SPEAKER_01
I think that you've said a lot of amazing stuff for the past two years. I think what you just said right there actually might be one of the most valuable rants in terms of just money that you've ever said. Yeah.
SPEAKER_00
I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days on.
On a road, let's travel, never looking back. What's up?
SPEAKER_02
It's me, Sean, and Sam, the vanilla gorilla.
SPEAKER_01
All right. We have a good episode today. Sean just said he thought this was an amazing episode.
We talked about a lot of different stuff. You have a list. What did we talk about?
SPEAKER_02
We talked about the surprisingly big business of greeting cards and e-cards. We talked about the crazy Chick-fil-A tech stack and some ideas around that and creating a consulting company around that. We talked about this crazy FBI takedown where the FBI basically tricked thousands and thousands of criminals with a pretty genius app.
What else? You did a good bump boxes breakdown
SPEAKER_01
and a bump box of a guy who's built a business that sells subscription boxes to pregnant women and their babies. It's like $40 million a year. The babies don't buy it.
They might, but it's meant for the babies. Right. That does $40 million a year in sales. We talked about how this article that came out about rich people not paying taxes.
We talked about how they actually get money to live, which was kind of mind blowing to me.
SPEAKER_02
Then we talked about one of my favorite childhood actors and childhood movies. How that young child actor has become a crypto billionaire. Then I got excited saying he's the Billy of the week.
But that's all to come in this episode.
SPEAKER_01
And do me a favor. Go to your Spotify. Go to your iTunes.
There's a button that says subscribe or follow. Follow if you're on Spotify, subscribe iTunes. Click that button because when you click that, we go up in the charts.
We go up in the charts. We get more listeners and we get more listeners. We get recorded more stuff.
Please do that. Thank you and have a good episode. While you're listening to this podcast, you're probably doing something else too.
It's cool. We get it. When you're having conversations with your customers, the same is probably true for them.
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SPEAKER_02
Well, first happy birthday. You are, you're what, 31? 32. 32 now.
Okay, great. Good. I was feeling bad. I'm 33 and you're always like, yeah, we're basically the same age.
We're both 30, 31.
SPEAKER_01
I do it to slight you. I do it as a joke because you're only you're older than me, but I want to make it clear that you're older than me still.
SPEAKER_02
Yeah. Yeah. And in my head, I immediately stop listening to everything else you say and I just start thinking in my head, fuck, I'm older than Sam. And then I have to be like, what does that matter? Who cares? And then I get back and I don't even know what's going on.
SPEAKER_02
35. Okay, great.
SPEAKER_01
I do it as well.
SPEAKER_02
I feel even worse now. My trainer, by the way, he's at a 40, 41 something like that and I looks great. It looks like he's 25.
And anytime someone's like, oh, wow, I didn't know that. You know, once they find out his age or whatever, he's just like, he's like, I'm living to 105 and he's constantly watching videos of people who are like 105 but healthy or like 100 and they have like, you know, they're still like madly in love with their husband or wife. And he's just constantly watching these videos, these outlier examples to be like, that's me.
I'm going to have that life. Do you care about living till you're like really old? Yeah. Well, I tell everyone 130.
SPEAKER_01
I say, I'm going to be 130, but I'm going to act like a current 70 year old. Like my like the 70 year olds now, that's what I'm going to be when I'm 130.
SPEAKER_02
Okay. And why 130? Where is that number from?
SPEAKER_01
I just think it's a nice ambitious but realistic number. I think that so I went out with this guy the other day and he is a date. No, I'll name drop.
You got kind of name drop. I went out with Lance Armstrong. I got dinner with Lance Armstrong.
SPEAKER_02
Dude, you weren't going to say that. You were just going to say I went out with this guy the other day.
SPEAKER_01
Yeah. Well, yeah. Amazing.
I had the reason I'm saying that is like it come from a reputable source. Uh, and he had this guy who worked at Adidas and Nike with them, this like huge rip guy who was like, he's probably 55 or so. And he was telling me that there's a direct correlation between lean muscle mass and age.
So like a longevity. So the people who have more muscle at an older age are more likely to live longer. And so that was like a realization to me.
So, uh, anyway, that was a two for one.
SPEAKER_02
You get to be jacked now and live forever.
SPEAKER_01
Yeah. But, um, wait, what were we talking about? Oh yeah. But I just, well, so we just did this little thing.
Let's get back into it. I got a card, an email from my aunt, my aunt Debbie, who's in her fifties called, I forget what it was called, but it was American greetings was the name of the company or the main, I whenever I get like one of these things, I scroll straight to the bottom and it says like the name of the brand, but then it says like copyright American greeting. Right. The like terms and conditions part. Yeah. I'm like, all right, that's the good stuff. So I always like Wikipedia.
And it was this company, it's a greeting card company that does cause, can I pause you
SPEAKER_02
one second? That thing you just said that this podcast has like rewired my brain where that's all I do now. I'm like, Oh cool. This thing is in my life.
Who's behind this? How much do they make? What's the company? What's the backstory? Is there an epic founder behind this? I was at the dentist and he's showing me an x-ray of my teeth yesterday. And instead of looking at that, he's like pointing out something in my teeth. He's like, Oh yeah.
Who makes that machine? I'm looking at the name of the software in the top left corner. It's like VM, you know, VM imaging. And I'm like, Hey, can you have my phone real quick? I need to just write this down.
I'm going to go look up this company. I bet it makes like billions of dollars doing this x-ray software for dentist's office. Or like he was like scraping my tooth with some tool.
And I was just thinking, why isn't there like better divide? This is the same scraper they've been using since like I was 10. If every dentist is buying these things, these things can't cost, they have to cost a lot of money. What's the company that makes these little devices and are they innovating? Why not? You know, blah, blah, blah.
So my brain has been like, I have like this chip in my brain now that has to get to the root source of every product I feel, which is what you're doing.
SPEAKER_01
Whenever I see a building. And your aunt sent you a birthday card. Well, when I see a building, like a huge warehouse, if it's a massive warehouse and there's a sign on it, I always look up, what's the story of that? Right.
SPEAKER_02
I always do that. So yeah. I was thinking like, you know, people are excited about AR or like when Google Glass came out and they're like, Oh, it's great.
You'll be able to read your email or you'll be able to like see directions, you know, like the map will be in front of your eyes. And I was like, the killer app of this is I just look at somebody and it tells me who they are. Like I can just like, you know, like when you stalk someone, you see someone interesting, you like try to look them up, you find their Instagram, you see what their life's all about.
I think it's going to be amazing when we just have contacts or glasses and I could just look at you. It'll be like Sam Parr, CEO of the hustle, blah, blah, your last two tweets next to your face floating above you, you have no idea that I just have like, you know, there's
SPEAKER_01
also in targeted you. There's also practical stuff. Me and Sarah were walking on the street the other day and Sarah saw a guy with college shirt and she's like, I think we know that person, but I can't tell because all white guys with college shirts look, look the same to me.
So there's some practical, there's some practical implications. Dude, when I was a kid and I would use my fake ID, I had a fake ID and the guy was a white dude, but he had like a shaved head and it was like, he had clearly had black hair. But if you go to the Indian or the black stores with like a black clerk, like a different, a clerk of a different race, they all thought that like all white people.
Yeah, looks just like you. And so the joke was you have to go to a like a person who's not white because they all think we look exactly the same. Did you ever do that when you're a kid? Like you got to like, you got to go to the white clerk.
SPEAKER_02
I didn't realize that hack, but that makes perfect sense to me. You think all white people look alike? No, not all white people look alike, but definitely like, you know, John, Jeff and Jacob, you know, I might mix them up from time to time. Yeah. In the same way that, you know, I look like, you know, Aziz Ansari to everybody, you know what I mean?
SPEAKER_01
Right. Yeah. But we were talking about American greetings, American greetings. And the reason I bring this up, huge company.
And it's just crazy that this should still exist. But I guess it's not that crazy.
