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SPEAKER_02
All right, we got a friend of the show here, Jordan Harbinger, he's one of the guys who's been advising us on how to build this podcast because his podcast is way more successful than ours and has been around. He's been doing podcasting for like 12 and a half years, which Jordan, that's gotta be as long as podcasting has existed, right?
SPEAKER_01
Yeah, I think podcasts have been around for like 14 years or 15 and I've been around for 13 of those. So yeah, when I started, there was no way, there were no iPhones. So you couldn't get podcasts on your phone.
You had to use an iPod to play them.
SPEAKER_02
Yeah, straight to cassette. That's how long this guy's been doing it. So Jordan, I like your show.
I've been binging it while in quarantine because what else am I gonna do besides try to learn something new or improve myself in some way? And I gotta say, I like it because you do the interview style show where you go deep with a guest. I think, you know, you had it, I was listening to the one with Tony Hawk, which was pretty awesome. And I gotta say, I like that you don't do the kind of surface level, you know, just, you know, pity padding around with the questions or trying to do, you know, inspirational fluff where you're just saying, go, you can do this.
So with that episode with Tony Hawk, what was that like? Because Tony Hawk's an icon. How was it, you know, interviewing Tony Hawk?
SPEAKER_01
It was great. He's a really interesting guy, really open and fun. And he told some pretty funny stories.
One which was very apropos of what's going on right now is one day he walked into his agent or some sort of marketing team that he'd hired. He walked into their office. This is like at the height of video games where he's making, I don't know, well, 50 million bucks off these skating games and these brands.
And he goes in and he says, look, I got this backpack that was made pretty shoddily and it's got my name and face on it. I don't want any more stuff like that. And as the agent, marketer, whatever is sort of knotting his head and understanding, Tony goes, wait, what's that on your shelf? And it was a roll of toilet paper with Tony Hawk's name, face and logo on it.
And he goes, what the hell is that? And the guy goes, oh yeah, anything we put your name and face on does so well. We were joking that we could put your face on toilet paper and we'd still be able to sell it. And he fired them on the spot because it was clear that they didn't value his brand, which I thought was a funny story.
And he's got a ton of stuff like that that he talked about on the show.
SPEAKER_02
That is epic. You know, I actually met Tony Hawk. We went on a trip to Africa, a charity trip together.
And believe it or not, we were halfway up a mountain in Ethiopia where, you know, it's like, this is a mountain village and somebody saw him there and they were like, Tony Hawk, you know, that's probably the only English word they said to us all day. They identified Tony Hawk on a mountain in Ethiopia. That's how famous that guy is.
So that's an amazing guest to have on the show.
SPEAKER_01
Imagine being that famous that you get recognized in the middle of countries where like, nobody speaks your language and they maybe don't even have skateboards.
SPEAKER_02
Yeah, we were there trying to give people clean water. They didn't even have water, but they knew Tony Hawk. That's how famous I got.
Amazing. Awesome. Well, if you want to hear more from Jordan, we're going to be having him on more and more.
He's a friend of the house. And you should listen to this show. It's one of the podcasts that I would recommend.
If you like Tim Ferriss's stuff, if you like our stuff, you're going to like his stuff. And so go check out the Jordan Harbour and Gear show on iTunes, Spotify, wherever you get your podcast, you'll find them there.
SPEAKER_02
handled it wonderfully. I read the letter he put out and it was great. And I think a couple of weeks ago we kind of capped on somebody who had done an announcement that we didn't think was great.
And I thought this was an example of one that was pretty great.
SPEAKER_00
I also liked that the letter was great. In a previous meeting, Brian referenced that letter. Oh, did he? Okay, nice.
What did he say? I don't remember exactly, but he was like, yeah, you know, it's good that he was able to do that. I don't remember. I don't even want to be quoted because I don't remember exactly.
But I think that he complimented it, he handled things, Brian handled things differently. I think he did great, you know, he was crying. The other day we interviewed Sophia Amarosa.
I think that I will speak for both of us because
SPEAKER_02
I think it's true that we both really liked her. Yeah, I tweeted this today. I usually actually hate having guests.
I prefer if it's just me and you shooting the shit. I think a guest kind of changes the dynamic, the flow a lot, but guests are good for growth. So we book them.
And also I actually like the conversation with the guest. It's just I don't think the podcast is very, it has the same zip to it. Exactly.
But she was great. And she was great for like this, what sounds like the stupidest reason, which was she was just really honest and just like said what it is and didn't try to make it sound better than it is and didn't make it on worse than it is, didn't make it more dramatic was just like, here's what happened. Here's how much money, you know, we got offered.
We turned it down for this reason. I kind of regret it. I guess I kind of heard from it, but you
SPEAKER_00
know, she even said an urban retailer try to buy them. Right. Yeah, exactly. I was like,
SPEAKER_02
okay, so urban outfitters, is there any other? I don't know if that's like, if I have my brains too literal or what, but I just thought she was really candid. And we've had guests we've run, I would say two or three episodes with people that we literally just didn't publish because we were like this person came on. They weren't real.
They didn't share real stories, real numbers. They kind of stayed on the surface and it's kind of a not an infomercial, but like it definitely was too guarded. And so we just didn't run the episode.
We just have it in the in the vault. And this was the opposite of that.
SPEAKER_00
Yeah, she did great. I really liked her. I followed up with her and just said, thank you.
And I don't do that a lot. I should do that with guests, but I don't.
SPEAKER_02
Yeah, we should do it all the time, but we didn't I have it. I have it written down. I'm sending one out today.
Also thank you, Erica's. Yeah, it was good. Anyway, let's
SPEAKER_00
let's talk about a bunch of ideas. I have some cool ideas to bring up. Can I tell you something that I've done though since Saturday? And I didn't mean to do this, but I was like a day in and I was like, let's just try this since Saturday.
The only calories I consumed, other than a little bit of almond milk in my coffee has been meat. You're going carnivore. No, I've not like going carnivore.
