SPEAKER_02
It's useful for crypto users to use a VPN and so that was one of my ideas about we sold before we got around to do that.
SPEAKER_03
That would have been cool if you would have done that would have been that's a pretty cool move. Too bad.
SPEAKER_00
I feel like I can rule the world I know I could be what I want to put my all in it like days on the road.
SPEAKER_02
Right. What's up. We got John Cougan here.
John somebody who I only know through a lunch at a Mexican restaurant in LA and that's the best way to meet anybody who's going to be a podcast guest. So you you got a crazy background. I'll give people the rundown if they don't know who who you are.
So you've been an entrepreneur your whole life never had a job. Started two companies that were both really interesting. Soylent which was basically making a meal replacement drink is the easiest way to explain it.
Tasted like the milk of hunting that Cheerios which I always appreciated and then Lucy gum which was like a nicotine gum. Both of them went through YC together. They've raised over one hundred thirty million dollars a bunch of good lessons there.
You're also an EIR Founders Fund which is one of the more interesting places to kind of hang out or be a part of and like us you've made the mistake of leaving entrepreneurship to just be a YouTuber. And this is great. So you know how to make content to which is which is amazing.
You make really awesome videos. Sam was sending me one this morning. Sam you like his stuff.
SPEAKER_03
I love it. Yeah. I like your stuff. John. I by the way Sean I'm an investor of Lucy so I got to get that out of the way and probably a user too.
SPEAKER_01
At one point for sure. But I mean I think you did invest like four years ago. So you know the fact that I haven't been on yet.
I think I earned my stripes by posting on YouTube playing in the content world. You know what is your guy.
SPEAKER_03
I don't even know. Can you say what the valuation is. I think I invested twenty five thousand dollars at a ten million dollar valuation.
SPEAKER_01
And ten. Yeah. You were probably in like the seed round and now the company's worth like sixty seven email.
SPEAKER_03
All right. On paper I've made a little bit of money. Yeah. Not bad.
SPEAKER_02
We had I think we could tell the story. We had one of the other co-founders of Lucy come on the pod once and this guy we had met him at some like event. I first maybe a hustle event.
Some some nighttime event. And this guy was holding course. That was Dave Dave.
Yeah. He was telling stories. There's five people around him.
He's got ideas. Yeah. He's like oh there needs to be something called Pleasure Island. And it's a place where you can just go sin.
And I was like wow. This guy. What is he talking about.
And he's telling stories. He's amazing. Everybody's just captured by this guy.
I'm like we got to have this guy the pod. He comes on the pod. Tells none of the stories and none of the ideas.
And I don't want to tell all those on the phone. Or like dude. And so I don't even think we ever ran the episode because he refused to tell the good stuff.
So John will you make the same mistake as your pal.
SPEAKER_01
Absolutely not. I mean I do think a lot of founders have just a ton of scar tissue built up from like the last 10 years of like the media just going after tech founders and like tech bros programmers. Like it was really aggressive for a while there.
Like anything you said would be like taking out a context putting some click bait. But now that Elon bought Twitter and kind of just like caused enough chaos like you can just say whatever you want. And there's like no.
I've been telling every founder I know like cancel culture is over. Like don't worry about things. Just say whatever you believe.
SPEAKER_02
So we're going to do some of your philosophy. Some of the philosophy like cancel culture is over. But first let's run through the background here because both of these startups normally we try not to spend too much time on the guests with a background but yours both are so interesting.
Can you just tell us you know give us the origin story for Soylent because when this came out it was a very different idea than anything I was seeing anybody doing Silicon Valley. Nobody was at that time. This was maybe 2012.
I had just moved to San Francisco and you had kind of like Uber and Airbnb but very few people were in the San Francisco venture community were doing like like a drink or like a product that you could eat. You could drink that wasn't software based and but still was innovative. And so it was like kind of in this mix and I remember Andres Horowitz got behind it and some others.
And so it was very interesting thing and I think it started out of like a hacker house
SPEAKER_01
right like you guys had a crazy house. Is that right. Yeah. I mean a bunch of funny stories from that. This was the yeah Warby Parker was like the first e-commerce company to kind of think about it from like a tech first angle.
We were a couple of years after them right around the same era as like Dollar Shave Club if you remember that company. But yeah we met in a hacker house. My my co founder and I we went to preschool middle school high school together went to college in the same city.
And so we move out to Silicon Valley. We're looking for a place where you find something on like Craigslist. It's like an Airbnb listing and they're like this place is incredible.
It's got a pool. It's got five bedrooms. It's exactly like the social network.
You're going to love it. We show up the pool is filled with algae. The bathrooms don't work.
It's just absolute squalor. So we grind for like six months there. Eventually we moved to the Tenderloin which is an even nicer community.
And and we're living in technically a one bedroom with three guys. So I was living in the living room. Another guy Rob the guy who actually came up with the idea for Sorenland.
He was living in what was technically a closet because it didn't have a window. And we were just we were just hacking. We were just not a lot of dating going on.
Not a lot of dating. Not a lot of anything. Just wake up program go to sleep.
Wake up program go to sleep. And we just had sticky notes on the wall being like OK after this idea fails we'll build this next idea. All all the worst ideas you've ever heard on here when people come on and they give you their bad ideas like like we were building them all and they were all failing.
Give us a couple. What were they. Take a picture and it puts it through a filter and it puts it on a shirt and like mails you the shirt like it's just like weird stuff like that.
There were some ideas that were good. They were just like way before their time like Do you know Google Stadia allows you to play video games in the cloud streams it to you like we basically built that but it was just like five years too early and also we didn't have a trillion dollars of data centers for free like Google. So it like even Stadia I think failed.
So like even Google couldn't pull it off and so of course we weren't going to be able to get it done. There were just a lot of those ideas where it was like too early wrong team bad execution or just terrible go to market.
SPEAKER_03
Like there were some things that we built that were pretty good but it just didn't work. And and living with Rob living with Rob would be odd because I know Rob he's he's so he's so unique and eccentric and weird and in such an interesting way.
SPEAKER_01
Yeah. So he'd been writing on his blog and posting on Hacker News and he wrote a bunch of basically viral clickbait targeted at programmers. So he's speaking of dating he wrote a blog post saying how he hacked Tinder and and he was saying this was before like bots and stuff.
So he basically claimed he didn't really do this. It was more just like for satire and for fun. But he said he wrote a script that would automatically swipe right on everything.
And then and then generative AI talked to this was like 10 years ago too. But like talk to talk to the person. And then it would use the Uber API to call them a car.
And then it would order DoorDash and deliver the food. And so like the punchline at the end of the at the end of the story was basically like he wasn't involved at all. Because it was like you know you can imagine where that goes.
But basically he had he built a little bit of a following on Hacker News. And so when the question was like we like building these software companies we like coding and building stuff launching businesses. But we are going to run out of money and we're going to have to get jobs.
So we need to look at our expenses and understand where are we burning money. We paid a rent a year in advance. I think we were paying $1500 for three dudes to live in the heart of San Francisco like crazy low money.
We owned our laptops paid our internet bill like there was really no cost other than food. And so figuring out how to get food as cheap as possible was like a very logical you know conclusion from that. So Rob starts whipping up the powders figures out this meal replacement.
He's like instead of buying a cheeseburger over here or some groceries over there. Let me buy 200 pound sack of protein powder.
