In this episode, Sam Parr hosts a solo Q&A session, sharing his personal six-step framework for identifying and validating high-potential business ideas. He illustrates his methodology using real-world examples like 1-800-Flowers and Heineken, while also discussing the importance of consistency and networking in entrepreneurial success.
Topics: Entrepreneurship, Business Strategy, Market Research, Networking, Personal Development, Startup Validation
Introduction [00:18]
All right, we’re live. Sean is not here, so I’m going to do a question and answer session. I tweeted out that I’m going to be doing this, and we have a bunch of questions. Jonathan is going to be reading the first ones. What are they? Where do you want to start?
Business Idea Generation and Testing [00:35]
All right, this one is from Jimbo Slice @Jgilly3. He goes, “Would love to learn how to develop ideas for businesses to start and how to test said ideas.” So basically, because of this podcast, I have to research cool companies. But what a lot of people don’t know is I’ve been doing research on companies before I worked on this podcast, before I started this podcast, and this is how I created The Hustle. We ended up selling The Hustle for tens of millions of dollars, and this is how I created Hampton, which is going to be a huge company, I think. And I’ve done a bunch of other little projects based off of this research model.
Ideation Bootcamp [01:12]
I’ll do a quick plug. Basically, if you go to ideationbootcamp.co, everyone kept asking me about this process, so I like made it into a course. You can go and buy it if you want. I’ll just kind of give you a little preview now.
The 6-Step Research Framework [01:25]
I’ve got this way of researching where I look for five or six different things. And it’s almost like the way that I compare it to a song. So there’s a song called, uh, uh, you know, like a Guns N’ Roses song, like “Welcome to the Jungle.” Is that what it’s called? “Sweet Child o’ Mine,” that’s what I’m thinking. “Sweet Child o’ Mine.” “Sweet Child o’ Mine” has this amazing guitar solo, uh, in that song. And the, the band said that they, someone asked them how they write songs. They’re like, “Well, sometimes, like with ‘Sweet Child o’ Mine,’ I heard this, uh, amazing guitar riff that Slash was tinkering with, and I wrote lyrics around it.” And then we created the bridge and the hook and whatever. Other times, I’ve got this really cool one-liner, this lyric, we’re going to turn it into the song. I do the same thing with business. And so those little hooks that I look for are, the first thing is demand. So I’m constantly seeking out what problems people have.
Analyzing Market Trends and Leaders [02:16]
The second thing is I’m constantly looking at, uh, how many people share that particular problem, and I’m going to give examples of all this. The third thing I look at is, who are the leaders in that space? So what’s succeeding and why? The fourth thing I look at is, of the leaders and the people in the space, what shortcomings do they have? Next, I look at which business models are most effective. And then finally, I look at what problems aren’t being solved. And I’m going to give you an example of this. And so I have all these tools that I use. And so, like, here’s a, here’s an example.
Case Study: 1-800-Flowers [02:51]
So there’s, there’s this company called 1-800-Flowers, and, um, it’s a phone service where you call and you order flowers. And I was just like, probably buying Valentine’s Day flowers on their website one time. And I noticed that their traffic, I use this tool called SimilarWeb. I use that all the time. It’s a plugin, it’s free. They have a paid version, the free version’s totally fine. They have this plugin where it tells you a guestimate of what the traffic is from a website. And 1-800-Flowers, as predicted, it had like pretty great traffic. Like it was like 5 million people a month coming to their website, and then in February, it like peaked to be really, really big. That’s easy to guess because it was Valentine’s Day. But basically, it was that told me that, wow, a lot of people are using 1-800-Flowers on a regular basis, and it peaks in February. And it also, uh, had a big jump in, uh, um, whenever Mother’s Day is, May or June. And so I was like, “All right, that’s interesting.” I kind of knew that, but let me re-a little bit more about this.
Case Study: Annual Reports [03:52]
And so I use another tool called annualreports.com. And I love reading annual reports because it teaches me about the company. So an annual report, if a company is public, they have to release this quarterly report where they talk about their earnings and all these interesting things about the company. And a lot of time they appear boring, but I’m reading them to find insight. And I found this one insight that said, “We are noticing that the, the succulent plant,” it’s a very particular plant, “we are noticing that amongst our millennial consumers, it’s the fastest growing trend.” I also did this with Heineken. The company Heineken, they in their annual report, they said, “Um, Heineken 0,” so which is like a non-alcohol version, “they are, uh, it’s our fastest growing segment. It’s still really small, but it’s fast growing.” And when you see a big company like 1-800-Flowers or Heineken, so a company that has millions of customers, when they say one or two lines like that, that gets me really interested.