I was just like, you know, you happen to do it. I just like it worked out that way. And I was like, let's just pursue this thread.
And I've already lost weight. But what are you doing? What's what's breakfast? I don't typically eat breakfast. I my first meals typically at noon.
Today I had hot wings. So just baked chicken wings with Frank's red hot, which I guess that is a calorie, but I thought Frank's baby was, but it was just chicken wings. Last yesterday, I ate a lot of ribeye and I ate
SPEAKER_02
ground beef and chicken. And then are you planning to keep this upper one? I don't know. So like
SPEAKER_00
I'm eating healthy because I challenged this guy to a race. So I got to lose weight in order to get fit. And I have a planned cheat day on May 17th and I've already ordered all my food that I'm going to eat on that cheat day.
And so I won't keep it up until then. I ordered from gold belly, which was is the coolest thing I've found in a long time. Have
SPEAKER_02
you heard of that? Tell you, you put, you talked about it, you tweeted about it or something. And I was like, that's a good name. What is this? And then it's like pies.
What the hell
SPEAKER_00
is it? Yeah. So this is business talk. So I'll bring this up.
So what gold belly does is it's goldbelly.com. I think they is gold belly with one L, which I think is stupid. But what they do is so let's say Sean, you're from, well, you're not really from anywhere because you've been all over the place.
But let's say you grew up in Austin, I spent a lot of time in Texas. You grew up in let's say Dallas and there was this one bakery that you love there. And they sell, I don't know what a Texas dessert is, but let's say it's a bundle cake or I don't know some Texas-y thing.
And you can only get it in Texas, which is the case, which a lot of mom and pop places. And you want it, you call them and you're like, Hey, can I order like this one thing you guys have? It's like a pain in the ass. Well, they're just a store that helps facilitate that.
So Lou Malanades is a famous place in Chicago for pizza. I ordered a pizza from there. There's a bunch of pie and donut and cake places in New York.
And there's bagel places that I ordered from. And then there's some places in St. Louis where I'm from that is just, you don't see anywhere else.
And
SPEAKER_02
so it's just like a, it gives you places. So they mail it in some way that kind of like preserves it. And it's a, it's in like, if you ordered a pizza from Chicago, the restaurant
SPEAKER_00
mails it. What happens when you get a gold belly box? It's in a gold belly box and it has ice in it. That's all it is, which ships really well typically.
So they just freeze it ahead of time. So I ordered a deep dish pizza from Lou Malanades. It's a, it was pre frozen and then they threw ice, an ice pack on top of it.
And I'll probably get here in a three year four days.
SPEAKER_02
That's amazing. Okay. I actually like the guy who is doing, is it a small thing?
SPEAKER_00
Yeah. So the guy who started his name is Jason. I forget his name, but he, they went through white comedy.
Previously he was the CEO of deliver.com. So he has a history in the restaurant business. They raised close to $30 million.
And Joe, Joe Ariel is his name. He, their office was up the street from my house. I live in a residential neighborhood and they had a house that they lived out of and they went to white Combinator.
And I have to imagine they're booming right now. They're booming so much so that the pizzas all, all have delayed delivery due to high demand. And so, and the delivery charge is interesting.
The delivery charges very hefty. It's, it wasn't cheap. Ordering two pizzas was like $80.
SPEAKER_02
Right. But they know they're playing on the sort of nostalgia, the like special moment type of thing. Like if I gave somebody, if I gave my wife like her favorite thing from her hometown, it's like an amazing gift.
It's so thoughtful. And food is like, you know, the universal gift. So for, so a couple of things.
So yes, they raised 33 million. It's gold belly with two L's. So normal belly, normal belly.
SPEAKER_00
It was gold belly with one L's before.
SPEAKER_02
Ah, okay. Got the second L. Good. Okay. So this is kind of cool. So this could be a thing.
So like I grew up, you said all over the place. One of the things that happened was in high school, I moved to Beijing, right? So I finished high school in China and then I hopped around. I lived in Indonesia.
I lived in Australia. And one thing that happens is you, if you're kind of an American living over there, you're called an expat, an expatriate. And so expats, like you start to have these expat cravings for just like simple things that you just can't find in Beijing.
It's like, oh dude, what I would give to have a box of Reese's Puffs cereal right now and you'll pay like $22 for that box of Reese's Puffs cereal. And there are stores there that just do this. They just import the like your favorite snacks from America and they just sell them at like a 5x upcharge.
And then other people, they, they sort of this sort of like a drug, you know, camp, dump, drug donkey or whatever thing where it's like, okay, you fill up a suitcase with this one rare item that people want and you bring it back when you go for a trip. And so I could see this, you know, this gold billy thing. It sounds kind of, when you first started describing it, it's not kind of stupid.
And now I'm pretty convinced that it's not stupid.
SPEAKER_00
One of the reasons why it's not stupid is if you go to the website, they've done a wonderful job of creating the brand. So they make it seem fun, but also they have so many photos and they tell the story of the brand and they do a really good job. And two other examples of people who do this wonderfully of telling the stories of the products.
The first is Huckberry. So the business of Huckberry, it's basically a huge email list of one to two million guys. And what they do is they find really cool clothes and they tell the story behind it.
So for example, they had a duffel bag that was made from a, the founder was an army guy who used to skydive and the duffel bags were made out of old parachutes because apparently that's like a interesting material. And they told the story about this and they just blast it out in the email and they just take a cut of the revenue and it's like a bootstrap company that does probably $20 or $30 million a year in sales. And so telling the story behind of what you're selling is really important.
And the second people who do it is Airbnb. They do a really good job of telling, of helping craft the story.
SPEAKER_02
Okay, I like this. So I've never seen Huckberry either. So okay, so here's what I would do.