SPEAKER_02
It's funny. Just to explain in simple terms, they do e-cards. So you can send it to somebody.
SPEAKER_02
Yeah. $20 a year membership. And they do above a billion dollars in revenue.
They own multiple smaller brands. So they own like Jackie Lawson. Have you ever heard of Jackie Lawson, by the way? No.
You should Google this name. So Jackie Lawson, go look at her website and like welcome to 1982. So just, I mean, whoever's doing the video on this, you've got to pull up the Jackie
SPEAKER_01
Lawson website.
SPEAKER_02
Oh my gosh. I love Jackie Lawson. Literally.
Okay. So the profile photo looks like, you know, some bootleg Carmen San Diego. And then it says Jackie Lawson.
And then like there's like a mouse, like a computer mouse is like, like part of the end. Because probably like when she invented this, it was like new to be like on the computer sending cards to people. And this thing is incredibly popular.
People love Jackie Lawson cards. He's like really well known, sold her company, I think to American Greetings. And I ran a company for a period of time, maybe a year or two.
That's called birthdayalarm.com. That's why I bring this up, by the way.
SPEAKER_02
I didn't start this company, but the company's kind of remarkable. I'll break it down. So Michael and Zochi Birch were the investors of my previous company.
This was their first win. So Michael is a programmer at an insurance company. He's like, ah, this is boring.
Wants to go do a startup. He comes up with this big idea to do a self-updating address book, meaning like what if you had a contact list that was like dynamic. So I'm in your address book.
If I ever move, I can just change my address or my email address or whatever, and it'll automatically update everyone's contact list, you know, dynamically. So you have this idea of this. You build this product.
It's really complicated. It's not really going anywhere. But he adds one feature to the address book, which is birthday.
That's your birthday. And which is ironically the thing that doesn't change. You don't need a dynamic address book to do that.
But he started sending a reminder. So like a little reminder would come out like, I should have got a reminder yesterday that said, hey, it's Sam's birthday today. Wish him happy birthday.
And this was before Facebook. So this is actually an incredible, incredibly useful thing. So people used to email him being like, hey, thanks so much for that birthday reminder.
I would have totally forgot my aunt's birthday. You know, you saved me on that one. Or, you know, I looked like husband of the year because of that birthday reminder.
And so he's like, shit, nobody likes my thing, but they just like this one feature. So he makes that the product. So he goes and he makes it birthday alarm.
com. And all it does is it reminds you of your friends and family's birthday. And immediately the site starts to like do a little bit better, but not like not gangbusters yet.
So he says, okay, well, how does this product work? I should be able to email all my friends and family and say, hey, add your birthday to my birthday alarm calendar. And then he does, he, at the time there was no term for viral marketing, but he's like, I don't have a budget to do, you know, I quit my job to go try to make it big in the startup world. So I don't have a marketing budget.
So I need one user to recruit another. So here's what I'll do. When I email all my friends and families to add their birthday to mine and they go type in June 15th, then it'll say, do you want to save Sean's birthday in your calendar? And they're like, oh yeah, sure.
Why not? You know, tit for tat. And then it says, cool, your birthday, your calendar has one birthday in it. Who else's birthday do you want to know? Send this to your friends and family.
So that became the viral loop. And all of a sudden he started getting tens of thousands of members, still a free product, but tens of thousands of users at the time to him felt like a million dollars. It was like, oh my God, I've actually made something that's growing.
And then he's like, all right, how do I make this even better? So he just, he went all in on this virality piece. He didn't try to figure out the business model or things. He's like, how do I make this even more viral? And so he's like, well, today there's still all these steps involved.
I got to type in each person's email address. I have to figure out what to write. So he starts one by one changing these pieces.
He's like, oh, instead of you having to think what to write, I'll write it for you. Just copy paste this, right? Here's a copy button to copy this into your email client. And then he's like, could I just send this to their whole email address book? And at the time, nobody was really doing this.
And so he wrote one of the first scrapers for Hotmail where you could just log into your Hotmail and he's like, great, I imported all your contacts. Just hit send and it'll send to all of them. And he's like, dude, this is kind of crazy.
He's like, for sure Hotmail is going to shut this down in 10 days, but whatever, 10 days of growth, let's do it. And so immediately he makes up next morning and there's like 100,000 members. And it just keeps growing exponentially after that.
And here we are, he started that website in 2001. So 20 years later, you could still do that thing in Hotmail or Gmail where you import your address book. They never were able to fully shut it down.
And so he's like, that hack that I thought would last 10 days lasted 20 years. And the site started growing exponentially. So now it's had over, I don't know, maybe 100 million members at this point, put Ad their birthdays in this thing.
SPEAKER_01
It wasn't it making like $5 million here every single year?
SPEAKER_02
So at that point, it's free. Now what happens is his buddy Morgan, who's like a friend of his, sends up a link to, I don't know what it was. He's either Jackie Lawson, American Greetings, Blue Mountain, one of these websites.
He goes, dude, you should do e-cards. I made an e-card website. You should add e-cards to this.
That could be the business model, sell birthday cards. Don't just remind them of the birthday, let them wish them a happy birthday. Turns that on immediately starts making $10,000 a day or whatever.
Numbers are not exact. In fact, we re-released his episodes. You can go listen to the exacts, but basically starts making money.
That business with just like pretty bare bones. So it was him working on it, his wife working on it, his sister-in-law did the books, and there was like, a cousin did customer support. It ran like that for a number of years and just had outsourced people making e-cards.
And it was making at its peak $4 or $5 million a year of revenue with most of that being profit, like maybe 80% profit at that time. And it ran like that for a number of years. He used that to self-fund his next startup, a social network called Bebo.
And then because he self-funded it with birthday alarm, when he sold Bebo for like $850 million, the husband and wife duo, they owned like 70% plus of the company because he had self-funded it using this e-card website. And so when I went to go run his idea lab, that was still the cash cow that was paying for that fancy office you saw, all those Silicon Valley engineers. Most of it was because birthday alarm was still cranking $2 million a year of profit, even though nobody was working on it.
And there had been no updates for like multiple years at that point. And so then I took it and we tried to like turn it around and make it grow again. And so it started to grow again, you know, after we worked on it.
But because of that, I looked into Jackie Lawson and American Greetings and Jibjab and all these different companies. And this space is actually pretty big.
SPEAKER_01
Yeah. Well, that's why I brought this up is I knew I would get a story out of you like that.
SPEAKER_02
There's also one other company that somebody who listens to the podcast had told us, I'll give them a shout. Have you seen this app called Givingly? No. So it's a, it's a new age version of this same idea.
So givingly, what they do, what they make easy is that they're like not just good looking cards, but a gift card to like any service. So like it was my trainer's birthday. I wanted to get him something.
I had forgotten to give him a gift. And so I sent him a givingly, which was like a beautiful little e-card I made on my phone in like, you know, five minutes. And then I was able to attach like a hundred dollar DoorDash pass to it.
So it's like, oh, dinner tonight's on me is what I sent him. And, and so it was like so easy to send a gift and a gift card. And I was like, oh, this is actually kind of interesting.
And so I talked to the founders and their stats are honestly pretty impressive. People send a ton of these and the way that they grew is a little unconventional. They grew as a Snapchat mini app, which like, you kind of don't hear anyone talking about like, do you ever hear about Snapchat minis? No, I don't even know what that is.
They released this like app platform called minis. And like, you never really hear anybody talking about it. And then when they showed me their numbers, I'm like, dude, where are you getting like hundreds of thousands of users? And they're like, oh, Snapchat, like people on Snapchat just send little cards back and forth to each other all the time.
We're the number one mini. And it's like, what? And so I went and looked in the little mini store and the sure enough, they were like one or two at the time. So I thought that was kind of interesting.
And it made me think, oh, I should do a deep dive into minis and see what else is actually working here.
SPEAKER_01
That's, that's fascinating. And that's, we've talked about this like idea of like, you need distribution first. And if you have that, you have everything.
