to align.
0:19:03 Yeah, actually, I think in reality, that actually wasn’t the case.
0:19:08 And in truth, the streamers just could have like moved over and there’s nothing Twitch could have done about it.
0:19:11 Like the contract wasn’t, you have to stream here.
0:19:14 The contract was, you only get this deal if you stream here.
0:19:19 Meaning like you get this ratio, this, maybe the split or this minimum guarantee, whatever, right?
0:19:25 But like the reality was if Twitch went and started suing streamers, that would have been horrible for their own business.
0:19:30 They would never do it, which is why multiple streamers did take money from Mixer and Kick and others.
0:19:32 And they left and Twitch didn’t do anything about it.
0:19:38 So like the reality was a more high agency version of me, you could have actually tried it.
0:19:43 And it would have been, probably would have been more worthwhile my time than what we did with the tool because the tool never had the upside.
0:19:51 Alright, my friends, I have exciting news for that business idea that’s been sitting in your notes app.
0:19:58 The Hustle, which is my old company, has partnered with IndieHackers, one of my favorite websites, to launch a pitch competition.
0:20:00 It’s called The Hustle’s Big Break.
0:20:03 And it’s a pitch competition with a simple premise.
0:20:09 You tell us your business idea in 60 seconds or less, and the winner gets $5,000 to turn it into a reality.
0:20:10 Here’s how it works.
0:20:13 Record a 60-second video pitch of your business idea.
0:20:16 Include your business name, description, revenue model, and tagline.
0:20:20 And finally, submit it at thehustle.co slash bigbreak.
0:20:23 And it all has to be done by April 4th.
0:20:26 The winner gets $5,000 in cash to kickstart their business journey.
0:20:32 Plus, we’re going to feature them in The Hustle’s daily newsletter, which is read by around a million and a half people.
0:20:35 And these are the smartest business and tech folks out there.
0:20:37 The winner will be announced on April 11th.
0:20:43 So again, if you have a business idea, go to thehustle.co slash bigbreak.
0:20:44 All right, back to the pot.
0:20:48 This is a great story.
0:20:50 I want to know the update.
0:20:51 I want to know what happened.
0:20:52 And how did you know how much money he made?
0:20:54 I told you.
0:20:55 My guy on Beehive.
0:20:57 He basically went to their…
0:21:02 Rene’s LLC or whatever, the equivalent of an LLC, is on Companies House.
0:21:05 And you can see that $280 million hit the bank in a certain year.
0:21:07 They had to report that.
0:21:08 And so he kind of did all the math.
0:21:10 And he also had their cap table, like their waterfall.
0:21:15 So it was actually kind of nerdy and interesting in that the way they structured the deal was basically with investors.
0:21:23 The founders who were doing the roll-up were basically entitled to somewhere between 22% to 28% of all proceeds of the roll-up.
0:21:24 All right?
0:21:26 So that was like their profit participation at the end.
0:21:29 So whatever we sell this for, we get between 22% to 28%.
0:21:30 Investors are going to get the rest.
0:21:32 Wait, that’s insane.
0:21:33 That’s different than equity?
0:21:41 No, it’s like equity, but it’s basically like, you know, you have equity, but then you have, let’s say, preferred equity, right?
0:21:43 Or you have like liquidation preferences.
0:21:44 You can have rules.
0:21:45 You can have strings attached to equity.
0:21:45 So for example…
0:21:46 Wow, I did not know that.
0:21:48 What they did…
0:21:48 You did.
0:21:49 Because in venture, this happens all the time, right?
0:21:51 When a company raised money, they rated preferred shares.
0:21:53 Preferred shares mean they get their money back first.
0:21:56 So even if I own 25%, I don’t necessarily get 25%.
0:21:56 I might get zero.
0:21:59 Yeah, I guess I just assumed if this is a PE firm, the rules are different.
0:22:03 And like, it was like, for example, it was like tied to the carry or something like that.
0:22:09 So what they did was, it was based on the multiple of the invested capital, the MOIC, right?
0:22:13 So it’s like, if it was under 3x return, so they raised 400 million.
0:22:18 If it was going to be an under 3x return, they were going to get like only 9% of the proceeds
0:22:19 or something like that, like a lower percent.
0:22:19 Got it.
0:22:22 But they hit 10x, right?
0:22:25 So they hit the highest tranche, which was basically they got their 10% of sweat equity
0:22:28 plus 11% of profit participation.
0:22:29 So they got like 22% or something.
0:22:31 Did they use any of their own money to start this?
0:22:34 I think Rene was an investor, but I don’t know how much.
0:22:36 Yeah, this guy’s great.
0:22:37 That’s a good story.
0:22:40 I have a life update for you.
0:22:41 Okay, let’s do it.
0:22:45 And I wanted to share because I think it’s fun.
0:22:48 But I also think that there’s a lot of people who can learn from the situation that I’m in
0:22:49 because I think they’re in similar situations.
0:22:54 So the life update is my partner, Joe, and I, we are now the CEOs of my company, Hampton.
0:22:59 And the life update is basically I’m going like pretty much all in on it.
0:23:04 And I wanted to explain a quote that I read that made me want to do this.
0:23:07 So we like, or at least I like Palmer Luckey.
0:23:08 Do you like Palmer Luckey?
0:23:09 Yeah, sure.