If I'm listening to this and I'm an entrepreneur and I got some time on my hands right now, you know, there's a version of this that is, you know, like Tim Ferriss and these other guys, they are kind of like connoisseurs of products like, you know, Kevin Rose, it's like, oh, you know, what, you know, what coffee mug do you or what coffee blender do you use? It's like, oh, I use this one. It's made of matcha wood and it does this other thing and it's so special and you can only get this in Puerto Rico or whatever. And so there's all these products where people care about sort of the best of the most well made is how you define best here.
And so, you know, whether it's wallets, headphones, it's the type of stuff you find on like mass drop or whatever. But if I was somebody, I would build a brand, I would build an email list around what is the absolute best of X product. And maybe it's something that you can only find in a local geography, like, you know, that's what kind of gold billy students like the best pizzas.
Oh, you want Shake Shack, but you live in, you know, Arizona and Shake Shack is not in Arizona here. It literally like you see it on the website, it's $49 to get Shake Shack delivered to you in Arizona. And so if you can tell the story of how crazy good this thing is, how people go nuts for this thing and how it's the most well made, well crafted pocket knife or whatever those items are, I think you could get a lot of people to impulse buy and like, yeah, I want one.
If you could
SPEAKER_00
just email this to tell the story, I do that constantly. I buy stuff. I go to wire cutter on a daily basis and I'll buy interesting things like I love gadgets.
So I bought a power washer from wire cutter. I don't really need one, but I bought one because it just looks like a nifty cool gadget. Wire cutter has a long article on the best aluminum foil.
I bought it right to try it. And so there's a few other but I think it's called I bet you a bray who knows, but all the YouTubers, they get asked the same question, which is what equipment and microphone and camera you're using. And so at the bottom, they have a link to like my kit and you click it and you go to like Casey Neistat's kit, equipment kit.
And if people buy that stuff, they get an affiliate fee. And so I think that those business bottles
SPEAKER_02
are fantastic. Yeah, there's something cool here. I like this.
And I think gold belly is one of those sneaky good ideas, I'm going to say it's sort of Airbnb-esque in a way where it's like tapping into this thing that people want that sounds a little unusual. It's like, how many people really want to do that? How many people really want to stay in a stranger's home rather than a hotel? And it's sort of like that. It's like, how many people really want to order the best bagel from New York? And it's like, you'd
SPEAKER_00
be surprised is the answer. Yeah, I think, I think that it's a pretty good idea with amazing execution. I'm very into gold belly.
I just discovered them in the past month and I think that had I discovered them prior, I would have loved to have invested.
SPEAKER_02
Right. Okay, cool. What are some other ideas you got? You want one or you want me to throw
SPEAKER_00
one at you? You do want to then I got another one.
SPEAKER_02
Okay, so here's a company that I am interested in investing in. I've been talking to the founder of a company called Nana. Maybe I shouldn't even say this because I kind of want to invest before I say it, but whatever, let's put it out there.
So the company called Nana, I discovered it because my dryer broke at home and you know, I got in that that shitty, shitty state where you run the dryer three times to dry one load and it's like, oh, fuck, what's happening? This is not how it's supposed to be. But I don't know how to fix a dryer and like my wife's looking at me like, are you a man or not? And it's like, no, no, we already know I'm not, I can't fix this dryer. And so then I'm like, okay, cool, where am I going to look in the manual? God damn it, that's going to suck.
And so what Nana does is they solve this problem of appliance repair. But the way they're doing it is very interesting. So there's this extreme shortage of technicians who can repair appliances.
There's more appliances that need repairing than there are technicians available. Technicians tend to be older, they're aging out of the workforce. And young people are not really going into that profession, even though you can make a lot of money.
So the back store here is the founder of this company. He's kind of like a small time hustler entrepreneur. He like had a clothes, like a jeans store in Israel in a mall.
And then he had this other little thing that he was doing there. He's kind of hustling and making it work. So he built a couple of small businesses.
When he was in America, he needed to pay off his student loans. So he was like, all right, how do I pay off like 200 grand in the next like 18 months? And what he did was he saw his friend was repairing appliances and was making like 20k a month. And he's like, whoa, okay, how do I learn how to do that? And so he started repairing, he started learning how to repair appliances, he started doing it.
And he ended up building a little like a one man service company that he hired up a couple other technicians under him. And he was doing like 2 million a year in revenue, he paid off all his loans and he built a company overall over the kind of two, three years, it did about 5 million in revenue on his a parent company repair. Wow. So then he was like, all right, I'm going to build and what he's built is basically Lambda school for technicians. So you can say, okay, I want to make this much money.
I want to, you know, you pick your own hours, but you can make good money if you're a technician. And but you don't know anything. And so he's like, cool, I can train you in one month to repair one appliance.
And then in the next month, I can teach you a second appliance. And, you know, within a few months, you'll have all the appliances, but the whole time you can actually start working after one month, you can pretty much start working and start making money repairing, let's say, dishwashers or fridges or whatever. And so on one hand, he's training up a technician workforce.
So it's a trade school for technicians. And on the other side, he's partnering with the manufacturers of these appliances who get the customer complaint that says, Hey, my thing's broken. And these companies are looking to dispatch a local repairman to go fix it.
They don't want to run that local repair, you know, fleet themselves. So they used to use Sears, had like, I don't know, tens of thousands or hundreds of thousands of technicians in their workforce, but Sears has kind of gone downhill. So he's trying to be the like best option for getting every lead when somebody needs a repair.
It's like, cool, we're like Uber, you tell us where the repair is, our guys do a good job, you push a button, they get dispatched. And so I really like this company I'm trying to invest and I just love
SPEAKER_00
the concept in general. Okay, I like that. I don't know the economics of it, but I do know iCraft, you know, iCraft, it was a little bit similar where what they do.
So explain what they did from so what iCraft does is if you broke your iPhone eight, it's you take it to the store and it's typically pretty expensive $350 to fix the screen for some phone. And what iCraft did was, well, regardless of which phone you break, an iTech will come to your home and fix it for you. Now, these businesses are actually a little bit sneaky.
And I want to maybe you could tell me about Nana is typically the way they work is they're a little bit more of a ecom or marketplace than you think. So they're the name of the secret to their business and the ones like it is getting loads and loads of iTechs. And then on the other side, getting loads and loads of leads.