And like, that's why I like Chrome plugins. That's why I like WordPress plugins. I didn't even know about minis.
SPEAKER_02
Yeah. And you know, I don't know if you need it first. There is definitely like a case for that.
Other people would say, no, you need a product people love. And other people say, no, you need a great team. And like the way I think about it is this guy near IAL who I think also listens to podcast.
He wrote this book called hooked.
SPEAKER_01
And he's a listener. That's cool. I've read that book.
SPEAKER_02
Yeah. And so he has awesome book. And so he, he had told me this once in my office.
He goes, every business is like a three legged stool. You have growth, you have engagement and you have monetization, G E M. And he's like, you know, when you start your startup, you have none.
You just have like, you know, a stool with no legs. And then you need to get your first leg on there. It can be growth or it can be engagement, like a sticky product that people love.
He's like, a good startup will have two. And if you have two, you have a pretty good shot of figuring out the third. The problem is there's a whole bunch of people here with one legged stools, trying to go raise money.
And I thought that was so spot on. And so then when I looked at companies, I just thought to myself, oh, do they have all three legs figured out? Two of the three I'm okay with, one of the three I'm going to wait.
SPEAKER_01
Dude, I dig it. And I completely agree with that. We have like a ton of ideas here.
I'm really excited. Can I tell you something really quick though that I learned? Yeah. So do you remember, is it called pro Republic? What was that article that got released with rich people?
SPEAKER_02
I think pro Republic was the name. It was like the billionaire taxes. I didn't read it by the way.
So that's cool.
SPEAKER_01
You don't have to have read it. But okay. So there's something going, I didn't read it either, but it's not important because it's the general topic of this, of like how rich people pay little taxes and they do that by basically, and like, I don't know how to bring this up, but that's something like a total douche.
But when you make little money, like you get access to loans that are like 1.5% or 1.2% or whatever it is. It's based off of like a lot of times.
SPEAKER_02
Rich people get the most free shit, whether it's products or cheap capital or cheap anything.
SPEAKER_01
Basically like when you sign up for like a big bank, you get a line of credit. Like I think it's 75% of your, of the amount of money you have in there at like a 1% rate or it's like based off the London bond exchange. And I was curious about this, but basically a lot of folks like Elon and just most people who are wealthy or a lot of people who are wealthy, they take loans and that's what they use to live on.
But in my head, I'm like, but you still got to pay that back. So how are they doing that? And I went and talked to some bankers and do you know how this, like, do you know what the expectation is here? The expectation is that you actually live on those loans forever.
SPEAKER_01
And your estate pays it when you die. Is that crazy? Is that a crazy thing to think about? I kept thinking like, but how does the bank get their money back? And it's like, oh no, no, no, no, like we expect that it's going to be an outstanding loan for like 50 years. And we're just going to keep loaning and loaning and loaning.
And then when they die, we're going to take our cut.
SPEAKER_02
They're not trying to make their money off you, the wealthy person. They're trying to take all of your millions and millions of dollars and lend it out to other people who are going to pay higher rates. So they're like, okay, we need to lend money.
Where do we get the money? Let's get the money from rich people. How do we get the money from rich people? We offer them amazing terms. Okay. Then how do we make money? Well, we're going to take that money and we're going to lend it to people who don't have as much and we're going to charge them more, right? Kind of sound screwed up when you say it, but that's the business model here, I believe.
SPEAKER_01
Yeah. It's just like something that I didn't understand.
SPEAKER_02
I feel like I'm just a dumb idiot. If I'm wrong, I might be wrong because I'm not a banker nor am I a bank, nor have I thought
SPEAKER_01
about this stuff. It's just weird. I just thought that was weird and that was totally like, that was one of those things where it's like, hello, this is how the world works.
I was like, I didn't know that. I'm just a country.
SPEAKER_02
Well, it's funny because like, you're like, oh, you're the CEO. How much do you make? Oh, wow. This CEO came out and said he's taking a $1 salary for the year.
What a great guy. And I was like, no, obviously that just means he doesn't make his money off of salary. He makes it off something else.
It's okay. He's getting stock. Okay. Great. Wow. He's getting all the stock stocks and we're helping him. He must pay a ton in taxes.
No, no, he doesn't. Why is that? Well, he doesn't sell the stock. So he doesn't realize any game.
Okay. Then how does he pay for like that jet? Oh, because he just like lent, he gets a big loan or line of credit off of his stock as collateral. And so wait, so he lives for free off that loan.
Yeah. Yeah, he does. He's like, you know, 1% or 2% or 3% interest.
Oh, wow. That seems pretty good. Okay. Even better. Let's say he takes that money and uses it to invest.
Now that interest payment is also tax deductible. So it's like, just gets like kind of crazy how the advantages sort of stack up against each other. He bought real estate.
Great. Now he's going to take this huge depreciation, you know, on the real estate he bought. And then if he sells it for a gain, he's going to 1031 exchange it into another real estate property and pay no gains.
It's pretty amazing.
SPEAKER_01
I felt like when I learned this, I felt like I was sitting, like I went to a fancy dinner table for the first time and they finally showed me like that small fork is meant for like taking crab meat out of the claw. I was like, oh, that's for, oh, well, God damn.
SPEAKER_02
I thought that was the kids fork.
SPEAKER_01
Yeah. I was like, I just thought that was a little people. I don't know what that is.
Anyway, I, that was like, it just like hit me in the head. I'm like, duh.
SPEAKER_02
So that was the, so I had a call with a tax guy, a tax strategist. I'm paying for this like tax strategist cause I'm like, okay, where do you figure this stuff out? Is it worth it? My brother all had found somebody through a thing and he saved him a bunch of money and he was telling me about it. I was like, I got to talk to this guy.
So I talked to him. It's got Jeff and he's like, okay, you know, so what are your goals here? You know, and I was like, I want to learn what the rich people do to pay less taxes. And then, you know, decide or try to do some of those things if they apply to me.
And he's like, okay. And I was like, so walk me through here. Like if I make this much money in a year, I'm just doing this.
I'm just writing this huge tax bill, tax check, you know, every year, what do they do where they don't have to do that? And he was like, just kind of like amused at my line of questioning, but in the end, he was like super helpful. He really like kind of outlined all the things. And then at the end I was like, all right, how does attorney client privilege work here? I was like, let's just say I tell you that, you know, this, this part of my house, that's my home office deduction.
Sometimes I nap there and like also I store my dog stuff there, right? Like that's unrelated to my office. I said, how honest can I be with you? And he goes, you can be totally honest. I recommend you do, but there's no attorney client privilege.
I could be subpoenaed. And he goes, I'm not going to do anything wrong because I don't have to.
SPEAKER_01
It makes me just need to ask for like red, like green, like yellow, like, like, now he'll
SPEAKER_02
be like, yeah, so like, are you active or passive on that? I'm like, suppose I was active. What would the number be at the end? And then suppose I was passive and then I will give you my answer by the end of this. And he's like reading between the lines of like, oh, okay, I understand.
We haven't even actually gotten into any of my stuff, but I wanted to ask all the questions upfront to him about like, like, I'm more fascinated with how the tax thing works. I don't even have like a very complicated setup. There's not really anything I could do because I'm not like Elon.
I don't have this like complicated structure and all these shares I can borrow against in that same structure, but I'm more I'm paying this guy to tell me what other rich people do and I'm fine with that. I think that's a great trade.
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. 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.
Do you want to talk about, you want to go, I've got one idea. So I will do yours. You want to do mine first? I'll give you the summary and then we can get into it later.
Yeah, do yours. Okay. Do you know who Paul Singh is?
SPEAKER_02
I never met him, but I've heard about him and my buddy is his business partner. Great.
SPEAKER_01
So Paul, a baby bump. Bump boxes. Bump box.
So, yeah, sorry. So you'll actually know more about this than I do. Yeah. So I reached out to Paul because I don't even know how I contacted him, but Paul Singh is a guy who started this thing called 500 startups. They're not really around too much anymore.
