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SPEAKER_01
All right, we're live, we're on.
SPEAKER_02
OK, we're on, man.
SPEAKER_01
Listeners, so Sean has had a little work emergency, not like a real emergency. He just couldn't join the podcast today. So we have Trong.
What up, man? So Trong is a writer for the hustle. He wrote for Trends. Now he basically writes the daily email by himself to close to 2 million people a day.
He is big on Twitter. What's your handle? TrongTfan. So he's around.
A lot of you guys hopefully know him, but he's been wanting to come on the podcast. Sean wasn't here.
SPEAKER_02
So I want to be grilling Sam for everyone. And I just want to clarify, we do have some other hitters on the daily email. I mean, I did some heavy lifting in Q4 2020, but we've got some hitters now.
Jacob Cohen, I got to give a shout out to the young one. He does great stuff. But yeah, I'm here for the listeners to ask Sam when he was selling hot dogs.
Missouri, if you ever thought he'd be selling a media company to a SaaS firm.
SPEAKER_01
We have this group on this app called Apex. And it's like a private group where a bunch of my first million listeners are on this group and they anonymously say stuff. All of them make fun of me for talking about hot dogs too much.
So I don't think I could talk about that anymore, because they say I talk about it too much. So I don't know if you can go the hot dog route. But you know what we should do one day, Abrayu? We should have Trong and his team come on and actually talk about how they write the daily email.
I feel like a lot of people ask me that all the time. But it's way less sexy because it's basically Trong just locks himself in a room and does it. One time I talked to Trong at like 11 AM his time, and he was outside with his kid at the playground.
And I was like, Trong, don't you got to write the email? He goes, dog, it's done. I did it already. He took the day off.
I was like, all right. We'll have to do that sometime. But yeah, our deal was announced, I think, last Wednesday.
The company, the hostel, has been sold to HubSpot. That includes this podcast. And we're going to do a ton of cool stuff.
I actually think we're having Kieran on the guy who was the champion of the deal at HubSpot. He's going to be on this podcast tomorrow to talk about, from his perspective, why they did it. But today, we can talk a little bit about our company's perspective and some things like that.
Just as everyone knows, and so Trong knows, because we got bought by a public company, we're definitely not allowed to talk about certain things. Or to like, I'm going to try my hardest not to make a joke. Like, oh, you got to go out and buy the stock, right? Because that's illegal.
And I'm still learning all this as I go. I'm not as I go. I mean, I've learned a lot already, but it's definitely new to me.
I have to make sure I don't do anything unethical or illegal on this podcast. So Trong, hopefully you'll be able to get that in mind.
SPEAKER_02
Well, just for anybody that's wondering, what's your biggest HUBS, so is that going to have to get bleeped out?
SPEAKER_01
No, I don't think you're saying anything wrong. You're just saying a fact.
SPEAKER_02
That's a ticker. I mean, this one might have to get bleeped out. But I was telling Sam that of all the hub companies that purchased the hustle, I'm glad it was HubSpot, you guys can do the math and the other hub companies.
What do you think, Abrayu? No, I didn't keep talking about it, dude. It's a big one based in Montreal. We'll just leave it at that.
SPEAKER_01
So what do you want to talk about? What should we talk about with this deal?
SPEAKER_02
Well, why don't you tell the listeners? I mean, no one's heard from you other than that thread. Just tell them, download on them right now. You're feeling.
SPEAKER_01
Yeah, so we, a while back, so we've always had people wanting to buy us. A lot of media companies and mostly all media, or all media companies and private equity firms. And I was never going to sell to a private equity firm.
Like, no, not a chance. Wasn't going to be part of that. Media companies, I thought it was cool.
So I went to like the offices of like a lot of these cool New York publishers in Brooklyn or some of the older ones that own lots of brands in Manhattan. I went to a lot of these companies, and they were lovely, nice people, but it was just not a culture fit. It was like, I remember I was like in this boardroom, or felt like a boardroom.
Like you imagine like boardroom in like a, just picture like an old white dude with a tie overlooking Central Park and me telling him when I was 26 or 27 about like this email where it's kind of funny because we could say the F word and we just do crazy stuff and yada, yada, yada. We once I wrote an article about doing a bunch of LSD. And I'm like, this guy does not get it.
Like I'm just a lying item to him. And I didn't want to be part of that. I also felt that a lot of the media companies out there, they were dying.
And they thought that buying us or buying a bunch of businesses like us would somehow save them. And I did not want to be part of that. So we never like, Trump, name one media company that's doing great like publishing media company who you'd want to own stock in.
Are there any?
SPEAKER_02
No, well, I mean, I think you've talked about this before, but like, I mean, the ones that raised major venture like four or five years ago, like the Vices, Bud Fee, the Voxes, just like those business models aren't going to be able to last in 2020 and beyond. They're all tons of ventured, tons of growth expectations that they're never going to be able to meet. So to answer your question, no.
SPEAKER_01
And then like, is there any public company that is a, like a traditional acquirer of us that you'd want to own stock in? Have you ever spoken to the times? New York Times? Yeah. Not in this capacity. You're right.
So that's one. I would want to own New York Times stock, but there's not many.
SPEAKER_02
No, there isn't. I mean, the other one is a private company. And it's at this point, it's like, I'm a nonprofit.