SPEAKER_02
Do you remember that first conversation when he's like guys I got it. We'll just get a bunch of powders and then that'll be the food. Like is that.
Yes.
SPEAKER_01
Is that literally how there were two. There were two phases. The first phase was he told me like oh I'm doing this diet experiment.
I think it's going to make me healthier. I'm going to you know monitor all my macros and micros and start working out and get in shape. And I was just like who cares what we look like.
Like the only thing that matters is like our code and like our business ideas like we don't we don't which is very stupid because obviously you do need to be healthy to like be productive. So that was a stupid take by me. But I kind of wrote it off and then he kept doing it for a few weeks.
And then we were at like a dinner with a friend. She'd made like homemade sushi. And I mean that's like a treat when you're broke.
And he was like no I'm not going to eat. I'm on this soy milk thing. And I was like this is crazy.
It's so I mean it's sort of like the Brian Johnson. Before Brian Johnson you know. Yeah yeah yeah it's the stress test.
So basically he told me that I was like do you have a name for this. And he was like I'm calling it Soylent. And I knew the reference.
And I was like this is genius. We need to sell this today. Like this is like this is going to be the market entry strategy is going to be so viral.
But yeah I mean he basically did a stress test. He lived on it for 30 days. And then people would just be like yeah I think this ingredient is stupid.
I think this is bad. But like hey if you survived 30 days only on this like I can probably take a sip and see how it tastes. And so it created this curiosity.
SPEAKER_03
When we launched my content company the hustle one of the first early viral video viral you articles was I paid a guy two G's to live on it for 30 days while he was running 70 miles a week as like a amateur runner.
SPEAKER_00
Yeah. May he rest in peace. Yeah.
SPEAKER_03
He dropped dead on day 15. And that's what made the story go viral. The Soylent thing that was the gift that kept on giving particularly I mean for me as well you know like I got traffic from it too.
SPEAKER_01
Yeah. And it was it was like a left right issue. Everybody hated it.
And then you'd post it. And then this was back in the day when like the Facebook algorithm was like entirely comment driven. So people would correct us and they'd be like oh you made a mistake.
You named you accidentally named your company after a movie with Charlton Heston. That's a sci-fi movie. And it's like no obviously we did that on purpose.
Like what are you talking about. But that the fact that there would be that comment and then another person would come in and be like oh well there's actually this book and somebody be like oh you need to fire your marketing people be like I actually got the reference and then they'd be talking every single time we posted anything in addition to all the comments about is this good is this bad. What does it mean for society.
So just massive viral fuel any any article went viral. And so we were able to kind of trade up the chain and go from vice news to you know the hustle to BBC to the New York Times New Yorker and then eventually Rob was on the Colbert report with sitting next to Stephen Colbert is crazy.
SPEAKER_02
It's definitely shows the power of a viral product but also it was my first time learning about signal. So like I had never bought a fancy watch or car or jacket or anything. But the first time I was seeing you holding a soilant it was like this crazy signal was going out to the world.
I'm in tech. First of all you know that just by this drink you don't have to ask anything else. All right maybe we'll look at the brown guy and say what this is you're probably going to guess that one.
OK what what else does it tell you. It tells you like I value productivity. Brought you up.
Brown guy it's so much you know like back to the back of my knees with somebody like so. So that is like number two is like you value productivity over. Yeah. Things like taste maybe things like health right like. Oh yeah everything.
Yeah. So it's a value signal. Then it was like a contrarian signal and it was like I don't give a fuck what you think about me signal.
It was so powerful as a signaling tool for like this one year period.
SPEAKER_01
Yeah but that actually cuts both ways because food is such a signal and there's so much badge value it's very hard to accrue like monopoly power. And how do you actually go about disrupting Nestle. If it be if every if every food is like an extension of personal expression it gets very hard because as soon as everyone is doing one thing I'm going to want to do something different.
And so there's this constant like ping ponging in these products.
SPEAKER_02
It's very very hard to create like one brand to rule them all. You said something about Peter teal. Talk to me and for one in one hour he diagnosed everything that would go wrong in my business was that about Soylent.
SPEAKER_01
Yeah. What did what did Peter tell you. Yeah I mean we went in for like the pitch and sat down and did like kind of a working session and I mean now everyone knows the framework because he's written the book zero to one it's it's like incredibly popular everyone kind of knows that you know the way to enter back companies a crew value is through moats the development of moats and you know the Hamilton Helmer has the powers framework.
Peter has you know different different theses around this and and we know the basics it's like you know brand intellectual property complex coordination scale economies network economies right network effects. And so but at this time in 2013 everyone thought that there would just be a magical network effect that would show up and that's just not true. Like so there was this weird dynamic where you know a lot of investors that we talked to were like oh yeah like you don't need to advertise you can just like like the people like it so much that they'll sell it to each other.
And that's true in a multi level marketing scheme but it's not true if you don't build that infrastructure to make that happen. So we never we never achieved like escape velocity there and it was just kind of like yeah like this is just a widgets business like run this like a you know any other business like you need to sell like you have product market fit which we did like you just need to maximize you know you're like like run the playbook of you know market bring the customer in make sure you're bringing them in cheaper he was basically like this is a great lifestyle business guys congrats and and then we raised a bunch of venture and it was a disaster. What was your peak what was your peak revenue like almost 100 mil almost 100 mil.
SPEAKER_03
I was reading you guys sold that recently and not a good outcome. All right I was going to say no disrespect but the outcome sucked like for for how compared to the hype and your peak revenue I think it was like it was sold by a publicly traded company that I read it was sold for 60 million dollars.
SPEAKER_01
Something I mean not not a lot I actually like don't even know the exact dynamics because there's a bunch of other like assets that were like rolled up and it's part of this combined thing but it was sold for like maybe.
SPEAKER_03
Maybe as much or less than you raised you raised 100 million dollars. Yeah exactly which basically means like the common doesn't get anything got it.
SPEAKER_01
So you didn't get much you didn't get that wealthy from it. Yeah we got a decent amount but not like what we should have you know if we'd maximize that company.
SPEAKER_03
But then you started Lucy so Lucy is cool.
SPEAKER_01
Are you there full time right now. No I'm like one day a week at Lucy mostly helping out with stuff like this doing content and then ideally like brokering deals with other content creators like we want to do more. We being pounders fun.
No no me being like we being the Lucy team. So to give some background you know Soylent is this nutrition product. We run that for four or five years and then Lucy is a nicotine gum brand and nicotine pouch brand.
So if your if your viewers are familiar with Zen you know we're a direct competitor Zen but we differentiate on flavor strength and a couple other dude.
SPEAKER_03
I'm a I'm a all day every day type of Zen guy.
SPEAKER_01
Yeah I imagine most people in the audience are extremely.
SPEAKER_03
I just wish that Lucy sold it at 7 11 because going to the gas stations like part of my routine you know I got to go see my boys there and hang out.
SPEAKER_01
I mean 100% that is that is the name of the game and that was what will actually unlock like massive value in the Lucy business.
SPEAKER_02
100% people should know that by the way when you when you email Sam you're like hey I know you're a super busy guy and so I'm going to keep this brief. Sam's busy at 7 11 shooting the shit with his boys on the curb.
SPEAKER_03
I'm going to keep it so scratch themselves my friend.
