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SPEAKER_01
We're live. Sam, it's almost Christmas. Are you a big gifter?
SPEAKER_02
I do everything last minute, as expected. And I overspend on my close family. So, kind of.
Are you?
SPEAKER_01
I'm also a last minute, in fact, usually so last minute that they get a photo of something that's to come. And I'm famous in my family for like, oh, remember that time I got a photo from Sean of a stroller? But the stroller never came? Or like, you get this photo of a bag that I never got? I'm the famous kind of photo only gifter.
SPEAKER_02
It's just like, it's not, you know, your love language. You know what I'm talking about? It's like, touch, service. Lint of affirmation.
Yeah, gifting. And gifting is not mine. So, I just like forget that a lot of people really care about it.
I'm like, ugh. When I actually get gifts, it's like, you know, I'm doing Christmas in Austin. My mother sent me a book.
And it was a lovely book. And I like it. And then someone else, but someone else sent me something else.
I'm like, ugh, more packages. I don't want to get rid of all this cardboard. It's like stressful more than it is good.
SPEAKER_01
That's good. And one of my goals this year was to become a good person, like Ramon, who's our good friend, who is the best guy now, I would say.
SPEAKER_02
He's like the best gift giver, too. That's his thing.
SPEAKER_01
And he's the best gift giver and super thoughtful. So I was like, I'm going to outgift Ramon this year. And so I have created a system where I'm giving gifts at scale.
I'm gifting to 30, 40 people who I think are amazing and I care about, even if we don't talk all the time or whatever. I've made a list of the 30, 40 people who I think are awesome and I want to invest in. I want to give them gifts.
I've just been too busy, slash lazy, slash not thoughtful to do it. And then you gave me the great idea for the perfect gift for this month. So I sent out a high quality pair of Christmas socks from Stance to everybody on that list.
And Stance was like, oh, this is great. Cool. We'll take care. You know, just upload a CSV of their addresses and we'll send it all out and we'll get you a bunch of credits and all this stuff.
And I was like, this is amazing.
SPEAKER_02
This is how you that's awesome. You email them. So Ben actually took care of this whole thing for me.
SPEAKER_01
So I was like, I told Ben here's what I'm trying to do. He's like, I got you. Just get the addresses for me.
I put all the address in the spreadsheet. He's like, all right, I talked to Stance and they said they're going to do this. And I was like, Ben, I love you.
I love Stance. I love that this is actually happening now. And so what I'm going to try to do is every month, I'm going to try to send them a little something.
Maybe it's just socks that I thought were great or a little just something small that I think is cool. And Ramon had this thing he said once, which was like, from now on, I buy two. I buy anything I like, I buy two.
I buy one for me, but one for you. And I was like, you wouldn't even say this to me, but I heard it. I was like, wow, that is like the ultimate Ramon friend philosophy because he means it.
He's not like a bullshitter and he's not smoozing anybody. He's just does it because he does it.
SPEAKER_02
He's bought me. So Ramon is our mutual friend. When he was the first or top five or one of the first episodes, Sean did.
He sold the number two, I think. So pub, so Barbara website for 10 million bucks almost. He's given me a $500 helicopter ride, like mean Sarah went on a helicopter ride.
He's given me an Apple watch. He's given me a sauna for my wedding. He's amazing.
What else did he give me?
SPEAKER_01
I was in Las Vegas and I just told him, hey, I'm in Las Vegas. And he goes, oh, that's great. Have a good time, blah, blah, blah.
The next day he's like, hey, at 6 p.m. today, you need to go to T-Mobile Arena, you and your friends. And he cooked us up with like a VIP pass to the UFC event.
Like we got to meet some UFC, he arranged for UFC fighters to come and like met you. He came to our seat and was like, hey, are you Sean? And I was like, oh my God, Ramon, Ramon, he gifts you to the point where you feel uncomfortable.
SPEAKER_02
You're like, how can I live up to this? He does that to me all the time. And to the point where I actually had to tell him, I go, dude, you're making me feel you're making me feel bad. Like, please, like, if you're going to give me something, keep it under 50 bucks.
I'm like, you go too hard. He's so generous.
SPEAKER_01
It's like M&Ms. Like there's a point where too much of good equals bad at some point. And so he is that much of a giver that you'll feel guilty and bad about yourself and by the end of being his friend.
SPEAKER_02
He's coming over to my house for Christmas tomorrow.
SPEAKER_01
Dude, you better have a gift ready. I bet you he's coming with the heat.
SPEAKER_02
No, we do. So this is the second Christmas we spent together. We hooked him up last year and we're going to get off some good stuff this year.
He doesn't listen to this. So I can tell you we got him some clothes because Ramon is from, he's got this Eastern European vibe. And so he sometimes, he hasn't fully acclimate acclimate.
And he's a single dad. So he hasn't fully acclimated to American hip fashion, even though he wants to go out and date. And so sometimes he'll wear two religion jeans.
And so last year we bought him Luthe Lemon because he had never, he didn't know what Luthe Lemon was. I was like, Ramon, this is what yuppie fancy people wear instead of affliction hoodies. So we got him that.
And then this year we're getting him a fancy cashmere sweater so he could wear on dates. So we're trying to step up his fashion a little bit. I like it.
SPEAKER_01
He's going to wear the cashmere sweater with a affliction hoodie on top.
SPEAKER_02
That's what he does. He wears like, he has like an affliction hoodie. He wears like just stuff that was cool like 10 years ago.
SPEAKER_01
And we should say, so the next episode we're going to do is our big bang end of year, end of 2020 finale. It's going to be fun. We're going to prep for it.
It's got a bunch of kind of like year end type of things. So I think that one's going to be good for today. We have a bunch of little things.
Where do you want to start? I have a cool idea I want to tell you about. That's this company I saw that is in Brooklyn. So it's a company called Fridge No More.
Have you ever heard of this company?
SPEAKER_02
No, but I'm going to Google it.
SPEAKER_01
You just go to fridgenomore.com.
SPEAKER_01
And it's called Fridge No More because their idea is like, if you use our service, you don't even need to have a fridge. So what they do is they take grocery delivery that's like Instacart or whatever that are, have gotten super popular during COVID. And they actually just shrink it down into the most sort of simple delivery service that you can get.
It's 15 minute delivery. It's like a corner store. It's like a cloud corner store.
And so they have a one mile radius that they operate these out of. They have these like electric bike messengers. Yeah, I'm looking at it.
As soon as you place the order, they're gone. And 15 minutes you have your thing. And you can just order like a pint of Ben and Jerry's and that's it.
You can order like, you know, six bottles of water. You can order fruits and vegetables. You can order whatever the hell you want.
It's a really cool concept. And the guys who started it. So I get on this call because I'm thinking about investing, right? I love the idea.
It's like Postmates, but even simpler and more lightweight because you get it even faster. And the trick is they're not going to. So unlike Postmates, unlike DoorDash, unlike Instacart, it's not like a shopper goes to a normal shop and buys it at the retail price and then kind of upsells it to you and they charge a delivery fee.
And it gets really expensive. Fridge no more themselves is the grocery store. So if they go buy wholesale snacks and all the shit, they create a small tiny cloud in a corner store.
And then they sell it to you at the normal retail price. That's how they make their markup is just because they buy wholesale, they sell retail. So unlike Instacart, Instacart goes to a normal grocery store.
They buy a retail and sell at double retail, right? So that's the kind of business model here is to be an actual grocery store.
SPEAKER_02
And I don't know the answer to this, but have you asked yourself why Instacart doesn't do that? So it's a different model.