So they just have to go out and buy advertising rank on Google for repair my iPhone. And then someone comes into their system, they go, all right, I need an iPhone and then their technology dispatch or I need iPhone fix dispatches that lead to any iTech in the neighborhood or in the area. And they also have to make sure that this iTech is like clean and nice and reliable and things like that and train.
And the way they make money typically is they take a small cut of the fee, which is pretty small, small enough that it's almost like they're it's like Legion. And then they sell the iTechs all of their screens repair tool and tool. And so is Nana
SPEAKER_02
kind of like that? No, so so basically they so it's similar in some ways, but I think the economics a little different. I think they'll end up with like a 20 to 25% margin per job. So like average job will be like 200 bucks, the technician will make about half of that.
There's a parts cost and then there's what they take, right? So like, let's call it round numbers just just to sort of, I can't give away exacts, but let's say a job is about 200 bucks, half of that will go to the technician, 25% will go to the parts cost, and then 25% is left over for them to take at the end 20, 25%. And so they don't charge the technicians, they're not trying to make money there. In fact, they're going the other way, which is they're trying to hand technicians sort of a career in a box.
It's like, Hey, do you want to be making 80 grand a year, 150 grand a year, whatever it is repairing these things? Like watch you download this app and it's like Uber. It's like a job will get dispatched to you. You can choose to take it or not.
And you wear this brand and this brand means that you are a trusted technician. And it's like a franchise model basically for these
SPEAKER_00
like freelance technicians. So I like I think it's awesome. Let's talk about reasons why this would suck.
Yes. The first reason why it would suck is so the reason why I think home joy and cleaning services are really hard. And a lot of them went out of business and a lot of them are only okay businesses is because for two reasons.
Well, yeah, two reasons. The first is when you have a cleaner who comes in and out often they're just shit like a cleaner is good after you get to know them for a handful of tries and they understand the difference between each person's clothes or they understand where the everything goes. And so it's the second reason it's also a matter of trust.
You really want to trust them and you can't always trust that with home joy. I mean, you get a little bit of like, well, they represent the brand, I know the brand will reimburse me. And then the third reason is if I find someone who's really good, I say, Hey, fuck this platform, just come to my house every two weeks, I'll just pay you.
Yes. And so that's those are the three reasons why I think this would not work. But this is different, right? Because this is not
SPEAKER_02
repeat, you don't have a broken appliance every two weeks where you're going to like disintermediate the platform and say, Hey, let's just do this direct, right? So this is a very important thing you do. The other thing is that they're not acquiring customers directly. So they're not like home joy or cherry, which was a car washing company, which is basically spending a ton of money trying to get a customer and then and then trying to make back the money.
What these guys are doing is they're getting free customer leads because they are solving a problem for the B2B vendor, their B2B partners, which is like, you know, the maker of the washing machine, the maker of the washing machine has the lead, they're just going to decide who do we dispatch this lead to. And if these guys can prove that we are faster and we do the job and your customers will stop calling you saying the thing is broken, then they will become the preferred partner. And so they're proving right now where they're getting, they're becoming the preferred partner for a whole bunch of these different vendors.
And that's like the unproven part, but it's much better than if they were trying to just generically market on Facebook or Google and say, Hey, Sam, if you ever have an appliance, you better use Nan. I like, hopefully I'm, hopefully I'm putting my ad here while you have this problem, which would be really, really hard to do.
SPEAKER_00
And so instead of, I don't think that, I know I actually disagree. I don't think that would be hard to do at all. And I think that's actually a great thing to do because when you search locksmith
SPEAKER_02
or broken search is different, right? Search, search makes sense. I'm talking about just Facebook ads or whatever works.
SPEAKER_00
Oh, no, no, no, no, you need, what's the difference in advertising contextual and I forget, but
SPEAKER_02
you need, you need search, you need search where there's intent I needed my, I need my fridge fixed, right? That's different than just I'm scrolling on Facebook and somebody
SPEAKER_00
says we fixed fridges. Why did they raise money? A business like that could be profitable, like profitable pretty fast.
SPEAKER_02
So the reason why this is, I think the real challenge, which is they have to get all these different, it's a, it's a local type of business. So you have to build up supply density of technicians and demand in every single city for this to work. And so that's why they're going to need money because they're going to have to bridge this gap where there's a, you know, the vendors aren't going to give them leads if they don't have technicians.
The technicians aren't going to come on board if there's no jobs to do. And so they have to figure out how they're going to bootstrap Atlanta and then Peach Tree, Georgia, and then this other suburb of Georgia and right, like city by city, they're going to have to build up supply and demand like Uber did basically. And, and so I think that's the main challenge and that's why they're going to need money to be able to do it.
But that, if I was going to say, why did it fail? It's because damn solving that local supply demand thing is not easy. It's like dating apps have this problem too. If I downloaded dating app and I have nobody nearby to match with, I delete this dating app and I move on.
And the dating apps that win aren't ones that make you a better data. They're ones that figure out how to get a bunch of guys and girls in one city on the app at the same time.
SPEAKER_00
I like this though. I like people who are hustlers like this guy that good.
SPEAKER_02
Yeah, the best, the best part is that he went to talk to himself as a, as a repair guy for two years or whatever. That's like where you're like, okay, you're not just the typical sort of like opportunist who's like, Oh, I researched this market and I saw there's lots of appliances in the world.
SPEAKER_00
Did you say he, and did you say he is Israeli?
SPEAKER_02
I believe he's Israeli. Yeah, I could be wrong.
SPEAKER_00
I have a whole bunch of Israeli where in Tennessee, I was friends with Iran around. I dated a girl who was friends with all these Israelis. So all my friends ended up becoming like a bunch of Israeli guys and they, they all were locksmiths.
Like they all had like side hustles as locksmiths. And I was like, this guy's name was Ram. I was like, Ram, what is this locksmith shit? He goes, dude, I make like half a million dollars a year as a locksmith because I like, I learned how to rank on Google.