SPEAKER_02
He's busy just in a different way than you expect.
SPEAKER_01
Yeah I got to drop off like a pallet of Lucy at that exact 7 11 and just be like here it's free now Sam can get his.
SPEAKER_03
Well the Lucy things are cool because basically a Zen is just a pouch but Lucy has it's called a breaker and so you like bite into this and you get like a little menthol or something like a flavor. I love it.
SPEAKER_01
It's like it's like a liquid flavoring so yeah I mean a lot of people complain that the pouches although they're they're much better than the pouches of previous years they dry your mouth out and that's the number one complaint so we figured it out. You know how do we address that well let's just actually take liquid flavoring and put it inside a capsule then and then when you break it it moistened the pouch and then doesn't dry your mouth out. Gotcha.
SPEAKER_02
All right. Let's talk about ideas so those two ideas you did. I would say are in the like top 1% of weirdo ideas which means I love it and I love you.
What are your other weirdo ideas that you're not doing. You sent us a couple of bullet points but explain them so let's run through some of your ideas.
SPEAKER_01
Yeah I mean I think the first one that would be interesting to talk about just because you know you guys are obviously creators as well is just this idea of a creator owned VPN. So we've seen that VPNs might be the number one advertiser on YouTube I don't have the exact stats but anyone who's listened to a podcast or you watch a YouTube video can probably name five different VPNs and yet none of them are venture backed. There's not like one or they're not like majorly venture backed they're not big venture winners there's not like one that's running away.
SPEAKER_03
Have you researched these guys. Yeah yeah a little bit. They're like all in Panama or Moldova like Maldives I've tried looking them up on LinkedIn because I did a ton of research on about this.
Specifically I did a lot of research on the VPN review website. So there was one called Compare Tech that was doing 14 million in revenue 13 million in profit. Like I saw their financials and they sold to a VPN company and I was like these VPN companies are crazy.
But I looked all up I looked up the employees on LinkedIn and like you can't find their employees on LinkedIn even though they're companies that are doing 300 400 million dollars a year revenue.
SPEAKER_01
Yeah yeah yeah it's a very very odd space and basically like there's no there's no big like venture winner there's no like Airbnb we all know the CEO he's taking the company public you know there's no like there's no like front facing company that's like oh this one's winning and going to run away with it it's more like there's a bunch of them they all print cash and there's not really going to be one winner because there's no network effect again it's it's it doesn't have a big moat. The moat is marketing and that's why they all spend on marketing that's how they differentiate is just you check all the boxes how big are they easily easily in the billions for for the aggregate industry and like you said you there's certain that are doing there's certain VPNs that are doing hundreds of millions of dollars. And so the name of the game is just check all the boxes so that no no VPN reviewer who's independent can like take you down and be like there's a fatal flaw and do not use this VPN because I know for a fact that it doesn't do the right thing.
But once you've actually implemented all the features where yes we do we check all these boxes then it's just a marketing game and that's why you see them.
SPEAKER_03
Is it just a commodity like with I don't know much about the VPN tech like is it is it terribly complicated.
SPEAKER_01
It is complicated programming lines like it's it's somewhat complicated to write the code I guess but it's not complicated from like understanding the features the customer wants you're not trying to create some sort of.
SPEAKER_02
And you called it beast VPN. So what's your business idea here.
SPEAKER_01
Yeah I called it beast VPN because obviously Mr Beast is the biggest creator and he is an interesting place where he has an international audience. He has a audience that's it's just it's just everyone his audience is everyone. And so what's a product that you can sell all everywhere across the world.
That's very high margin low churn VPN and that's why VPNs are advertising all over YouTube is because it doesn't matter if the ad is served to someone in Japan or India or Europe like the VPNs available there.
SPEAKER_02
So I'll give this idea a nine out of 10. Nice. What I like about this idea is exactly what you said it takes the weakness of creator businesses which is you get a bunch of low value kind of subscribers might be like you know some the value of the random subscriber in India or random subscriber in Croatia. It's like hard to get ad money for that type of viewer.
But this product is actually even better for international people than it is for in the US. So I think that's one big strength and then obviously recurring revenue digital good or return revenue software is obviously amazing. I only give it a nine instead of a 10 just because it's the first idea and I'm not that easy.
So I got to I got to one point just on that alone.
SPEAKER_01
Also to be fair it might make more sense for like a Linus tech tips and an MKBHD to do this because they're more of like tech people.
SPEAKER_02
We were going to do this at Milk Road actually when we built the road we're like OK cool we're making money we're profitable on just newsletter ads but I was like what's the best product we could do. I was like what if we did a crypto VPN for the crypto economy because we're at that time we're you know one of the more trusted brands were like it's kind of a commodity software. It's useful for crypto users to use a VPN and so that was one of my ideas about we sold before we got around to doing that.
SPEAKER_03
That's a good idea. That's a good idea. You should have that would have been cool if you would have done that.
That would have been a pretty cool move. Too bad.
SPEAKER_02
Well they still the guys still own Milk Road so we still own a part of it. I'm going to tell them after this and be like hey guys let's revive.
SPEAKER_03
The main thing is that you just have to have the distribution. You've listed Linus tech tips on your you said you know this guy. No I just saw him so you said that what's the guy's name Marquis.
What's the guy's what's his channel. MKBHD. Yeah. Mark yeah I like him. Everyone knows him.
He's cool. This guy Linus tech tips has 15 million subscribers. Oh my god.
SPEAKER_01
He has a team that's like you know I think over 100 people. Wow. Multiple channels podcasts like everything. He actually built his own like media platform where you can like go in and watch videos and and talk to each other.
SPEAKER_02
It's like a forum site. He just released like a screwdriver and sold like $5 million of a screwdriver or something like that.
SPEAKER_01
Yeah I'm sure you I'm sure you did great on that. The question is like would he have done better if instead of buying a screwdriver which needed to be bought probably locally or it was really expensive to ship internationally. He sold something that was recurring software that was 99% margin of VPN.
The only thing is that like honestly the screwdriver is cooler than a VPN so you know I can't fault him because the screwdriver is like you get to build your hacker you get to put your PC together like that's fun. VPN it's it's a little boring. I use VPN.
I like VPNs.
SPEAKER_03
So you may know this but my beginning in business was being a copywriter. I mean it just basically means figuring out what motivates someone and how to use the written word to take an action get them to take an action or to think a certain way. And the way that I learned how to copyright was I did this thing called copy work and copy work is this famous technique that's not really popular anymore but it used to be really really popular and you basically take writing that is great writing that you love and you write it out by hand and you copy it and you make notes of what particular thing that that writer is doing that makes it special.
That's how I learned how to write I locked myself in a room for six months and I just did this for many hours a day. I created a program to make it easy so you can do that it's called copy that copy that dot com you can go there and you can check it out to 10 day exercise to make it really easy to learn how to write. If you want you can just go do this on your own you can find great writing just literally copy it by hand I know it sounds crazy but it works really effectively but I made something that makes it a little bit easier so check it out copy that dot com and back to the pod.
SPEAKER_02
All right what you got second idea.
