Sam and Shaan break down the $500M cash sale of Follow-Up Boss, a bootstrapped real estate CRM that took four years to hit $100K in monthly revenue. They then riff on Peter Levels, Brian Johnson’s Blueprint launch ($20M ARR on day one), Consensus.app riding the OpenAI app store wave, the value of an “intentional internet” over algorithmic feeds, and what makes a great business partner.
Speakers: Sam Parr (host, co-founder of The Hustle), Shaan Puri (host, founder of Milk Road)
Cold Open [00:00:00]
Shaan: Let’s do a little public math here. Let’s break a rule. He just launched this product, he had more demand than he was willing to let in, he let in 5,000 people. That’s $20 million in ARR that he had on day one of launching this product.
Intro: Follow-Up Boss Sells for $500M [00:00:15]
Shaan: All right, what’s up. It’s me and Sam — two guys who you can’t live without. You know, I should really think about what I’m going to say before I start this. I literally just start talking and whatever comes out of my mouth is fine. And also it’s 9:00 AM for me. I wake up, I don’t talk to anyone from 8 to 9 AM, so these are the first words I say, period. And that’s what came out.
Sam: All right, well here we are. We both have one topic in both of our lists, which is very, very rare that we have overlap. We both have this topic because there’s a business that sold for $500 million — that is a badass story — and it’s called Follow-Up Boss. I had never heard of this company before. I find out they sell for $500 million in cash. Tell me about Follow-Up Boss.
Shaan: I think you know more.
Sam: You know how I know about them? I know about them for two reasons. The biggest reason: they’re a Hampton member, and so I saw them post that they had just sold. Man, this story is crazy.
Shaan: So I had never heard of this company. Have you never heard of them till today?
Sam: There’s not really a reason why we would have heard of them other than we’re just business nerds. It’s a real estate platform. It’s vertical software. Basically the gist of it is that if you are a real estate agent, or if you own a company that has multiple real estate agents, you get leads from Redfin, Zillow, whatever — ideally thousands of leads per month — as well as homes you’re selling and people buying homes, and you have to track them all. It’s basically what HubSpot or Salesforce does, but specifically for real estate agents.
Sam: The guy Dan — he started it 12 years ago, I think. Do you know how he started it? That’s what’s fascinating about it.
Shaan: I don’t know how he started it. You’re right, so the gist of it is it’s a niched-down CRM. Agents get leads, they need to follow up with those leads, you’ve got to keep track of all those leads. It’s a HubSpot for real estate agents, just zoomed way in on that one niche. A pretty insane exit. So how did they start it? What was the final sale price?
Sam: $400 million up front in cash and then another $100 million earnout.
Shaan: Listen to how this guy started. His name’s Dan. He’s from Australia but lives in Wyoming now, so technically it’s a remote company — but it’s a Wyoming startup. It’s got to be one of the bigger tech exits out of Wyoming.
Sam: Listen to this. He actually went through a course called The Foundation — do you remember that? Like 10 years ago, it was a course to teach you how to start a startup.
Shaan: No, I’ve never heard of that.
Sam: Yeah, that’s what it was called. I guess this is their greatest success story now. He went to this thing, and he started trolling Facebook groups while working a normal job. He was a marketer at a big company and was like, “I want to start a company, I need some ideas.” He had a buddy in real estate and thought that was interesting, so he started joining Facebook groups for real estate agents and just skimming all the posts. What are people complaining about? What’s a common thing?
Sam: He saw this guy complain: “Man, I’m paying $500 a month for software I hate for tracking all my leads. How are you guys tracking your leads?” And he’s like, “Okay, that’s interesting.”
Sam: So he partnered with a developer friend, they built an MVP, and they say it took them about six months. They only had one customer paying $150 a month. But the interview I read with him — this was a few years old, so I don’t know if it was true till the end — he said, “We basically built our entire business on Facebook. Not Facebook ads.” He said, “I would just go into all these Facebook groups as the CEO and I would see people talking about, ‘Hey, what’s a good platform for this?’ It wasn’t even related to Follow-Up Boss, I was just being helpful constantly. People would click my Facebook profile, see that I was the CEO of a tech company, click off, and buy it. I would call them and become friends with them.”
Sam: They found this idea just by trolling Facebook groups. They’d see people complain about stuff, and he would DM them on Facebook: “Hey, I think I’m building a solution for you. I don’t care if you buy it or not, but could you give me 10 minutes of your time so I can make sure I’m solving the right problem?” He did this so often that that’s how they came up with the software.
Sam: They bootstrapped the whole company. I don’t know their exact revenue — the only source I found was one I don’t entirely trust, but it looked like $28 million a year. Less than 100 employees and a huge exit.
Shaan: Don’t people have to tell you their revenue when they join Hampton? Can’t you just take a peek at the Hampton records here?
Sam: I would never cite that. I just Googled “Follow-Up Boss revenue” and saw what was public. I don’t know exactly.
Shaan: This is an awesome story and a great example of the niche-down, zoom-in pivot. There are many business plan blueprints. For example, the guys from 37signals — what they do is find something super popular but with too many features and make it do less. The less-clutter version. They’re doing it again with Once, where it’s software you only pay for one time — no monthly recurring. The stripped-down version of X.
Shaan: I don’t know if you saw, but the guys who started Tuft & Needle came out with a new company. Did you see this?
Sam: What’s it called?