SPEAKER_01
This requires like capex. So basically they have to open up locations, right? So they have to like get a space, buy the inventory, hold the inventory and then like do the delivery themselves. Whereas Instacart was like, cool, we'll just get a network of delivery people and they'll just go to the existing grocery stores.
It'll be fine. It does work. Instacart clearly works, right? It's a multi-billion dollar company, but this is a little bit different because if you either are more price sensitive or time sensitive, you want it faster, this is the way to go because Instacart and stuff, they deliver everywhere.
They deliver to the suburbs, all this stuff. So they'll take like at the minimum two hours to deliver your stuff. These guys are 15 minutes.
SPEAKER_02
I'm looking up the founders. They seem very accomplished. They've got some hardcore Russian names it looks like, right? Exactly.
SPEAKER_01
So that's what I was going to tell you. I get on this call and I'm a little bit skeptical because I'm like, Ben, I don't know. I feel like Instacart already won.
There's Farmstead, which is a great company that my friends started that is this model, but a little bit different. And I said, I don't know. I feel like these guys are five years late to this party.
But I get on the call. First thing I see is these two hardcore Russian dudes. I'm like, all right, already I sit up straight in my chair because I've learned one thing in business is that the Russians, when they get into business, they win.
These guys are an incredible class of entrepreneurs.
SPEAKER_02
It's like Anton and what's the other guy's name? Pavel. Anton and Pavel. Yeah. I mean, they sound like their last names. They're like 007 GoldenEye villains.
Right.
SPEAKER_01
If you ever are competing, you're doing a startup and people are like, oh, don't worry about competition unless your competition is named Anton and Pavel. Then you better fucking watch your back. Yeah.
SPEAKER_02
Or like Surrey from Israel. Right.
SPEAKER_01
Yeah, exactly. You just don't want to mess with Israelis or Russians. Yeah.
SPEAKER_02
They've all served like three years in the military and they're here to kick ass. And yeah.
SPEAKER_01
So I start talking to these guys and I'm like, okay, tell me about your background first because I'm intrigued by the Russian thing first. So the first guy's like, I'm Pavel. I spent the last 10 years actually at finance working for a Russian billionaire.
And I was like, which one? His name is Mikhail Brokharov. And I don't know if you've heard of this guy, but he was the owner of the Brooklyn Nets. Yeah.
SPEAKER_02
The tall guy. Yeah. Super tall. Mining.
He did mining. Now, those guys are all rich because when the Soviet Union collapsed, they gave, they like allocated parts of the government to like young people and they're like, hey man, here's your cut. You got to give it to us.
And he goes, yes, yes, sir. I'll do it. And then now they all made billions.
SPEAKER_01
And so I'm talking to him. He's like, yeah, that was a funny time. Because he doesn't own the Nets now, but he owned it then.
He's like, what a business to own. Like you look at the fixed cost, the salary commitment was like $100 million a year for the players. He's like, that's just your salary commitment.
And he's like, that was a crazy business. So he's telling me about that business. And the other guy, I'm like, what about you? What's your story? I thought, okay, maybe this guy has a lame background.
And he goes, oh, I started this company called Coob. And I was like, Coob, that sounds, Coob, holy shit. Do you remember this company called Coob C-O-U-B? I don't know if you ever heard of this.
No. This was basically TikTok before TikTok. And it's still the TikTok of Russia.
So I remember once upon a time, I used to do these things where every Friday, once a month, I would have a random day. I would invite random people, either speakers or just guests to come over to the office. And I just want to expose my worldview to new things.
One of those random days, I invited a group of students who was entrepreneurs traveling around from the Ukraine, I think. And they came and they talked and they're like, oh, tell us about Silicon Valley. If you remember, I always felt weird because I was like, I really haven't done shit.
I don't really want to tell you anything. But my office was so legit back then. Like our office looked like I was a billionaire myself.
And so it was always this weird thing where they would come and ask me to speak. And I would be like, I don't really know anything. I can tell you what we're doing.
But like, and I used to ask them, tell me what you know. What do you know that I don't know? And I said, what's the hottest shit in Ukraine? I asked it kind of as a joke. And they go, oh, Coob.
And everyone's like, Coob, Coob, Coob. And I was like, what the fuck is Coob? And I go to the website and it's basically TikTok. It's these short videos with audio that's like mashed together that doesn't fit the video.
And they were funny as hell. And I was like, oh my God, this is great. I was like, is this like a startup? They're like, yeah, it's new, but it has like 10 million users already.
And I was like, what? And they're like, yeah, 10 million. I was like registered users, like no daily users. And I was like, whoa.
So they ended up getting recruited into Y Combinator. They just didn't make it into America. Like they didn't make the crossover.
The content didn't have the same humor that like would have fit America. And then like, five, seven years later, TikTok comes out, does the same concept, but better and wins in America. So that was Coob.
So this guy's like, I invented Coob. And I was like, holy shit, you're amazing. You guys are both amazing.
Tell me more about this concept. So they're telling me about this concept. And they're basically like, look, we're going to open up 100 of these in New York.
And each one's just going to deliver in a one mile radius. This only works in dense areas like cities or college campuses, which is where another concept that's like this called GoPuff is like a massive winner. GoPuff is a company that was started by guys outside of Silicon Valley.
They basically did this for college campuses where it's like, it's kind of like the vibe is like, you know, like a stoner just pushes a button and wants his cheetos delivered. That's what they did.
SPEAKER_02
They basically just created like, they've already raised $380, $380 million at a $4 billion valuation. So it's a huge thing. And I think they're cashflow positive.
SPEAKER_01
Exactly. Our friend, C.A.va told me about this because he had a college based startup years ago. He goes, you've got to check out this thing called GoPuff.
At that time, I think they were raising it like a.
SPEAKER_02
All right, everyone. Today's episode is brought to you by Imperfect Action, hosted by Steph Taylor. It's a podcast on HubSpot's podcast network, the audio destination for business professionals.
Imperfect Action is a bite-sized online marketing podcast for business owners. So join Steph Taylor as she answers all your business marketing questions that deep dives into the nitty gritty of online marketing, content marketing, social media marketing, and marketing for strategy for business owners. A few recent episodes include some of the biggest mistakes you can make with your launch.
Another one is why growing your audience feels so hard in 2022. And another one is five ways to make content creation less consuming. So check it out.
It's called Imperfect Action. You can look it up wherever you get your podcasts.
SPEAKER_01
I don't know what they're raising up. I think he said, he told me, I was like, I was like, oh, it's cool concept. I just thought it was like an idea.
He's like, yeah, they're going to do like 100 million in revenue this year. I was like, what? And I had never heard anybody in Silicon Valley talking about this thing. And still, I feel like nobody in Silicon Valley really talks about GoPuff.
SPEAKER_02
I think this was started. These guys sound Russian too. Are they? No, they are Russian.
SPEAKER_01
Are they Russian? I believe so. Yeah, Eastern European or Russian. And they must be Penn folks.
Exactly. And so they do it on college campuses. They're all on like 500 campuses or something.
They're doing hundreds of millions a year. They were profitable then soft bank backed up the truck and invested like 200, 300 million into the company. So I don't know if they're still profitable because usually when that happens, it's like, here's the truckload of money.
Go grow like crazy. Burn this money to get all the market share.
SPEAKER_02
Dude, this is so funny. I'm looking up this GoPuff thing. They're Israeli.
We called it. We've called it entirely. And this type of company is like heavy on logistics.
And you could pull it off, but it's a really hard business. You probably have to be incredibly aggressive and very precise. This is a very, like, I think these, if they're from, if they're Israel, Israeli, they definitely have a military background.