It's whatever Steve Jobs is, Wito is doing, the Rheem Powell Jobs.
SPEAKER_01
I've talked to them, but not in this regard. Do you believe that those companies can like three, four, five, six, seven X their?
SPEAKER_02
Oh, on the valuations, impossible. I mean, what's vice? Was that his peak? Is a $5 billion company? It's insane.
SPEAKER_01
Yeah. So when we met with these companies, or just like thought about these companies selling to them, it destroyed me. I also think that a lot of media companies, particularly in the New York scene, and I make fun of New York.
I love a lot of these people, a lot of them are my friends. But just like in Silicon Valley, there's negative stereotypes. The New York media scene has these negative stereotypes that in my head, it's the same people revolving doors at company building the same shit, and most of it is horrible.
They all say, oh, let's go to video. Let's do this. Let's do that.
Now they're all saying, let's go to newsletters. It's like, doggy, that was six years too late. But they're all saying the same stuff, and I didn't want to be part of that.
And so in my head, I always thought, you know who should buy us? We work. I thought we work should buy us. Like before we found out that they weren't that great.
And then I thought LinkedIn should buy us. And then I started thinking, oh, what about like a Salesforce, or like companies like this? And then last fall HubSpot reached out to me. And I was like, oh my god, this is finally happening.
One of you companies that I always thought should buy us is showing interest. And so that was quite interesting. And then they kind of explained their plan.
And it made a ton of sense. And I was like, all right, this is great. We got to keep talking.
SPEAKER_02
Want to explain just briefly before Kieran gives a full download. I mean, top level, what is the value prop for them?
SPEAKER_01
Yeah. So basically, the hustle, our vision from day one. Here's been our vision from day one.
We said that we wanted to build up this really large email list. And we're going to do it for this entrepreneurial business minded person. We're going to make profits early on, which we did with advertising.
We had about an eight figure advertising business. And then as we grow, we're going to use those profits to launch more stuff that we could sell directly to them. And our first thing was trends, which was a massive hit.
I think it's a massive hit. But and then eventually it was like, all right, that's working. Let's launch another.
Let's launch another. And then it was like, all right, we're making all this profit. Let's invest in some of these cool companies that are trends members or hustle readers are making.
That was kind of the long term goal. And HubSpot came to us and they go, yeah, we want to do this thing. And they basically described what I described.
They're like, we have these products, but a lot of media companies who have these great audiences, they haven't made like the really high margin stuff. And we could partner with them and kind of a one plus one equals three type of thing. And so that's what they said to us.
And I go, well, we are already going to do this. Maybe it is a good idea to partner so we can just get to it right away. So the idea with HubSpot is like they have like 90,000 customers or something like that.
And a lot of their customers, I think, are not a lot. But some portion of the customers are small to medium size businesses. Well, the hustle has like a million and a half, almost 2 million of those people.
And then we have tens of thousands of trends members. And they're all that person. And so they're like, well, if you could get us like 2 or 3,000 new customers, we're talking like you just gave us like a 3% bump in our customer base.
That's awesome. And so we don't need to sell that much stuff eventually. I mean, the way that we're going to look at this is just brand awareness.
Can we get the brand well known? But this allows us to hire the best writers, the best creators. I mean, the life that Trung is going to have, starting, I guess, today whenever that starts, is going to be probably better than everyone who works at The New York Times.
SPEAKER_02
I mean, I like some of those Twitter followings. But to your point, I get it. I actually want to add something that, afford you something that Ross Simmons wrote from Foundation.
I know you know Ross. He's a trends member. He did a quantitative back check on what you just said about the audience that were the HubSpots getting with the hustle.
So he looked at the most frequently used words in the bios of the HubSpot followers, marketers, digital marketing SEO. And then he looked at the most followed, the most used terms in the bios of hustle followers, co-founder, product, growth strategy data. Completely different subset, right? But also some of the HubSpots going after.
I mean, there's literally numbers put behind this that they found a very yin-yang kind of acquisition here.
SPEAKER_01
Yeah, it was great. And then here's what's something funny. As we were talking, the founders were like, kind of stalking us a little.
Like, I could see Darmash was like, fronting me on Facebook and following me. Brian was doing the same thing. They were just wanting to check in and make sure we were legit.
And I know Darmash, I don't know him well, but we run in the same circle. I've never met Brian up until recently. And I saw Brian join Trends.
He must have bought it, which is his company credit card. And he was trying to fly into the radar. And I saw that shit.
I immediately went to the group and I said, hey, everyone, Brian Halligan from HubSpot just joined the group. And he got like 300 replies in like an hour. That was hilarious.
I told all my friends, they go, hey, comment on this for me. Will you? There was reasons like, and people were saying like, oh HubSpot rocks, I use HubSpot yada, yada, yada. That's so cool you're here.
And I was hoping that in his head, he would feel like, oh, this is perfect.
SPEAKER_02
Well, I mean, clearly something worked.
SPEAKER_01
Yeah, that's what I was hoping for. But anyway, so that's kind of how it came to be.
SPEAKER_02
But let's just add this. This was, I mean, I don't think you noted this, but it was completely unsolicited that the cold approach you got over the fall.
SPEAKER_01
Yeah, yeah, it was just a cold email. They must have saw your lecture. Yeah, and I was not intending to sell at all.