Shaan: Boring Mattress. The guys who created Tuft & Needle — they were part of the DTC wave where Casper and Tuft & Needle and Purple got big, raised a bunch of money, burned a bunch of money, kind of didn’t have great exits. So these guys came back and now it’s boring.co. It’s basically: “This is a plain mattress. Our friends told us we should tell you about all the cool benefits and features that will make this different and sellable, but we’re not convinced we don’t think you’ll fall for that. So here’s just a really good mattress that’ll last you a while. No frills.” And it’s only like $400-$500.
Sam: That’s their new thing.
Shaan: So that’s one blueprint: do the same thing with less. Less frills, less brand, less features. Trello is a good example. All productivity apps kept adding more and more features. Trello was like, “We’re just going to have less features.” It’s just index cards on the internet that you can move around.
Pivot or Persevere: The Slog of Bootstrapping [00:08:30]
Sam: There’s actually another takeaway here though, which is — how long until you hit your first $100K in monthly revenue? For my e-commerce company, like three months, probably?
Shaan: Okay.
Sam: You’re involved in Shephard — how long do you think it took them to hit their first $100K?
Shaan: I have no idea. I’m going to guess six months.
Sam: Yeah, quick. Okay, so we’re talking months. Hampton took a short amount of time, months as well. The Hustle I think took nine months. Do you know how long it took Follow-Up Boss to get to $100K in monthly revenue?
Shaan: Well, you said they had one customer for $150, like hanging by a thread for a while. So is it more than a year?
Sam: Four years.
Shaan: Years?
Sam: Four years. I was reading this interview with them. It took him four years, they had 11 employees, and they were at $100K in monthly revenue. They said “around $100K,” so it could have been a little bit more. But what’s crazy is — these software companies, you and I both have this thing where we want to go fast — if you’re under $100K in revenue four years in, are you still doing this?
Shaan: It’s hard. I have an audience now, so… do you think you could have stuck with it?
Sam: It depends where I was in life. If it was 26-year-old Sam: 50% chance. Where I am now, I would say 5% chance. It would be really hard. You’d be going into those meetings like, “All right guys, we’re going to review the metrics today — everybody cover your ears — we’re at $42K in year four.” All right, but there are other things to be excited about.
Sam: But we talked to Dharmesh about this. Dharmesh — HubSpot — Dharmesh is the founder of HubSpot. HubSpot I think grew actually a lot faster, but he was like, “Man, the first like six years we only got to like four million or something.” He conveyed the idea that it’s a slog at first. At that time things just grew slower. Now things grow much faster — the benchmarks and expectations are different. But you have to have faith, and of course we’re talking about the one that worked. There are so many more that don’t work. But to have that faith, to stick to it for 10, 11, 12 years — if you have the right metrics, this pays off. These software companies are so much cooler than what we typically start.
Shaan: I did a fireside chat many years ago with Michael Birch — at the time my mentor and boss. He’s built four or five super successful internet companies that scaled to millions of users. He’s basically a billionaire in Silicon Valley. A bunch of entrepreneurs came over and were asking questions, and one of the questions they asked was: how do you know when to pivot or persevere? Meaning, you hear the stories about Follow-Up Boss or Pinterest where it wasn’t taking off for a while, and then they stuck with it and it did.
Sam: Did Pinterest take a long time?
Shaan: Pinterest took a long time. The graph was not like some explosive social app at the beginning. And I turned to him because I wanted to know: what does the guy who’s done it in Silicon Valley actually say? And he goes, “This is the hardest question for any entrepreneur and it is deeply personal and situational. For every one story you hear of a Pinterest that just keeps going after 12 months even though there are no signs of life — there are a hundred people that did that and failed and you just never hear about them. They don’t get to talk at the conference. So it’s super hard because you have survivorship bias, and you don’t know which story you should listen to.”
Shaan: He said, “The one thing we figured out was: we would set a time box. We think we can hit this milestone by this date.” Setting that time box is really important because it keeps you honest upfront when you’re super optimistic. I set one for this new company — I haven’t announced it yet on the pod — but I set one. I said, “I think we can get to $500K ARR in the first 60 days.” So I think we get to $500K of revenue in the first 60 days. And I set that. Now if we don’t hit it, that doesn’t mean I’m going to throw in the towel or shut it down. But maybe no — life’s on the line for these companies.
Sam: But the reality is you set that so that you have to have a conversation about why you didn’t hit your expectations. What were you wrong about? What assumption did you have that was incorrect? Because it might be a fatal assumption, or it might just be, “Oh, I underestimated how long it takes to do X,” and that’s okay.
Shaan: The thing we did when I worked with Michael was ask: what metric gives us the most faith, and what metric worries us the most? Let’s say four years in we don’t have $100K in revenue — that’s the one that worries us the most. But of the 52 customers we do have, they love it and nobody’s churning. It’s like, okay — what can I hang my hat on to give myself the excuse to keep going? If the thing giving you faith is “that one guy told me he liked it,” that’s not a very strong counterpunch to low revenue and usage. But it feels horrible when you’re in it.
Sam: I posted a link in our MFM doc — it goes to a TechCrunch article. I remember when I was running The Hustle, I looked up to Business Insider a lot. Henry Blodget was fairly transparent about their traffic. He wrote an article — looks like maybe six years into the company — and he made a funny joke: “We eked out a net profit of $2,100 on revenues of $4.8 million — basically enough to buy a MacBook Pro.” And he reveals their traffic with this nice graph that looks like it’s exponentially going up.