This is totally like what you need for this type of company.
SPEAKER_03
It's funny because one co-founder has on his LinkedIn Hebrew as language and the other has Russian.
SPEAKER_02
That's so funny. I love when we get this stuff right.
SPEAKER_01
I love when our things that are like, you know, you say, it'll probably get you fired if you say it like, you know, in a normal context and sounds like a total like bro assumption. But there are these patterns you notice that like, you know, you can't help but notice the more companies you see like this. And so, you know, I'm sorry.
SPEAKER_02
Well, have you ever, I'm in the advertising world and a handful of my buddies who run these huge companies, like how many people do you think live in Israel with 10 million or 20 million? It's tiny.
SPEAKER_01
It's like 6 million people or something tiny. It's something small. A brain to check it out.
SPEAKER_02
It's nothing. And yet the amount of successful people in ad tech who are Israeli, it's astronomical. It's like Samoans who play football.
SPEAKER_01
Yes. It's like you were saying, it's basically like, if you see a Samoan, they're strong. If you see a Mormon, like it's like the Mormon religion, small number of people growing like crazy.
Israeli is like tiny population, 8.8 million people. They probably own like, like a half the world's net worth.
It's crazy. They're so successful with business.
SPEAKER_02
Yes. And particularly in ad tech. So like Taboola, Alperin, everything like that.
I've got a friend, Nadav, who has a, he changed the name of his company. I forget what it's called now actually, huge ad tech. It says ad tech.
And then my friend Joe Spicer, who have you met Joe Spicer?
SPEAKER_01
Yes. He's an investor in my fund.
SPEAKER_02
Yeah. He, oh yeah. He told me he did that.
He's a great friend of mine. All of his friends are Israeli all in ad tech. It's crazy.
SPEAKER_01
I think this is a cool concept. I'm curious to see if it can work. So I'll tell you why I think it can work.
I'll tell you why I think it can't. So why I think it can work is it's pretty clear at this point that like the phone is a magic wand. And you just say the magic word and then shit magically appears at your house, right? Like e-commerce, you know, buy an item, you just buy it on your phone, push a button, it arrives.
Food delivery, same thing. Push a button, food arrives from DoorDash or whoever. Grocery delivery, same thing.
I think this is a subset of grocery delivery for people who care about speed and convenience. It's the equivalent of the convenience store instead of the grocery store, but it's in the cloud. So I do think inevitably this is going to exist.
And I have some numbers behind it if you're curious about anything. So like just for example, they need one, so basically they're going to do 200 stores just for two cities. So that's how many locations they need.
That's a lot of locations you've got to pop up and you've got to be very efficient. What's a rent on a store, $3,000,000 a month? Very low. Yeah, it's going to be like $3,000,000 a month.
And the footprint is also very small. So it's not like a huge warehouse they need because they're just storing small like kind of package goods and things like that. How many, $100,000 or $200,000?
SPEAKER_02
They're going to do $100,000 per city. So you're talking close to maybe half a million a month in rent in one city. I mean, I guess that sounds like the end of the world.
What's it called?
SPEAKER_01
So basically they're doing like one store per zip code. They guarantee the 15 minute delivery. It's all through bike messengers.
The average order is like $35. So it's not like a grocery delivery where you're like $200 for groceries or whatever. It's $35.
So it's small things, but they buy really frequently. So what they're seeing, they're showing me some of the data is like, somebody buys once on the first day. They have a super high repeat rate the second day, like kind of shockingly high, almost like a social network app, which is not normally like for e-commerce or buying something.
You usually don't buy the second day. And then they have this set of users where once you buy a certain number of times, it's like they basically buy like three or four times a week. And they just like, they just like to click the button and get their stuff.
SPEAKER_02
Are they raising an eight figure valuation or a typical seed round of like three or five million? Yeah, more like a seed round. Wow. If they're listening, I want to join. That sounds cool.
SPEAKER_01
Okay, cool. I'll email in for you. Yeah, I think these guys are cool.
Okay. So here's why I think it might fail. And I told them this, customer acquisition is really hard in general.
It gets way harder for things that have a specific geographic like restriction because to make the one store work, they need like 2000 households in that zip code. Right. So the zip code will have 20,000. They need like 2000 of those households to be using them for them to be like profitable on that location.
SPEAKER_02
Let's put our optimistic cat on, which is it's probably not that hard in a city like New York. I mean, you could probably could just pay hourly workers to hand out. So I was like, what are you doing now?
SPEAKER_01
They're like, I don't know. We try a bunch of shit. We try as mad.
We do direct mail. Direct mail seems to work really well, but like you can't do it that often. You know, can't keep sending letters.
SPEAKER_02
Yeah. I wouldn't do any online ads. I would just have young men and women.
SPEAKER_01
Like fires. Hand it out. Yeah. I was like, yeah, hand it out at the church. Like whatever.
He's like, yeah, we're basically doing all that shit right now. We don't really know like what's the scalable thing. But right now we've got two locations in New York.
We're just going to keep filling them up and we'll figure it out, which I like that answer. But like gopuff, for example, I think they have one advantage, which is on campus, shit spreads like like literally like herpes, you know, like there's, if you get something on campus, it's going to spread throughout that dorm. That's going to spread to the next dorm.
Whereas in New York, people are in apartment complexes.
SPEAKER_02
Yeah, but can they do that with apartments? Like if you leave someone outside of it, like I had never heard of Good Egg until walking around my neighborhood and I see good eight boxes.
SPEAKER_01
Right. So I think it does work, but less so than a college campus, right? Cause you, I mean, I don't know my neighbor. I didn't know my neighbors really when I, when I lived in my apartment.
I knew like let's say one out of five and we didn't talk that much. Whereas on a campus, you just see way more and you talk way more. So I think campus is easier.
And I think that's the one variable would, which is like, this is gopuff in cities. Is either a gopuff just going to beat them or B is campus is just some magical thing that works way better than cities.
SPEAKER_02
And so that's the big bet. Maybe I'm wrong, but I wouldn't really care if go like gopuff could beat them or not, because it's like, it has to be one of the biggest markets out there.
SPEAKER_01
Yeah. It's like a trillion dollar plus market.
SPEAKER_02
And so I wouldn't frankly worry too much about competition. Would you?
SPEAKER_01
I wouldn't worry about competition. It's really that customer acquisition thing I was talking about. Like, is it going to be really hard and expensive for them to acquire customers in that little one mile radius? Or are they going to figure out some really simple tactics that like let them scale up and do it? If they do it, it's going to be a big winner.
SPEAKER_02
You know, so they got a cute little landing page as the app.
SPEAKER_01
Good. I haven't used it because it's not in my area. I'm in California.
SPEAKER_02
There's only as 26 ratings for four and a half out of five stars. It's small. Yeah. The reviews are great. People are saying it works seems good.
The one of the first one seems too good to be true, but it's true.
SPEAKER_01
It's reviews also, which also, you know, who knows if they're ever true.
SPEAKER_02
Right. They probably aren't, but it looks great. So cool.
SPEAKER_01
Okay. Cool. So that's for no more kind of way long on that one, but I like that concept.
SPEAKER_02
Okay. I'll bring up one. I was fooling around.
I go to this website called Starter's Store. You know what that is?
SPEAKER_01
Yeah. What is that? That's like a startup kind of like how they made it.
SPEAKER_02
It's a guy named Pat. And I think what he does is he just has a form and he emails people form questions like, how'd you get started? What's your revenue? Things like that. And the answer and then auto populates to his website.
It's pretty neat. And I found a game called a hunter killer. So it's a game called hunter killer and it's 25.