I was never going to sell. There was a few reasons that the when I decided to sell, I had just recovered from a really bad illness. I was in a weird state and I was like, you know, like if there's like a horrible emergency, like it would be nice to have this like a wind under my belt.
And I was just like really sick. And I just recovered from Lyme disease where I had spent a ton of time in the hospital. And I was like, you know what? Let's just guarantee a win and keep building it.
And I think that could be fun. And that's kind of like where I was when they called, but it was just a cold email.
SPEAKER_02
Have you in the last week like mentally changed at all? Or I mean, you've been telling me, yeah, it's not really just more of the same, but like to be honest, anything, anything changed. You were in a gray shirt on Friday. It's black today, man.
Like something's going on.
SPEAKER_01
Are you asking like if I bought something?
SPEAKER_02
No, just in general, man. Like you can't tell me that nothing mentally has not changed.
SPEAKER_01
I don't know how most people are in the situation, but my like, I don't know how to put this in a non douchey way, but like I had a fair bit of money before this. I had enough money that I was on like the high, one of the hierarchy of needs where I was like, I didn't need to worry about stuff. The thing that I've changed is that this change is just the fact that like I proved to myself that I could start something and end it.
And that is the thing that has changed. The money doesn't really matter because I already live a nice life. I already owned a nice home.
I have cars and I've got, and I don't really buy fancy stuff. So there's, I mean, I'm not wearing a watch.
SPEAKER_02
You're a gym guy. You spend all your money on fitness.
SPEAKER_01
I spent all my money on fitness and that's not that much money. You know, I built a gym for five grand. I'm going to buy a rowing machine.
That's $2,000. That's like what I'll buy because I normally would try to give them to give it to me for free, but now I'll buy it. But no, I think the biggest relief is that I started something and it ended and also the second biggest relief is that I don't have to worry about the stuff that I used to have to worry about.
So during this process, we're going to hire a CEO and don't say his name, by the way, because Trump, because we haven't announced who we never actually said who the guy's name was. And I don't want to call him out. He was awesome.
I loved him. And we almost did it. And then when this thing happened, I had to fill him in.
I'm like, hey, man, I think we're going to do this thing. So anyway, the reason I was going to hire a CEO is I hate doing stuff like managing payroll, negotiating with people about raises, checking in with people to make sure that just traditional managing stuff. I hate it.
I hated it so much to the point where there were some days where I'm like, I'm not going to work. I don't want to do this. I called in sick every once in a while because I'm like, I've got eight meetings.
I can't do it.
SPEAKER_02
Was Lyme disease one of the times you called in sick for six weeks? Was that a fake one?
SPEAKER_01
That was a real one. My face didn't work. I was looking like, gosh.
No, I hated that. So someone tweeted something, you tweeted something trunk today where you talked about MBAs and someone said founders found, managers manage. And that's the truth.
And when I was managing stuff, I was horrible at it and I hated it. It felt like it sucked the life out of me. And so I'm so thankful that I don't have to do the type of managing of worrying about, like looking at balance sheets and things like that and making decisions.
I'm so bad at it and I hate it.
SPEAKER_02
Well, actually, now that you mentioned that tweet, I think it's pretty funny to talk about because the content of the tweet was basically like, look at the big thing, M companies, whatever, like Facebook, Apple, Amazon, Microsoft, Google, they're all run by MBAs now. I didn't even realize Satya at Microsoft was an MBA until I googled it and it made the tweet way more fire. So no, managers manage founders found.
And like, if you're Larry Page and Sergey Brin and you're worth like 80 billion or whatever they're worth, you just want to go off somewhere and do peyote, right?
SPEAKER_01
Like they don't give a shit. No, like that's not where I was. You know what I wanted to do? I wanted to be locked in a room.
I want to know when to talk to me and I wanted to make. Right, right, right. I wanted to create stuff.
SPEAKER_02
Yeah, that's all I wanted to do. That's all I wanted to do. Like they're doing peyote and like trying to do crazy like moon shot stuff, right?
SPEAKER_01
I wanted to make stuff. So like when we launched Trends, it was me, and I'm not like bragging here, but I'm just telling a story. It was me who made, literally designed the page, ran the paid marketing to it to get a little bit of traffic, called the customers to figure out what did you like about that? What did you not like about? And I did that for about $50,000 with the customers.
And then we decided to launch it and I kind of helped people figure out the vision. And then I gave it to other people like Trung and Steph, who are way better than me at it. And then they made it awesome.
And I just wanted to only do that all the time.
SPEAKER_02
You're a starter guy. You like starting stuff.
SPEAKER_01
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 and 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. Yes, I cannot run stuff.
I love starting. I mean, I can run stuff, but I like starting.
SPEAKER_02
How comparable would you say like you want the portional role where you just get to be on Twitter 10 hours a day? He's creating all day, man.
SPEAKER_01
That's all he's doing.
SPEAKER_01
Yeah, but his creating is different than my creating. His creating is like performance art. I don't want to do that.
That's for sure.
SPEAKER_02
You want to keep making cool products like whatever. Yeah. Or the community. Key word for the community.
SPEAKER_01
Yeah, I don't care if my name's on it. It's just fun to tinker. And that's just what I wanted to do more of.
So yeah, the deal happened. It was cool. I was kind of a fear, a lot of excitement.
It's just a lot of big feelings, right?