0:23:10 Why not?
0:23:14 Palmer Luckey, we had him on the pod like three years ago, two years ago.
0:23:16 And I’ve been just fascinated with his way of thinking.
0:23:20 And he had this interview come out.
0:23:21 I linked to it on the bottom of our document.
0:23:24 It was with Tablet Magazine.
0:23:29 And I think he came out with this in 22, maybe.
0:23:30 And I want to read it to you.
0:23:33 So Palmer Luckey is the CEO of Andrel.
0:23:36 It’s a 13 or $20 billion company, something like that.
0:23:37 Also created Oculus.
0:23:43 So he said, at some point in business and in life and in romance, you have to commit
0:23:44 to a path.
0:23:47 A lot of my peers in the tech industry do not share this philosophy.
0:23:50 They’re always pursuing everything with optionality.
0:23:53 Oh, I need to be able to raise money from anybody.
0:23:55 I need to be able to sell my business in any way.
0:23:56 I need to have liquidity in any way.
0:24:00 I need to make sure that I’m not closing myself off to future romantic partners.
0:24:03 I need to make sure that I’ve got my options open.
0:24:08 I need to make sure that I’m not going to buy a house and lock myself in or having children.
0:24:08 I don’t know.
0:24:09 I’m not ready.
0:24:10 I don’t want to commit to that path.
0:24:16 And keeping their options open, they ensure that they’re going to jump from option to option.
0:24:19 And if they don’t commit to a path, they’re going to fail at it.
0:24:21 You have to commit to make it work.
0:24:23 And I think marriage is the same way.
0:24:24 You just have to commit to it.
0:24:27 You have to say, this is the path that I’m on for better or worse.
0:24:28 And I’m going to double down.
0:24:33 And I thought, that is a great quote.
0:24:36 That really stuck with me when I read this.
0:24:41 And I realized that with my business, Hampton, I had hired a CEO for it.
0:24:43 And so I wasn’t able to like really…
0:24:44 From day one, right?
0:24:45 I think that’s the important thing.
0:24:46 Day, month eight.
0:24:49 So I got it to a million in revenue.
0:24:53 He scaled it to eight figures in revenue.
0:24:55 And then I am now taking over.
0:25:02 But because of that, I wasn’t able to put my influence on it.
0:25:03 You have to respect your CEO.
0:25:05 You have to respect the manager in charge.
0:25:07 And I hated that.
0:25:08 I was not a fan of that.
0:25:12 And I think that on this podcast, we talk a lot about that.
0:25:13 And it sounds cool.
0:25:15 And I’m sure it’s great for a lot of people.
0:25:16 But it wasn’t great for me.
0:25:21 And the reason I wanted to bring this up on the pod was because a lot of people you see doing this.
0:25:25 They called it like a holding company or whatever, where they’re like doing lots of different stuff.
0:25:26 Because we glamorize it.
0:25:30 Because if it works, I’m sure it’s great if that is your main thing.
0:25:33 And I was starting to think, oh, that would be great.
0:25:34 I would like to do that.
0:25:36 I realized I don’t want to do that.
0:25:37 I just want to do one thing.
0:25:39 And this quote really inspired me.
0:25:40 That’s really what I care about.
0:25:43 Now, let me ask you a couple questions.
0:25:45 You weren’t doing a holding company, though, right?
0:25:47 You were just doing Hampton already.
0:25:47 Yeah.
0:25:58 So why the switch where you go from being founder, chairman type person to I want to be the CEO or actually co-CEO, not even be the CEO?
0:25:59 Why that?
0:26:04 I realized that I wanted to have full control because I wanted this to be a legacy.
0:26:08 I wanted to just put my texture on it.
0:26:13 But also, when I realized I hate remote work, I hate it more than anything.
0:26:19 And I wanted to create an office where I live, an office culture, because those are some of the greatest memories that I have.
0:26:24 You and I used to work across the street from each other at the corner of Bush and Montgomery, right?
0:26:25 Was it Bush and Montgomery?
0:26:25 Yeah.
0:26:27 I loved that intersection.
0:26:34 Just walking out and seeing the action and seeing my employees upstairs and be able to just like go for lunch and just like, like shooting the shit during breaks.
0:26:35 I loved it.
0:26:42 And I just felt that this was a really good way to make all of my selfish wants come to reality.
0:26:42 Right.
0:26:44 Yeah, that’s great.
0:26:48 You know, I think that a lot of people are probably feeling this right now because everybody went remote during COVID.
0:26:55 And now we’re, what, two, three years into that, that full remote decision.
0:26:57 And at first, you have the honeymoon period of remote.
0:26:58 Ah, look at this.
0:26:59 I don’t have to commute.
0:27:01 I don’t have to even get dressed.
0:27:02 I don’t got to wear pants.
0:27:03 I just got to top up.
0:27:04 Here we go.
0:27:06 You know, oh, this is great.
0:27:07 I can see my kids.
0:27:11 And then you’re like, God, I can’t get away from my kids.
0:27:14 I haven’t left the house in weeks, you know, or whatever, right?
0:27:19 Like you start to see some of the consequences of the negative side of those decisions.
0:27:29 And I think the biggest one for you and me, at least I felt this, is I miss just being creative and serendipitous with my team.
0:27:32 So it’s like, A, have a team, right?