Sam: But when I zoomed in, it’s broken down by month, and you could see that basically in February of ‘09 they hit an all-time high and then didn’t surpass that until December of ‘09. So for 10 months — two years into the company — the monthly traffic basically either went down or didn’t go up. And when you’re living that every single day, every single week for 10 months, it feels miserable. Then you zoom out and you see it has gone up. But these graphs are never a smooth upward line. A lot of times for two, three, four years it’ll be flat, and then after a while it starts picking up if you do a handful of things right. But that requires extreme faith and it’s very hard to manage your emotions every day.
Shaan: I totally agree. Tony Robbins said this thing: “The number one choke point of any business is the psychology of the owner.” Every problem you think your business has, if you do the root cause analysis, it goes right back to the psychology of the owner. Let’s say you’re not growing fast enough. Why? Your paid acquisition sucks. Why? The guy running paid acquisition has been doing it for six months in his life and you don’t have someone experienced. Why? The owner hasn’t made that a priority and isn’t willing to spend money on talent. And so everything goes back to the psychology of the owner — which is both empowering and scary. The empowering part: it’s in your control. The scary part: it’s my fault.
Sam: And it also goes back to where the owner or CEO actually sucks. For example, at The Hustle I was always fearful of overspending, so I was overly cheap. There were times when Facebook ads opened up and it’s like, “Dude, we’ve got to spend more here.” Looking back, I should have spent way more, but I didn’t because I was being too cheap. And why am I cheap? Well, because of all this other stuff I experienced in life. It’s basically like what they say with people and money: it’s just going to magnify the traits they already have. Or what people say when someone’s drunk: the true feelings are just going to come out. Same thing with running a company. You’ve got to master that inner game, and it’s really hard.
Peter Levels Is Insane [00:20:00]
Shaan: All right, let’s do another one. I want to talk about Peter Levels.
Sam: Tell me the “Peter Levels is insane” one. That’s a good headline. I love this guy.
Shaan: So Peter Levels — we’ve had him on the pod, I think only once, but he’s got an open invitation to come back. He has like four or five different businesses that he runs, I think by himself, doing collectively around $2 million a year in sales. He’s super transparent about all of it, puts his revenue in his Twitter bio, shares everything. Really fascinating, thoughtful guy.
Shaan: Did you see what he did with his stock portfolio? He basically created a Google sheet — he doesn’t explicitly say the total, but you could do the math. He says, “Here’s how much my stock portfolio made me” — it was up 32% — so you could basically do algebra and figure out how much he has in his portfolio. And he reveals every single holding.
Sam: A, I’m happy he’s doing this. B, I would never ever do this. His transparency is wild. But it’s super fascinating to see what this guy is doing when it comes to sharing his numbers publicly.
Shaan: Two things about Peter. First, Peter — come back on the pod. We miss you. You’ve done a bunch of interesting stuff, including this plus your new AI stuff that we haven’t talked about yet. Second: we’ve had a bunch of people on this podcast — big names, big track records, billionaires, people who built hundred-billion-dollar companies — and nobody, and I mean nobody, has a higher approval rating amongst entrepreneurs on the internet than Peter Levels. Have you ever met anybody who is not a fan of Peter Levels?
Sam: I’ve had billionaire friends in conversation go, “That guy’s doing it right. Everybody likes this guy.”
Shaan: Put his profile picture up on the screen. Go to YouTube and just look at this guy’s profile picture — this is your personal branding seminar. Look at this picture. It’s him on a couch in the international pose of “guy scheming on the internet, just messing around, having fun, by himself.” He’s on a couch, half his body dangling off, he’s got his laptop on a pillow because the laptop starts to scorch you after a while, and he’s at this messed-up angle, his neck’s all messed up. This guy is a one-man band just having fun.
Sam: CEOs of major companies are like, “That guy — that guy’s doing it right.” Because everybody is jealous of being able to be this guy. A guy who’s just one man with a laptop, traveling around the world, building whatever projects he wants for fun. He builds cool stuff like an artist. Whatever he builds tends to have some juice behind it because he’s a very creative guy. He’s had many failures, but who cares? And he’s got a bunch of successes. He’s very open about them. He’s not trying to sell you anything.
Shaan: Peter Levels is a hero amongst makers. Nobody — I will contend this — nobody has a higher approval rating on the internet amongst entrepreneurs than Peter Levels.
Sam: He’s great. And I think on this podcast, a lot of people say, “Oh, you’re talking about just big companies too often.” We always reiterate: we like people who carve their own path. And that path could lead to a huge exit, or it could lead to something really small — you could just be a great artist. It doesn’t matter if it’s a big money thing or not. Peter Levels is so fascinating because he’s carved the hardest path and sticks to it. He’s very values-based. Really, really cool guy.
Shaan: He did a tweet: “Only 4 out of the 70 projects I’ve ever done have made money and grown. 95% of everything I ever did failed. By hit rates, only 5%. So ship more.” It has 15,000 likes. It’s literally like a VS Code screenshot of projects that made money and grew — four of them: Nomad List, Remote Talk, Rebase, and a YouTube network. This is before his AI stuff I think. And then there’s all of his other projects: ice cream chat, analytics, gift book, Telegram chatbot, startup retreats, places to work, fire calculator — I don’t even know what half of these are. But each one of those is like a great weekend that was had by him doing these projects.