Well, he didn't start it, right? Did he start it? Dave McClure started it. I don't know. Yeah. But he was there at the beginning. And so, yeah, I don't know if he helped start.
Maybe it's the right word. And he was just, he was a guy there. He helped make it popular.
And somehow he started traveling in an RV. That was his shtick. He actually left San Francisco before school.
He goes, I just want to travel in an RV. And years and years and years ago, he started a hosting company, like a web hosting company. He wouldn't talk to me about it too much because it's kind of private.
But he's like, basically, I make millions of dollars a year from cash flow from that. And I invest a large amount into privately held companies, both brick and mortar and tech startups every single year. And I would travel just to meet new potential investments.
And at one point, I met these folks who had this thing called Bumpbox. It wasn't very popular. And so it sounds like you know the people from Bumpbox, right?
SPEAKER_02
Yeah, I know it super well.
SPEAKER_01
Oh, well, then you probably know a lot more than I do. But let me tell you what I know. So he met these folks and he bought into it.
He didn't start it and he didn't buy it outright. But I think he bought into it. So for like $200,000 or $300,000 or something like that, he bought a portion.
I don't know how much it was. But basically the whole shtick was we know statistically where you should be in your pregnancy and the feelings that you're going to have and the products that you're going to need. And so we sell you a monthly box for $50.
SPEAKER_02
Well, let me simplify that part. I think it's more like when you get pregnant, especially for the first time, there's all these new things happening outside your body. You're trying to figure stuff out.
And there's like a million things that you're supposed to buy and get to do, but you don't know what they are. And even if you know what they are, you don't know which product to buy because you want to buy the one that's like safe, but also effective, but also whatever. And so a lot of reading reviews, trying products.
And so what Bumbox did, which is pretty genius was they just said, look, we're going to find the best products for every phase of your pregnancy, first trimester, second trimester, third, and then post. And we're going to package it up into a subscription box. So you're just going to, it's just going to show up on your doorstep.
You don't even have to think and worry about this stuff anymore.
SPEAKER_01
And so Paul came in and he's like, yeah, they're doing, you guys are, this is okay. It's pretty good. I think we could think of just a tad bit bigger and we could turbo charge this.
And so now their vision is basically from conception to like 18, 19, 20 years old, a mother is handling lots of different stuff. And we want to be the place that she turns to for a variety of different like needs to care for her kids. And the company's pretty interesting.
It's like $40 million in sales. These goals to grow the company, two X every single year. And of that 40 million in revenue, 60% is from subscription boxes and 30% is from this, 30 to 40% is this other stuff.
And Paul came into this business and he goes, these boxes are great, but let's just make more and more and more stuff for this person. So let's figure out everything the mom needs and let's just make it. And so now 30 or 40% of their business comes from medical equipment, which I don't even know what that means, whatever, I don't know what they sell.
SPEAKER_02
So like, I don't know if they're selling this yet or might I have to take this out? I don't know if this is out yet, but like for example, a breast pump. So when you're breastfeeding, you're going to pump in between feeds or whatever and insurance covers it. And so, you know, these things are expensive devices that you need medical devices that the doctor sort of gives you that you'll use for the first year or so of your pregnancy
SPEAKER_01
of your afterbirth. And the other stuff they sell is they'll figure out what you want this and they're going to call you and one of their insurance agents are going to call you and say, here's the 50 best types of insurance companies that you should check out if you want to buy this breast pump or whatever. It's all covered by insurance and then they make a cut off that lead.
So kind of an interesting company that I wanted to talk about and I wanted to talk about it because there's a few things going on here. First, this is a guy who has made a lot of money angel investing in tech companies and he told me, I never want to raise money. I want to own as much as this business as I can and we could either distribute profits to ourselves and our employees or we could sell for a fuckload of money and B, I just think that it's kind of interesting.
It's not like it's out of my world. You know, I don't have kids. I'm not a woman.
It's kind of interesting.
SPEAKER_02
What do you know about this? So Leland, who's the founder and Leland is his wife. I don't remember his wife's name top of my head, but they started this thing. They're amazing.
He's been so helpful to me in e-commerce. He really knows his shit and just awesome guy. I think they're based in Illinois or something like that and super nice in the Midwest built this company out.
It's kind of a great company and I think subscription is really hard to do, but when you do it, it's fantastic. And I think they've done a pretty good job of actually pulling it off. And the way he says it, he's like, we're not a box company.
We're a mom acquisition machine. And I'm like, that's absolutely right. And that's why they think bigger than just what's one product we could sell them.
Okay, box might be the first. What's the second? What's the third? What's the second? What's the third? How many items, how many products did I get to sell? So to be able to go out of the office to do the same thing, to make sure that they're
SPEAKER_01
in time. And I said to Paul, I go, this is great, but you are doing a lot of stuff that I think is a bad idea. But it's a great idea.
I mean, clearly you're making it work, which is you are not just, you're not focusing exactly. You're focusing on the mother category, but you're launching loads of different stuff and he goes, yeah, that's actually our goal. And the reason we're doing that is our whole unique strategy is that we're gonna move quickly.
But he's like, when you think about it, 100 years ago at some board meeting, the guys at P&E or CalLog or whoever it is, the big conglomerates nowadays, they go, you know, like look, we could start building, you could start selling more soap, or we could just buy all the soap and then buy all the razors and just buy everything that like you possibly use in your home and own the whole category, as opposed to just focusing on this one thing. And even though tech focuses on this one thing, let's just do the opposite and say, you know, why can't we build a family of companies? And I thought that was pretty cool. It broke my frame.
It's a little different than what I've heard or what I would have done. And I think it's neat to see something that's the opposite of what I like or what I would do.
SPEAKER_02
The one caveat would be, I think they did focus on getting bump boxes core to work for a number of years, right? This is not new. Obviously, yeah. So you buy yourself the right to try a bunch of new things by getting your core to work really, really well and get to scale.
So I think they did that part. They weren't doing, I think, I don't think five different things before. The other thing is like, this idea is so simple.
And, but when you talk to Leland, you're like, oh, you're like a badass operator. Like he's in the nitty gritty. He's like, oh yeah.
And Facebook ads, I can copy paste this over here. And if I do that, it's like, it's just a little bit better. The platform doesn't even really support it, but I can do it manually this way.
Or like, you know, they'll use a tech, you know, like when they're marketing to people, they're like, yeah, we actually call, I don't know if you've ever heard of this. Have you heard of like Ringless voicemail?
SPEAKER_02
It's like this marketing tactic that he's like, oh yeah, we call our customers. I was like, don't people hate getting calls? He's like, oh, it's not a call. It goes straight to voicemail.
I was like, what? He's like, yeah, there's a way to call somebody that goes straight to voicemail and you leave a message. So it's a great way to like, instead of staying in the email inbox and you're buried under 5,000 other emails, the person might get one or two voicemails a day and one of them can be from us. And people like hearing from us.
And they hear a voice of a human being talking to them. I'm like, he's just doing a thousand of those small operational wins every year. And I'm like, oh, that's why you win because this is a simple idea that I think nine out of 10 entrepreneurs who tried this same exact idea would have failed.
Same idea, same time.
SPEAKER_01
So why did he fail? A portion of it, if he's a powerhouse, he just needed some help.
SPEAKER_02
Early on, I think they needed some capital and I think they met Paul, pretty impressed by him. And I think he's been a good kind of like partner for them. But, you know, if you offered them a deal now, I don't think they would take it, right? Because he's in a different position now than when it's just like, I mean, he started the company.
He had his wife for like, I think they were like at a conference or something like that. And they were just like walking. It was like, you know, like the parking lot or the hot dog stands like, you know, far away because everything's inconvenient at an event.
And while they were walking there, they basically like had this idea. They're like, screw it. Why don't we do this? Like, let's start a business.