SPEAKER_02
HubSpot, by the way, is like a $20 billion company. Sometimes you have to check these things to realize it. How big the software companies are.
SPEAKER_01
Yeah. And it was bad ass. I've spent a little time with the CEO.
The CEO came to our meeting today. That was cool, right? He's just like a normal guy, I guess. He's just really successful.
SPEAKER_02
MIT dudes. I lived in Boston for five years. I lived in Cambridge.
I am MIT in Harvard. I'll tell you about living in Cambridge, what's interesting about that area. You'll never hear, actually, no, you live in San Francisco.
Those two places, San Francisco and Cambridge, in the States, where you'll walk around the street and just hear overhearing stuff. It'll be the craziest random talk you'll hear. Somebody will be curing some random disease or launching some kind of program in the Middle East, which will save the region.
These are the type of conversations that go on when you're just walking around. You know that.
SPEAKER_01
Yeah. And so, Abrey, you had a question, and he wants to know what's going to change going forward. Is the pod going to be shit now? No.
So, over the last three months when I've been working on this deal, I unfortunately have kind of left Abrey you and Sean hanging a little bit. I haven't been in it. People were criticizing the podcast.
They're like, man, you guys aren't focused enough and you're not preparing enough. Well, I'm sorry. It's because there was 90 hour work weeks for this deal.
So, no, I think actually the podcast is going to be even better because we're going to hire some people to help Eva make it even better. We're going to get more distribution because we're going to spread it across our channels a little bit more than before. We're going to spread it on HubSpot channels.
We're going to have some more money and budget to make it great. And then maybe we'll do it more often. I'm not sure yet, but we're also going to be releasing a ton more podcasts.
Maybe Trunks is going to have his own podcast. Maybe some other writer who we find is going to have their own podcasts. And so, we're going to actually have more.
In terms of changing on the consumer's point of view for the hustle or for the pod, nothing. I don't think anything is going to be changed except we're going to do more of it. And maybe you'll see a HubSpot logo on some stuff.
SPEAKER_02
It's going to be more of the same. That's how I, when people ask me, like, I got a lot of congratulations. I'm sure you got like a multiple of a thousand, but they're like, Hey, man, how's this changed for you? I'm like, honestly, nothing really.
It just, I still got to work on those five emails a week. And honestly, at the end of the day, nothing really changes for the content side.
SPEAKER_01
Well, we're going to hire more people.
SPEAKER_02
So right now, like we didn't hire people, but I mean, like the job's still the same,
SPEAKER_01
right? And the writers cost hundreds of thousands of dollars and like, we could never afford that. Now we can.
SPEAKER_02
And hopefully we can go, you know, send those applications in.
SPEAKER_01
Yeah. I don't want to give any applicant a false sense that they're going to get hundreds of thousands of dollars. I just mean like, we're working at a tech company now.
It's a lot different than a 30 person media company. And that's interesting. Another thing is I think a lot of these media companies, because they're reliant on advertising, I think they're so screwed.
They're not screwed like they're necessarily going to die, but they're screwed in that it's a horrible place to work.
SPEAKER_02
Yeah. It's high pressure and you got to deliver like you said, these numbers. But you mean you've been, I mean, you've been a very even killed person about it because you run an advertising based business, but you also have a subscription based business.
So I think, I mean, when you kind of opine on it, I'm like, oh, you know what? I'm going to kind of take sound for this because you've seen both sides of it. I've seen you on Twitter, like argue both sides, right? Like you're very balanced about it.
SPEAKER_01
Look, it's not bad. It helped us get us to where we had to go. But if we wanted to be, it would be really hard to become, I'm not saying advertising is bad to have.
I'm saying it's great if it's part of your mix. But like if we had Bonobos, one time we had Bonobos as an advertiser and there was a shooting that we covered and Bonobos was like, hey, like we can't be running next to this like Nazi who just killed this. There was something like a shooting in New York where a guy shot like a, what's a Jewish church? It's synagogue.
synagogue. There's something like that. And some brand, I don't remember if it's Bonobos, but they were like, you know, we don't want to advertise.
So it was like, fuck, we just lost 30 grand that day.
SPEAKER_02
Absolutely. It's like, well, like you said, you can sell the back end is real good now. It's a software.
All right.
SPEAKER_01
So we just got done talking to the deal about the deal. We're actually going to talk about it more tomorrow or I guess in two days, whenever these go live with Kieran from HubSpot. So we're going to talk about that a little bit more in detail, but just wanted to give you a little bit preview on what happened with the deal.
Now let's get back into it with the old stuff and we're going to have Trunk tell us some interesting ideas that he's looking at. Trunk is the writer of the hustle, a writer at the hustle. Let's do it.
SPEAKER_02
So why don't we throw some ideas out there?
SPEAKER_01
I didn't prepare anything.
SPEAKER_02
Did you? I did. Well, it's because I've been writing so much the last couple of weeks. I got some ideas here.
So I actually want to ask you a very specific one. When you hear the word financial engineering, what do you think?
SPEAKER_01
Bernie made off.
SPEAKER_02
Okay. So you think financial engineering, it's a negative connotation.
SPEAKER_01
When I think financial engineering, I think of a thief.
SPEAKER_02
Okay. I think that characterization is pretty much out there. A lot of financial engineering happened in 08 with the mortgage backed securities.