SPEAKER_01
Yeah so the obviously Americans love guns you're an American you have some guns that's not changing we've seen through you know the past few decades that like real like restrictions on guns are not coming and so the business is probably pretty durable we've seen that the stocks of ammunition companies are doing fine over the last decades but the price is increasing a lot of that's just due to supply chains but there might be some more structural issues also just more people are hunting more people are are buying guns and buying ammunition and obviously shooting is just a fun hobby. So the the over the last three years the price of shotgun shells went from $10 to $16 pretty big increase and there's this massive shortage so the idea here is basically like maybe you need a new. Maybe we need to bring some some efficiency to the ammunition supply chain and I think it's an interesting idea.
I think that the hottest trend right now in business is like roll ups or search funds and every guy who graduates from HBS is like I'm going to go roll up laundromats or I'm going to go roll up dentist dentist it's like everyone has an idea for these things and they're all very commodity they're not very contrarian and so there's probably not a lot of alpha there but it's like the guy the people that are coming out of HBS are probably not saying I'm going to go roll up weapons manufacturers and obviously like and roll is crushing it in the venture side but they're doing like insane software building hardware building drones building like these really advanced AI powered weapons systems this is not that you do this company you buy a bunch of you know all we do is make shotgun shells you buy three of them you move the employees around you kind of optimize things a little bit it's very boring like like you know private equity style roll up and then maybe it accrues power over time because obviously it is a massive industry but you're not coming in and trying to reinvent the wheel you're not being like we're going to actually three print the shell or something
SPEAKER_03
it's just like good operations a lot of gun youtubers you know we could we could mix that we could get them in do you live in California I do I do are you guys even so I used to live in California I live in Texas now I own guns because I have a ranch and it's fun are you guys even allowed to own guns in California
SPEAKER_01
yes we're allowed to own guns like what's the rule no no I mean you can there's a whole bunch of restrictions on like rifles like certain capacity magazines but the I think most recently like it's pretty easy to get a concealed carry permit in San Francisco it's kind of a narrative
SPEAKER_03
violation wait what I thought for years that was impossible.
SPEAKER_01
Yeah most people think it's like unthinkable but in fact it is becoming easier which is kind of crazy but yeah I mean obviously California is not like a dream state for for you know if you're a gun fan but.
SPEAKER_03
Sean Sean you've been talking about getting your conceal and carry for years now right.
SPEAKER_02
Not at all. I was like I love this idea but it was so far field out of like what I'm just investing in that I was like how do you know yeah how do you know that they can actually do the due diligence like if you can't do the due diligence exactly I don't think I would touch this I wouldn't touch this either why.
SPEAKER_03
I wouldn't want this in my obituary that I you know even though and I and I and I I understand how that's hypocritical you know I criticize Sean because Sean wants to like invest in only fan companies and I'm like I'm not touching that. But at the same time I could sue porn so like there's definitely like a little bit of I acknowledge the hypocrisy cognitive. But like you know I guess I guess you know it doesn't have to be black and white shades of gray and like I prefer to stand the wider of the of that side.
SPEAKER_01
Yeah yeah I mean that's totally fair and I think that's why there might be alpha in this area because I think that dummies like you Sam.
SPEAKER_02
That's what that's where I why this opportunity exists because that made no sense. It made tons of sense dude. What are you talking about.
You're like I love guns. I enjoy them. I buy them.
I'm buying I'm buying the ammunition but you know I don't want to support. I don't want to invest in it because only bad people would buy it. What does that mean.
SPEAKER_03
No no I didn't say only bad people I said I don't want to own it. I didn't say I said that I buy the stuff. I use it.
I think it's a very enjoyable. I love shooting for fun but that doesn't mean I want to make it my career.
SPEAKER_01
I mean Sam would your opinion change if we were actively at in a hot war. Like it's your duty to America to optimize the ammunition supply chain because there are like there are troops from you know some country landing in the beaches of California. Would my opinion change.
SPEAKER_03
Yeah of course. And that's totally fair and I think that's right. And my opinion could change about the whole thing.
I'm very open to new data points and changing my opinion. I'm just saying like like Andrew like I love Andrew. I like I think that's a very patriotic mission.
But I'm 100 percent owning Remington like right now. I'm like I don't know man. Like yeah I could probably make money in other ways and my conscious would be a little less like it would be it's very it's just an easier decision.
SPEAKER_02
Sam I got a question for you. There's a thing going viral on Tiktok right now that's a girlfriend's asking their boyfriends or you know wives asking their husbands something. I'll be the wife here.
I'm going to ask you a question that they're asking. Hey when's the last time or how often do you think about the Roman Empire. Anything to do with the Roman Empire.
SPEAKER_03
Oh all the time a lot.
SPEAKER_02
Like why. Under what circumstances would you need to think about that.
SPEAKER_03
Just like like gladiators and shit just like battling to the death in front of everyone.
SPEAKER_02
When's the last time you thought about something like that like this week. Last night.
SPEAKER_01
I mean the funny thing here is that like the the meme immediately before that was like the in the arena meme and everyone in tech was posting literal like Roman Empire gifts. That's because everyone in tech is like obsessed with the arena and I know that there are two separate communities like that's not why the meme popped up but it's like.
SPEAKER_02
It's so funny to see all these women are like they're like they see somebody ask the question the guy answers some exact almost verbatim what Sam just said. Always always it's like I'm thinking about it right now all the time.
SPEAKER_01
Yeah like what do you mean of course. My wife has a video of that. I didn't know that the meme and she takes out her phone videos means like she asked you this thing about the Roman Empire.
Yeah I was like I'm thinking about it right now why.
SPEAKER_02
And then all the comments are like you know that makes you know that's crazy and then they come back reply like I just asked he said last week. He said he thinks about it twice a week. Yeah. And don't like mind your big blow. They're like I can't fathom why this man who doesn't take out the trash on time who forgot to pick up our daughter from preschool.
Why he is thinking about the Roman Empire twice.
SPEAKER_03
Dude I think about 9 11 and World War two like 90 percent of my day like. Do you guys not think like what would I do if I was on that plane. All the time.
You know what I mean.
SPEAKER_01
Like all the time. I think about that constantly.
SPEAKER_03
I think about that constantly.
SPEAKER_01
It's just a very normal masculine urge.
SPEAKER_03
There's this joke Shane Gilles he's like just so you know being obsessed with history particular World War two is a precursor to becoming a Republican. It's not going to happen today but like you know it's early onset.
SPEAKER_02
Early onset. For sure.
SPEAKER_03
Wait Sean you don't think about like World War two like on a regular basis.
SPEAKER_02
No but I have my own version of it which is like I'm constantly like I if I walk into a place. I'm like assessing how if I had to how would I like Rob this place or like. Some shit went down like what's the move.
All right what's the move.
SPEAKER_01
Okay there's some sort of like masculine daydreaming that happens like everybody David like he imagines like ninjas coming through every door and window and how he would like take them out tactically like that's his every time I'm in a baggage claim.
SPEAKER_02
I'm like I could take any of these bags right now and just walk out there is no security in this place. Are you kidding me like the bag is clean. I would never get over that why it's so easy to just take anyone's bag.
SPEAKER_03
My wife and I got the dinner we have like a rule Sam's back does not sit to the front door. I have to see the front door like you know like I can't have people coming in without me knowing I've got to see the front door. I do think it is a man thing.
You know John we there's this funny quote Scott Galway said he goes huh you should exercise so you can kill and eat most everyone in a room or be able to outrun them. And that's like at its root that's kind of like what we're talking about right now.