It ranges from 25 to add-ons of maybe $30 a month. You can go to the landing page and see it's a board game. And you sign up and you get your first pack and then they send you new.
And you're like, I think you're trying to find a killer and they send you new clues every month. So somehow like ongoing, this game does $5 million a month in recurring revenue. Wow. And it's just a game. It's crazy.
I started fooling around on this or looking around on it and I was like, is this real? It's only five years old. It was in the ink 5000. It was the sixth fastest growing private company in America, or at least who submitted themselves to ink.
And I think it's bootstrapped. I imagine the margins I have to, if they weren't making 30% profit on this, I would be a little bit surprised. It's pretty wild.
Have you, I guess you've never heard of this.
SPEAKER_01
I've never heard of this game. Actually, I think I literally just am passing and heard of it once, but I didn't know about this business. And the 5 million a month is honestly very impressive.
SPEAKER_02
Incredibly impressive. What's 5 million divided by 25 bucks? If that's our average subscription, I'll do it. 200,000.
It's a huge market. It's 200,000 customers is a lot, but it's not like, I mean, it's a big market. And here's, let me tell you why this is interesting to me.
I listened to probably two to three hours a day of crime podcasts.
SPEAKER_01
Such an insane amount of time.
SPEAKER_02
So it's usually three episodes.
SPEAKER_01
If Sam ever tells anyone he's busy, now you could be like, bullshit, you listen to three hours of true crime a day.
SPEAKER_02
Well, I do it while exercising or I do it while I'm just sitting working or I just like while I'm cooking. I just, I love it. There's a few that I really like.
I love anything mob related and there's a,
SPEAKER_01
what is the best one? Like if somebody doesn't listen to any, what's the best one they should just go listen to?
SPEAKER_02
Date line. So I like date line and I like serial killers. Serial killers is produced oddly by this company called Parcast.
And they have all types of stuff on crime and I like serial killers is what it's called. But date line, do you know about date? You know what date line is? The TV show. Yeah. It came out in 1980, something. It's 30 plus years old.
They launched a podcast a year ago and it's already gotten like 150 million downloads. It's all, if you look, if you go to podcasts, top charts, date line is always in the top. And it's a 30 year old program and I listened to so many episodes.
It is so awesome. And just the appetite for anything crime or mystery related is just massive, massive, massive, massive.
SPEAKER_01
So it is the number 21 podcast in America of all podcasts right now.
SPEAKER_02
It is. And it's always in the top.
SPEAKER_01
It goes between 15 to 20. Yeah.
SPEAKER_02
And they produce, they might do one every day.
SPEAKER_01
Are they just taking the TV show and then just like being like, that's just taking the audio and that's the podcast?
SPEAKER_02
I don't watch the show anymore, but I think so. It seems like it. Maybe they do a little special stuff, but yeah, it's nothing.
And they have a 30 year library. So like I'll listen, like an episode came out yesterday and it was from 2014. And all they're doing is repurposing this, which I actually think that every TV show should do this.
Like even a family guy or Jeopardy. I don't know why every Jeopardy is not a pod. Yeah. Because I do that all the time. I turned Jeopardy on my YouTube and I put the phone in my pocket and I just listen and play in my head.
SPEAKER_01
I have this question. I just get to know you question that I use that you have like 10 of the best answers for, which is like. The question is, what's something if people knew that you do, they'd laugh.
And I feel like you just spout out like 10 of these per episode.
SPEAKER_02
Wait, you think that's weird? Listen to Jeopardy episodes? Dude, they're on YouTube. Like they're great. I listen to all the time.
Ken Jennings is a new Jeopardy host starting tomorrow.
SPEAKER_01
I'm afraid of you. Is that weird or is that normal? Do you do that? I'm afraid you have ever thought about it.
SPEAKER_02
I've never heard of anyone. Dude, I'm telling you, these episodes get 10s of thousands of views. More people are doing it.
I like listen to them all the time. Or if I'm on a long drive means her, that's what we do. We'll play Jeopardy.
I love it.
SPEAKER_01
Are you good at Jeopardy? I'm awful. I can't watch the show because I'm just like, dude, I didn't know any of these.
SPEAKER_02
Like if it's college Jeopardy, I would win. If it's normal Jeopardy, I'm hit or miss. But like college Jeopardy, I crushed.
I always watch the university ones because I know I'll kick those Cornell kids' asses.
SPEAKER_01
It's Jeopardy. Yeah, fifth grade Jeopardy. I'm a winner.
Did I ever tell you when I auditioned for Wheel of Fortune and I got on?
SPEAKER_02
No, you really got on?
SPEAKER_01
All right. So story time. It's kind of a lame story because I didn't end up going on the show, but I got cast.
Which is I was doing my first startup, which was like, I've talked about a little bit before. It's a sushi restaurant chain. The cloud kitchen for sushi, basically, that we started.
And me and my buddy Dan are in the kitchen and Dan is the type of guy that always applied for any contest. And we always used to call him like the sucker at first until we realized he wins a lot of these because nobody actually applies. He would open up a pack of gum and they would be like, oh, create a 30 second jingle for our gum and you could win a lifetime supply of gum.
So he won a lifetime supply of stride gum. That's hilarious. Then there's this sandwich chain called like something like pickle, some pickle sandwich chain or whatever.
He named their mascot. He won that contest and he got taken into the headquarters and like they gave him a big like round of applause awkwardly in front of the whole company was very weird. It was like, is this a penalty or a victory? And so the last thing he did was he was like, yo, I'm going to try out.
He's like, I got to go for him. He's like, I got to go for like an hour. Can you cover me? I was like, where the fuck are you going? And at this point I'm like beating down from the startup.
I hate the restaurant. I hate the kitchen. I hate the food industry.
And so I'm like, no, you're not leaving. Don't leave. I don't want to do this shit.
You don't want to do this shit. That doesn't mean you could just make some lame excuse to leave. He's like, no, no, no, it's not a lame excuse.
Like I got to go do something. I'm like, well, if you were something legit, you'd tell me what it was. He goes, all right, I'm auditioning for Willa Fortune.
I was like, what? He's like, yeah, they're in town. It's 10 minutes away. I'm auditioning for Willa Fortune and I want to go do it.
And I was like, okay, well shit, I'm coming with you then. So we both just left the kitchen, closed down the, you know, you can just take a cloud kitchen offline, just push a button. It's not taking orders.
And it's so weird how they do these things. So I'll tell you what happens in a TV show audition for a game show. I didn't know this.
By the way, I didn't actually plan to audition. I just wanted to go see it, but they said, if you're in this room, you have to audition. So I said, okay, sure, I'll audition then.
So there's probably like 80 people in the room and there's a woman up front and she's the casting director and she goes, okay, am I the way? Am I saying Willa Fortune's the one where- You spin the wheel and you guess the letters. Spin the wheel guess the letters. Exactly, that's the show.
So she's like, you know, at the beginning, what's his name? I don't know what his name is. Like Pat or whatever his name is. Yeah. He's going to ask you- Oh, no, sorry. Before that was round two.
Round one was we're just going to have you stand up and say a letter. Because if you ever watch the show, they don't just say like, I think maybe like a D. They go, R.
Yeah, like, give me a D. So they're like, stand up and say a letter. And you're like, well, what's the puzzle? They're like, no, there's no puzzle.
Just say a letter with energy. And so there was, let's say 80 people in this room, they go through, everybody stands up, says their letter, and then they immediately dismissed half of the room. So they were just like, you guys didn't have the energy.
Second thing was a written quiz like puzzles. And then the third one was, so that eliminated another half. So now we're down to like 20 people left.