Goldman was involved in a deal where they put a mortgage backed security bond together and basically bet against it. This is actually one of the most famous financial engineering, which is a lot of fuckery involved. You probably have to believe that out, but when Greek tried to join the EU, you have to hit certain debt numbers.
And Goldman basically said, listen, we can do some kind of financial instrument for you, which will make it look like you have a lot less debt than you do. Goldman made like $700 million on this deal. And they basically lied to get the Greek government and Greece into the EU.
And that basically led to the European financial crisis, right? So to your point, financial engineering, very negative.
SPEAKER_01
Okay. But where are you going with this?
SPEAKER_02
There's a very positive story just wrote about it. And it involves a professor at the school of our co-founders now of the company we work for HubSpot, MIT. His name is Andrew Lo.
Andrew Lo created a new financing mechanism for the biotech industry, which has now led to a company that's worth over $8 billion. And essentially what he did was he put financial engineering to the biotech industry. Because you know, for example, what do you know about the drug creation process? It's expensive.
SPEAKER_01
It's expensive and it's hard and it fails a lot.
SPEAKER_02
Exactly. It's a lottery, right? So you'll spend $200 million for a chance, a 5% chance at getting a blockbuster drug which might be worth $20 billion. So Andrew Lo about a decade ago, this professor lost six people very close to him, including his mother to cancer over the span of four years.
And this like made him to reassess his life and like look at his field and be like, what can I use my expertise with? He's like a godfather in the industry. A whole generation of cons were taught by him. And he's like, I'm going to look at biotech to figure out what the issue is.
And you probably know this term. Do you know the term of the value of death and funding? Some industries are unfundable, right? Like a solar reached the value of death like a decade ago. It's just very difficult to fund these like long shot things with long off payoffs.
He goes, I'm going to find a way to make biotech funding more viable. So he went and said, what if we got 150 startups to get $200 million each? And that's a $30 billion fund. And he ran the numbers and said, if on this fund, there is a 90% chance that you'll be able to get five blockbuster drugs out of it.
So the key being this though, each startup has to go after a different disease, be completely uncorrelated. And he ran the numbers and he's like, this now can make financial sense for an investor.
SPEAKER_01
So explain this again. What do you do?
SPEAKER_02
You fund, you pull risk together. So instead of you fund 150 startups attacking 150 diseases.
SPEAKER_01
But isn't that what a biotech VC firm would do anyway?
SPEAKER_02
No, the thing is this, you have to specifically go after different diseases.
SPEAKER_01
But wouldn't a fund, wouldn't any smart fund already do this?
SPEAKER_02
No, but this is things like the industry just hasn't been doing it. Like this is what he discovered.
SPEAKER_01
And how's it going?
SPEAKER_02
One of his students took his model and he went out, raised money from KKR, raised money from Sequoia. It's a public company now is worth almost $9 billion. They have 20 drugs in the pipeline and four of them are in phase three.
So they literally applied his model and they're curing rare diseases and rare cancers.
SPEAKER_01
Is that his name? Loeb, Andrew Loeb. Andrew Loeb. So he's like the fund manager.
SPEAKER_02
No, he, the company's not a fund. It's just a biotech firm that treats his model like this. They have a centralized research, centralized operations.
Each new drug that they create, they spin it off as subsidiary. Andrew Loeb.
SPEAKER_01
So where's the opportunity here?
SPEAKER_02
Loeb. Basically he created this funding model where you can attract money from conservative investors that wouldn't put it into biotech, which is otherwise way too risky. Because he's saying it's actually de-risk by doing it with this model.
So to your point, you would think that it has been done, but it hasn't. And he created kind of the situation and went out with a champion for it. And now he can go all guard money and potentially pension insurance money into this type of system before it just be venture VC kind of biotech risky money.
But now he's going to pour all this other money into it and with this proven up model. The company's called Bridge Biopharma.
SPEAKER_01
Bridge Biopharma.
SPEAKER_02
Yeah, check them out. So to answer your question, it seems to be a little bit minutia of confusion here. Like, aren't they already doing this? I think that my rebuttal that is the amount of money needed isn't going into it because it's still too risky.
Let's say a biotech fund is like 100 mil. The other low is like, no, no, we need tens of billions of dollars. And he's out here championing this model.
It's like, you got to think bigger. You can't just diversify across 10 startups looking at 10 different diseases. He's like, I want 150 startups looking at 150 diseases.
And looking at my model, I can get the probability of three blockbuster drugs, which is probably worth 50 to 60 billion over a lifetime is like 90 plus percent. So he's de-risking for a conservative investor. If you're an insurance company, you can actually look at this now and be like, you know what, this is viable.
SPEAKER_01
Whereas before you would not. So we had Jason Calcainus on here a few days ago. He might be worth 100, 200 million dollars.
I'm not sure. I mean, he's up there because he's invested in Robinhood, Com, Uber, all these great things. And he says that that's his strategy with angel investing is like a little bit of a shotgun approach.
I don't think he said this explicitly, but if you look at his track record, it appears as though he's like, I meet with tons of people and I invest in a ton of stuff. It has worked for him. I mean, it seems like a pretty common model for high risk investing.
It's just quantity over quality because it's too hard to tell the quality early on.
SPEAKER_02
Yeah, absolutely. I think the thing I really want to emphasize here is the low to no correlation. I think that is really what, because if you're looking at like, for example, the biggest kill in the United States is probably heart disease.