0:27:37 And B, be able to just whiteboard, sticky note, go for a walk, go for lunch.
0:27:39 Like I brought Diego out here.
0:27:41 So Diego was living on the other side of the country.
0:27:42 He was living on the East Coast in Baltimore.
0:27:44 How long has it been now?
0:27:48 Diego’s been out here for a couple months, two, three months, something like that.
0:27:49 How has your life changed?
0:27:50 For the better, dude, way better.
0:27:53 First of all, I get to kind of still do basically what I do.
0:27:56 But now I just have a buddy to do all of it with, right?
0:28:01 So it’s like, I kept the same schedule where it’s like, in the morning, he comes over.
0:28:03 The first two hours of my day are like my creative block, right?
0:28:06 Where it’s just, I don’t do anything else.
0:28:09 I just write or I podcast or I, you know, read.
0:28:11 I only do something on the creative side.
0:28:13 It’s like a creative gym session.
0:28:14 It’s like going to the gym, but for creativity.
0:28:15 All right.
0:28:15 So we do that.
0:28:16 Well, we do that together now.
0:28:16 It’s great.
0:28:19 And then my trainer comes over.
0:28:19 We work out together.
0:28:21 He’s working out with my trainer now.
0:28:21 So it’s great.
0:28:22 Yeah.
0:28:23 You know, we do a hard workout.
0:28:25 Then we go grab tacos.
0:28:26 And while we’re grabbing tacos.
0:28:27 Dude, you guys are like a prison gang, man.
0:28:29 That sounds exactly like a prison gang.
0:28:29 You wake up.
0:28:31 Yeah, we just need some enemies, dude.
0:28:31 Yeah.
0:28:34 The problem is only there’s just like old retired people around us.
0:28:35 But if they, you know.
0:28:36 Dude, go start a beef.
0:28:39 Actually, I do have some neighborly beef.
0:28:41 I could, I could actually just double down on that.
0:28:42 Now that I think about it.
0:28:42 Yeah.
0:28:45 My trash can’t get blown into your yard.
0:28:45 I’m sorry.
0:28:47 I don’t control the wind.
0:28:49 So, but then we go.
0:28:51 And what I told him, I’ll go, notice this, dude.
0:28:55 Of our best ideas, how many of them have come while we were at this taco shop?
0:28:59 Because there’s something in the creative process to like the bounce, as they used to call it,
0:29:00 the pickup artist game.
0:29:03 And in the book, the game, they talk about this technique called the bounce.
0:29:05 It’s like you’re at the club or bar, you meet someone.
0:29:09 If you really want to like accelerate your connection with that person, don’t just stay
0:29:10 there for another hour with them.
0:29:13 Just be like, Hey, let’s go grab a bite to eat.
0:29:14 I know a great place.
0:29:17 And if you leave, if you do the same, the same hour with that person, but in two different
0:29:19 places, connection goes up.
0:29:23 Well, there’s a, something like that with creativity where we’re working on a problem here.
0:29:26 We end up getting, you know, like slightly stuck, or we come up with what we think is
0:29:29 a solution, but in our gut, we’re like, that doesn’t seem great.
0:29:30 Oh, let’s take a break.
0:29:31 Let’s go for a walk.
0:29:34 So we walk or bike to a taco place at the taco place.
0:29:36 It’s always, that’s where the idea comes.
0:29:38 Once we’ve taken our mind off it, once we’ve changed the environment.
0:29:41 And I was like, dude, notice how many, how often that happens.
0:29:46 If we were just remote, none of that would have happened because I would have gotten off
0:29:47 the zoom with you.
0:29:48 And then I would have gone to take a break.
0:29:49 You would have gone to take a break.
0:29:51 I wouldn’t be like, Hey, let’s just leave our phones on.
0:29:54 Like it would have just been like a little bit weird to do that.
0:29:57 And we would not have had, you know, those next ideas.
0:30:00 And if you’re in the creative line of work, those ideas are gold.
0:30:02 Those ideas is what you’re in it for.
0:30:03 Right.
0:30:03 Right.
0:30:07 Like, unless you’re in a like factory type of work where it’s all about productivity,
0:30:11 um, you know, for us, creativity is the pro is productivity.
0:30:12 It is the new productivity.
0:30:16 And so we need to set up a situation that lets us be more creative, which being in person
0:30:18 was, was pretty massive for that.
0:30:19 Yeah.
0:30:19 It’s funny.
0:30:21 We’re both craving the same stuff.
0:30:25 And I think that a lot of people are, um, and I, yeah.
0:30:31 And so like, I went and looked at apartments this weekend and, um, I, uh, we have our, I
0:30:32 I think my lease starts May one.
0:30:36 Uh, and so I’m going all in on this, uh, this in real life stuff.
0:30:39 Like I needed an office or you’re going to like split.
0:30:41 I don’t know yet.
0:30:42 I’m still working out logistics.
0:30:44 I went and looked at this apartment building.
0:30:47 Do you, have you ever been to like, I don’t know if this is happening in San Francisco.
0:30:52 So the new thing in New York is that there’s these apartment buildings and it took me a
0:30:54 long time to realize what they are, but I I’ve nailed it.
0:30:55 They’re cruise ships.
0:30:58 And so basically what they are is they’re really cheap.