Why don't we just go for it? And they just like kind of decided to do it. And so, you know, at that point, you're really green. You don't know anything.
And then now he knows obviously a lot because he's been doing this for, I don't know, whatever, seven years or something.
SPEAKER_01
Have you heard of, I'm making a quick pivot. Have you heard of this thing called the anti-Galloway index?
SPEAKER_02
I don't know if it's a real thing. I know that a lot of people basically make fun of Scott Galloway for being absolutely wrong about all his investment advice and predictions. So there's this guy.
Someone turned it into an actual investable asset.
SPEAKER_01
It is crushing. No, no, no. So there's this guy named Scott Galloway.
I've had lunch with him. He's been nothing but nice to me, but a lot of people dislike him because he makes some crazy statements. They tease him for being real woke.
He makes these predictions where he puts like the winners and losers of each year, and he makes these really bold predictions. And a lot of people attack, and a lot of people in general make fun of him because his predictions, I mean, I'm sure some of them are right, but like a lot of them are wrong, like really wrong. Massive wrong, yeah.
Like one time he said that Macy's is gonna crush Amazon. And that's just an example. And some shithead, who I love, made a thing called the Anti-Galloway Index.
And so basically, if you would have done the opposite of everything he said since 2019, tech companies that Professor Galloway has predicted would fail have outperformed the S&P 500 by a whopping 61%.
SPEAKER_02
No, no, no. They've outperformed the S&P 500, and the return itself is 61%. Sorry. You know, during the time, and you know, even if you, it says even if you exclude Tesla, which was one of his big bets that he said was fail, and it took off and said, even without that one, still 23% return. That's crazy, isn't it? This is hilarious.
Who made this? Let's give him a shot. I don't know. I don't know.
Okay, that's hilarious. This is cool. Yeah, let's, so okay, here's an idea, by the way, which is, is there, I think there is, there's some new products that are coming out that let anybody create a basket of stocks.
That's like, like, for example, I think there's a company called Doji that's doing this, DOJI. And what they do is, you can go, I can go create the Sean index, and it's five stocks that I'm investing in, and you can actually put your money into my index and buy it by those stocks, and then it'll show over time how my index is performed. And I can make the tech index, and I can make my like high risk, high reward index, or whatever, that's my understanding.
I haven't used the product, but my understanding is it's kind of like that, which I think is an awesome idea, by the way. What are you thinking of that idea?
SPEAKER_01
Yeah, I mean, why can't you do that on, I've mentioned them before, I think it's called like bull, bull something. There's that one, there's that one Israeli Robinhood competitor, and they've done this, it's called Copy Trader, and you create, Weebol, is that what it is? Yeah. Weebol. And you could do this on that platform. I think it's sick, I think it's awesome.
SPEAKER_02
Yeah, it seems really cool. I don't know if I get some incentive by like sharing my basket, but that would be like a really cool model where essentially I get a small cut of the assets that are invested into it, if we perform or something like that. And then you could see like, who's right, who's wrong, and not just people who cherry pick, oh, I invested in this one thing and it's done great, but they don't tell you about the five losers they had.
Here it's like all on the record what you picked, and then you can see like the Gallo index.
SPEAKER_01
I think it's amazing. So you wanna talk about some of your ideas?
SPEAKER_02
Yeah, sure. Which one do you wanna do? So have you heard about this Phantom Secure thing? I thought this was pretty sweet.
SPEAKER_02
So, okay, so there was this story the other day about the FBI had this huge crackdown on criminals, and I was like, okay, that's interesting, tell me about it. And so I was reading it, and in there they were talking about this story. Okay, so there was this app called Phantom Secure.
And what Phantom Secure was, it was marketed basically as an app that you can use if you don't want anybody to see what you're writing here. So obviously criminals are like, hey, that's interesting. I'd rather write there than on Gmail, where my stuff is stored on a server somewhere and I can get those records, can we get subpoenaed or whatever.
And so Phantom Secure at its peak had 20,000 users. It would be $80 million off those 20,000 users, so just for like math. Because you would pay to use it, right? Because for you, you're like, this is a business tool for me if I'm a criminal, I need secure messaging, I'll pay for this.
And so they were making $4,000 per user, and just for like comparison, WhatsApp makes like $2 per user. So $4,000 per user, it's like an enterprise product for criminals.
SPEAKER_01
So why were they paying for that versus like the other things, like Telegram or whatever it is?
SPEAKER_02
Because this was even more secure. What you were getting here is you're not just getting an app, you're getting a phone that has been wiped. All the other apps are gone.
There's only a secure messaging app on the phone. That secure messaging app will self-destruct under certain conditions if you're like, you know, arrested or you trigger it or whatever, somebody messes up the password three times. So it's a like, it's a burner device designed for criminal communications.
CTO gets arrested. The only way you could even get into the app was through referral, right? So this thing existed, they arrested the guy and criminals were like, oh, shit, we don't have this app anymore. So the FBI, I don't know, the story is like these two detectives were out to lunch one day and they're like, why don't we create another phantom secure? But we own the thing, we own the back channel.
So they created this app called Anon, like Anonymous, and they put it on 12,000 phones. They let it be out there for 18 months for criminals to use and start to trust and refer other criminals onto it. And the whole time, every message is going to the FBI's secure servers, but they just waited.
They just let the thing spread like a virus all throughout the criminal organizations, and then they just took everybody down. And I was like, that is a badass story.
SPEAKER_00
How did you find that?
SPEAKER_02
Props. I don't know, I saw this story and I just clicked it. It's amazing.
SPEAKER_01
So do you think, okay, so I think that, I actually think this is an amazing idea, by the way. It sucks that people were using it that way, but I think it's an amazing idea, kind of like Silk Road is like an amazing idea where it's like, yeah, like it's cool to create like a marketplace where you can sell anything, but it's kind of shitty. I don't want to support anything where like,
SPEAKER_02
who are the people that want a marketplace that will sell them anything? Even different stuff than I can sell on eBay. Oh, drug dealers in it, like assassins, weapons dealers.
SPEAKER_01
I'm not like in favor of actually everything. I'm not actually a true libertarian because I do think that like some stuff should be illegal, right? But I am incredibly bullish on things like, what's it called? So there's DuckDuckGo. Do you see DuckDuckGo? They just took a bunch of funding.
I didn't see that, no. Yeah, they sold a hundred million dollars worth of secondary shares and they're doing over a hundred million in revenue. And then also, do you know Proton? Is it called Proton Mail? Right, the social media.
SPEAKER_02
All you're laughing at me, I say it funny? No, no, no, I've like, I haven't heard. So the funny thing is all these ideas I remember hearing about like DuckDuckGo, six years ago I remember reading about it and being like, oh, that's kind of weird. I thought it was like huge.
Does anyone care? Like, do people really care? Oh, no, it doesn't seem like they care. Move on. Proton Mail, Signal, all these apps.
And then they were right. Their core insight, which is that people are gonna care about privacy. People are gonna care about not being tracked by big tech companies, not being advertised too.
And they're gonna care about not having all their messages stored forever in a way that could get leaked or hacked. And you get canceled or you get your business secrets outed like Sony did, right? And so all those ended up being true. And at the time, for years they looked like non-winners.
People weren't really using them at the time.
SPEAKER_01
I totally agree. I thought it was stupid. I'm like, DuckDuckGo, what are you talking about? Now it's what I use.
SPEAKER_02
You use DuckDuckGo as your default?
SPEAKER_01
I use it often and I'm starting to use it as default.
SPEAKER_02
Yeah. And do you use Brave? Because Brave is the new one that I think fits into this category.
SPEAKER_01
Brave Brown. No, I haven't yet because switching from Chrome is shockingly challenging.
SPEAKER_02
Right, but switching from anything, switching from mail, messaging, they're all a bit challenging.
SPEAKER_01
Well, Google is a bit easier. Is it? Why? Switching my search thing? Yeah. I mean, I could probably get good results on Bing or Google.