If you're just trying to attack heart disease in different parts of it, they probably have the same underlying causes. So that model wouldn't work. Right? You have to be very specifically, you're searching for diseases and maybe single gene mutations that are completely uncorrelated.
Listen, I'm probably completely chopping up Andrew Lowe's paper here, but I thought it was super interesting because financial engineering gets such a bad reputation as when I asked you what your first instinct is to that word.
SPEAKER_01
All right. What else you got?
SPEAKER_02
Idea guy. So the other thing we wrote, and I think you saw this, you retweeted it, but I know you retweeted a lot of my stuff without reading it, which I do appreciate. Marcus Bullock, the CEO and founder, former inmate, turned a CEO of what they call.
..
SPEAKER_01
Yeah. That's a crazy business.
SPEAKER_02
Let's talk about that. Yeah. So do you remember, you read the story?
SPEAKER_01
Yeah. Yeah. Yeah. Yeah. Yeah. So basically there's like a sob story along with it. I say that just, I don't mean that disrespectfully, but like there was like, it was like a sad story.
I think if I remember correctly, he screwed up, got locked up and at 15, I imagine like he did what he did. And so he just spent some time in jail and they make a collect call, went to the point of he almost like bankrupt his mother, right?
SPEAKER_02
His mom had to move from an apartment to studio just to be able to afford to communicate with
SPEAKER_02
And what did he get locked up for?
SPEAKER_01
Arm carjacking.
SPEAKER_02
Got it. And this happened six years, about six, seven years after the 1989 Central Park rape case. Remember the, the jogger was raped by five.
Well, the jogger was raped by five minority youths was what they were charged with. And it turned out to be not true at all. But in the aftermath of that, the start of that case, every state in the United States basically said, we're going to start trying use as adults.
So he got totally fucked.
SPEAKER_01
Banked rep is not bankrupt his mom, but depleted her funds. She had a completely changed her lifestyle just talking the phone with them once a week, however long it was. How much did it cost to make a collect call? Like $12 a minute.
$18 for 15 minutes. 18 for 15.
SPEAKER_01
Insane. Yeah. And that was in the 90s, right? Yeah.
SPEAKER_02
A lot of money. And it's because the telephone systems for prison system in America is run by basically two private equity backed telecom companies.
SPEAKER_01
Okay. And what is it?
SPEAKER_02
What did he create? He created something that he just looked around. He's like everybody using their phone for social media, prisoners obviously don't have access to Twitter and Facebook. But what if I could create something that would be similar from the family side and you can kind of still communicate with them.
So it's very simple. You open an app on your phone. It's called Flick Shop, F-L-I-K-S-H-O-P.
And you basically do whatever you do with Twitter or Facebook. You click on an image and you send it. But instead of sending an image between phones, you are sending it to Flick Shop and they're going to write a postcard for you with the image and the text.
And what's amazing about the story is the hustle involved for him to get into like over 2,700 prison systems in America. He was like meeting these wardens and administrators like in person, trying to convince them that they should allow Flick Shop. And for the administrators of these prisons, it actually makes a lot of sense.
They want to reduce recidivism and go out and commit crimes again. But what way to do that is just keep them mentally healthy, right? Let them communicate with their family. Let them know there's job opportunities.
A lot of corporations use Flick Shop to send job opportunities and ideas. And the other thing that's a benefit to the prisons is Flick Shop is a known vendor quantity. So you're not going to begin ketamine laced into these postcards.
SPEAKER_01
What and how big is the business now?
SPEAKER_02
I haven't gone through the full numbers. I know he sent, I think he sent maybe hundreds of thousands of millions of postcards already. And I'm just looking at the landscape.
I know that there are kind of these like on demand, I think Flutter Shop or something. I don't know if that's right in Flutter Shop.
SPEAKER_01
That's an interesting industry. Let me tell you a story real quick. So about two years ago, one of our investors and now a mentor and great friend of mine, his name is Chris Redlitz.
Chris like helped start Reebok and then he was the first investor in Wish. He's been around. He's very successful, a real low key though.
But about 15 years ago, someone asked him to go volunteer at a prison to talk to them about technology. And he was like, what? I don't want to do this. What am I doing? And then he gets there and he does the presentation and he's like, I'm going to dedicate my life to this.
He starts this thing called the last mile and I went and volunteered at it. And basically I went there. He took me out to San Quentin and this guy, he's met, I think he's met with like the Clintons and the Trumps.
He's met with like on both sides of the aisle, they all support this program and it's this in depth program and it teaches inmates WordPress basically, like relatively simple things, but it allows them to get a job. So some of them have gotten jobs at Slack. He teaches them like front end stuff.
I think a lot of WordPress, a lot of just basic web building stuff so they can get gigs. And I went out to this prison and I'm a big crime guy. Like I love like crime, I love like prison TV shows and like cops and all that stuff.
And so like I knew what San Quentin was because you know, that's like, oh, you're going to San Quentin. That was like the, you know, that's a big deal. And I was just walking around the yard.