And anytime I get a lead, I just send it to my friends and a lot of my friends came here from Israel and I just said, Hey, come, I'll give you like a $25 a dollar job. And they come here and like, you know, they rely on me. So they all work hard.
And anyway, this whole, this, this, this is part, and he told me he was like, this is part of Israeli culture is this, this industry. And it's super interesting.
SPEAKER_02
I think I've told this before, but I'll say it again, because I love this thing. I read this thing once, which was like, if you, I want to look up, if I, if it's like, so there's a tool for tooltip for hiring. It's like, let's say you wanted to hire a locksmith.
You don't want to hire the best locksmith, the guy who's best at fixing your lock. You want to hire the guy who's named his company triple a locksmith. Why? Because he's thinking about in the yellow pages, how do I be the first listing for locksmith? It's like a, a, a locksmith.
It's like, that's the person you want to hire, which is somebody who's good enough at unlocking the doors, but is actually thinking through how to grow and how to get business and customers and not just a locksmith who's spending all their time getting better at repairing locks and not thinking about how they're going to get customers. So I always say, I'm trying to hire triple a locksmiths and nobody knows what the fuck I'm talking about. I'm going to name
SPEAKER_00
all my business. All right. What else you got? Just fucking right.
Okay. A few weeks ago,
SPEAKER_02
we talked about JD power. Do you remember that? Briefly, not really actually. I said briefly as if I did, but I totally didn't.
Okay. I'm going to talk about a similar business.
SPEAKER_00
Okay. And I've talked to you about them. Do you know what Gartner is? I know I've heard
SPEAKER_02
the name, but I couldn't explain their business to you. Okay. So I just subscribed to this
SPEAKER_00
guy's subscription. It's really good. I'm going to give him a shout out.
It's called Scuttle Blurb and he's just this dork like I am. And he just talks about interesting companies, but he does incredible breakdowns. And he had this one on Gartner and I've known a lot about Gartner because I think our company can almost become something a little bit similar, but not quite, but it's in the, it's in the similar ballpark.
So Gartner before the Corona, it was worth about $40 billion, I think, or 20 billion, whatever it's worth. Now it was worth double that. And so it's a big company, like $3 billion a year in sales.
It was, I read the biography of the guy who started it. He's interesting. Another is what are they doing? What is Gartner doing? What are they selling? Yeah, I'm going to explain.
And so, okay. And so the way in which people explain it, it's not, it does not make sense. But when let's dive deep and it will make sense.
So what they do is they research a variety of IT tools. So like what's the best tool for HR stuff? What's the best marketing tool? What's the best sales CRM? What's the best finance tool? And if you're a big company, you pay them a subscription fee ranging from $20,000 a year to $200,000 a year in exchange you get access to a database of research that examines this as well as a consultant who you can call and they can answer your questions. Now that sounds like a stupid thing, right? Like why would you need that? Like why can't you just pick and that's weird.
And in a way it is weird, but the reason why they're so successful is for three reasons. Okay. The first reason is that people say they want like if you, so there's a hundred thousand companies in America that have a IT budget north of 10 million a year. And so they have lots of research in order to make sure they're like spending their money effectively.
And so they want Gartner's research and apparently their researchers are really good, but they're not that good. Now the second reason why it works now, this is what's interesting and this is the angle I want to get at in a second, which is they buy it because any executive or IT person who's making a decision on their like, which like they're going to buy like, you know, 5,000 laptops, they say, well, Gartner said we should use this one just so they don't get fired because the execs trust Gartner. And so they only do it.
They put it not only, but one of the biggest reasons they do it is so just to cover their ass. So like, well, I don't, don't blame me Gartner. And then the third reason why, and this is where Shik it's also really interesting.
It's because their sales force, they have this training where they take, where you get hired and they take you away for like a few weeks, they throw you in a hotel and they indoctrinate you on how to sell and you sell through their process. And then at the bottom, they find like the 20% of people who they just don't think you're going to make it and they just fire them right away. And so they create like a fraternity or sorority of like a hazing process of salespeople.
And a lot of analysts think the reason this company is any good is because their sales culture is so phenomenal. And I find that to be incredibly interesting because that is not what most people would think, but having like a pretty good research department, but it's not significantly better than all the other competitors, but a super good sales team is what made this company work out well.
SPEAKER_02
And that is interesting. And so when you hear this and you're like, okay, you said, I think we could do something like this. Do you actually think about that? Like, okay, what is the modern day version of this? Or how do we, what would be our version of
SPEAKER_00
this? Well, yeah. So here's a few examples, which is Harvard Business Review. Do you know
SPEAKER_02
Harvard Business Review? Yeah, I'm pretty familiar with them. Harvard Business Review
SPEAKER_00
makes $300 million a year in sales. And it's like half profit. Harvard Business Review, like the publisher makes more revenue than Harvard Business School tuition.
Yeah. If
SPEAKER_02
you want to see all the annual reports are online. So it's great to go look at Harvard's Business School reports and the business review as well, HBR. And they make money through subscriptions
SPEAKER_00
and then they also sell like millions of case studies a year. And why do you buy a Harvard Business Review case study? Well, just because it says the name Harvard on it. So it's real.
That's the moat is building a brand that people like just trust and know. And so that's kind of hard, but that's definitely doable if you have the right skillset. But the second thing is once you get entrenched into your sales force, because entrenched, which a lot of people who are building stuff, they don't know this because they think to themselves, if I just have the best product, I'm going to win.
That's not true. And so when I think about this, I'm like, well, I want to have the best product, but also like, how do I just like build this massive sales culture? And so what I want to know to you, Sean, is first of all, what are other things in which people need to cite someone else? They don't get fired. Because that's where like the app that's like an interesting human psychology.
Like that's like an interesting psychological trick to exploit. But then how do you feel about this whole sales thing? Because you read about people like, I have no idea if this is true. But let's just say like Elon Musk, he's like, no, fuck salespeople, which I think might be true.