I mean, I'm just really trying to go to the Wikipedia or Quora or Facebook or Twitter. Right.
SPEAKER_02
I'm pretty sure that private browsing, basically a Brave or a Brave-like company, five years from now, we're gonna look at it and it's gonna be just like DuckDuckGo or Signal in that it just takes over slowly but surely.
SPEAKER_01
I agree. And I think that 10 years from now, we're gonna say, I can't believe you used to use X, Y, and Z and you would just do that. That's shocking to me.
SPEAKER_02
You used to just give up your location to anybody, to be advertised to, right? You used to, Alexa, right? You used to just have a hot mic on in your house all the time, right? So those are gonna seem like strange situations
SPEAKER_01
that we were okay with. And that's the influx, so the other day, if you didn't listen, we had this guy named Mike Maples on and he was kind of a genius and he was, he talked about inflections and he's like, what I invest in early stage stuff and it's pretty impossible to predict what's gonna be big. So I try to use some frameworks and I just basically think like, what interesting things, what interesting inflections are gonna happen in 10 years that's gonna make X, Y, and Z possible but it's not possible right now and I'm gonna try and get into it.
So like for example, Uber, what made it possible was everyone started having really great phones that had GPS's in it. Without those GPS's, it would have been very challenging to do this. And one of those inflections that I believe to be true and I'm trying to put my money where my mouth is and I invest stuff like it is this privacy thing.
I believe that that, I believe that to be true. I believe that's gonna be a big thing coming up. I don't know who's gonna win or what the end result will look like but I believe it will make a trend.
SPEAKER_02
Right, right. You know what to look for and you know what's gonna look strange now, right? We talked about Guardian, that app on your phone that like is like a auto VPN for your mobile apps. Brave browser, I think fits into that.
You know, when Mike Maples was on, he said something really fast that I thought was actually super insightful that we didn't really go into. He goes, he goes every like kind of era of tech, the old valuable thing becomes like completely commoditized and there becomes a new valuable thing. So what does that mean? So he goes, you know, back when it was like, at first you were selling PCs and all the money to be made was in the hardware.
And then you had like Microsoft and others basically come up and they're like, cool, IBM, you be the hardware, we're gonna be the software. And then like all the money shifted from being made in the hardware to the hardware became completely commoditized and all the money was made in software applications. And then it was like, oh, software applications are, you know, like where all the money's made.
And then people started making services like Google and Facebook. It's like, wait, it's a free software application. So then how do you make money? It's like, cause data is the valuable thing.
You don't realize that, right? Microsoft doesn't realize that. They're gonna charge you for the software. We're gonna give away free software, but we're gonna make all the money on the data.
And it's like, okay, great. And the shift that's happening now is that data's the thing that makes money. We're gonna make our data open, open source.
We're gonna make our blockchain open. Anybody can build on top of it. And we're gonna go open data.
So then where's all the money to be made? And then you have like kind of like a new answer that comes after that. And so I thought that was like such a spot on observation. And it's like, that's how you observe.
That's how the next, you know, $100 billion, $500 billion company looks nothing like the last one. And if you're just looking to match, what's the next Microsoft? You're never gonna think it's Facebook, this college social network that's free. Or you're never gonna think it's Google, this search engine that's free.
You're gonna think it's supposed to look more like, more like Microsoft, this like enterprise, paid software thing. But no, it keeps switching because they react to it in that way. And so like that's why, you know, I got kind of made fun of when I was talking about BitCloud.
But BitCloud, I think is an example of this where they took the most valuable part of Facebook and Twitter, which is the social graph and the data that's underneath it. And they were like, no, that's gonna be freely available. Anybody can take our data.
You can make a better version of BitCloud. You can make a new skin, you can make a new client. You can make a fork off this.
The data is all open, open chain, which Facebook would never give you access to their database that shows you every person, their photos and their friends. You can never get access like that. It's their most prized possession.
And BitCloud basically says, that's now free. Instead we're gonna make our money on these creator coins, right, a different method.
SPEAKER_01
I think that you've said a lot of amazing stuff for the past two years. I think this little rant right here might be the most, like not valuable in the sense of like, whenever you talk about like fluffy bullshit, that's useful of like, I need to have confidence. Be happy.
Yeah, like that is useful. I call it fluffy, but it's incredibly useful. I think what you just said right there actually might be one of the most valuable rants in terms of just money that you've ever said.
I think that I do not have the ability to build pretty much any of the things that you're discussing. I don't, you might have the ability, but I certainly don't. I don't think you do either.
But I think that if you are listening to this and you think you have the ability to do some of this stuff, I think like we've very clearly just said a thesis of what like the world's gonna be like in 10 years. And I would bet my own personal money that that actually is gonna be true. And I think it's gonna be not just true a little, but like true a significant amount.
SPEAKER_02
Right. And there's not just one trend happening at once, right? Like I remember talking to Alex too, the founder of Calm, and he just believed that like mindfulness and being, and you know, Calm and meditation was gonna become a bigger thing. And there was multiple years where it was not getting, it was not growing very fast because it wasn't a thing.
And then sure enough, people started to feel really fatigued with technology. They started to feel really busy and constantly on and the mobile phone was too much. And then, wow, there's this app that like is actually designed not for me to constantly use it and check it, keep checking the notifications over and over and over again.
This app is to calm me down and mindfulness and mental health became a thing. And it's like, yeah, mental health became a thing and he was prepared, he was ready with a solution for that that he had been baking for years.
SPEAKER_01
Yeah, so I think it's bullish or not bullish. I think it's amazing. I think it's gonna be a thing.
You wanna do a couple more? You wanna do this Chick-fil-A thing?
SPEAKER_02
So I read this blog post or this article that the Chick-fil-A tech team put out. And if I'm not the biggest Chick-fil-A customer I'm top five easily in the country. So anything Chick-fil-A I'm gonna read.
And what they were talking about was like, Chick-fil-A using AI machine learning blah, blah, blah. And I was like, oh, let me see what this is some bullshit. And I started reading it.
It was actually pretty interesting. First of all, 90% of it was just over my head. But I thought it was pretty fascinating.
What they were saying, well, first two things, they kind of like, they put their stake in the ground which I appreciate. They go, Chick-fil-A is a restaurant that's sort of different than others. We're only open six days a week, but we do more sales than people that are open seven days a week.
SPEAKER_01
It's a baller thing to say.
SPEAKER_02
I was like, baller, strive to be Chick-fil-A. I wanna be the Chick-fil-A. I wanna work less and make more than somebody who's working more.
And the other thing I thought about was like, a lot of people hate Chick-fil-A because they're like overly Christian and like have like anti gay marriage and stuff like that. And I'm like, oh, that sucks. Like this chicken is so good.
I'm gonna eat here. I, you know, like the chicken wins in the end.
SPEAKER_01
What I would always say, it's like, I can like R. Kelly's voice, but not like him. Like I can admit that I believe I can fly is like a banger.
And also say he's a horrible human being.
SPEAKER_02
Also you're not invited to my daughter's birthday party.
SPEAKER_01
Yeah, like I can do both. It is possible to do both.
SPEAKER_02
And so with Chick-fil-A, it's like, I wanna stuff my mouth with chicken and then be like, you guys are wrong. You know, like that's how I wanna be. So anyways, I'm like, you wanna be like Chick-fil-A.
That product's so good that you can actually be batshit crazy or even offensive and still the person who disagrees with you, they need your product. It's that good. It's must have.
So then they were talking about their tech and they were like, well, our stores, when we designed them, we thought they were only gonna handle like, let's say, just for simplicity sake, 100 orders, 100 customers a day or whatever. But the actual usage is the demand is so high for Chick-fil-A that we get three times more output than the store was designed for. And he's like, so how do we do that? Like once you designed the store, it's kind of, it's already built.
You can't really go back and change it. So we've had to use technology to get three X the output that the thing was designed to do. He goes, so the first thing we tried to do was, can we like predict demand better? Right? So if you wanna pump orders out faster, instead of waiting till after the order happens, I should just say, hey, there's always a lunch rush at noon.