SPEAKER_01
Yeah yeah yeah 100% yeah.
SPEAKER_02
John I want to ask you you. So Sam is basically like clearly just like surging on testosterone. So you know we had that guy who was on the show and he was like I was on the show and he was like yeah I was on the show.
I remember when we were talking about PayPal they said you know Max left to interview some engineer back in the early days of PayPal and then he was like no no can't hire this guy like what he passed everyone else's test. He's like he plays basketball. And what's that like because seems like a room full of very interesting very different people.
SPEAKER_01
Yeah it is it's it's oddly they've done a great job of not creating a monoculture in a very small organization. So yeah there are definitely like complete jocks that I mean obviously we know Keith Reboy is that Barry's like five times a day.
SPEAKER_03
Yeah I don't know if I would call Keith Reboy a jock.
SPEAKER_01
But like why he's like a workout not he's a fitness nut for sure.
SPEAKER_03
Barry's. Yeah he's not trying to be the best at sports you know he's trying to be the best at exercise and why is that guy why no I'm just joking. But why is that guy why is Keith Reboy such a dickhead on Twitter.
Like why does he behave that way. He's like needlessly rude.
SPEAKER_01
I think a lot of it is just like holding the line on like when he sees something that's like not true. He doesn't want to spread and so he just like shuts it down like really aggressive.
SPEAKER_03
Yeah he's like put it he's like he's put his flag and some silly things like Miami. So it's like if Miami doesn't work it it's like going to hurt him and it's like you know it doesn't have to you know you could love it and also it's not the best.
SPEAKER_01
A lot of these things are you know I think learned behaviors I think everyone in tech is somewhat like like just injured from the past like for sure it's very obvious. Just getting like just beat down for every little thing. And so a lot of people have put up walls and I think that it's time I agree with you.
I think it's time to kind of take down the walls be a little bit less defensive generally but I understand where all these behaviors are coming from.
SPEAKER_03
What's Sean Parker up to. We haven't heard about that guy in years.
SPEAKER_01
We got to get him back on Twitter because if you are asked because if you talk to anyone who knows him they will just say that he was the greatest poster of all time. Who's the best on Twitter now. I mean probably like Rahul Ligma Daniel Johnson like those guys right like do you guys remember that publicity stuff they did a fooled CNBC into reporting that they were fired.
SPEAKER_02
It was very like that that's just like you know those guys they're like doing a normal startup they're like building some debt. Yeah no they're not like comedians they should have just gone all in on like oh shit we need to just create like this sort of like some version of punked or like you know something for the tech industry they should have just gone all in as personalities. I would have dropped the startup like six months sabbatical on the startup.
I'm just going to see what happens if I fully troll and like maybe I could be the thing that the community needs.
SPEAKER_03
Dude Rahul Ligma still makes me like spit water out my nose when I hear that.
SPEAKER_01
It's so funny. It's so funny. Yeah I don't know I mean how would you monetize that if they would you just be doing standups.
SPEAKER_02
I think you get silent donations from billionaires I've seen that guy and he only hangs out with successful billionaires when I've seen him in person like because everybody who was big in tech loved that troll. Elon loved it. You know like the olden guys like oh my god it's the best it's the best.
I feel like they could have a patreon of billionaires only that just fund them to like do statement art you know like comedic statement art against the media against the local politicians against whatever that's what I would have done if I was them.
SPEAKER_01
That's maybe that's not an idea but I don't know I like it seems like they're pretty legit at what they're doing. They're like actually good programmers.
SPEAKER_03
You have a thing on this document that I want to fight you about.
SPEAKER_01
Yeah I knew this. I was getting you good.
SPEAKER_03
Here's the so John sent us this document he says unique philosophies lifestyle businesses are worthless.
SPEAKER_02
What do you make your case before we make you walk the plank.
SPEAKER_01
No no I this is mostly just like let's have a fun debate because I'm like you know working at a venture capital firm and I can kind of represent the VC crew and you guys are like the kings of like the lifestyle business so.
SPEAKER_03
We aren't the kings of that by the way.
SPEAKER_02
I want to be the king of it actually I actually will accept that a compliment.
SPEAKER_03
I don't mind being the king of it but I'm saying is I think that we are one of the very few kind of content creators you pay proper respect to it. Yeah I think what I'm saying is we do both we think both are cool that that's there's very few people I think that are in the middle and I think we are in the middle.
SPEAKER_01
Yeah yeah yeah yeah that's fair that's fair. And so yeah basically I think the point is just that lifestyle businesses are great to find that. So I would say I would say like non venture backed non blitz scaling non hyper scaling non monopoly something without a crazy moat where it's just like you go and work at it and maybe it gets really big and maybe you wind up being a billionaire but you didn't you didn't like do this growth at all cost insane thing.
SPEAKER_03
And what's hyper growth two or three times a year.
SPEAKER_01
I mean sometimes 10 times a year right. It depends on the scale at the early stages it goes really really fast but I'm specifically thinking of like Facebook right I'm specifically thinking of the power law outcomes in venture and my my point is that basically only about 1% of companies that get started raised venture capital but about 99% of the market cap in the public markets. They took venture and so venture has this very like ask like like disproportional outcome and I believe that that the bigger the company the bigger the impact on the world.
And so if you want to have a really really big impact you should actually be trying to raise money grow very grow very quickly like you're not going to build a hundred billion dollar company compounding at 2% a year 5% a year over your lifetime it just won't happen.
SPEAKER_03
Alright let me play the other side of that. Your analogy of well okay so you're saying 1% or 90% of the value is created by the 1% of companies that raise money. That to me is also saying that like look 100% of the soldiers on D day who ended up killing like the Nazis that ended that battle.
You might have to land on that beach anyway right so you might as well land on that beach and I'm like yeah but the other one's got like fucking killed and destroyed how about I just like not worry about killing Nazis and like I can just like start this little thing on the side. You know what I mean like it's like it's like dude like this whole thing with like VC it's like you're funding all you as an investor are funding all these companies and you're like dude I don't give a fuck which one of you's dies out here because I know one of you is going to like make me my money. And so from my perspective I'm like yeah so if I can get rich at with the higher likelihood which is maybe in most cases the number one reason for starting a business and not most cases like other cases it's like the number three version let's say your number one version is like I want to like create change.
Getting rich is still up there so like if like if you can get rich and create value and have fun and work for yourself and have a higher likelihood of doing that. Why wouldn't you go that route.
SPEAKER_01
So so the reason I think you shouldn't go with that route is because I think your overall impact on humanity and society and the world will be lower if it survives. Yeah this whole question of would you rather own 100% of a hundred million dollar company or 1% of a 10 billion dollar company. I don't even think it's a question obviously the 10 billion dollar company because the 10 billion dollar company is having a much larger impact on the world.
SPEAKER_03
That quite that's that's not an obvious answer.
SPEAKER_01
But no no no it's not it's not for for a lot of people they say I would rather have 100% and be able to go on vacation and you know chill and just have these cash flows come directly to me and not have to deal with like you know all this other stuff. And I get that but my point is that like I believe that humans have a duty to each other to go and have the largest impact possible and that is often done with the backing of venture capitalist.
SPEAKER_03
I don't think you believe that.
SPEAKER_02
Yeah I do. Would you not be like curing cancer is that a cell in nicotine gum like yeah let's be honest.