And they're like, OK, you got to have a story. You got to be a character. Like this is not really about like how good you are at this game.
But like Pat's going to interview at the beginning and you need to either be like a stay at home mom who watches every episode or like a businessman who like, you know, is, you know, owns this company or you need to be like whatever, you need to have your stick. So we were like, whatever, we're starting a sushi restaurant. And so they have everybody, you say your name, you say your one line kind of thing about you.
And then they call you back a week later or two weeks later and tell you if you got it or not. And so both me and Dan got casted on it. He actually went on, I had moved to Australia in that three weeks later or whatever.
Yeah. And so I was like, I was in Australia when they called me. I was like, I'm not going to fly back for Wheel of Fortune.
But Dan went on and had an epic joke on the show.
SPEAKER_02
That's crazy. Well, too bad you didn't make it. Friend of mine was on it actually very coincidentally.
Facebook friend of mine who I went to school with was on it and he won 50 grand last night. Last night? Two nights ago or yeah, this week.
SPEAKER_01
That's amazing.
SPEAKER_02
Well, he was on it, I guess, weeks ago, but he posted that he's like, yeah, you know, I won 50, like he's posted the photo of him winning 50 grand.
SPEAKER_01
I've also auditioned for Survivor twice and not gone on, but I will keep trying. Anyways, I don't know why I went on this huge tangent, but you're saying TV shows, you're saying they should turn them into podcasts. And I think like, you know how we had Tai Lopez on and he was telling us like, oh, I'm buying up the e-commerce rights of these brick and mortar brands like Dress Barn and whatever.
I wonder if an entrepreneur could basically go buy the podcast rights to certain shows, game shows, or whatever that's out of date. Like, hey, Arnold or something.
SPEAKER_02
Right. And just convert it into a pod. Or like, would you listen to that? I would listen to like some of these TV shows.
I like, I used to listen to Family Guy when I was like, I don't even remember what I was doing, but like I would put it in my ears. It was just funny background noise.
SPEAKER_01
And the other one that's the other idea that's sort of like this, my friend Jason was bringing this up the other day. He goes, you know, TV shows, what they should do is they need to go like multi-platform. So basically, let's say you have friends, you have this hit TV show friends, people get invested in the characters, right? It's like, would you listen to a podcast of Chandler and Joey doing like sports betting or like talking about dating? If they stayed in character, but they off the show, they could probably make a fuck ton of money just being the character in more places now, in more mediums.
And podcasting, I think is a really good one for that, where you could take these characters and you could take them off platform if people really love these characters.
SPEAKER_02
I'm down. I think that's a fantastic idea. I think that there'd be a lot of contracts around syndication, which would be a pain in the ass.
Can we talk about this thing you tweeted about angel investing? Sure. So you wrote, I doubled down angel investing over the past six months. I've invested $600,000 into eight startups, a few standouts.
And do you want to talk about the standouts?
SPEAKER_01
Yeah. So I was just kind of doing an end of year review seeing, you know, okay, I've ramped up my investing. Let's see kind of like what I'm excited about, what I think I could be doing better next year, et cetera.
Okay. So standouts. I said there's some themes here.
So first is like India. I think I've talked about this before, but I've invested to Indian companies, which is always hard to do if you're not on the ground. It's hard to, you're not meeting the people face to face and stuff like that.
You don't know the market as well. But these companies were just great ideas that were growing really fast. I could just see like already had great adoption.
And what I'm seeing is that in India, there's this thing happened called, have you ever heard of Jio? Jio?
SPEAKER_02
He's a billionaire guy in India who people kind of hate because he has, he owns a skyscraper.
SPEAKER_01
Well, it's not his name, but yeah, the Ambani family, basically, they owned a company called Reliance. Reliance is like, I don't know, like ExxonMobil of India. They have like a big energy company, but they're not just Exxon.
They're also like AT&T and they're also like Verizon and everybody else. It's like Berkshire Hathaway or something. Exactly.
So India was kind of behind infrastructure wise, internet infrastructure wise. So they released Jio, which is basically like a cell service, like AT&T or T-Mobile or whatever. But it brought people up to kind of like 4G connection for really cheap.
They like subsidized it and just kind of gave it away at cost or below cost. And they call this the Jio effect in India because so many hundreds of millions of people now are online that just weren't online before this. And this one company kind of like took the whole country and moved them forward seven years by doing this.
And because of that, there's this crazy opportunity for tech startups right now in India where like, if you have product market fit, if you have a good product, you're going to grow at this insane pace. So I was talking about two of the companies. One company invested in it called Dukan.
Dukan means store in Hindi. And it's basically Shopify for shopkeepers of India. So if you owned a little shop that like sold scarves or shoes or food or sweets or whatever, COVID killed your business, killed foot traffic, killed brick and mortar stores.
And so Dukan basically is this little Android app that's kind of like Shopify that just lets that shopkeeper put their whole store online and anybody can order from their phone and then it gets delivered locally like to wherever, based on wherever you're on.
SPEAKER_02
Who found this? I found this one.
SPEAKER_01
How? I was just lurking on Twitter and I had been following this guy. I think I've talked about it once before, so I won't go into much depth. But I found the founder named Smeet and he had built something called ranks, which is an SEO tool.
And so I wanted an SEO tool to grow my websites. I was looking at them and I saw ranks. I was like, oh, that's actually a well-made site.
Anytime I see something well made, I go find out who made it. I want to be friends with them. That's like how I built my network.
And so I go and I find this guy and I'm like, yo, you built this thing. This thing's fucking cool. Like, let's talk.
He's like, okay. And I called him and literally on the, and I just did a zoom call with him right there on the spot. No scheduling.
I was like, are you free right now to talk? He's like, yeah, sure. It's like 8am in India, but all right, no problem. And I call him and I'm just zooming from my backyard and he's like, I'm like, what's your story? And he's like, I've been running growth for all these startups.
He's like, I ran growth and, you know, for all the startups they wanted to grow through SEO. So I just made my own SEO tool. And then I thought, why am I growing all these other guys startups? Like I'm the one creating all the value for them.
They're raising at these huge valuations and they pay me like dirt. You know, they get famous, but I'm the one driving the growth. So screw this.
I'm going to do my own startup. I was like, what are your ideas? And he told me about this idea and I was like, that's awesome. And I just gave him kind of my usual spiel.
Like I love to help you advise and invest at some point. And then the next day is like, yo, I got 300 stores on. I was like, what? And he's like, you know, it just kept going.
And so he's had 3 million merchants join the platform in under five months, which is just an absurd number is growing like crazy.
SPEAKER_02
Seems like it might be a hit. And so you are the first money in.
SPEAKER_01
Yeah, we're the first round in the company. And so, um, and there's only like three or four of us from the U.S. who invested in this thing. So it's me, it's Ryan Hoover and my friend, Kumar, who also knew also is a internet lurker and had found this guy in the same way I did.
And it was like, yeah, sure, I'm in. And so, and then the rest are the big VCs of India, like whoever lightspeed or matrix or whoever, whoever they have. So this, this company, I mean, it's either going to explode.
Like it's going to grow so fast that it kills the company or like expectations get too high. They get taken too much money. It's like, it's one of those companies that's like, it's going to die of excess or it's going to be like a multi-billion dollar company.
It's going to be crazy.
SPEAKER_02
So this fund that you have, it's going to be, it seems like, cause every company you're naming, I'm like, you know, who knows if it's going to work, but they all seem legitimate and like promising. They're definitely promising.
SPEAKER_01
So this one, by the way, I did before I started my angel funds. This is my personal money before that, but all the others in the thread are from the rolling fund itself. And yeah, I think they're all promising.