Sam: You know that meme — “Babe, wake up, Shaan just tweeted again”? Whenever Peter replies to one of my tweets, it’s that feeling. It’s like, “Babe, wake up, Peter just said he liked what I’m doing.” That’s how I feel about this guy.
Shaan: I have a theory: what is lacking in most people’s lives is that they don’t live life on their own terms. And the way that expresses itself is — you have a lot of fun when you’re living life on your own terms. When you’re just doing your thing, you’re having a good time.
Shaan: Peter Levels, that profile picture of him on his couch all crooked, just on his laptop — he’s doing his thing. And this is honestly a bit of why people like this podcast. We’re not the most prepared or researched or well-spoken, whatever, but people can tell we have fun in our lives and we literally just do the stuff we want to do. It might be that the things we do are not at all the things you want to do. Sam’s buying a ranch, tipping cows, I don’t know. I don’t want to do all that stuff. But I can tell that you want to do all that stuff, and that’s awesome.
Sam: I DM him on a regular basis. He replies to me 10% of the time. So Peter, if this makes it to you — come back on the pod, man.
Brian Johnson / Blueprint: $20M ARR on Day One [00:28:30]
Sam: All right, another person who’s gone from zero to hero: Brian Johnson. Have you seen the T-shirt he wears lately?
Shaan: “Don’t die.”
Sam: “Don’t die.” That’s a new brand. You know what I like about it? It’s the same look as the “Austin 3:16” T-shirts.
Shaan: Yes. He should have just done “Johnson 3:16 — Don’t Die.” In fact, I might make “Johnson 3:16 Don’t Die” shirts, because that’s who he should become.
Sam: All right, so I was looking the other day because I saw that Brian Johnson finally started to sell something. You and I had made a prediction about six or a year ago — we said, “I don’t think Brian’s doing this for the money, I don’t think he’s doing this for the fame, although he’s going to make a lot of money and the attention feels good in the moment.” But we said: is this the greatest pre-launch marketing stunt ever?
Sam: What he did was basically turn himself into a character. A lot of people have done this in the fitness niche, but he’s not a fitness influencer — he branded himself as a longevity influencer, a “live forever, don’t die” influencer. He spent a couple million bucks on tests and content and building his brand. He came on pods like ours. You can look at Google Trends and see the interest in Brian Johnson growing over time. And he’s been doing everything you should do as an influencer — not that he wants to be an influencer.
Sam: Have you seen his meetups lately? These runs he’s doing?
Shaan: They look awesome. They take all these people and they chant “don’t die” and then they run up a hill. And then they get at the bottom and there’s a pot of lentils and they’re all eating lentils together. It’s amazing. He’s building his little cult and it’s a great thing.
Sam: So he came out with his first paid product. Did you see it?
Shaan: Is it the meal service?
Sam: Not exactly. It’s kind of like a meal service — it’s basically part one of his Blueprint diet as a ready-to-eat-style package. I think you pay $330 a month. It’s not like Blue Apron, it’s more like the supplements and the drink, whatever — some slimmed-down version of his anti-aging protocol.
Shaan: Got it. So it’s the Blueprint self-experimentation study. There are 67 interventions and it looks like there are a couple of powders, a bottle of olive oil, and a bunch of pills.
Sam: I like all those things. Powders, pills, and oils — send me up.
Shaan: So he got 12,000 people to apply, 5,000 people paid. Let’s do a little public math here — let’s break a rule. He just launched this product, he had more demand than he was willing to let in, he let in 5,000 people. That’s $20 million in ARR that he had on day one of launching this product. And $20 million ARR for a subscription supplements business is essentially like a $200 million business. What do you think Athletic Greens is revenue-wise?
Sam: They raised at a $1.2 billion valuation. $100-150 million, maybe $200 million max?
Shaan: Okay. Not bad. But this is day one. Come out the gate with $20 million. And he let in less than half the demand he had — he could have been at $40 million if he wanted to. I don’t think he’s doing this for the money, but goddamn, that’s an impressive start to a business.
Shaan: And it shows what I’ve been saying — I have this phrase now that I say, and my wife doesn’t think it’s cool, she’s the only one I’ve tried it on: “All content is now marketing, and all marketing is now content.” That’s what Brian Johnson did. He was putting out content. It happened to be marketing. And that marketing is now leading to a lot of sales for his new protocol.
Sam: When you say that to your wife, I can just hear the world’s loudest eye roll. Like, “Shut the up, Shaan. That works on those dorks that listen to you, but did you warm up the mac and cheese like I asked you to?”
Shaan: Yeah, exactly. It’s sort of like that scene in The Big Short where Ryan Gosling’s character is like, “Look, you’re getting the ice cream, you’re getting the nuts, you’re getting the chocolate syrup, you’re getting the whipped cream — and when this works out, I’m gonna get the cherry on top.” That’s his fee. That’s what Brian Johnson is doing here. He’s doing everything else because he’s a dork who enjoys it, and then it just so happened he got famous, and now he’s like, “Yeah, yeah, that’s pretty cool, okay fine, I’ll do that too.”
Sam: Isn’t it weird how much trust and faith we have in this guy? Part of it is that he already has the “screw you” money, so we think he doesn’t care, he’s just doing this because. The way he’s turned himself into a character is really interesting. In his case there was a high barrier to entry — he spent millions of dollars doing this, and he kind of lived like a hermit for two years to perfect it.
Sam: But the idea of turning yourself into a character and doing it in front of a lot of people — that’s actually a really appealing route. You change your identity, you go all in on this, and you can actually make a great living doing it.