So I'm gonna throw a bunch of fries in and I'm just gonna know that I get this much demand. He goes, but the problem is there's too many variables, you know, a soccer game ends nearby, you get a rush of customers, the weather changes and that causes a dip in customers. You know, there's too much traffic on the highway, that's cause a dip.
So it's too unpredictable. You can't just say, Fridays at noon are always gonna have this much demand. Too many external variables.
But he goes, so what we did do instead was, we put like hundreds of sensors inside of a store so that in real time, I'm basically taking the, you know, like the order as the person's typing it in to the machine and that's being matched with a sensor that tells us how active the fry machine is and then it gives a signal to the worker to basically like, hey, dude, put more fries in, there's gonna be more demand or whatever, right? Like they're taking all these signals and how many people in the drive-through times this, times that and basically making predictions of, what do they need to make so that they can get that extra 20% of orders done per hour for throughput. And so I thought that was just kind of interesting and I don't even fully understand the model and I'm kind of like, I'm kind of like, what's like, it's not like mansplaining, I'm like dumb-splaining, like the thing I just said is not actually what they do, but it's the essence of what they do, which is they take a whole, they have 100, like sort of smart devices in the store.
SPEAKER_01
Oh, that's kind of like what this whole podcast is, is we just said like, oh, they just, it just bump boxes, all they do is they just sell shit that like, I mean, that's all I believe. They're not like expert at Facebook ads or experts at like deal making for like supply change. So I mean, they just do that.
SPEAKER_02
Right. So the point is there's like 100 smart devices in a Chick-fil-A that are feeding into a machine learning algorithm to put something out there so that a frontline worker who makes, I don't know, $16 an hour is able to be more effective and they're able to get more sales per square foot. And so I started thinking like, first of all, I had no idea that like kind of old school companies like Chick-fil-A are that deep into like adding technology into their stores and their services.
And it made me think too, for two ideas. The first is those people should spend, the engineers working on that should spin out of Chick-fil-A and then go offer this as a service to every other restaurant is basically like, hey, Chick-fil-A spent $50 million over the last five years developing the technology to make their store smarter. So we generalized it and it's a product for you, right? That's my old export framework.
They should export this idea from Chick-fil-A and make it available to any restaurant chain. So that's like the first idea. The second idea is what are the companies that are like McKinsey or like a consulting company? Because I assume Chick-fil-A, when they go out in the job market, they're trying to hire machine learning and AI engineers.
I bet they're finding it pretty hard to compete with like Google and Facebook and OpenAI and all these other companies. Like what great engineer is going to work for Chick-fil-A?
SPEAKER_01
I think you'd be surprised. You know who crushed it with tech stuff or relatively speaking was Walmart. Walmart had this amazing thing called the Walmart Innovation Lab in Silicon Valley.
It was pretty sick. And I went to, I was reading the other day about the most beloved brands amongst young people and it's like, it's like Vans, Starbucks, one other one. And like the number one most loved brand is Chick-fil-A.
SPEAKER_02
So fair enough, maybe some people, I think a public graduate is going to work for Chick-fil-A and they're cutting against the grain. But I think most people are going to go towards more traditional brands, which really told me the way most companies are going to solve this is not by having as much in-house tech talent as consultants that basically take good tech talent, but like hypercharge them to get them to go faster. And so I'm curious, I bet this exists, but I'm curious who's building like a McKinsey type of company, like a badass consulting company that is only tech consulting.
It's hardcore engineer, it's engineering specifically around like the new age stuff of machine learning and AI. And I think that you could build a new McKinsey Deloitte PWC that is basically when your company needs tech, when your company needs tech answers, you basically hire this high price consulting firm that comes in and these guys are not suits that are great talkers. These are and make great pitch decks.
These are engineers who come in and they actually build and they teach your team how to build and they build themselves.
SPEAKER_01
I know that- I know that-
SPEAKER_02
Are all these guys offer that you think? They do offer it, but I think their brand is not branded as this. And so I think there's an opportunity to come in and say, we dress differently, we talk differently, we don't even do, we don't have these 10 other offerings that McKinsey has, we are actually the best. If you really want to hire the best when it comes to engineering, you know, all of our guys are straight out of Facebook, Google, Stanford, Harvard, that's our crew.
And everybody's got a computer science degree. You know, this is our CEO. Look, he's a nerd.
He's got Cheeto dust on his shirt. Like that's who you're dealing with here. Whereas today I know that McKinsey and others are like offering offering these as part of their services.
And in addition to like tax planning and like 10 other things that they're gonna do, you know, like financial audits and like other shit. So I think there's an opportunity to create like a big four type of consulting company. If you just went all in on engineers.
SPEAKER_01
I'm on, I'm on board. I think it's cool. I think that any engineer who's smart though would never want to start this business because that would be hard as fuck.
But I do think that there's so many cool things that started as agencies that eventually they create their own software and it becomes badass. So for example, I do think it would be cool to do this for five, 10 years. And then eventually just make the software and you could become, it would be a really easy way or not easy straightforward way to have a bootstrap software company.
SPEAKER_02
So have you ever heard of consensus?
SPEAKER_01
No, what is it?
SPEAKER_02
So consensus is a, it's a version of this. It's in the crypto space. So it was started by this guy, Joe Lubin, who was like one of the first kind of like six guys backing Ethereum.
So he was like, Ethereum pre-launch, I think he was one of the main funding sources essentially. He came from the finance world and he believed in Ethereum. And so he's known as one of the co-founders of Ethereum.
This guy basically became a billionaire off of Ethereum. He takes that, he basically spins off Ethereum launches. And instead of sticking with the Ethereum foundation, he creates consensus.
Consensus is like, we have an office in New York, L.A., Shanghai, whatever, right? Like Tokyo, whatever. They like kind of a traditional consulting model.
And, but they weren't just doing consulting, but what they do is they, they had like in-house projects. So for example, MetaMask, which is like the most popular Ethereum wallet, I think, that's built into a browser, was like either incubated there or they like kind of like found the guy who built it and brought them into consensus. And that was one of their projects.
But they basically, they make like, they'll go to like Mastercard or Visa and be like, you guys keep hearing about blockchain, right? Don't you need like just a group of blockchain like specialists who can come and teach your company how you should be using blockchains and we'll consult with you, that will build projects for you. And like we'll be kind of this like hybrid like agency, incubator, consulting company type of thing. And they do like, I think they said they forecasted like 60 million of revenue in 2021.
Now I should say, I personally think consensus is kind of a shitty company. They hired like a thousand people. I don't think they had like the business fundamentals to support any of that.
You know, so, so I don't think consensus itself is gonna be that successful, but that's an example of somebody who said, cool, all of the Fortune 500 is curious and interested in this new age technology. We can brand ourselves as the like de facto group of if you're a big Fortune 500, come talk to us about blockchain.
SPEAKER_01
Dude, look at this. This consensus company's fucking nuts started just recently, oh no, 2014. Yeah, it started right after Ethereum.
They do, did this guy, Joseph Lubin's help create Ethereum?
SPEAKER_02
Yeah, like I said, he was basically one of the big kind of like financial backers early on and kind of helped. When they were pre-launch, he was involved when there was like this group of seven or eight people that were helping build it. And they each had a different role.
SPEAKER_01
The amount of wealth that this shit is creating in such a short time is crazy. Like, do you know that one guy, okay, so what was that Disney movie called like the Secret Service Kid or the first kid? You remember first kid? Okay, yeah, I don't know where you're going with this. Okay, you remember that movie? You remember the kid actor?
SPEAKER_02
I don't remember him like fucking.
SPEAKER_01
He was also in the movie Mighty Ducks.
SPEAKER_02
Oh, which one was he in Mighty Ducks?
SPEAKER_01
I don't actually know what he was in Mighty Ducks, what the name was, but his name's Brock Pierce.