We go up there, we show up, we walk around these yards and imagine just exactly what San Quentin is, it's like all dirt, it's kind of overlooks water and there's these huge dudes shirtless, lifting weights, mean looking dudes and me and Chris walk in there and they part, they like get out of the way. It's like the Red Sea or Chris and they all go, Hey Chris, man, how are you? And he goes like, what's up Darren? Like what's up? Like he was the God there because everyone knows if you get into his program, they have a zero percent or they had a zero recidivism rate, meaning everyone over the last 10 years who went through their program, not one of them went back to prison. Do you know how many have gone through? I think thousands, thousands, I think you can look it up.
And so it was crazy. I was just walking around with these guys. I mean, these are many of them were just, dude, were you honest?
SPEAKER_02
Were you scared? Like you must have been extremely uncomfortable.
SPEAKER_01
I was scared at first and then you start talking to him and it's like, I'd start talking to this guy, I'm like, Hey, what did you do? He goes, I caught a guy cheating with my wife and I beat him up really bad and he almost died. He was like, I was just so angry and I just lost my temper and I flipped. And in my head, I'm like, yeah, I mean, you deserve to be here, but that was 20 years ago, you're doing better.
So he was just a guy to me. He was wearing, you know, his, his inmate clothing, but besides that, he was just a nice smart dude and we were just talking about stuff. And for the most part, it felt like normal guys who did bad stuff like years ago.
And I don't want to generalize. I mean, obviously there's a lot of bad people there who deserve to be there, but it was crazy. And so what he's working on now is they are what he discovered was the same thing.
It's really hard to communicate and very expensive to communicate and it's hard to track people. And he said that, uh, like, I forget who it was exactly, but a lot of these private equity companies have like these prepaid cell phones or something like that, that, and they were gouging these, these families like crazy to use them. And so his new startup, I don't know if it's launched yet, but when you think about it makes sense, but it's crazy on the surface.
He wants to give an iPhone to all the prisoners. Now I don't know if this means like low security, high security. I don't know which prisoners exactly, but he wants to give an iPhone to all of them.
They won't be able to use the internet, but it's a way to track them, to send them education stuff so they can learn how to prepare for work. A lot of really cool stuff. It's very fascinating.
It's called the last mile and the hustle. We actually did a great story on it. Super interesting space.
And he says that this business, he goes, it's going to be massive. He goes, we're going to be as big as T-Mobile.
SPEAKER_02
He's looking at like a businessman, right? He's not looking at this. I mean, both parts.
SPEAKER_01
He's also looking at it. Well, I mean, he runs a nonprofit that he raised money for and it just doesn't make any money. It's a, you know, they just pay, they cover their ass, but he's like, I want to make a business for this.
And he's like, I want to come at it at the right direction. So it's like good for customers. It doesn't completely screw them.
But if I make it for profit, that allows me to expand faster and reach more people. And it's a crazy unique situation. This whole private prisons and that whole space, it is quite fascinating.
It's really corrupt, but it's very interesting.
SPEAKER_02
Well, your friends at the Cicero Institute, you remember, remember the Cicero Institute? So they sent us a bunch of stats about the prison industry. I mean, 2.2 million incarcerated.
And what Marcus said was essentially when you go to prison, your whole family goes to prison, right? So 2.2 million times what called the average family is four or five people. Maybe extended is 10.
You're talking 20, 30 million people directly affected by the prison industrial complex, right? And that's the US population. US expenditure government and state and federal spend 81 billion on the prison system. So huge industry that needs a ton of change.
And then you get the social good out of it. The lowering recidivism is huge.
SPEAKER_01
Yeah, super interesting space. We actually do more research on this space and come back. If you want to learn about this Google, probably the hustle, what would they Google the last
SPEAKER_02
mile? Zach wrote about it, right?
SPEAKER_01
Well, Zach did the last mile. So Google the hustle, the last mile. The last mile is three words, the last mile.
And then for Trunk's story, Google the hustle. And then what was it called?
SPEAKER_02
Flick shot. FLIKSHOP. I mean, we could probably throw these in our nose.
But yeah, and Marcus is crazy. He's insane. Yeah, actually, one part of the story that I just want to add before we jump into something else is I asked him, I'm like, in your late teens, 16, 17, 18, and you're in prison, like, who are your mentors? Like, how'd you even come into an entrepreneur? He literally said he got hold of Jay-Z's album, his first album, and Jay-Z was rapping about this non-traditional past to entrepreneurship.
And the line that he said was from the song, You Don't Know, he goes, you can make 40 off a brick, but one rhyme can beat that. So he's like, why be in the street hustling if there's this other past that you can possibly use, right? And I mean, I'm sure Jay's influenced a lot more and inspired a lot more people.
SPEAKER_01
And let's go to one more idea. But to wrap it up, what did that guy get from the article? Did he get a bunch of customers or anything?
SPEAKER_02
Well, I'll tell you that one was he wrote me and he said a state government reached out to him and they wanted to put him in the flip shop and the institution. So I mean, like, honestly, that was amazing, man, to get that message from him. He's like, I'm like, and he wrote to me, he's like, there's amazing, dude, like, what did I do? Like, this is your journey, man.
SPEAKER_01
Like, I didn't spend eight years in prison, right? You gotta be like, yeah, I helped you a ton, man. You had some equity or what? All right, man. All right, well, let's do one more.
SPEAKER_02
All right. Well, this one will be an easy one for you. I'm sure you got a million ideas on it.
Tell me what you think about Twitter subscription business.