0:31:04 I mean, they’re super expensive, but the build quality is like kind of crap, like all like
0:31:07 basic builder quality, uh, apartment units.
0:31:11 But then the actual lobby has a bowling alley.
0:31:12 Oh, like the amenities are amazing.
0:31:12 Yeah.
0:31:13 Yeah.
0:31:14 Like a rock climbing gym.
0:31:15 And it’s like all like in the basement.
0:31:18 And then it has like the best gym you’ve ever seen in the world.
0:31:21 And then it has like a playroom, a golf simulator.
0:31:27 It’s basically built to be sort of like a mall where like it’s built for like, uh, the 35
0:31:31 year old, three, two kid, uh, all under eight type of like families.
0:31:33 And so I went and looked at like an apartment like that.
0:31:37 And I was like sitting in that apartment building and I’m like, I don’t know if I go to bed here
0:31:41 at night and these like tight ass walls, like hearing like honking in the city.
0:31:45 And so I haven’t decided if I can like put up with that and I’d rather commute, but potentially
0:31:46 I would move to the city.
0:31:47 I like, here’s what I did.
0:31:49 I sat down and I was like, what’s my dream day?
0:31:54 Well, my dream day is I get up at seven, I go and work out and then I get coffee with
0:31:58 like Austin reef who lives next to my in-laws or I would get coffee at my in-laws and then
0:31:59 I’d go to work at nine 30.
0:32:03 And then my wife would like show up at the office to do some work.
0:32:05 And then we’re both home at five to have dinner.
0:32:09 And that’s like, and then maybe at like seven or eight, after the kids go to bed, I would
0:32:09 go for a walk outside.
0:32:10 I’m like, that’s the perfect day.
0:32:11 All right.
0:32:12 How can I create that?
0:32:16 And so I’m still working backwards on how, how could I create that?
0:32:20 The problem is I forgot about going to bed at night and how I need a huge ceiling because
0:32:25 I get claustrophobic and that’s going to cost $60,000 a month because New York City is like
0:32:28 the craziest place in the world when it comes to renting an apartment.
0:32:31 And so I’m still trying to figure out, you know, some of those logistical details on how
0:32:33 on earth, like I could pull off this.
0:32:37 It was like super relatable with like walking and doing whatever until you’re like, but I
0:32:39 need 16 foot ceilings to sleep.
0:32:44 No, I just like at your house, like you’re like a lot of apartment ceilings are eight feet
0:32:44 tall.
0:32:45 And it like, I don’t know.
0:32:46 You feel like claustrophobic, dude.
0:32:49 The rent in New York City is outlandish.
0:32:55 So when we were younger, uh, do you remember like the idea of when we were 25, I think I
0:32:59 spent like $800 a month, a $10,000 a month apartment nowadays in New York City.
0:33:00 It’s not nice.
0:33:02 It’s like a shit two bedroom.
0:33:05 Uh, it’s crazy how expensive, uh, Manhattan is.
0:33:09 And so I got to like figure out all the logistics, but that’s my spiel.
0:33:11 I’m going all in and I’m going to go all in on in real life.
0:33:12 I need it.
0:33:13 My soul is aching.
0:33:18 How much were you working on Hampton anyways, hours a week, 40 hours a week?
0:33:21 Like it was like, Oh, what’s going to change your CEO now?
0:33:28 Well, I can’t like, like before it was like, well, how can I convince this person that my
0:33:29 idea is the right way?
0:33:36 Uh, you know, like it, I was a very respectful boss.
0:33:40 I felt like, and it was like, but now it’s like, I don’t, I don’t really got to be respectful.
0:33:41 I’m just going to say like, this is what I want to make.
0:33:46 Uh, I need you guys to help me make this, uh, type of energy versus before.
0:33:49 I think I was a little bit more hands-off and I was thinking a lot.
0:33:50 Now I’m actually operating.
0:33:51 Yeah.
0:33:53 What?
0:33:55 Oh, no, that’s just funny.
0:34:00 Like, I feel like, uh, I was just reflecting, like, you know, you, I think Andrew has a good
0:34:00 gift to this.
0:34:03 I do this too, which is like, we tell these great stories.
0:34:06 You’re like, you know, I was reading this article about Palmer Luckey and he said this
0:34:08 beautiful quote and you have this quote.
0:34:12 And you’re like, I decided I too need to commit and choose a path, but it’s like, and it’s
0:34:14 a great way to frame a story like this.
0:34:15 It’s like the truth.
0:34:19 I think I’m going to speak for you for a second, but I think the truth, a lot of these situations
0:34:25 is just like, it’s irritating to be out of like, to not have your hands on and not be in control.
0:34:28 It’s like, I just like to be in control and do things my way.
0:34:31 But like, wow, that’s a less fun story to say.
0:34:32 It’s like, you know what?
0:34:37 I just really feel like we all chase optionality and we’re better off to commit and really just
0:34:38 No, that is the truth.
0:34:43 And it’s like, I think it’s the truth, but I don’t think that’s why you’re the CEO now.
0:34:45 No, usually, usually discovery.
0:34:46 Because you read this Palmer Luckey quote.
0:34:50 No, usually discovery for me, and I bet it’s for you and for many other people is you feel
0:34:53 a certain way and you’re like, this freaking sucks.