Sam: Same reason I bought shoes from the Knees Over Toes Guy. I’ve probably never bought shoes from any brand besides Nike in like 20 years. And then I see this guy who’s over 40 years old dunking a basketball. I see what he looked like before he was doing his thing and how he had knee surgeries. Undeniable proof is a very, very powerful lever. This guy literally just does a somersault, then gets up and dunks the basketball — and he’s a 45-year-old white guy. He came out with a pair of shoes — the Knees Over Toes-style thing — not great shoes, for the record. Definitely don’t buy V1 of anybody’s anything.
Shaan: But I have a high amount of faith and trust in this guy because, again, all content is marketing. For two years he was just putting out free content, didn’t sell a thing. All he did was put out very helpful content and showed an undeniable level of proof that this guy was in incredible shape, that his legs were super strong, and where he started to where he was is a very powerful transformation. Anybody who wants that transformation will trust him, and when he comes out with a thing and says, “Hey, this is what I use,” people will buy it.
Sam: By the way, I also bought the shoes he was wearing before he came out with his own shoe. He was always wearing these other shoes — that white shoe that’s like $70 or $45. Couldn’t even really get it on. I have a thick American foot or something. Doesn’t fit in the European shoe.
Shaan: Dude, I wore the out of them. I love those shoes. I remember seeing the picture and Googling, “What are those shoes?” They’re not very comfortable, but they look cool though. Are they like Futura? Like TCH?
Sam: I love the Futuras too, man. They were as hell.
Hampton Data Business & the Benchmarking Opportunity [00:39:30]
Sam: Can I do a quick thrill/shill? Okay, so basically at Hampton we’ve got access to all this data. In order to grow, we started doing these surveys where we survey different industries and get benchmarks. We just did one on agencies — we surveyed 60 agencies, they gave us all their revenue, all their profit, and we did this cool survey showing here are the benchmarks for profit per employee, revenue per employee. You can find it at joinhampton.com — go to our blog, you’ll see the surveys. We did one on wealth, we just did one on agencies. If you’re an agency owner, check it out.
Sam: But here’s the thrill part: I think if I decide to do this, have you ever heard of benchmarking as a business? I didn’t know people would ever pay for this. The most common form of benchmarking is salary benchmarking. There’s salary.com and like 10 or 20 others that have raised hundreds of millions of dollars.
Sam: I think in a couple years, if I get enough data, I can spin this off and create a data company where I do benchmarking for different industries. The problem we’d be solving is: let’s say you’re an agency or an e-com business above $50 million in revenue and you want to know, “Are we spending the right amount on ads? Are we spending the right amount on employees?” I think we can build a cool data business off of this. So that’s the thrill — I just wanted to call my shot and say I think we’re going to do this.
Shaan: I don’t think it’s “calling your shot” if you say “maybe eventually.” Calling your shot is “I’m going to do this.” That’s the only requirement — you have to say “I’m going to do this,” not “I kind of sort of might probably will.” It’s like if Babe Ruth just kind of shrugged.
Sam: Also, you reminded me of something. Have you seen the leaked Mark Zuckerberg AIM messages from when he was 19 years old starting Facebook? He DMs a friend: “Yeah, so if you ever need info about anyone at Harvard, just ask. I have over 4,000 emails, pictures, addresses, Social Security numbers.” His friend goes, “What? How did you manage that?” He goes, “People just submitted it. I don’t know why they trust me. Dumb.”
Shaan: This is Sam in his Slack about Hampton: “Yeah, every agency just submitted their profits, their revenues, their growth tactics. They trust me.” Next Zuck.
Sam: For the record, I want to say I have access to zero of the documents that people submit in order to join Hampton. I’ve got zero access. I purposely did this. For years I purposely didn’t ask your name or the name of your business. I just literally don’t know how to log in and I don’t have a password.
Shaan: The equivalent of “no hablo” and staring out the window.
Sam: I can’t access this stuff. Trust me. All right, let me stop making jokes about that.
Consensus.app and the OpenAI App Store Moment [00:44:00]
Sam: All right, let’s do another one. Last year I invested in this company called Consensus. It was an AI company for research — for scientific research specifically. Instead of reading individual studies, this website would tell you in aggregate what many studies show. They were only doing okay. It was basically just two guys still trying to figure it out. This sounds interesting, but I don’t even know if this is going to work.
Sam: Well, something happened a few weeks ago that I think is going to change their business. There’s an inflection. Like when the iPhone came out and the App Store happened — we heard stories about Pandora, which was a company before they were the music service. The App Store came out, they built an app, they were one of the first apps — that’s what made Pandora popular. When COVID happened, there were companies like BetterHelp, tele-medicine, because laws changed during COVID where a doctor can prescribe meds cross-state lines.
Sam: Now one just happened. On January 10th, OpenAI created an App Store. They’ve kind of done this before where you can make your own GPT and all that, but they created a proper App Store. I don’t think they’ve even announced the pricing yet. With the iPhone App Store the developer gets 70%, Apple gets 30% — OpenAI hasn’t said what the split is going to be. Still really early.
Sam: This company I invested in is like, “Our thing is doing okay, but what if we just went all in on this plugin for the OpenAI store?” Their version is basically: you type in a medical question, it gives you a slightly better answer than OpenAI but it’s a lot better — or at least enough that you want to pay for it. There’s not that much traffic yet to the OpenAI App Store, but this is one of those inflection moments.