They don't hire salespeople. And that's like sexy and like romantic. But do you?
SPEAKER_02
Okay, so let's talk about the first one. So the first thing is the the learning as an entrepreneur, which is a lot of people buy your shit, not because you have the best product they buy this shit, like what is the job to be done of Gardner? Like you're saying it is to inform yes, for sure, I am going to get some information from this. But really, it's because when I present my proposal that we're going to spend $8 million this year on XYZ, I need that to not be me Sean saying that we should spend $8 million.
I need that to be saying Sean thinks that we should take the Gardner recommended path and do this. So it is CYA. Cover your ass.
So I do think there's that. Now this is just a general and I see this with a whole bunch of different research things, right? So like, there's a whole bunch of market research things that right now at my company, when somebody says, hey, we want to go after this opportunity, and they present their research and you know, the source cited is super important. Now we pay a lot for these research reports, thousands of dollars.
Who? So it'll be like, like for example, in the eSports world, New Zoo is a niche one that really talks about gaming and they talk about eSports a lot. And so you see New Zoo all the time. Forget about the fact that New Zoo, if you just go back and read the report from four years ago, they're like, oh, eSports will be at X billions of dollars.
And then this year, now four years later, it's a smaller number than they predicted. Like the prediction now for four years from now is smaller than it was four years ago about today. So like, they're wrong a lot that we should not take their word as like, you know, any good here, but you know, because they're predicting and humans are shitting at predicting.
But I see that I see it on the like, kind of like market market data. So we need data about like, smartphone penetration in a country, the wireless, you know, what is the wireless speeds? What is the disposable income in this country? Should we go into this country or not? All these things, there's not us like Googling, like we have to get to some like a Deloitte paper that we pay $3,000 for or some some subscription we have that gives us this data that we can say, look, I'm not the one estimating these numbers. That's them and they're a big brand.
And so I think that McKinsey is another brand like Harvard. I think if Google or Amazon wanted to get into this business and say, hey, these are Google case studies, they could compete with Harvard. But I think as an individual person, I've looked at this because I was like, dude, I could make it, I could write better case studies for business schools than Harvard Business Review.
I know it. I've bought their case studies and I know what I could do. But I'm like, it doesn't matter because they're not trying to buy the best case studies.
They're trying to buy Harvard's case studies because that is better for their business school brand.
SPEAKER_00
So I hear you on that. I hear you on that. And that you say in a way to persuade people not to do this or you persuade yourself to do that.
I totally get it. Yeah. I come from the other end, which is, wow, that's like their moat. So it might take me a little while to do it.
But once I do it, man, I'll make money for a hundred years.
SPEAKER_02
Yeah, I think that's true. Like you want to be in a defensible business and unfortunately, defensible businesses are pretty hard to overtake. So it's like the barrier to entry is the same reason you want to enter in the first place.
Now, I do think if you can find an angle, like you go after a niche that they're not aware of, that's cool, right? Like I've thought about doing this, which is instead of doing case studies on existing sort of legacy industries and businesses, I know that these incumbents are really shit at the cutting edge. And so I'm like, I could make the school of the future and we talk about cryptocurrency and we talk about a whole bunch of stuff that Harvard Business Review is not going to talk about for four years. And so you could become the thought leader or the stamp, the sort of credible authority in that new space.
Like you guys could do it with DTC or Trends or whatever, right? Like that 2pm guy, right? Well, that's what we're doing with Trends.
SPEAKER_00
This is what we're doing with Trends. So this is why it interests me. But what space would
SPEAKER_02
you do? I think I would do, so like you went on Pomp's podcast and I think he's been trying to do this with cryptocurrency. Now, he's trying to do it towards consumers, but I think you could sell knowledge about this to existing financial institutions at a very, very high price. I think you could just be scraping data about the current, you know, the 2020 cryptocurrency Bitcoin landscape.
And I think you could sell that for thousands of dollars to all the consulting firms, all the financial institutions, and you could get to single digit millions in revenue pretty quickly there, then you add a conference, then you kind of go from there. And so I think that's one where I would go towards a niche that the existing big brands don't cover because it's not their area of expertise. And also it's small today.
And so they're still covering all the big spaces like agriculture or whatever else.
SPEAKER_00
Okay. And what do you think about having a, I personally, when I started my company, I was like, I don't want this to be a sales organization. I hate salespeople.
I want to only be around like nerds, not like alpha, loud, obnoxious people.
SPEAKER_02
And now you're 180. No, you love having a sales team is what I mean.
SPEAKER_00
I like the results and our salespeople are, our salespeople are in fact the most fun, like they're just like regaerious fun to be around. That's like their job is to be likeable. But I think if you have a sales driven organization, it isn't always.
SPEAKER_02
Yeah, I don't think so either. I also think you got to be, so my, my take on that sales thing is every business is selling. It's just a question of, are you selling with salesmen? Are you selling with digital ads? Are you selling with like Elon is clearly one of the greatest salesmen of all time.
And then he talks about how they don't employ salespeople, blah, blah. That's part of his sales pitches that our product is so good, we don't need salespeople. And, you know, he does his sales through Twitter and through video presentations, like on stage and all different types of things where they, you always got to sell.
It's just a question of what's the vehicle. And then you should just choose the tool that fits your product. Right. So like, if you have a high priced enterprise product, then you should have a fleet of enterprise salespeople. That's not always the case.
So Atlassian claims they have no salespeople. You can try to be the outlier, but I'm saying like, if you're trying and all these companies do switch, right? So like Slack and whatnot, I believe now as they're trying to go get multimillion dollar contracts with companies, most of their revenue comes from, right? It comes from direct sales. Human salespeople don't go out and
SPEAKER_00
do anything. And this is a fact, by the way, this is in their filing, which is mostly revenue is driven by a handful of account. Right. And so I think like, you know, depending
SPEAKER_02
on what your product is and the price point of it, that dictates it. If you have such a low price point item, you just can't afford salespeople. And so you got to get creative and be like, okay, I'm going to sell through content marketing.