Health and Fitness Journey [09:48]
All right, this one is from Mike Teravella. He asks about the evolution of your health journey while being an entrepreneur. He goes, “I’ve been lifting to get back in shape and just curious of lessons or future roadblocks to watch out for.” So this is around fitness and health. So let me give you guys some background. So I was an exceptional high school athlete. I was one of the best in the state of Missouri where I’m from at the 200-meter and 400-meter dash. And then I went to a Division I school where I was a scholarship athlete for two years, and then I quit and I got into business. And between the ages of 20 to about 28, I was fat. I was pretty lumpy and I was pretty disgusting. Now is a good time to put the my before picture. So if you’re on, uh, listening to this on audio, you can go ahead and see, you can go to our YouTube and see those pictures. But I got pretty fat, and I got disgusting. And then about three or four years ago, I said, “This is it. I’m going to get my act together and I’m going to become a fitness model.” That’s what I said. It was a joke. I’m not actually that, but it was a joke, and I did it. I got pretty fit.
The “Flat Ass” Rule [10:56]
And so, I basically created this rule. Uh, General Mattis, he’s this, uh, general in America, he’s got this great line. It says, “Figure out your flat-ass rules and stick to them.” And the reason being, and I stole this from Ryan Holiday, who’s an inspiration to me, he said, “The person who decides every day, uh, what choices they have to make for each decision, that person will be exhausted and burnt out.” And so about when I was 29, 28 years old, I made the decision that I will never, ever, ever miss a workout. And so at first, I basically created programming for myself, which means I created my own schedule, my own lifts, and like how much I should lift. I did that on my own for a little while, and then I hired a trainer. His name is Jesse O’Brien at Central Athlete. I think if you go to centralathlete.com, you can see him. I’m not affiliated, I’m just a fan. And he created all my training for me, and I meet with him monthly, and I do the workouts remotely. But basically, I don’t miss a single workout. And I have, uh, I workout five days a week. And I, so that’s five days times 52, I think that’s 260 workouts. In the last two years, three years, I’ve probably have missed five to 10 a year. And that’s usually only because of sickness or like if someone dies and I have to take a flight to a funeral. But basically, 95% of the time, I don’t miss. And so I believe big, big, big and big time into consistency, so I don’t miss.
Shiny Object Syndrome [15:06]
This is a great question, and this is something that I think holds back 90% of people from really big success. So I constantly ask myself, “What can I do this week, this month, this year? What can I accomplish in a certain time period that will make every other task not important?” And so there’s this idea of like procrastination. Paul Graham wrote this great article, if you Google “Paul Graham procrastination,” he talks about there’s actually good procrastination and there’s bad procrastination. The bad type is, um, you’re just not going to, you just don’t start working. But the good type is that it’s like the idea of this crazy scientist who’s a genius and he forgets to shower or he forgets to wear two, uh, matching socks. And the idea being is you can actually ignore most things as long as you’re getting the big things right. And so I ask myself all the time, “What is that one thing that I want to accomplish?” Most people, they try to jump from thing to thing to thing because something’s not working or because they feel pressured into doing something. I actually think that you should do one thing for an extended period of time.
Loyalty and Relationships [26:23]
All right, so I back-channeled a few questions. This one is from your buddy Neville Medora @NevilleMedora on Twitter, and he wanted to hear a bit about your loyalty to your dog, Sid. He had a quote to share that I thought was pretty great. He goes, “I remember Sam vividly saying, ‘I hate when people give away their pets. When you sign up for a dog, you sign up for life.’” So Neville wants to hear a bit about your relationship to Sid and just if you could elaborate on that quote a bit. Yeah, so basically I have this dog named Sid. I got him when I was 20 or 22 or something. He’s 14 years old now, and I do crazy stuff for this dog. Like, for example, I live half the year sometimes in New York, and sometimes I’ll fly, sometimes I’ll drive, but if I fly, I hire a driver for him. So I basically hire someone to drive him from Austin all the way up to New York. And like I don’t travel because of him, uh, overseas typically. Um, and so the reason being is I mentioned, uh, having rules. Another rule in my book is responsibility and loyalty. So there’s a few people in my life, my wife, my dog, my business partner Joe, Sean’s one of these folks, uh, Jordan, the CEO of Hampton. I firmly believe that you never, ever, ever speak badly about them behind their back. You don’t lie, um, you don’t disrespect them publicly, you don’t question them publicly, and I try my hardest not to do that even a little bit. The reason being is, uh, I’m a firm belief in loyalty, and so, uh, there’s I basically have zero loyalty to most people, and then there’s like eight people in my live, my life who I like, I can like write them down and cite them. I will do anything for them, and I expect them to do that for me.