Sam: You remember Honey — the coupon code company? Grammarly did the same thing with the Chrome Store. You had friends who did this with the Facebook platform. Zynga, which at one point was a multi-billion-dollar company. All those Mafia Wars-type games. The Draw Something guy — Dan at Camp FM — I think he had a multi-hundred-million-dollar exit. I think you’re going to see all this happen right now with the OpenAI plugin store.
Shaan: It’s fascinating. What did the founder say about it?
Sam: I think somebody asked the founder — he said he thinks it’s going to be “something between more than the Chrome extension market but less than the App Store.” Short-term it’s awesome for marketing and functionality for users, and OpenAI is footing the bill on a lot of the compute costs. Medium-term, they have 2x the usage of the next biggest GPT, and I think Canva is next.
Shaan: So this is the number one GPT?
Sam: Yeah, it’s taking off. And these guys — they’re smart guys. But when we invested it was still: “I don’t know, hopefully we’ll figure it out.” There was a time where I was like, “You guys better figure this out soon.” And then this inflection happened. This change happened.
Shaan: This product is awesome. I just went to their site — not the ChatGPT thing, just their app. It’s really cool. I asked, “Are microplastics dangerous for humans?” And it has all these papers. Then you hit “synthesize” — which I think costs credits, but you start with 23 credits — and it says: “Summary: We looked at 10 papers. The studies suggest microplastics are dangerous for humans and carry toxic chemicals, contaminating ecosystems and linked to various health issues including cancers and immune system disruptions.” And then: “We looked at 14 papers. Yes: 43% of the time. Possibly: 57% of the time. No: 0% of the time.” And then below you can see each specific paper, tagged like “this is a rigorous journal,” “this is highly cited,” and you can have AI summarize each paper.
Shaan: This is a sick product. It’s cool. But by the way, just like all great stuff, it did not start that way.
Sam: I’m mad you didn’t tell me about this. Why did I invest in this?
Shaan: It wasn’t obvious. It’s still not obvious. This company, just like any startup, could still totally fail. But it’s a very interesting bet. Verticalized Google specifically for scientific papers, with AI being the “why now” for what you could do differently than before — this makes a lot of sense. Shout out: consensus.app is their website.
Sam: The point being — Consensus is great, I think it’s actually going to work out. And there’s going to be a lot of stuff just like them on the ChatGPT store. When we invested in them, I’m almost positive the word “AI” didn’t come up one time in the conversation. It was like, “We know the outcome we want, but we’re not entirely sure how we’re going to get there.” Then they started figuring it out, AI got more popular, the ChatGPT store opened up, and they were like — boom. We found the path.
Sam: And I think that path is open right now. It’s more competitive than the App Store and more competitive than Chrome because there are more people doing this stuff. But that inflection is happening right now. OpenAI even said they don’t know what payment terms they’re going to give these people. They’re still all figuring it out. But this is happening this second, right now. There’s an opportunity here.
Shaan: It’s like a celebrity relationship — “We don’t want to put a label on it yet, we’re just exploring each other and figuring out who we are together and individually.”
The Intentional Internet [00:55:00]
Sam: Have you used Perplexity?
Shaan: I don’t like it. I don’t know why people are going nuts for it.
Sam: It’s pretty cool. It’s just like OpenAI but with a science bent. That’s one of those companies — I don’t know much about it, this is an uninformed opinion — but I feel like every VC who missed OpenAI, or couldn’t get in now because it’s at a $100 billion valuation, realized this is the big thing and then said, “What’s the next best competitor?” And all the capital floods to Stable Diffusion, Perplexity, the next thing, the next thing, and they get these super-inflated valuations. I’ve seen that story many times. It happened in crypto, happened when mobile was happening — for every Instagram you’d get 10 super-funded other apps that didn’t make any sense. I would take the under on that.
Shaan: After the pod, go to your email and type in “Consensus.” I’m almost positive I heard about this company and you were CC’d on the email.
Sam: I’m almost positive… okay, we’re gonna burn it down and hide it. Do a rant about something.
Shaan: All right. I’ve had a realization. My world — a lot of the content I was consuming — was algorithmic. You go to Twitter, it’s an algorithm telling you here’s the content you need to see. You go to TikTok — algorithm. Facebook, Instagram, yes. Even email isn’t really algorithmic, but it’s essentially “here’s what other people want you to look at.” Same thing with news — “here’s everybody’s problems on the other side of the world, pay attention to this.”
Shaan: I’m calling it the Intentional Internet. I started being really intentional: “No, no, no — if I’m going on the internet right now, what is it I want to see? What am I curious about? What do I want to learn?” And then I go in and I’m stiff-arming algorithms left and right. I’m Marshawn Lynch on that one run where he just sheds eight defenders, goes all the way, and just rumbles to the end zone. That’s me on the internet now.
Shaan: I think more people should be doing this. Join me on the Intentional Internet, where you don’t just take whatever the algorithm gives you — where you’re not just a little puppy eating the puppy chow the algorithms give you. Go on with some intent and say, “What is it I’m looking for?” Maybe it’s a certain type of entertainment, maybe it’s information, maybe I want to be inspired. Okay, then go look for the things that give you that. Follow that way.
Sam: You follow 13,000 people on Twitter.
Shaan: Right, so the trick is you don’t just go to Twitter. If you go to Twitter, you’re going to hit the feed and start scrolling. What do I do instead? I make a little list — “I’m curious about how this started” or “I want to learn more about this” — and then I’ll go to YouTube or Google looking for just that. Adding that little paper step between me and the internet has been very useful. I learned a bunch of interesting things in the last three days. I got more out of the internet.