SPEAKER_01
Yes. Oh I mean that's hilarious that you use that as an example because that's like the actually the best way to stop lung cancer is to get people to switch.
SPEAKER_03
Yeah but don't let facts get the way of a good argument.
SPEAKER_01
But but but but but I will actually synthesize this for you and I think we will agree on this point which is that what you should actually do with your life is pick the hardest most interesting most value created. Problem that you are equipped to solve. So can I create a cancer curing drug.
No I don't have that background. It's not an option for me. So I would fail if I went into that industry.
But I should pick the most ambitious thing and the best idea that I have and then I should be very rigorous about whether or not that idea is appropriate for venture capital. And I think that if Mark Zuckerberg didn't raise venture capital his company would be dead and I think there's a lot of companies. I've been a part of some of them where we raise cut we raise that VC for a company that didn't need VC and it also killed the company I think.
So basically you have to you have to pick the best idea that you're equipped to solve and then decide the financing strategy that aligns with that. And there's no one size fits all solution.
SPEAKER_03
Do you wish you would have done a different idea instead of Soylent or do you wish that you just hadn't taken VC and you got wealthy.
SPEAKER_01
Oh I don't know. That's interesting. I mean right before so I was working on natural language generation in 2013 which is like the hottest trend now.
And so if I probably just like stuck with that for a decade I'd probably be doing something cool right now maybe.
SPEAKER_03
I think that you would have been more impactful if Soylent hasn't had raised and you had gotten rich and then you would have been able to like say like something else. Well you would have been like I don't care about money as much so I'll just do this other crazy thing that is a moonshot. Like I think it's because I took a similar argument as you and then someone corrected me and they're like yeah but it's a lot easier to go after moonshine ideas when you don't have to worry about a mortgage.
And as someone who had a bootstrap exit I agree. I'm like it's pretty like I understand why founders want to take secondary because you are more dangerous when you have 10 or 20 or 30 million dollars. Like you are more dangerous when you don't worry.
You're like I'm rich enough that I don't have to worry but I'm not rich enough that I want to stop.
SPEAKER_01
Yeah I 100% feel like I'm in that category.
SPEAKER_03
Like that puts you in a dangerous category I think.
SPEAKER_01
Yeah I 100% feel like I'm in that category.
SPEAKER_03
And thus because that's true I think lifestyle businesses are awesome.
SPEAKER_01
Oh because they can get you there faster.
SPEAKER_03
Yeah yeah for sure.
SPEAKER_01
Yeah get like the base hit before you do the big thing. Yeah not unreasonable. And I think that's also kind of a synthesis of what we're saying we kind of agree.
But that it's like moonshots are good but the path might be circuitous to them.
SPEAKER_03
And there are freaks out there like at Elon like a Zuck. Well I don't know about Zuck but like an Elon who's willing to risk it all.
SPEAKER_01
Yeah even Elon like PayPal could be framed as like less ambitious than SpaceX and Tesla right. It's like the mission might not be as big who knows.
SPEAKER_02
Well he tweeted this out the other day. And so Andrew Wilkinson had tweeted something out like this that was like you know you know learn to crawl or learn to walk before you run. Yeah yeah yeah.
And he's like most people who want to do a big crazy ambitious thing should start by doing a smaller thing. So they learn how to do business and then do you know make things happen and then graduate up. And a bunch of people were agreeing with him.
I totally disagreed. I was like if you know the thing you want to do you should just go do the thing. You know the way that doing something before you do your bigger thing works well I believe is at first that was the biggest thing you knew.
Yeah. And then as you did it your worldview expanded and your ambition expanded and your exact set of possibilities you were aware of. Expanded and then you went and did that thing.
However Elon did reply almost confirming what Andrew had said for him in his case he was like yeah you know I couldn't have created SpaceX if I didn't have the money and the skills and reputation as I had during zip two. And specifically somebody had said that like they had talked to Elon and he you know I don't believe this for the record. I don't believe a word of this but they were like yeah I talked to Elon early on and or I talked to Elon and he said that early on he decided oh I want to die on this.
He said the following I would like to die on Mars just not on impact. And you know that's like his joke and then he's like and I decided the way to do that was I needed a lot of money. And so then I went to the Internet just to go get the money quickly you know as quickly as I could.
I don't believe that to be true because you know first of all not everybody is like that much of a mastermind you know when he was like sleeping under his desk as like a college kid I don't think that he was like. I'm only doing this so that I can amass a fortune to launch three spaceships you know to be able to fund three of my own ships like I don't believe that. Also he went and did X after zip two.
So it's like oh if you already had you know whatever you know I don't know what he did I think like some like 60 or 80 million dollars out of zip two. Like I'd be surprising to me if he was like you know what it's not going to be enough I need to go get to 250 million that's the magic number.
SPEAKER_01
Yeah there's a big question about yeah like like should you ever sell a company because if if your real goal in life is to have an impact on the world. Maybe the company is the best way to do that. And so you should just continue to run your company endlessly.
I mean you guys everyone on this call sold companies. Well my goal is very simple. Yeah what's your goal.
SPEAKER_02
You said like if you want to have maximum impact on the world that is not my goal. And so it's very easy for me to just be like oh cool. I could rule that out.
I'm trying to have the best lifestyle that I could have. That is my selfish and very transparent goal. I am trying to improve my quality of life.
And with that comes my family's quality of life with that might come living in a good place and being being a happy content person walking around the world is my contribution to society. I don't feel the obligation to go save the world personally.
SPEAKER_01
I mean the beauty of that is that like by you will naturally have a positive impact on the world by doing what you do to achieve those ends. It might not be as big as oh you got us you cured cancer got us to Mars. But like there's going to be economic activity that provides value and utility to various people as you like go about your business.
And as long as you have like a moral compass that doesn't that doesn't result in you doing something really unethical like you'll probably have a net positives of you on society.
SPEAKER_02
Like my trainer has a great way of saying this he goes you know we I was like yeah my goal is to like have an amazing lifestyle quality of life right. That's my my number one like you know why do things is around that does this improve my quality of life. Oh if I go do this thing I'm stressed out all the time and I have meetings all the time and I don't see my kids.
No no no you've it is not improve my quality of life. But he said the other the other thing he said is mutually beneficial so that all the things I do are mutually beneficial to the people that interact with us. If I make a product it needs to be mutually beneficial to them if I have a partner or I interact with somebody it needs to be mutually beneficial.
And so that's the only caveat that we add into it to make it you know work.
SPEAKER_01
Is your personal trainer like your life coach.
SPEAKER_03
Yeah yeah that's like a that's a recurring theme is Sean's personal trainer John you you're cool because you I think you're like us but maybe even more extreme in the tech world and that you have your foot in the startup world and you're hanging out with these big wigs. But you're also can just joke around and shoot the shit and like you're pretty self aware. Who what do you align with who do you align with politically.
SPEAKER_01
Oh yeah I I really like this guy Mark heard who's a Republican from Texas. He was he's a smaller candidate so he's not polling super well but he worked for the CIA and he also was on the board of Palantir and he would be the first computer scientist president. And I think that that would just be very very interesting to see someone with a CS background.
Obviously I love programmers and I think that they think about the world in very interesting ways and we've had this very long long arc of you know lawyer lawyer businessman lawyer lawyer right like that's the story and he's like a younger guy so I'm I'm proud to endorse him.