0:34:54 And somebody puts words on it.
0:34:58 And then someone puts words on it and you’re like, oh, that’s like normal to feel or this
0:34:59 person said this.
0:35:02 I guess what I’m saying is you weren’t choosing multiple options.
0:35:04 You just weren’t in control.
0:35:07 The quote that Palmer Luckey should have said is like, if you’re the founder,
0:35:11 put your fucking DNA in the company and just go like, be hands on, be a micromanager,
0:35:12 but go in there.
0:35:12 Do it.
0:35:13 I was going easy.
0:35:15 I was in like the dad phase.
0:35:20 So like, it was like, uh, like I want it to be available at like noon.
0:35:25 Now I’m, now I’m more so like, look, I can be there in the morning and in the evening.
0:35:30 And I think that’s, I’m still being a good dad before it was like, uh, I have to have
0:35:32 X amount of hours of FaceTime.
0:35:34 Now I’m out of the honeymoon phase of being a dad.
0:35:37 And I’m like, look, I could like be with you for breakfast and be with you for dinner.
0:35:39 And I think I could still be a good father.
0:35:41 And so that was partial it, partially it.
0:35:42 Gotcha.
0:35:43 Yeah.
0:35:48 I, uh, I was talking to somebody and, uh, recently and they were like, you know, I just want to
0:35:50 like, I’m working, I’m working hard on this.
0:35:52 They’re like chasing some projects, some deal.
0:35:56 And I was like, why are you doing this?
0:35:58 You’re so like, you’ve done so many deals.
0:35:59 You’re, you’re post-economic.
0:36:00 You’ve made so much money.
0:36:02 Why go so hard at this?
0:36:06 And they were like, I just really want my kids to see what the, you know, their dad working.
0:36:10 And I was like, I don’t, I don’t even think he was lying.
0:36:12 I think he genuinely believes that, but I’m like, dude, you’re doing this deal because
0:36:13 you like doing deals.
0:36:14 That’s all you’ve done.
0:36:15 You, you’ve done deals for 30 years.
0:36:17 You’re amazing at doing deals.
0:36:18 It’s a rush to do a great deal.
0:36:19 It’s fun to win.
0:36:22 It’s fun to dunk the basketball and you’re trying to dunk.
0:36:26 And you don’t have to be like, I just want my kids to see a hardworking dad.
0:36:27 It’s like, dude, you’re sitting on your laptop, sending emails.
0:36:31 It’s like, it’s not like they see your, their dad, you know, sweating it out in the
0:36:31 soul.
0:36:32 You’re not chopping down wood, dude.
0:36:36 So I was like, but people tell themselves all kinds of stories.
0:36:39 And I just find it hilarious because of course I do the same thing, but when you see it
0:36:43 in other people, it’s much more easy to spot like, oh, you’ve told yourself a story.
0:36:43 That’s cool.
0:36:44 Like that makes, it’s fine.
0:36:47 Whatever, whatever gets you to do the things you want to do is fine.
0:36:53 New York City founders, if you’ve listened to my first million before, you know, I’ve got
0:36:57 this company called Hampton and Hampton is a community for founders and CEOs.
0:37:01 A lot of the stories and ideas that I get for this podcast, I actually got it from people
0:37:02 who I met in Hampton.
0:37:05 We have this big community of a thousand plus people and it’s amazing.
0:37:09 But the main part is this eight person core group that becomes your board of advisors
0:37:11 for your life and for your business.
0:37:19 Now to the folks in New York City, I’m building a in real life core group in New York City.
0:37:23 And so if you meet one of the following criteria, your business either does 3 million in revenue
0:37:28 or you’ve raised 3 million in funding, or you’ve started and sold a company for at least $10
0:37:30 million, then you are eligible to apply.
0:37:33 So go to joinhampton.com and apply.
0:37:36 I’m going to be reviewing all of the applications myself.
0:37:38 So put that you heard about this on MFM.
0:37:40 So I know to give you a little extra love.
0:37:41 Now back to the show.
0:37:45 Would you want your children to work with you?
0:37:47 Is that even in your wants?
0:37:51 I would, I would think that would be really fun or cool to do.
0:37:55 I worked with my dad for about a year and it was actually a lot of fun, much more fun.
0:37:59 Like working with my dad was more fun than just like hanging out with my dad and not working.
0:38:00 You know what I mean?
0:38:02 Like it was actually like a better dynamic.
0:38:03 It was a cooler dynamic.
0:38:03 I learned more that way.
0:38:07 And I saw him differently and he acted differently in work mode versus he did in home mode.
0:38:08 So it was kind of cool.
0:38:12 So I think it would be really fun, but it’s not something I’m like trying to gear up.
0:38:14 You know, I think I’ve told you this before.
0:38:20 Like my new sort of dad ideal is Ben’s dad.
0:38:23 So Ben’s dad, Andy, he, he did a very simple thing.
0:38:27 That’s going to sound like, it’s going to sound like nothing, but I personally think it was
0:38:33 quite profound, which is the way I initially was trying to be a dad and how other people
0:38:35 are dads is you have things that you’re into.
0:38:38 I love basketball and I keep trying to buy little basketballs and like put them near my
0:38:39 son.
0:38:41 I buy the hoop and I like take them to a class.
0:38:43 I’m like really trying to get them into basketball.