Sam: What’s been on your list?
Shaan: I’ll give you an example. I was doing research for one thing and I came across this name — do you know Ricky Van Veen?
Sam: Yes! He’s amazing. I’ve gotten him on… wait, are you talking about Ricky Van Veen? The Facebook guy?
Shaan: Yeah. This guy’s great. He created College Humor, and then — you’re forgetting the thing they started — in pre-YouTube days they created a better way to host videos. That’s Vimeo. Which they sold to IAC, and IAC spun off Vimeo as a billion-dollar-plus publicly traded company.
Sam: So he creates Vimeo, creates College Humor, goes to IAC. IAC is a super interesting company with a very cool pedigree of people. Tinder came out of there. A bunch of really interesting things. They’re sort of the Proctor & Gamble of the internet — a conglomerate of internet sites, mostly media, plus match.com. And now Ricky is head of creative content at Facebook, I think?
Shaan: Yeah, I was thinking about College Humor and just followed the thread: “Who’s behind that, what are they doing now?” That “what are they doing now?” thread has been one of my favorite ones. I’ll think of something that was cool and be like, “Where did they go? I haven’t heard about them. What are they working on?” That’s a very useful way to explore.
Sam: By the way, Ricky — I don’t know if they’re still together — but he married Allison Williams, the actress whose father is Brian Williams the newscaster. If you just Google his name, this guy is just hanging out with all these celebrities and seems really cool. Dreamy Silicon Valley strategy Facebook guy.
Shaan: My point is: I have a list of cool companies or cool things that were built 10 years ago, and I’m wondering what are those people doing now. College Humor was one of them. I go look at Ricky, and then I’m researching Vimeo, and I find he gave this talk in 2008 at a media conference and then came back again eight years later. For nerds like us who create media and content on the internet, it’s very interesting to see what somebody thought in 2008 — the iPhone had come out but hadn’t changed the world yet. His presentation is literally like, “Yeah, kids on their BlackBerries are not going to be doing XYZ.”
Shaan: When he created College Humor, it became the number one comedy entertainment site on the internet — way bigger than Cartoon Network and all the incumbents. He comes back eight years later and says, “Here’s what I got right and here’s what I got wrong.” One of the things he talked about: at some point, people on the internet will stop leaving the internet. They’ll stop using it as a springboard to go onto Netflix or get cast in a TV show. They’ll realize their YouTube channel is worth more than those shows and won’t want to leave. He basically had four or five predictions about where the world was going.
Shaan: He put up all the sites — Viral Nova, Upworthy, whatnot — and said, “Right now these are the hottest sites in the world. Their traffic is crushing ours. They’re getting more traffic than God.” And then: “I think all of this is going to zero. This is highly commoditized and it’s not going to work.” He was absolutely correct.
Shaan: It was very interesting to learn from this guy who’s a master at what he does. Compare that to just logging on the internet and taking the last thing somebody tweeted or the latest TikTok someone uploaded. I’m playing defense. I’m playing their game, not mine. I’m trying to have a little bit more intention when I use the internet.
Joe Speyer, Little Things, and Platform Risk [01:06:00]
Sam: Did you ever hear the story about my partner Joe in Hampton? You’ve mentioned it before — he got a huge Facebook referral, had an offer to sell, didn’t take it?
Shaan: Is that the story?
Sam: So Joe’s an amazing entrepreneur. He started his first company — an ad tech company — and sold it for hundreds of millions of dollars when he was like 25. Huge success at a young age. His next business was called Pet Flow — a pet food company. They started it before Chewy, except Joe was a little conservative: “We have to spend money profitably on ads, so we’re going to go a little bit slower.” Chewy comes in and goes, “Nah, we’re going to lose money for the first six to twelve months per customer and we’re going to do such a good job they’ll come back.” Joe was like, “That’s a dumb strategy.” Turns out it was right.
Sam: But in order to make Pet Flow grow, he created a blog where they just wrote content on pets. Within a very short time they started getting 10, 20, 30 million people a month coming to this blog. And he’s like, “Forget the pet food — let’s just do this blog.” Within four years they were the most shared website on Facebook, bigger than Viral Nova, bigger than BuzzFeed, bigger than HuffPo — all those publishers that were huge in 2014-15. They were getting something like 250 million uniques a month. Scaled up to I think $90 million in revenue in four years.
Sam: I cold-emailed him, went to his office. They had these studios, and they were saying, “Facebook Live is the next big thing. We just built out this $250,000 studio in our Manhattan office. We have 150 employees. It’s going to be the biggest thing ever.”
Sam: The problem was — they built this entire company, Little Things.com, on the back of Facebook. They got an LOI to sell the business. They were literally three weeks from selling for hundreds of millions of dollars. Facebook puts out an annual report: “We’re actually changing, pivoting from this thing to this thing.” And three weeks away from the deal closing for hundreds of millions of dollars, the buyer backed out. Within six months the business basically laid off everyone and shut down. All in a matter of six or seven months from “we’re on top of the world making $100 million a year” to nothing.
Sam: It’s a crazy, crazy story. If you Google “Joe Speyer Little Things,” you’ll see it. I think Inc did a big story on it.
Shaan: The lessons we learn unfortunately. It’s cool to say “you learned so much from failure,” but God, sometimes it’s just so painful.