SPEAKER_03
Are you more Republican than Democrat or do you vote both.
SPEAKER_01
Yeah yeah I vote both it just kind of depends on who is who can have like the highest impact on mostly technology and the business community I think that those are kind of the the things that we need to be thinking about. I do think there's the interesting as I look back on Trump I didn't vote for him didn't support him voted against him twice but but I think that there's this weird situation where like the problems that Trump brought were obviously really bad. He like divided the country and just created a lot of chaos and I think that was like probably net negative for the United States.
But he did kind of get China right and he started this like he got people waking up about the fact that we are in a great power competition again. And so you could see a world where the China situation dissipates and things get better and that would be phenomenal for the world and that's what I hope happens. And in that case Trump will be remembered as like an idiot basically but the opposite could also happen where the China situation gets hotter and then people look back to Trump as like a like a genius who first saw this all and like took the first steps to like make things safe.
And so I think the what's interesting is that the way we remember presidents is often not by what they actually did but by how their decisions look in hindsight and it comes back to the you know don't judge a venture investment until it's 20 years later 10 years later. It's the same thing it's like like maybe we shouldn't judge our presidents until we you know with the full history of time.
SPEAKER_02
You had said something earlier about like you were working on natural language generation in 2013. Yeah. Now these large language model LLMs all the rage. And you had an idea around this that I liked because it was very different than how most people most investors talk about this.
So you had said something like everybody is knocking certain AI startups because they're always just a rapper on top of GPT. It's just a rapper on top of what Open AI is doing. It's a flimsy little thing.
You had a different take. What's your take.
SPEAKER_01
Yeah my take is that that might be a reasonable critique for a growth stage venture capitalist to debate with their partners at an investment committee meeting. That is not necessarily what we should be putting out on Twitter X to the next generation of young builders. And if you are you know I know a lot of these kids who are 17 18 19 and they're hacking and building chat GPT rappers and some of them are making a ton of money and it's fine.
SPEAKER_03
What's an example.
SPEAKER_01
Yeah. I mean like an example would be like like just just narrowing down to something very there are a few people that have done like like almost like dating coaching kind of like to help with. If you're bad at texting.
There was a whole South Park episode about this where it's pretty funny. Yeah. Yeah. Like if you're if you don't know what to text someone on like a dating app you can have like you can go to chat to PT and say hi I'm on Tinder and I need to send a response to this girl and I feeling awkward like what should I say and it'll give you a recommendation. But these apps have kind of like fine tuned it to be a little bit more like spicy or you know engaging.
SPEAKER_02
People will do homework help. They'll do rap lyrics. They'll do whatever.
SPEAKER_01
Right. Yeah. I mean I don't know what the details about those but a lot of people will be like oh those aren't appropriate for venture capital. Therefore like they should not be built.
And this is kind of where I'm flip flopping to my you know lifestyles are bad. It's like no actually these are phenomenal because we need these these like people to get experience building. And I think maybe I think about it even less from the economic side and more from just the experiential side of like if if you ever talk to somebody who's like they were able to.
They were able to do some small business when they were in high school. That's always a bull signal for entrepreneurship. Like there it's always like oh you're and now you're doing the venture back thing.
It's going to make a lot of money.
SPEAKER_02
It doesn't matter what the thing was right.
SPEAKER_01
It's like oh I was hustling sneakers or oh I was like selling reselling concert tickets. Like my thing was I bought DJ equipment in the United States and then I would export it to Australia. And I was just like hustling that stuff in high school.
Like everyone has one of these stories. I'm sure you guys have tons of told them the pod. But so so basically with the with the we need I want the lens for chat GPT moment.
So lens for those of you who might not remember was I don't know what that is. So so it's this app that you would download and you'd upload you know 10 selfies of yourself from your camera roll. Yeah. And then it would generate AI images that looked like you. So it would be like it that looks like Sam's face but it's on Superman or it was like but it was really like a Russian company.
SPEAKER_03
That was that was the rumors that it was a Russian company.
SPEAKER_01
I don't think that one was. But yeah I mean there are some weird like these apps come from all over. I'm not sure about Lenza.
I think I don't I just haven't looked into the company.
SPEAKER_02
And it made a bunch of money. It was like number one in the app store for a bit.
SPEAKER_01
Yeah. Yeah it was based on it was based on stable diffusion which is this open source software package and dream booth which was this paper that Google put out that then people went and implemented. Like no one knew what those things meant.
No one your aunt doesn't know what stable diffusion or lens or dream booth is but she probably downloaded and paid for Lenza magic avatars and had that as a profile picture for a little bit. So it's just like this this fun viral moment that was really successful. And I think that there's a lot of people who I would hate if they're toying around with chat GPT and they don't build something that's really fun and cool because they're like oh well this won't be like a hyperscaler combining like generational company.
It's like maybe you just need to go build the fun thing and put it out there and see how it goes. What would be something you build. So I have an idea about this which is basically that there's a few things that these that these systems are really good at.
You know obviously there's been huge progress in helping software developers program with GitHub co-pilot which is you know built by open AI under the hood. There's also you know just the Google use case like I go to chat GPT all the time just ask you questions that I would normally ask Google. People are doing a lot of like AI girlfriend stuff like you know Sean I'm sure your your next your next big only fans investment will have an AI component probably.
But but I think that the that one of the interesting things that these language models are particularly good at is something called the Barnum effect. Have you guys heard about this. No. So the Barnum effect is this psychological phenomenon where like I can say like something that sounds like it's very specifically tailored to you. But it's actually vague and applies to everyone.
So so an example of this would be Sam you have a great need for other people to like and admire you. You have a tendency to be critical of yourself. You have a great deal of unused capacity which you have not turned into your advantage.
Like these things resonate with everyone. They certainly resonate with me. I feel like yep yep yep but and they feel personalized.
It's like astrology. Yeah. Yeah. They use this in astrology. And so what I'm thinking is like someone should take the you know chat GPT LLM's and make some sort of like viral personality quiz viral astrology app something along those lines that is clear.
Yeah. That X that exploits this effect that LLM's are really really good at and then and then uses it. It's just like yeah you oh yeah did you get your personality test is like did you get your lens of magic avatars like yeah I got them like I had to do the in app payment it was 599 it's like oh did well did you get your custom personality test through this chat bot that's new and going viral like yeah sure I did that.
SPEAKER_02
I think that's a great prediction. I think that's going to happen very soon. And this will look back at this clip and be like dude he called it John called it that that was going to happen.
I love it. It has to happen. Somebody said this the other day they go.
They showed me under the show me a Steve Jobs clip and Steve Jobs goes once this technology happened. Then there was a set of 20 things that were going to happen no matter what it didn't matter who was going to do them they were going to happen a series of events were going to unfold once that breakthrough once that first breakthrough happened. And you just didn't know when you didn't know who but you definitely knew that they were going to happen.
That's how I feel about this idea. I love it.
SPEAKER_01
I'm glad I'm glad I got the thumbs up on all my all my yeah your ideas were actually very very very solid.
SPEAKER_02
You said you did your high school flipping thing. You also were a what was it called like a phone a telemarketing scam artist.
SPEAKER_01
Tell that story we'll wrap on that. So this is a phenomenal story. What do you like workaholics.