0:38:46 Cause like, Oh man, I really just want him to like, love the things that I love.
0:38:47 And then we could share that.
0:38:48 We could bond over that.
0:38:52 Whereas his dad was like, he’s like, what’s that type of blood?
0:38:54 That’s like, uh, it’s the universal donor.
0:38:57 It looks like O negative or something like that.
0:38:57 He’s O negative.
0:39:00 So he’s like, he’s got one son who’s into standup comedy.
0:39:01 So he’s like, great.
0:39:03 I’m now into standup comedy yesterday.
0:39:04 I knew nothing.
0:39:05 Didn’t care today.
0:39:09 Everything I do is eat, sleep and breathe standup comedy, bought books, watch videos,
0:39:13 goes to shows by himself, starts practicing himself, starts giving his son feedback on every
0:39:16 single thing that he’s doing in a helpful, supportive way, making connections, whatever,
0:39:17 whatever he could do.
0:39:19 He’s like, I’ll meet you where you’re at.
0:39:22 And, um, Ben loves the Phoenix suns.
0:39:22 Guess what?
0:39:27 Andy now watches every Phoenix suns game is a hardcore fan is always talking about the suns.
0:39:29 Cause he’s like, I’ll meet you where you’re at.
0:39:32 If that’s what you’re into, I will get so into it that we can bond over that.
0:39:37 And I just thought that was like a really selfless kind of amazing thing he did.
0:39:39 And I just hadn’t seen a lot of dads do that.
0:39:43 I think my instinct and many dads instincts is just to try to get them to like the shit we
0:39:44 like, and then they don’t.
0:39:48 And then we’re like, all right, like I support you, but like at an arm’s length.
0:39:51 And I just thought it was much cooler to go all in on what your kids are into.
0:39:55 So I hope, and I’ll expose my kids to like business and like, I’ll be totally open to
0:39:56 them working with me.
0:40:02 But I really want to do the Andy thing, which is if they’re into whatever musicals, then
0:40:05 do re mi, you know what I mean?
0:40:08 That’s awesome.
0:40:11 That, that almost makes me emotional here about Ben’s dad.
0:40:12 What a, what a great dude.
0:40:13 He really is.
0:40:15 Do you want to end there or do you want to keep going?
0:40:17 I have a, I have one quick one.
0:40:18 This is actually kind of cool.
0:40:19 This guy, Josh on Twitter.
0:40:22 So Joshua Ogundu, uh, tweeted this out.
0:40:23 It was a cool find.
0:40:27 So he tweeted out about this company called Shotzi.
0:40:28 Have you ever heard of Shotzi?
0:40:30 It’s an app.
0:40:31 No.
0:40:32 Yeah.
0:40:33 Didn’t we talk about Shotzi?
0:40:34 No.
0:40:39 So Shotzi is an app for tracking your Ozempic injections.
0:40:40 Oh, that is funny.
0:40:43 And it just crossed a million in ARR.
0:40:46 And all it does is it basically is a, it’s a shot tracker.
0:40:48 So, you know, it’s, I guess, I don’t know.
0:40:53 Maybe you can tell me, like, I guess it’s somewhat cumbersome to keep track of maybe, I don’t know
0:40:59 if it’s when you did it, how much your dosages, a reminder, it’s time for your next shot.
0:41:02 By the way, how about that little jab of, uh, I don’t know.
0:41:04 Maybe you could tell me, like, how do people use this app?
0:41:05 You’ve talked about you too.
0:41:06 I know, I’m joking.
0:41:10 With Ozempic, you have to increase the dosage a lot.
0:41:11 So let’s say you start with, like, 5 ml.
0:41:16 After two weeks, you have to go to 7, and then you have to go to, like, 10.
0:41:17 And it’s not, like, incremental.
0:41:18 So you…
0:41:20 So when you hear this idea, were you like, yeah, that was a pain point?
0:41:22 Or for you, was it like, nah, I don’t really see it?
0:41:25 I didn’t take it enough to be a pain point, but it’s very clear.
0:41:29 It’s just sort of like, imagine taking vitamins and, like, you have to add a pill.
0:41:31 Every two to three to four months.
0:41:35 And it’s like, it just, it is easier to track if you want to follow it by the book.
0:41:38 I’m more of a, like, eyeball and see how I feel type of guy.
0:41:41 Look in the mirror.
0:41:43 Yeah, like, do we want to party today or not?
0:41:46 That’s like, you know, that’s kind of…
0:41:48 They call it vibe coding.
0:41:49 I was a Vibos epic guy.
0:41:50 It was just, how do I feel that day?
0:41:55 Yeah, so the woman who made this, I think her name’s Aja.
0:41:58 She was an engineer at The Athletic.
0:42:00 Like, a software engineer at the media company, The Athletic.
0:42:04 And I guess on the side, she just built this, like, for her own pain point.
0:42:07 And then I think it took off in, like, the Reddit communities.
0:42:10 And just off of Reddit and then some TikToks about it,
0:42:13 it’s gotten downloaded, like, 100,000 times.
0:42:15 It’s got this paid subscription, crossed a million in ARR.
0:42:16 What?
0:42:18 Niches and Riches, man.
0:42:20 Like, this is Riches and Niches.
0:42:24 This is, like, just such a simple, just problem solution app, right?