Sam: He was basically set to make $50 million personally and three weeks away from it closing, it went away. He posted about it publicly.
Shaan: What’s he like to work with? You picked him as your partner for Hampton — why?
Sam: He’s the best. He’s a harmonious partner. He’s even-keeled. He’s very easy. Not like the partnership dynamics we’ve talked about before. What’s his edge? He’s so good at spotting opportunities. He’s technical and he’s so fast. I’ve never met someone who’s significantly faster than I am at making stuff and going all in. He’ll just find an opportunity, build a website for it, and he’s like, “Yep, this is what I’m doing now.” He pounces so fast.
Sam: One thing that we did that was so great — did you ever do this with Ben or any of your partners? Before you jump in together, you sit down and map out what do you want your life to be like, what do you want in five years and ten years, what do you want on a day-to-day basis, what are you willing to give up and not willing to give up?
Shaan: Not exactly. I think there’s a version of that I do, but I think everything changes. It sounds really great in theory and I think it’s a useful exercise to clarify your own thoughts, but I don’t put as much weight in it. People themselves are quite incongruent in general. You change, you don’t know what you want, you say one thing because it sounds good but then something comes up. Stated preferences versus revealed preferences. It’s very hard to get to people’s true preferences.
Sam: I think it starts a really good conversation — “Let’s talk about what type of life we potentially want and be very open about that” — and you acknowledge that it will change. Joe’s also 42, I think. At that age you’ve solidified the values you stand for more. If I did that exercise when I was 24, it would not have been good. In fact, I did do it when I was 24, and it sucked. You want to know what I said I wanted? I said I want 10,000 employees. “Wouldn’t it be awesome if we had 10,000 employees?” And then I hired three people and I was like, “Yeah, that’s not for me.”
What Makes a Great Business Partner [01:15:00]
Shaan: My thinking on this is the Buffett thing — you want a partner with energy, integrity, and intelligence. Those are the core things I look for.
Shaan: Energy is the easiest to spot and the easiest one to try to write off if somebody doesn’t have it. It seems like a nice-to-have but it’s actually a must-have for me. And every time I’ve tried to talk myself out of that with certain people, it’s been a mistake.
Sam: Who have you worked with that’s high energy, almost to where you’re like, “I can’t keep up”?
Shaan: Sunil’s like that. Super high energy, but not exhausting — I get energy from that. Everyone I’ve mentioned moves so fast that it’s inspiring. They bring their own energy to the table. I’m not bringing it out of them.
Shaan: Ben is interesting — Ben Levy, my current business partner. On the surface when you meet him, he’s more quiet, more reserved. Doesn’t come across as a huge booming personality. But Ben’s got that energy where it comes out through text message, or he’ll wake up and just do something, or he can’t sleep at night because he’s thinking about something. Energy is not just being a wacky, flailing-arms guy. It’s: are you driven? Do you take action quickly? Do you think about things all the time? When an opportunity arises, do you shift gears up?
Shaan: Then it’s intelligence or competence — what are they great at? This person’s great at selling, this person’s great at building, this person’s great at just pushing the ball forward every day.
Shaan: Then the last one, integrity, is the hardest one to get a feel for. How’s this person going to treat me when they have the opportunity to be selfish? Will they be selfish? Very hard to know. You can kind of only talk to people they’ve worked with before, or ask them questions and try to see if they’re pretty honest about their track record. And then I just work with them on something first before we commit. I would always trade an experience for a belief. If I can have an experience working with you on something for three weeks, that’s going to be way better than trying to take a leap of faith on a bunch of things you wrote down in a Google doc.
Sam: Did you just make up that phrase — “I would always trade an experience for a belief”?
Shaan: Tony Robbins special maybe.
Sam: That’s yours now.
Work Schedule and Family Time [01:20:30]
Shaan: How late into the evening are you working on business stuff versus family time or fitness?
Sam: I basically work out in the middle of the day. I work till about 2 PM, so it’s basically I’ve done enough where I could stop working. I wake up, do my morning routine, work, then take a break to work out, and then I’ll either play with my kids and just hang out, or if I have it in me, I’ll do another hour or two of work and then do family time until they go to bed. They’re usually fully asleep by 8:30 or 9. Then I chill out, slash work — both are kind of the same to me. Sometimes it’s watching a show, sometimes it’s working or reading, and I’ll do that till 11 or 12.
Shaan: Between the kids going to sleep and you going to bed, are you on the phone talking to people ever?
Sam: No. That’s me time. I’m not talking to people. I’ve got a bunch of friends who are like that — even my wife, she’ll try to talk and I’ll be like, “I’m doing no talking.” It’s a nice way of saying, “I don’t want to talk to you.” I’m doing no talking right now.
Shaan: There’s like an unspoken rule at my house where at 8 or 9 when she wants to ask me what dates I want to go somewhere, I just mumble. That means, “Dude, I just spent all day at Ikea, I’m overwhelmed, don’t ask me a date.” I’m not thinking about anything.
Sam: You know what we’ve been doing lately? Legos. Have you ever done Legos?
Shaan: I’ve never done Legos. I have a whole separate pod topic about adult Legos because I think it’s a thing and you’re one of those. We should actually do a full segment on it.
Sam: I’m so into it. I just got into it in November. I’m a Lego guy now. I love it.
Shaan: Okay, we’re talking about that next time. I’ve got to jump. This has been good.
Sam: That’s the pod.
Shaan: That’s the pod.