Like I obviously feel good about them, but I'm sure every investor feels fucking good about their companies. Maybe I just sell them better than other, other people. Like, I don't know.
SPEAKER_02
Definitely probably. But you sell them better, but maybe they are better.
SPEAKER_01
Yeah. Like, I mean, I wouldn't have invested like, I wouldn't have invested in them if I didn't, but these ones I'm talking about right now, like I legit think are going to win. Of course that the giant caveat is, you know, almost all startups fail and blah, blah, blah, normal disclaimers.
But like what I mean is within the basket of startups, these are relatively at the top. These I think are very, very good startups amongst startups. Now of course, all startups could fail and blah, blah, blah.
SPEAKER_02
So let's talk about, you did fitness AI. I was a customer there.
SPEAKER_01
You said was past tense.
SPEAKER_02
You turned out, I turned out, I signed up right when they launched and it was clear that they were just getting started. So, but I could see, I can see why it's great.
SPEAKER_01
Yeah. So there's two fitness companies that I invested in. One, they're both like of the kind of core mindset, which is, no, sorry.
SPEAKER_02
It is this fitness AI. Is this the one where they send you an Apple watch? No. Oh, nevermind.
I didn't use this one. You told me about this one though, and I would love to use this. I'm almost about to buy, what's that thing called the tonal, you know, tonal.
I wanted to buy one, but this company fitness AI might, I may not even need it because of
SPEAKER_01
this. Yeah. So I was a bodybuilder and he also like lifts weights, but like his dad was like a kind of like a did competitions and shit like that. And so he was like, I'm doing this fitness app.
And I was like, aren't there kind of a lot of these like personal trainer in your pocket? He's like, yeah, I'm being the best one for building muscle. He's like, if you break it down, he's like, there's one for cardio. It's called sweat.
And it's all about like kind of a high intensity interval training. There's some for running. And that's like my run keeper.
It's sold to Under Armour for 500 million. And then there's things like Peloton. That's for biking.
And the way that digital fitness is playing out is like people don't just like work out generically. They do a specific type of workout with a specific kind of like body they want to do. They either want to lose fat, they want to build muscle.
They want to like be active or whatever it is. So I invested in two. I did my yoga teacher, which is yoga based one.
And so what they're doing is they have yogis in India who are, you know, yoga is invented in India. So they have like experts in India that teach you over zoom a one on one yoga instruction where they're like, oh, move your foot to the right. Like do this, do that.
And so it's a zoom yoga class. That's can be one on one or group. And it's great because it's way cheaper than a traditional yoga class in the States.
So for in the States, if you go to yoga studio here, you're going to pay 30 bucks for that class. This you'll pay 30 bucks like for the month. You know what I mean? Like, you know, you can get one on one training for $19 on this app versus like a group class of 40 people where you don't get any attention.
SPEAKER_02
You know what I would do? I think this, you know, my yoga teacher is interesting. Indian company as well. It looks like, yeah, you said that.
SPEAKER_01
They're based in the US, but they just leverage the like labor arbitrage. So there's a lot of businesses that make money like design pickle, for example, they make money because it's a US company paying US dollar rates and the designers are in the Philippines. But for most things, you can't, it's like a worse quality experience when you get somebody overseas for the service with yoga.
These yogis in India are actually like expert yoga teachers. And so you don't have that same drop off you normally get without sourcing. So they get the cost savings without the quality drop off.
SPEAKER_02
The following that a lot of these yoga folks have, because I follow a lot of them on Instagram and on YouTube. And like there's this one called yoga with Adrian. Do you know her? I've seen it.
Oh, I love yoga with Adrian. This woman, she's got like this girl next door look. She's very endearing, very cute.
She has, let's see how many followers she has. She lives a lot. I think it's, it's, it's big, right? Like 10 million, maybe 8.
8 million. She's huge. And so I used to during COVID when I, I don't even know.
I mean, I still do it all the time. I wasn't just COVID, but I was using her like crazy and she has like a 30 day thing. And it's awesome.
It is so cool. She's so just got a good brand, good personality. She's just soothing.
And those are recorded, right? It's YouTube.
SPEAKER_01
Yeah. So I think that there's, again, if you segment these markets, it's like some people want to record it, but it's a better experience when it's a live instructor. Peloton is that way.
SPEAKER_02
Right. Well, I agree. But here's what I would do is I wouldn't, I would do what these makeup guys like Ipsy did with that Michelle fan or what was her name? Yes.
Or what Brian Lee at Honest did with Jessica Alba to get distribution and get users like overnight. I would call Adrian or the 150 people very similar. They're slightly smaller and being like, Hey, I'm going to be equity in the business and you're going to be a brand partner.
You in? And it would crush. I think it's a great idea. But getting customers for this yoga thing would be very, very hard, I think.
SPEAKER_01
Yeah. I remember when I was doing kind of researching the deal, I was like, okay, so you have this subscription. So I was like, so what's the churn like? You know, like everything, all your numbers sound good, but like churn is always the scary thing with any subscription business.
And he's like, well, our quarterly churn is negative 3%. I was like, wait a minute. I was like, you have negative net churn.
He's like, yeah, we have negative net churn. Like more people increase their membership value than we lose in dollars every quarter. And he's like, that's been the case for the last three quarters.
We hope it continues, but like three quarters is kind of like almost the whole year. And I was like, okay, I'm in like, you know, like, because it's a marketplace, right? On one side he's got instructors and the other side he's got students. And the more instructors and students he gets, the more valuable his marketplace is going to be.
It's a paid marketplace around subscription. And the subscription to churn is negative churn every quarter. I was like, okay, those are enough at the seed stage.
You really can't get more signals than that. You know, you can't be asking for more validation at that point.
SPEAKER_02
And how'd you find a yoga one?
SPEAKER_01
Dude, this one was funny. Some famous person, either Gary Vee or Jason Calacana, I said tweeted out like, what's the, you know, what's a cool startup I should be featuring? Or what's a fast growing startup? And this founder had reached, had tweeted back at him and said, you know, we're my yoga teacher, we're marketplace for yoga and we're doing seven figures in revenue already and we're growing, you know, this percent per month. And I was like, normally those threads are like trash.
It's just like, you know, I got this idea of like, you know, you go to their landing page is awful. And I was like, that tweet alone, I was like, this is good. I looked into his background, he had built a startup already.
His previous startup is currently worth about $300, $400 million as a private startup. And so I was like, okay, it's like a credible guy who's had success before. What's his previous one? It's called Punch.
Punch with I think two H's at the end. What do they do? I don't remember. It's like some marketing thing or like, I don't know what it is.
It's like seven, eight years old as the company is done well, but I don't think it's like one of the super break companies that's like going to go public. So it's like somewhere in between, which who knows what that means. So I was like, this guy's credible.
That tweet, those metrics sounded promising. I like the concept in general. Let me take a punt.
So that's how I found him.
SPEAKER_02
I'm, and then you have this other one called bubbles, which I just installed. I installed it while I was talking to you. Bubbles is a Chrome extension that helps you capture screenshots and videos and you could call it, right?
SPEAKER_01
Yeah, exactly. So you take a screenshot or a screen, like a video screenshot is either photo or a video screenshot. So you could just say, okay, here's what I'm seeing.
And then on top of it, bubbles is like kind of like a chat bubble. Like you can annotate it so you can type. Like for example, you could go to the hustles website or trends website.
Let's say you want to tell your team how it can be better. So you go to the hustle website, you screenshot it, you didn't just click and you like sort of add little annotations or comments about stuff that you think could be improved. And you just share that link with your team and then they can comment back and be like, Oh yeah, I'm going to fix this one now.