I'm going to sell through, you know, digital ads. I'm going to sell through these other methods, but you're always selling
SPEAKER_00
one way or another. So we were this podcast is going to be relatively short. You want to talk about, um, Oh, well, okay.
So last week we were, um, talking about YouTube channels.
SPEAKER_02
Do we bring this on Twitter? Somebody was talking about, um, I don't remember. It all
SPEAKER_00
is one world to me, but you, someone brought up is buying a YouTube channel, a good idea. I think in most cases it is a absolutely horrible idea and you should never do it. Now I was part of a friend bought a, uh, a, a website that was a content site that got a fair bit of traffic and he, uh, it came with a YouTube channel that had maybe two million subscribers.
And so I went and get, took a screenshot of the revenue. And so the revenue starting in January of 2019 to December 31st, 2019, your estimated revenue is $242,000. And that is with 80 million views.
And so 80 million views translated into 240 grand. Yes. So to me, the answer is that sucks. And, um, I would not want to do that.
And it, it, it's definitely
SPEAKER_02
declining. What the person was saying was, Hey, you guys had Andrew Wilkinson on, he rolls up internet companies. Hey, why don't you roll up YouTube channels that monetize well? You could buy a whole bunch of them, niche ones and, uh, and own them.
And that's fantastic. And I was like, this is a horrible idea. YouTube videos are often very dependent on talent, like a personality.
And when you buy them out, you sort of take them out of the game. Um, the second thing is YouTube videos are very dependent on the platform, the algorithm and the search, the way that the YouTube search works. And, um, that can change on a dime.
And when it does, you're thinking, go and our friend actually, uh, has a YouTube channel that's like this, that it was doing X and now it's doing, you know, X divided by five overnight because the algo changed and there's nothing you could do about
SPEAKER_00
it. Now it is valuable in the case of like your Nick bear and you are like a mid or your Sophia, which she doesn't have a YouTube channel, but like her Instagram page is probably the same thing where I bet she could just pocket a quarter of a million dollars a year just off the, the occasional ad on her Instagram. But the real value is her saying, I am the CEO of whatever company I'm the CEO of.
Here's my product. Check it out. Buy it. Yeah. That,
SPEAKER_02
it's valuable. YouTube channels can be valuable. I'm saying buying other people's YouTube channels, I think is a poor way to buy your way into cashflow.
If you're going to buy your way into cashflow, buy a, you know, an apartment building that's, that's spinning off cash or buy a business that's not dependent on a personality. It's a, you know, piece of software that just runs. That's what I would do if I wanted to buy cashflow.
Now I'm going
SPEAKER_00
to make a, I'm going to make a point that disregards everything we just said, which is the company group nine media, which owns Thrillist Ben Lear's the CEO. Um, he bought Seeker and Seeker. I became friends with the guys who run it.
It was ran by five to 10 guys in the dog patch here in San Francisco and they would make educational videos on a variety of things and they bought it and, uh, they bought it for a couple of million bucks. So that is an example of a YouTube channel that is not, so I was going to bring up a similar one, which is those people I think are stupid. They still shouldn't have bought it.
So, so I had a friend and less the price was, and less the price. So we've
SPEAKER_02
talked about my friend, uh, on the podcast before, uh, Steve Bartlett. So Steve was a young guy. He came in, I think it was kind of like an intern basically, but he was, you know, I've hired him when he was 20 years old.
He wanted to come work with us. I worked with him for a bit. Um, honestly, he was kind of a shit employee, but he's turned out to be a great entrepreneur and built a company that's now, you know, sort of semi-gone public in Europe or something weird, but he's built, you know, he's built a fortune of tens of millions of dollars for himself.
And, um, and what the way he got started was by buying Twitter and Instagram accounts that were not owned by a personality influencer, but by a theme account like I love food or whatever they have. I think love food. It's got like six million or seven million Instagram followers and they bought that account.
And he was figuring, he figured out pretty early, wow, the people who run these accounts with a million million followers. It's an 18 year old kid and I can offer him a thousand bucks and I can get the account and he's just, you know, doing affiliate links for protein powder. But if I aggregate all these, I can go sell this to Spotify as a great way to reach the masses and I can control these.
They're not based off of a person's face and a personality. They're based off of, you know, Harry Potter memes or whatever. And I can just have, I can just hire, you know, a whole bunch of fungible people to keep posting on those accounts.
That was a smart business plan that it did have some platform risk, but the cost was so low and the personality risk was also zero. And that was a pretty genius way of going about it.
SPEAKER_00
I'm definitely a little bit allergic to schemes like that because I don't want to hate on him for doing that because if it seems like it worked to him, I personally think I would never tell someone to do that though, because I think that is short term money that can go away in a heartbeat. Now, some people definitely pull it off, but I'm allergic to that shit where I'd rather not have stress about like, you know, I think you're wrong about that
SPEAKER_02
in that he was spending so little on it and he was making his, if you're making your money back in one month, then there's no risk. It can go away and you still like, you still will end up ahead. So it's all about what's the, what's the payback period on the thing? Is it a high priced item? These were so low priced that he was making his money back so quickly.
He's just free rolling from there. And so that I'm not agreeing with the result.
SPEAKER_00
It worked out wonderfully for him. Or I don't know. It seemed like it did, but I just personally would not want to do that because I'm like, dude, if you're going to spend like 10 years of your life doing something like make it, make it something kind of cool.
Like, uh, it just, I just, it just would be hard for me to like love that. And I don't think a lot of people would love it.
SPEAKER_02
Really? That's crazy to me. I think if I'm 21 years old right now and I was running the sort of, you know, he could push a button and make things trend on the internet all over the place. Right. And so I think that's an awesome thing to do for somebody who's, you know, you don't have capital, you don't have investors, you don't have like any real hard skills, can't code, can't design, can't do any of those things. I thought this was a great sort of entrepreneurial thing to do from age 20 to, I don't know how old he is now, 27 or something like that.