SPEAKER_01
Tell me about exactly what's going on. So basically Twitter bought this company called, is it review? It's spelled like a really cute way.
SPEAKER_02
I don't know. Use the newsletter business. I don't know if you saw them yesterday.
Twitter said that they were going to put subscription offerings potentially in this upcoming year. So you can pay for the following things it looks like potentially. I don't want to front run a fake story here.
You can pay for tweet deck, which I don't use, but I've heard a really good things about. You can pay for a pro features, which is like more customization on your profile and something about undoing sends, which doesn't really make a lot of sense to me because I just delete tweets I don't like.
SPEAKER_01
Yeah, but if you have a Twitter thread and you want to delete number three or five.
SPEAKER_02
Okay. So that one I might actually pay for. And then the other one was tipping.
You can tip accounts you like for extra content. I think that one's a no brainer.
SPEAKER_01
And they also bought a newsletter business. Yeah, review. Not a newsletter business, but a software that makes newsletters.
And I didn't Facebook say they're going to do paid newsletters as well.
SPEAKER_02
Yeah. Facebook has a team doing paid newsletter. So I mean, you're the guru here.
Tell us what you think.
SPEAKER_01
I'm happy we sold. That's a lot of competition. I think Twitter will work before Facebook works because Facebook's in the shitter right now.
You know, a lot of the people who make paid content, I think are on Twitter and trust Twitter far more than Facebook. I think that's amazing. I think I should go buy Twitter stock.
I think it's awesome. I think that's a great, great, great idea. I think it's going to be a massive, massive success.
Yeah. I remember lying Twitter more, which is probably not good if you're a creator, but I think it's going to make a lot of people millionaires. If there was some stock guru, like, and he was like, Hey, I'm going to tweet out like whatever I'm buying each day.
SPEAKER_02
Yeah. Pay for the tip me for the exclusive content.
SPEAKER_01
Yeah. I mean, that's going to be the biggest thing there is. So obviously that's going to be awesome.
If Elon has a thing where he just, Elon would never do it because he doesn't want that money. But if he just is just like, I'm going to tell you my inside thoughts once a week or something. Yeah, it's going to be the best.
SPEAKER_02
I think it's such a great idea. I think you mentioned that train of thought, the amount of sketchy insider stuff that could go on now is actually pretty insane. People that you know can move the market can just be like, all right, now you get the paid tipping to see me move the market beforehand.
Whatever. I mean, I'm just putting it out there.
SPEAKER_01
I think it's great. So we have trends. It's trends.
co. You have to go to trends.co in order to buy it.
There's some special stuff on Facebook where we can get people to purchase it in the content. If you're on your phone and you see trends.co, sometimes you can buy it right there in the app and that's great.
But trying to get new users, we post on Facebook and Twitter, the user has to click off, try to be sold on it, buy it, sign up and each week they're sent information in their email. And we know that removing a little bit of friction can increase the amount of users you get by two or three times. So you could have a 1% conversion rate and then if you change just a few things, you can have a 3% or 4% conversion rate.
And if Twitter can make this, so my credit card is on file with them and I'm just doing this like, oh, I want this, done, got it. It's going to go through the roof. And I can tell you that the people who buy with Apple Pay convert at a much higher rate.
Of course, people aren't always using Apple Pay on their computer, so we don't get that all the time. But I do know that having payments like that is going to be a huge win and it's going to make it really easy. Also I didn't know this and this isn't like me joking.
Do you know that there's like nudity on Twitter?
SPEAKER_02
I'm a huge no, I did not know that.
SPEAKER_01
Yeah, you can get nudity on Twitter. I didn't know either. Totally the other day.
Someone told me, I'm like, wait.
SPEAKER_02
That would be the other hub company we're talking about.
SPEAKER_01
Yeah, it is. There's nudity on Twitter. I had no idea.
I don't know if it's soft core or hardcore. I don't know what the deal is, but obviously we've seen only fans take off.
SPEAKER_02
Dude, I didn't even think about that. Twitter literally might have just doubled its market cap based on this potential.
SPEAKER_01
It's super interesting. I think that's a really smart, smart play. I don't think it's going to work as well for Facebook.
It's wise.
SPEAKER_02
I think the running joke, I probably even on last thought is it took them this long to figure it out.
SPEAKER_01
Yeah. The thing about Twitter is like, they don't innovate. I think if I was working at Twitter or if I had power there, I would fire Jack Dorsey right away or I would say, you know, you're demoted to this thing and we're going to put a new CEO in place because they don't ever innovate or do anything new.
So I think it's badass.
SPEAKER_02
What do you think? No, dude, I'm 100% on board. It's a little bit fair to them. I mean, they did have Vine.
You just have a history of crushing things. Periscope, Vine. So I'm on board, man.
I like that take.
SPEAKER_01
All right. So today's episode, a little, not entirely all over the place, a little new trunk. This is your first.
We were wrapping up. This is your first time on the podcast. Say your hit Twitter handle again.
We need all the hate mail, but hopefully way more fan mail to go to you. So what's your Twitter handle?
SPEAKER_02
All right. That's at Trong T Fan. That's T R U N G T P H A N.
SPEAKER_01
Hopefully the people love it and you can keep coming back, but it's up to them. Yeah. No, that's fine, man. All right.
Thank you.
SPEAKER_00
We'll talk to you all soon. Yeah. See you surtout.