Or like, let me, do you have any suggestions on what we could change it to? And like they can just, you collaborate on top of a screenshot or on top of a screen screencast. So for more and more companies working remote, you need a way to collaborate. I do this all the time.
I take like a thousand screenshots a day and it's so janky. I like annotate it with a big, big arrow.
SPEAKER_02
They're not let me capture part of a screen.
SPEAKER_01
You can. There you go. Maybe it's not fully assault or I don't know.
It's maybe not as obvious, but you can do a video. You could just full screen. One other thing I like is you could do a long screenshot.
So you know, it's so when you're trying to screenshot a long page, this lets you just grab the full page instead of 10 screenshots that you then have to like paste together. And this is to me a makeup of a company I should have invested in. I was friends with the founders of loom early on, which has turned out to be a $300 million valued company now and growing.
And you know, I could have invested that in probably like 5 million, 6 million bucks. And so that would have been a pretty big, you know, 60, 70 X return before dilution. Loom did the same thing.
They're like, Oh, quickly record a screen cast and share it with your coworkers.
SPEAKER_02
What did you learn doing this? I mean, it seems like a pretty fun job. Is it going to be lucrative? I think so.
SPEAKER_01
The thing with startup investing though, is it's more like what I'll call it is it's a fun retirement account. Why do I say that? Because like, you know, when you put money in your 401k, it's like, cool, I'm investing, it's compounding, but it's like, I can't touch it until I'm 65. That's the thing with startups, right? It's illiquid for a long time.
And you don't get answers about whether these are going to be the big winners that they could be. And for a long time, it takes time for these things to grow. And even when they succeed, like right now, Airbnb went public, DoorDash went public, all these companies are going public.
But they are like 10 plus years into their lifespan oftentimes. I think Airbnb is what, 11, 12 years into its lifespan, something like that, maybe about that. And so it takes a long time.
So it's like a mini retirement account, but that's like fun. And so it's like, this is something where you invest in it when you're 30, you pay it out when you're 40. And your money has been compounding at this very fast rate, but like, you don't get to touch it until you're 40 or 42.
You know, so it's like, you have to think about it that way.
SPEAKER_02
Do you think it's easier? It seems way easier than starting a company.
SPEAKER_01
It's easier, but it's also less lucrative, I think overall, right? You start a company, you could become worth tens of millions or a hundred million dollars. To do that with angel investing, you have to hit one of the giant winners, right? Like so for example, I was doing some calculations of the returns of these companies. So for example, DoorDash, one of the early investors of DoorDash put in $200,000 into the early round.
And that appreciated like a 700X. So they put in $200,000 and that stake is worth like $150 million right now in the public market. And so, you know, a 700X return is so crazy.
SPEAKER_02
But doesn't the individual or the company only gets 30% of that then, right? Or 20?
SPEAKER_01
The investor, yeah. So basically, okay, so I was doing the math on, for example, Sequoia. Sequoia released, Sequoia is one of the big brand funds, and they released their, what's it called? Like their earnings.
Or their returns of their previous funds. And so one of their funds, they said return to investors and 11X, 11X returns. Let me pull up my spreadsheet because I was doing some math and I was like, okay, how much do the individual partners at Sequoia make? How much do they make it off this thing? So let me just give you some numbers.
So their fund was a $1.3 billion fund and it returned 11X, which is crazy. But they returned that because they had like WhatsApp and several other big winners in it.
And the total return on that was about $18 billion, the amount they gave to investors of $14 billion. So for the fund managers themselves, the GPs.
SPEAKER_02
Is the GP the boss?
SPEAKER_01
GP is general partner. That's the top level at an investment fund. There might be like a managing director, but they don't get paid more.
So GP is like the guys who actually get a share of the profits.
SPEAKER_02
And they're putting up a little bit of their own money, but they're not always putting up their own money. They're putting up their share.
SPEAKER_01
Yeah, basically, that's their, so they get paid in two ways. They take a 2% per year management fee. So just on the 1.
3 billion, that's 260 million of just, what's it called?
SPEAKER_02
No, that's 20 million. No, no, because 1.3 billion.
2% of 1.3 billion.
SPEAKER_01
Oh, sorry, sorry, but it's 10 year fund. So over the 10 years, they get $260 million. Now let's assume, I don't know exactly how many GPs Koya has.
Let's say they have eight. So those guys, they made about, let's say they had eight GPs, that's $32 million over the 10 years. So that's $3 million a year of just their salary from the management fees.
Now of course, some of it's going to go to the office and other things. Let's just round down aggressively and say, they're each pulling home $2.5 million a year just to write the checks, just to meet.
SPEAKER_02
Do you really think so? Do you think that's the number? That seems awfully high.
SPEAKER_01
For Sequoia, because they're raising mega, mega funds, right? This is a billion dollar plus fund. Yes, I do think it's that high. And so that's the first thing.
So they're pulling in, let's call it two to $3 million a year salaries if there was eight partners. Then you had the carry on this fund, which their share of the carry was about $3.3 billion.
And again, they had multiple winners in this thing. So I think this was a extremely high performing fund, but whatever. That's $400 million each that they get as their carry after the kind of 12 year cycle.
Who is one of the current partners? Roll off, both of them.
SPEAKER_02
I can't tell that. Tell me one more. Alfred Lin.
So Alfred Lin, he started the company with, he started Zappos with Tony Shea. So then this guy's got to be close to a billionaire, no? I believe so, yeah.
SPEAKER_01
And roll off the same thing. He was CFO, I think of PayPal with Peter Thiel and them. And so he was, I believe the CFO during that time.
So he obviously has done well before this, right? They didn't like make it rich with this, but I just wanted to know how much do the top GPs at the top funds make? And I'm pretty sure that if you annualize it out, these guys are bringing home somewhere between $30 and $40 million a year.
SPEAKER_02
Do you really think that that is wild, wild, wild?
SPEAKER_01
Somebody can correct me. We have a bunch of people who are VCs who listen to this. You can correct me if I'm wrong.
I'm doing my back to the napkin math. I'm not from this job.
SPEAKER_02
I mean, Sequoia has the best. Top of the top. The best ever, maybe.
SPEAKER_01
I think that the partners at smaller kind of still reputable known funds, but they're not billion dollar funds and they're not getting this type of crazy 11X on a $1.3 billion fund. I think they're bringing in a tenth of that.
So I think where the top guys in the top years are bringing in $30 to $50 million each, I think that three to five million is what the normal successful GP VCs are making.
SPEAKER_02
I'm on Sequoia's website.
SPEAKER_01
They don't tell you how many GPs they have.
SPEAKER_02
Their website is slick. Yeah. Wow. It makes me want to like them. I mean, it makes me want to be part of whatever they're part of.
SPEAKER_02
Oh, wow. And Michael Moore went, it's okay. Yeah. He was the guy in charge. He's worked multiple billions.
So should we wrap up there and next week we'll get to...
SPEAKER_01
Yeah, we should wrap up. The last thing I would say on the investing front for me, what I've kind of like my take away at the end of this was like, this is cool. The financial way to think about this is like a mini retirement fund, meaning it's awesome that it's going to grow and I think it's going to do wealth.
I think it's going to compound at a fast rate, but it's illiquid for some period of time. Normal 401K is like 40 years. This is going to be illiquid for like 10 years.
But the other side of the way I think about it is this is basically like getting paid to go to business school. It's like I get to sit front row, learn about new businesses, learn about new technology, meet cool people, but instead of paying for it, you get to get paid by investing and start up.