Um, and he's,
SPEAKER_00
I'm not hating the player here. I'm not hating the player here. I think the game is stupid.
But if you got, he got results. I just think that it's kind of like a soulless, uh,
SPEAKER_02
isn't the same thing as a media company, right? So like all he was doing was saying, great, I'm going to buy these media properties. This is a brand with an audience that cares about food or fitness or whatever it is. And I'm going to create content that they love.
And occasionally I'm going to run sponsorships. How is that different than the hustle on paper? It's not so your own email list. So hustle is better that way, right? Cause you, you instagant, like what happened was a lot of their Twitter accounts.
Yeah, I don't care about that. You can't really get shut down. I think, um, I can't
SPEAKER_00
get shut down. It is a little different though. Uh, from my perspective, it's, uh, on paper, it is the exact same thing.
It's a little bit different because I actually give a shit, which maybe he does give a shit about his people, his audience, but, um,
SPEAKER_02
Gotcha. So you love the topic more and the audience as well, the community of people.
SPEAKER_00
That would be the difference. Yeah. Like I love the idea of building a brand that people know and love and trust. So like, um, which maybe some people do love these brands, but like, let's say, like, let's say, let's go with news.
So let's go with CNN, which is on the left and Fox is on the right. Like to their audience, they're like a source of truth, which people can debate all day if that's true or not, but they are. Um, now compare that to like fringe, like far left, uh, like news things that are just like clickbait and far right.
That's clickbait. It's like, that's the difference. It's like, well, what's the difference between porn and a, uh, a documentary where there's nudity, like, you know, when you see it.
And so this is like one of those things where it's like, well, it's both nudity, like, it's a little different. I also think that like, you know, the way
SPEAKER_02
Buzzfeed kind of started with the stupidest of the stupid list of goals and quizzes and now does like a bunch of investigative journalism and create a tasty and all these other things. I think you can evolve that. Like they did this with, with their stuff too.
They used to buy a little meme accounts and post stuff all the time to go viral. And over time, they built then, uh, a woman's fashion, like an athleisure brand where they're selling products into that community. They built a news channel that's sort of like a ESPN, um, that's focused on sport, but in a, in a millennial kind of way.
And so they ended up upgrading the like, I would say level of quality around their things, but it's because they had this asset that could make any of their pages big. Um, and they, that was like their renewal blast.
SPEAKER_00
I agree with that. I think that's, I think that's possible. I think that's possible.
I just personally don't find it to be incredibly exciting, but I buy, I understand it.
SPEAKER_02
Okay, cool. I like when we disagree. It makes for good, good conversation.
All right. Let's try to squeeze one more and I got two minutes left. Um, what's one more thing we could talk quickly about? Do you have something in mind? Um, okay, let's do this one.
So why did it
SPEAKER_00
Oh, what were you going to say? I'll bring you have some stuff. Elon, weird tweets and,
SPEAKER_02
uh, okay, let's do this one real quick. So I tweeted this thing out. I said, Hey, uh, you know, give me a book recommendation.
Get there. What's a book that you read that changed the way you see the world? Um, and I tweeted this out and I got like 500 replies, which was probably like the most, uh, replied to tweet I've ever had. Everybody gave me like 10 books, which was way too much.
Right. I can't read that in one lifetime. Um, but ironically, so I ended up with a good book recommendation out of this.
So I got, I got a list, bought all the books. I start, I started reading one of the books, um, as a book called story worthy and I fucking love this book and nobody, I never, there was only one person who recommended this book out of the whole list of 500 reply, replyers. And so story worthy is a book by this guy, Matthew Dix.
Who's Matthew Dix? He is a teacher. I think in Connecticut. He, um, you know how people do like slam poetry at these like open mic nights or whatever.
So there's a version of that for storytelling called like the moth storytelling competition. You just go to this little bar or whatever on. Yeah, I love the moth.
I listen to it all the time. So he is the like 20 time moth champion storytelling. He's, he's the, he is the Michael Jordan of the moth.
The problem is the moth is so small that nobody knows about it. But anyways, this guy is just a, dude, the moth is not small. The moth is big.
If we're polling our audience, I bet less than 1% know the
SPEAKER_00
moth or something. Um, it's like NPR where it's like, uh, it has a, uh, a large audience, but maybe they're not like 19 year olds who wear. Right. And so, so I listened to one
SPEAKER_02
of this guy's stories and I was like, Oh, that was a pretty good story. Um, but I read this book and this book is awesome because this book breaks down the art of storytelling and you will like, I already feel like a better storyteller just from reading. I've read three fourths of the book so far and I'm like, wow, this is one of the most useful books I've read in a long time because I walked away being like, Oh, that's why the stories I love.
That's why I love them. And for the stories that I go to, I have my two or three go to stories that I'm like, these stories kill. I know, I now know why they kill and I know why my other stories don't kill.
And so I'm like, this is the,
SPEAKER_00
And you know how to like take advantage and capture people's attention and commit them
SPEAKER_02
to do stuff now. Yeah, it could be used for persuasion, but I don't think that's really that's definitely not his intent because he's like a, you know, sixth grade teacher or
SPEAKER_00
whatever. I know, but that's the that's the intent of all stories. Just capture attention
SPEAKER_02
to make it feel it's to move somebody, you know, emotionally, right? So it's like, it's to get somebody to feel something. Now you can use that to get them to feel excited about your product or you can get that to make them feel like they'd like you and they want to just hang out with you more or whatever it is. Right. And so I think storytelling is a superpower. This book storyworthy is fucking legit.
You should read it. And next time I'm going to do an example of like good story versus bad story, but I ran out of time today. Awesome.
SPEAKER_00
This was a short one. Give us a review, please. I read we both try and look at the feedback every single day and iterate based on your guys's feedback.
So leave us a review. Awesome.
SPEAKER_02
Cool. We're out. See ya.