0:42:29 That somebody realized, okay, if Ozempic is the next big thing, right?
0:42:31 If these GLP-1s are the next big thing,
0:42:32 I don’t know how many people take them.
0:42:34 I think it’s, like, 40 million people or some, like,
0:42:38 really big number of people who now all are on some schedule
0:42:43 and realizing that you could build an app just for that population is a smart idea.
0:42:46 Have you seen, like, the Oscars and the Grammys and things like that?
0:42:47 Like, everyone looks great.
0:42:51 Luka Doncic is losing weight quickly.
0:42:56 Is it, is, uh, are they illegal in sports?
0:42:57 I don’t think so, no.
0:43:01 Ah, I mean, it’s kind of a, kind of like a, it definitely is like…
0:43:02 You lose, like, muscle mass, right?
0:43:05 So I don’t think athletes would really care too much about this.
0:43:11 You cannot lose, you, I’m not a scientist, but you, obviously, you can,
0:43:15 if you eat enough protein and you lift weights, I think you can maintain.
0:43:17 It basically just makes you not eat.
0:43:22 So if you can say, like, yeah, but I’m going to eat and I’m going to hit my protein
0:43:24 and I’m going to lift weights even though I don’t want to eat today.
0:43:27 Yeah, you could, you could keep protein.
0:43:29 It’s just, you don’t want to eat.
0:43:29 You’re full.
0:43:31 Let me ask you a random question.
0:43:36 Um, I was watching this video today about somebody was speculating, uh, that LeBron,
0:43:38 uh, LeBron does like whatever.
0:43:41 I saw the Lance Armstrong thing about it.
0:43:42 So Lance Armstrong was talking about it.
0:43:44 Chael Sonnen has talked about it.
0:43:45 Chael’s like, yeah, we have the same drug guy.
0:43:45 I know.
0:43:46 I know what he’s taking.
0:43:47 I’m not going to say, but I know what he’s taking.
0:43:49 But Chael’s also like a professional troll.
0:43:52 So you don’t know when he’s being facetious or truthful.
0:43:58 Yeah, but also did use, uh, you know, performance agency drugs when he competed and he was basically
0:44:02 like, he’s on EPO and like, you know, you would take, if you were, if you wanted to do what
0:44:08 he’s doing, if you wanted to be doing tomahawk dunks at age 40 in the NBA, uh, like, you know,
0:44:12 playing 30 minutes a game and averaging 27 points or whatever, like you would do this.
0:44:16 And, uh, and I, I actually just was thinking about this in like the world of business.
0:44:23 Um, is there PEDs at business and like, how would you feel about, uh, people doing that?
0:44:25 Have you ever taken Adderall or Ritalin?
0:44:30 I’ve never taken it, but I know I have several friends that do it, uh, to, to focus, to be
0:44:31 more productive.
0:44:36 I don’t do any, I don’t do any drugs, but 10 years ago, before I got sober, I, for some
0:44:38 reason, a doctor gave me a Ritalin prescription.
0:44:43 I have no idea why I don’t remember how, what, what happened, but I got it and I took it for
0:44:45 about four days.
0:44:48 And on the fifth day I had like a mental breakdown and made me too speedy.
0:44:50 I was like, I made me anxious.
0:44:51 I’m like, I’m going crazy.
0:44:51 This is horrible.
0:44:53 And I was like, I’m never taking this crap again.
0:44:56 But those four days I was on fire.
0:45:02 Uh, I was like laser focus and it, I felt on top of the world.
0:45:09 And so obviously a lot of people take this and I would not feel bad if my competitor took
0:45:09 it.
0:45:10 Is that what you’re asking?
0:45:16 I just, I don’t know, like in sports, it’s definitely seen as, I think for most people
0:45:21 when they would hear about an athlete doping or cheating, it’d be literally like you’re cheating
0:45:22 and it’s a tainted record.
0:45:23 Right.
0:45:26 But I think, I think those drugs should be legal in sports a little bit.
0:45:27 Do you think that?
0:45:31 So, so you would, you think in, in business, you, I guess there’s two questions.
0:45:33 Do you think a lot of people are taking this type of stuff?
0:45:36 I remember Sam Bankman-Fried had the, like the patch.
0:45:38 I think a huge amount of people are taking it.
0:45:41 Dude, I think there was a joke on Reddit.
0:45:46 There was a guy who was like, I’m naming my daughter Vyvanse because I love this drug so
0:45:46 much.
0:45:51 Uh, yeah, I think there’s a, yeah, I think everyone, I think if you’re under the age
0:45:53 of 30, I would assume that you’re taking it.
0:45:55 Oh, wow.
0:45:56 That’s great.
0:45:57 That’s, you think it’s that popular?
0:45:58 Yeah.
0:46:03 I think that I am now a very wholesome, straight edge person.
0:46:04 And I think you have always been that way.
0:46:06 So I think perhaps we don’t.
0:46:07 I’m just naive, dude.
0:46:09 I didn’t even like, nobody, nobody offered me any.
0:46:10 I didn’t, I didn’t get any.
0:46:12 It’s not like I’m like morally superior.
0:46:13 I just didn’t even know.
0:46:16 No, I’m not, I’m not saying that it’s morally superior to be this way.