SPEAKER_02
So that's why I think... But are you going to...
SPEAKER_01
Would you do this full time or would you start something? I wouldn't do it full time. I love it in the capacity that it is right now, which is I just keep doing my thing, you know, building cool shit, making content like this. And in doing so, I run into cool people and when I run into them, cool people doing cool things, I say, can I invest? And then I put this at the bottom of the thread, which I think is really important, which is in most investments, right? If you're a real estate investor or you're a hedge fund guy, it's all about the investor picks the asset.
That's it. Investor picks which asset to invest in. Startups are the only asset class where the investor picks the asset, but the asset also has to pick the investor.
Most of these deals, it's not just me saying, here's a check. It's can I invest? And then they say yes or no and for how much? And so this is the only industry. There's only asset class where that happens, that match happens.
And so the game theory of that means you have to be a desirable person for them to want on their cap table. In the meeting, you have to behave well. So that's good.
That game theory helps everybody behave better. You have to be helpful and have a reputation for being helpful. You also have to like build your brand as somebody who, if your name is on this company, it helps that company like legitimize itself for the next investor or the next customer that comes by.
And so it's cool because the more successful you get, the better investment returns you get also.
SPEAKER_02
Does having a podcast help significantly?
SPEAKER_01
For sure. Yeah. There's several of these. Bubbles is a great example.
Their round is over subscribed. They don't need me. I think a bunch of your audience would use a product like this.
And I think you guys have a good platform. So I want you in because you have a name or invest in Gaggen's new edtech thing, which is a way for influencers to launch courses. And I was like, hey, I want to teach anyways.
I'm going to launch my own course. He's like, perfect. Again, that guy's built two like kind of rocket ship companies already one that's worth multiple billions of dollars in the edtech space already.
So he had every investor he wanted to invest. He could have had in the only way I got access to that round was because I said, not only am I going to invest, I'll be a teacher on your platform and I have an audience that will come and so that I'll make your platform more valuable.
SPEAKER_02
I'll give you feedback as a user. Yeah. I missed out on that one just because I was, that was when I had Lyme and I just wasn't take, I wasn't talking to anyone. I don't, I won't regret it because by the way, I think you still can cause he's doing
SPEAKER_01
something cool, which is he carved out a very small part of the round. I think like quarter million dollars, $500,000, something like that to let any accredited investor from the public invest in it.
SPEAKER_02
I know, but the valuation is way higher than when you, it's not the way it's only $5 million
SPEAKER_01
higher. So I invested at 20 million. This is at 25 million.
So it's not that much higher. That sounds $5 million sounds like a big number, but in valuation terms, it's just like, I put this in my mistakes part of the Twitter thread, which was there was a bunch of companies where I was like, I was like, Oh, this is interesting, but I'm not sure. Let's just wait and see.
And like four months later, I wait and saw and sure enough, they proved it out more. And all of a sudden the price was three times higher.
SPEAKER_02
Yeah. That happened with a ring, I think. Were you part of that?
SPEAKER_01
I wasn't a part of that one.
SPEAKER_02
No, a couple of our friends were and they were like, or a ring, a hundred million dollars. That's a lot of money for evaluation. And now it's 10 times that.
SPEAKER_01
Right. Exactly. And that happened to be with, with several of these company.
We were talking about right before they launched was pipe. And I was like, Oh, this is a genius idea. You realize this is a genius idea.
We could have put some money in at that time at a lower valuation. And now I'm talking to him now and you know, the valuation is much higher because he's proved it out a lot more.
SPEAKER_02
That's that David Sacks business.
SPEAKER_01
He's one of the investors. I wouldn't give him the credit. Harry Hurst is the founder.
SPEAKER_02
Yeah. He's pimping it out all the time.
SPEAKER_02
And he was the lead of their kind of like first round or whatever. Right. We did miss that.
SPEAKER_01
Right. Missed that one too. Okay.
SPEAKER_03
So I feel like I take this episode a bunch of different tangents. Albrea, what do you think? It was pretty good. I don't believe we do zero minutes of prep.
We did like 10 here.
SPEAKER_01
So I want people to let me know like, because there's some stuff like this, like angel investing. I don't know if that's interesting to people or if it's not, I think it will be. You think so?
SPEAKER_03
I do. Yeah. I think we should do like, I don't know. People are kind of sensitive with salaries and stuff, but I find that stuff super interesting.
Nobody talks about it. Like how much do these guys actually make?
SPEAKER_02
We should have one of these folks on.
SPEAKER_01
Only if they're just going to say how much they make.
SPEAKER_02
Let's have Jason Calcane as come on, because he's kind of a loose cannon, he'll talk. Yeah, we should. I was on his thing.
He owes us. We'll get him one. Yeah, get him on.
That'd be great. I'm looking at the download numbers. People seem to be liking what we're doing.
It's going up. Yeah. Slowly, but surely. We're in the top 50 of all business podcasts today.
SPEAKER_01
Hell yeah. Ahead of, who are we ahead of, Albrea? That's what I care about. Top 50? All right.
SPEAKER_02
That sounds good. Who are we ahead of? Next to Motley Fool. Okay. We're on the morning brew. Who else?
SPEAKER_03
We're beating all the big names. Reading Pomp, Naval, Morning Brew's podcast, we're beating all the big guys. Yeah, those chumps.
SPEAKER_02
Well, those aren't big guys, but Pomp is, I guess.
SPEAKER_01
I mean, Naval's got like a million plus followers on Twitter. He's pretty good.
SPEAKER_02
Yeah, but he doesn't actually do that podcast, does he? Yeah, it's him. The Naval podcast isn't Naval, is it? No, it's him. Yeah, it's him.
Oh, for real? What does that guy even do? Does he do anything? Is he just like a personality? Is he like Tim Ferriss now?
SPEAKER_01
He's hired a CEO for Angelus, so he's not the CEO anymore. So yeah, he just thinks about shit and meditates and invests.
SPEAKER_02
Where does he live? Does he live in San Francisco, do you think? I have no idea where he lives. That guy's weird to me. I mean, in a good way.
SPEAKER_01
Someone sent me a shirt. They sent me a very kind letter I should find out what the person's doing.
SPEAKER_02
Oh, and I'll break you. You sent you a Naval book. Yeah, that's right.
SPEAKER_01
So I got the book here that my friend Eric wrote. This is actually a really smart tactic, by the way. This guy, Eric Jorgensen, he was like, let's take the fastest way to build your following and build a mailing list is to just capture all the philosophies of a famous person like Naval or Charlie Munger, Warren Buffett or whoever.
He just wrote the Almanac of Naval. He just took all the shit Naval had said in his different podcasts and blogs and stuff
SPEAKER_02
like that. Jack Butcher did it with him.
SPEAKER_01
Yeah, exactly. Jack Butcher got famous too with visualized value. He just took Naval's philosophy and created dope visuals around it and tweeted it out every day until those caught on.
And so like instead of being, you know, I'm going the long, hard, slow, shitty way of trying to like come up with my own ideas and make those famous. I should just be hijacking these other people's fame and building content about them and then slowly slip myself in.
SPEAKER_02
Whatever. It works. Yeah. I mean, I get this point now people are doing that with Jack Butcher. He has like a, he's like a Jack Butcher.
Someone made like a fan page for him.
SPEAKER_01
I might have made it. I love that guy. He's great.
SPEAKER_02
Correct. Is that what they're called?
SPEAKER_03
No, I don't get that joke. What's that mean?
SPEAKER_00
I don't get the joke. No, it was a lame joke. Okay.
SPEAKER_02
I'm out of here. I'll talk to you guys soon.