SPEAKER_02
Okay. Do you know who Brock Pierce is? He's also in Sinbad?
SPEAKER_01
Yeah, well no, Sinbad was the lead Secret Service Kid.
SPEAKER_02
He's the security guard first kid. Okay, do you remember that movie? I love this movie.
SPEAKER_01
Yeah, it's great, right? Okay, this guy's name is Brock Pierce. He's a Bitcoin billionaire now. What? Yeah, dude, Google Brock Pierce.
So he was a kid.
SPEAKER_02
Oh, by the way, in Mighty Ducks, he plays young Gordon Bombay. So he's not one of the kids. He's the flashback of Gordon Bombay as a kid.
SPEAKER_01
Yeah, but he was like a well-known actor. Like he was in, first kid was a thing. He was in Little Big League.
He just did all like the 90s like kid movies. Kid movies, yeah, every movie I loved. If you are born in the 80s, you recognize who this kid is.
SPEAKER_02
If you're 31 like me and Sam, then you, right?
SPEAKER_01
You recognize who this guy is. Dude, Google him. He's a big, he's worth like a billion dollars.
That's hilarious. You'll recognize him. He's a Bitcoin crypto guy.
He wears that stupid hat.
SPEAKER_02
He wears a stupid hat now?
SPEAKER_01
That's a thing. Yeah, Google, I go to images.
SPEAKER_02
Go get Brock Pierce. Oh, okay, yeah, I see them.
SPEAKER_01
Is that, yeah, he's that stupid hat leather vest guy. Like that's where the players, like he goes to Puerto Rico. Dude, that guy is a billionaire now.
Cause he was in on crypto in like 12, 13, 14.
SPEAKER_02
He's like, he's a K. I need all those royalties from the first kid. We're putting it into ETH.
We're putting it into the ETH crowd cell. Let's do this.
SPEAKER_01
It's just the amount of wealth that this has created. And so quickly, it's just crazy. It's just, it's fun.
It's such a fun story. But Brock Pierce, the fucking first kid, Gordon Bombay when he was a kid, whatever the guy's name was, he's a Bitcoin billionaire.
SPEAKER_02
Is that nutty? He's done two of my favorite things in my life, for Mighty Ducks and Bitcoin. And this guy's involved with both of them. Now I don't know, but I read his Wikipedia the other day.
SPEAKER_01
He's got like some shady shit going on where, I mean, obviously you kind of look at him. He kind of screams shady, but he like, his partner was like raping kids. I mean, it was pretty fucked up.
And like, if your partner's doing that, I'm not saying you're guilty, but I'm saying like you probably like are involved. Like I just, yeah, like, where there's smoke, there's fire type of thing. It's kind of fucking weird to me.
And so there's like, this guy's got a lot of, this guy's gonna be like the modern day McAfee, you know? Like, McAfee, he's just blind. He became a billionaire and then also like, did some crazy shit in Botswana or where the fuck he went. That's what this guy's gonna do.
But anyway, Brock Pierce, crazy, right? That's crazy.
SPEAKER_02
Okay, by the way, I also have this little calculator in Excel that I should publish, which is, will the Winklevoss twins get the last laugh? Which is, what does the price of Bitcoin need to be for them to end up wealthier than Mark Zuckerberg for taking their idea and making Facebook? And then I thought about it and I was like, I wonder if Zuck just owned some Bitcoin as a hedge to be like, you'll never pass me. But I don't think he's got that petty streak.
SPEAKER_01
I'm thinking about selling my Facebook account because I think, like I've totally done a 180. I think Facebook's whack as fuck now. But... Why? It's just lame. Like, who uses that now? I mean, Twitter's just kicking, it's just whack.
And Instagram, I think, is even stupid now. I love how you're like, who uses that?
SPEAKER_02
Like a billion people could raise their hand and be like me every day, multiple times a day.
SPEAKER_01
I just think that it's just lame. I think TikTok is so much better and more positive. I like it more.
But I think that Zuck is someone I would never bet, like I just think that he's the greatest in terms of...
SPEAKER_02
Did you see the video of him spear hunting recently?
SPEAKER_01
No. What is he doing?
SPEAKER_02
Oh, dude, you got to Google this. Google Mark Zuckerberg's spear. And there's this video that said he went hunting or whatever.
Or he went on a hunting trip. I think that might be separate. He's like at this little like kind of like a throwing range and there's like a giant target.
And then you see Mark Zuckerberg and Slo-Mo running up at it with a spear and then launching the spear and getting a bullseye in the target. And it's just like... It's everything you would expect out of a Zuckerberg video, which is like, you know, two parts awkward robotic, one part like sort of fearsome and weird at the same time.
SPEAKER_01
Yeah, I'm looking at it now. I mean, this is just... Yeah, wow. He got it.
By the way, you said TikTok.
SPEAKER_02
You should follow this TikTok account. It's amazing. It's called Vitalik Doing Things.
So Vitalik, who's the co-founder of Ethereum, he's also like Zuck, like hilariously awkward. I really love the guy. I think he's like.
.. When he talks, yeah, he might have like kind of an awkward way of talking, but I love his thoughts. I love his brain, basically.
And he seems like a very genuine guy. He doesn't just like shill Ethereum and like crypto and say it's the best thing ever and all that. Like he's just like way more reasonable and clearly like mission-driven.
I'm looking at it now. His story is kind of amazing, by the way.
SPEAKER_01
What's he like an adopted Russian kid or something?
SPEAKER_02
Do you know how this guy got started in crypto? No. So he's 18 years old. He discovers crypto.
He starts by just... He agrees to write free articles for Bitcoin Magazine, back when Bitcoin was like super underground at the time. And Bitcoin Magazine paid him $3.
50 per article. And he's like writing all about Bitcoin and all the cool things you're going to be able to do with cryptocurrencies. He's just like a kid.
And he used to go to different crypto projects and meet them and be like, hey, I'd love to help or like intern or like kind of like write about you guys. And he started just getting known as kind of like this little blogger boy. And then like little blogger boy goes on to like.
.. He helped write the white paper for one idea called Colored Coins. That was like going to be for this other project.
And then eventually decides like, you know what? Like I have all these ideas about how I think crypto could change the world. Like I'm just going to make it myself. I'm going to make Ethereum.
And so he invents Ethereum at like age 18 or 19 and like is the youngest crypto billionaire in the world since.
SPEAKER_01
Where's the name come from? Russia. What's that mean?
SPEAKER_02
Oh, Ethereum. Ethereum. I don't know why he named Ethereum.
Ether is like kind of like, it's sort of like, I don't know if you know what Ether is. It's sort of like this, it's like out of the ether. It's like this, like, it's like the substance of the world.
It's basically like, I don't know how you describe Ether really. It's like a, it's like matter. It's like, it's like a word like matter in the universe.
And so I don't know why he called it Ether. I think it was like, I don't know. I don't know the backstory.
I shouldn't really speculate.
SPEAKER_01
Well, you should have figured that out. I thought you're like betting your life savings on this.
SPEAKER_02
I saw, I took one look at this guy and I was like, I'm going to hitch my wagon to this nerd. This guy's taking me to the top.
SPEAKER_01
I think that's a good, I think that's a good bet to be honest.
SPEAKER_02
But the TikTok channel Vitalik Doing Things is amazing comedy because he's just a very unintentionally comedic guy.
SPEAKER_01
Dan posted it. So he goes, I immediately realized that I liked it better than all the other alternatives that I'd seen. I suppose it was fact that it sounded nice and it had the word Ether referring to the hypothetical invisible medium that permeates the universe and allows light to travel.
Right. Yeah. That's okay. You want to bet on it.
All right.
SPEAKER_02
I think that's the show, right? Yeah, that's it. Uh-huh.
SPEAKER_00
Yeah. I feel like I can rule the world. I know I could be what I want to.
I put my all in it like the days off on a road. Let's travel never looking back. Bye.