0:46:20 I just think that you and I have never, well, uh, since I’ve known you, I have never partied
0:46:24 and you have never partied or at least been part of like the drug or alcohol scene really.
0:46:29 And I do think most people, uh, it’s like getting weed, you know, like, oh, like I can’t sleep.
0:46:31 But the doctor’s like, gotcha.
0:46:32 I understand.
0:46:33 Do you know what I mean?
0:46:36 Like waking, like, yeah, that’s how I think it is.
0:46:41 The closest thing I have to that is like calling my dog a service animal so I can like, you
0:46:42 know, take her into some place.
0:46:46 Dude, I, so when we were younger, our parents would.
0:46:50 Like my parents gave me Ritalin because like every boy who couldn’t sit still in fourth
0:46:54 grade, they were like, oh, you, you, you have an illness, son.
0:47:00 And we need to keep you from standing up from the chair and like, you know, you, you, you
0:47:01 have to take this pill.
0:47:02 And I remember taking the pill in fourth grade.
0:47:06 And after like a few months, I’m like, I didn’t have like the vocabulary to explain to my mother,
0:47:09 but I was like, this is making me sad.
0:47:10 Like something was going on.
0:47:12 And so she was like, oh, this is crazy.
0:47:12 What are we doing?
0:47:14 But I remember taking it.
0:47:15 It changes you.
0:47:20 And I do think that when I took it as an adult, it felt like I was on EPO and I was having to
0:47:21 do the tour to France.
0:47:25 Like it felt, I’m like, oh, I understand how this is like a, a, a, a, a PED.
0:47:28 Did you see how Chamath wants to come up?
0:47:31 Which I don’t really respect a lot of what he says, but do you see how he said he wanted
0:47:34 to have the, uh, PED free poker?
0:47:37 Oh yeah.
0:47:37 Yeah.
0:47:39 Who’s saying like a no Adderall poker tournament, basically.
0:47:40 Yeah.
0:47:40 Yeah.
0:47:43 Uh, that’s, that’s sort of intriguing.
0:47:43 That’s it.
0:47:44 I must just be sleeping on this.
0:47:49 Like I, I didn’t realize this was as I have a couple of friends who I know they were, they
0:47:51 told me like, oh yeah, I’m going to stop doing that.
0:47:52 And I was like, oh, you’ve been doing that.
0:47:52 What is that?
0:47:53 Why?
0:47:53 For what?
0:47:56 Like, you know, it didn’t even really occur to me.
0:48:00 I guess as I, as you guys are saying this, I’m realizing that, oh, I’ve probably just
0:48:01 been foolish about that.
0:48:02 Yeah.
0:48:04 It wouldn’t surprise me.
0:48:04 Okay.
0:48:06 So like, what do you call the listeners of this pod?
0:48:10 The yuppie class, like the white collar class or whatever.
0:48:19 I would bet that 30% of the people between the ages of 22 and 35 who are in this white collar
0:48:24 or yuppie or Henry class are on ADHD medications.
0:48:26 That’s my prediction.
0:48:27 30%.
0:48:28 It’s a lot, right?
0:48:31 If you’re on that Addy in the comments, let us know.
0:48:36 We’re going to pull the YouTube comments right now.
0:48:39 Natty or Addy.
0:48:41 I had friends that would buy in the Silk Road.
0:48:42 Can you even buy it online?
0:48:44 I guess you don’t even need to buy it online anymore.
0:48:45 You can just go to your doctor, but.
0:48:48 There’s probably like an Adderall toothpaste at this point.
0:48:50 And if not, it’s a great idea.
0:48:51 Yeah.
0:48:54 Brush in a rush.
0:48:54 Let’s go.
0:48:57 10 out of 10.
0:48:59 10 out of 10.
0:49:00 You nailed that one.
0:49:01 All right.
0:49:01 That’s it.
0:49:01 That’s a pop.
0:49:04 I feel like I can rule the world.
0:49:06 I know I could be what I want to.
0:49:09 I put my all in it like my days off.
0:49:10 On the road, let’s travel.
0:49:11 Never looking back.
0:49:19 Hey, Sean here.
0:49:21 I want to take a minute to tell you a David Ogilvie story.
0:49:22 One of the great ad men.
0:49:25 He said, remember, the consumer is not a moron.
0:49:26 She’s your wife.
0:49:28 You wouldn’t lie to your own wife.
0:49:29 So don’t lie to mine.
0:49:30 And I love that.
0:49:31 You guys, you’re my family.
0:49:32 You’re like my wife.
0:49:33 And I won’t lie to you either.
0:49:35 So I’ll tell you the truth.
0:49:40 For every company I own right now, six companies, I use Mercury for all of them.
0:49:46 So I’m proud to partner with Mercury because I use it for all of my banking needs across my personal account, my business accounts.
0:49:49 And anytime I start a new company, this is my first move, I go open up a Mercury account.
0:49:52 I’m very confident in recommending it because I actually use it.
0:49:53 I’ve used it for years.
0:49:54 It is the best product on the market.
0:50:01 So if you want to be like me and 200,000 other ambitious founders, go to mercury.com and apply in minutes.
0:50:04 And remember, Mercury is a financial technology company, not a bank.
0:50:09 Banking services provided by Choice Financial Group and Evolve Bank and Trust members, FDIC.
0:50:10 All right, back to the episode.