Yeah. Yeah a little bit. I think I like the office as a reference point because that is the default like small business in America.
You know they make a thing and then they ship it out. And so the scam worked like this. I found the job on Craigslist.
I show up and I'm wearing a suit. I'm probably 17 years old or something. And I'm like I brought a resume.
I want this job. And they're like it's not that type of job like you do not need to be wearing a suit. Just sit over there.
You're going to call these numbers. Call down the list. And when they pick up read this script.
And the script goes like something like this. I probably still remember it by heart. But it was like when they pick up you do not ask how they're doing.
You do not talk to them. You just say shipping department please. And you want to make it sound like you've been disconnected.
Like I was already talking to the shipping department. Half the time people are like what are you talking about. This is a law firm.
We don't have a shipping department. But the other half of the time people are like yeah we got a shipping department. I'll transfer you down there.
Like you must have just gotten disconnected. Then you're down in the shipping department. So imagine Dunder Mifflin from the office.
You know you just talked to Pam. Pam transferred you down to I think Daryl is down in the shipping department. Right. And now you're talking to the guys down in the shipping department. And the scam was selling two inch clear tape.
So the guy picks up from the shipping department. So the shipping department you know John here or Daryl. And then you say hey you guys are still using the two inch clear tape right.
That was the line. So this is the secret. It's like it's like asking an office they use eight and a half by 11 inch paper.
Or like asking you know a podcast or like do you still use microphones. You know it's like yes everyone uses two inch clear tape in a shipping department. Because what you use to just tape boxes.
It's a clear tape that you use to pack things. It's packing tape. And so they're obviously going to say yes.
But it sounds like you've already sold to them. You know you're still using the two inch clear tape right. We didn't say that we sold you.
But then if they say yes then you say you know hey I just want to you know like thank you. Not for being a customer just thank you. I want to thank you.
And we're going to send out I want to send out another box of that two inch clear tape for you guys. And I'm going to throw in a Starbucks gift card for you personally. Your name is going to be on it.
This is one's for you. And they're running me through this. I'm like how much is the Starbucks gift card for.
I need information. I'm like I'm obsessive about information. And so it's like don't worry about it.
And I'm like no but I need to know because like what if they ask me. They'll never ask you. And I was like no but I have to know.
Like I just cannot do this job unless you tell me. And he was finally like it's five dollars. It's like wow.
So they do the Starbucks gift card thing. They get the guy to say you know yes I'd like you know I'm still using it send it out. And then they send it out with an invoice so you don't need to collect the credit card details over the phone.
They send it out with the invoice and they've priced this clear tape at exactly the level that they think most accounting point accounting departments will just stamp it. So it was five hundred dollars for a box of clear tape and it cost them five dollars to produce this tape.
SPEAKER_03
How much money did the company make.
SPEAKER_01
Millions I mean the guys were like driving around in sports cars like and I ran the numbers and it was like you know while I was there I only worked there for one day. And then like I quit because I was like this is a scam. I figured it out like almost immediately.
But a lot of people stuck around like you know but even then I think I think I sold a thousand dollars of clear tape.
SPEAKER_02
And they're just trying to get the one sale.
SPEAKER_01
And the conversion rate is insane. Yeah so they send out I talked to the guys in our shipping department of the scam. And and I first up hilarious the guys don't use their own clear tape because it just falls apart.
It just disintegrates. It's like the worst product. They buy the stuff that gets thrown away in China basically like like if they have manufacturing defects that's what they buy for like 10 cents and then they sell that for five hundred dollars which is already an order of magnitude more than you could just get from staples.
SPEAKER_03
Are they are they still doing this scam.
SPEAKER_01
I don't know. I don't think so. I think they get F from the better business bureau and then like I imagine that it like dissolved.
They probably got like all their phone numbers blocked or something.
SPEAKER_03
What do these guys look like. Did they look like what I think they would look like.
SPEAKER_01
I imagine they actually looked exactly like the three of us.
SPEAKER_03
Which is what I thought.
SPEAKER_01
I think I think the I think the CEO had your jacket. Sam.
SPEAKER_02
He was wearing a black. You're like you drive a black escalade. Yeah.
SPEAKER_01
Probably. No I think I think they were doing like Audi R8. I think that was like the big move.
SPEAKER_02
There's some guy listening to this that's in a shipping department that just had a holy fuck moment. He's like that God that guy keeps calling me this gift.
SPEAKER_03
And then there's like and then there's like a thousand other people are like so how do I get the leads to the shipping company. I've been a tape business now boys.
SPEAKER_02
The gang sales tape.
SPEAKER_01
One of the funniest things I ran into a guy who'd worked there a year later and he was he came up to me. I was at a concert and and he was like oh John like I remember you the tall guy like how's it going. And I was like remind me where we know each other from.
He's like Delta shipping. I was like oh yeah I worked there for like a day like what's up like are you still there. He's like no they fired me they fire everyone like through every three months because they need to turn people over.
Because as soon as one person finds out it's a scam they will tell everyone else. It's the same thing with like a pyramid scheme or Ponzi scheme like you got to like extra you got to like you know get out anyone who knows the truth and keep the blinders on everyone who's there because as soon as as soon as one person figures it out they're going to tell other people and be like don't you think it's kind of unethical what we're doing or don't you think this is like what if the police come like would we be in trouble you know and then that scares everyone and then the whole thing the whole well is poisoned. So I'm like oh you got fired like that's I'm sorry man that's tough like what are you doing now hopefully you got like a better job.
He's like yeah I'm selling drugs at this concert.
SPEAKER_00
I was like what.
SPEAKER_01
And he just like I've never heard anyone like so proudly tell me that they're like a drug dealer but I was like okay like. I'm not into that but I have some friends that are like I think it's a deal.
SPEAKER_02
That's amazing. You tell people what your YouTube channel is and also tell us why are you doing YouTube. You could be going out there building another business but you're like as your craved content.
So tell people what the channel is and why you do it.
SPEAKER_01
Yeah I mean basically just bored during the pandemic had always been I mean our first viral success at Soylent was you know content and content is super important for launching companies and I'm an entrepreneur so having a voice is very important in that equation. My YouTube channel you can find it just John Cougan search there I also have a podcast now power law dot FM power law hosted by John Cougan. Not an interview show it's just kind of deep dives on these power law people and companies these really good name.
SPEAKER_03
That's a good name. That's good titles. That's a good idea.
SPEAKER_01
Yeah so it's interesting. It's a lot of fun. I just I really like it and yeah check it out and I the biggest problem with it is that I don't have a lot of focus.
I'll talk about geopolitics. My last video was on Doug Jumaro breaking down his business like I just I'm all over the place but but it's so much fun and like there's clearly value in what we do like people enjoy it makes him happy and you need interesting people. We got to have a great conversation because of it.
SPEAKER_03
You know we appreciate you coming on. This has been really fun. You're you're cool man.
We we this has been awesome. We appreciate it and we don't have a lot of focus either. Look we went from scams to we got to go for the guns.
SPEAKER_01
This is like you your audience you won't be perfectly optimized like oh we're like the best ever but in terms of the lifestyle like we all agree like this is the way to run the content machine. Don't don't go too crazy with it.
SPEAKER_03
Well thank you.
SPEAKER_00
We appreciate it and thanks for coming on and that's the pod.