Hiring and Building Community [28:47]
So I’m not like a religious person, but there’s this, uh, thing from the Bible. I went to Catholic school my whole life. There’s this like a line from the Bible where like Jesus is trying to like get disciples and he tells one of his disciples, Peter and Paul, he goes like, I think they’re fishermen, and he goes, “Come join me and you are going to be fishers of men.” Uh, and I love that line. Um, that’s an example by the way of being interesting. You just find like interesting lines and you, you know, you know, you retell them. There that’s a beautiful line. And the way that I’m able to, um, hire good CEOs and hire great people, I mean if you look at The Hustle, I don’t know how many people we had when we sold the company, maybe 40, so we probably have hired 60 or 70 people. A lot of them are really successful now. Like we hired them when they were like 23, and a lot of them, maybe like 15 or 20 of them have went on to start successful companies, help grow other successful companies, have a name for themselves. And the reason they did that is I wanted to be a collector of people. Fishers of men, that’s a weird line. I call it collector of people. So I I worked really hard at collecting people. And so when I find someone that’s interesting to me, um, I try to make a mental note of who they are and how I can use them. And the line that I tell them, and this is a line that I believe, which is like, “Hey, do you want to hang out?” Like, let’s say I meet someone, I’ll follow up with them, or I cold email someone, and I’ll say, “Hey look, the best case scenario here is that somehow we work together and we create magic. The worst case scenario is that you have a new friend in the industry and we’ll just help one another. But our world is small and I have a feeling that it’s going to be nice that we’re going to be, uh, on the same team in some capacity, whether just as friends or literally at the same company.” So take this phone call. And that’s what I believe. And so, uh, for years, so like for example, for years I would host events or create excuses to meet people. So for example, I had this thing called the Anti-MBA. It was my book club. I started it in San Francisco in 2012, and basically the way it worked is I would pick one book per month, we would read a quarter of the book each month, and then and then I we would meet up and talk about the book, and I would bring experts on that book’s topic to come in and lead the conversation. So it was kind of like an MBA, but it was free, and I organized it, hence the Anti-MBA. A bunch of my great, great, great friends, uh, Sean and, uh, Perry, we we came in each other’s orbit via this book club. Um, Sieva, who, um, Kazinski, who’s got a really successful PE firm now, came, he was one of my first members. I posted ads on Craigslist for this book club. That’s how I got popular, by the way. I posted an ad on meetup.com and on Craigslist. And I would host this book club like one, I think I did it for two years straight, every week. And that is how I developed a network. And then from there, I hosted a conference called Hustle Con. And the whole idea was, “I’m not sure what I’m going to do next after selling my previous company, but I’m going to host this event called Hustle Con, and in doing so, I imagine I’m going to meet a handful of people who will inspire me or partner with me in order to create my next thing.” And so I’m constantly, I I do it less now. Now I I jokingly have this rule called “no new friends” because I have a pretty good network now, but basically, I just collected people. And anytime I saw someone who was intriguing, I did a really good job of getting to know them and then just filing them away in this bank, and I would check in with them once in a while and get to know them, uh, and remind them who I was occasionally. And then when I had like an opportunity, like I’m starting a new company, I would think, “Oh, I talked to this one person this one time, I left a good impression on them, I hope I can just holler at them.” And so I do a really good job of collecting people and doing outreach.
Viral Cuts [30:22]
So Viral Cuts is a company that I’m part of. Um, I don’t have anything to do with the day-to-day, uh, but basically, if you want footage, like if you have a podcast like this, or if you have a bunch of video footage, they chop it up and they, uh, post it on your social for you, so you get like clips. Um, the founder, his name’s Hunter, he used to have an agency, and he, he was like, “You know, it’s cool, agencies are great, but when your agency is really broad and you will do lots of services for lots of different, uh, clients, and it’s hard to focus on something, it’s hard to operationalize something, your margins kind of get crushed a little bit, and it’s just a lot more challenging.” And so his whole thing was, “We’re just going to do clips.” And then eventually now they’re doing more stuff under a different company, like they’re doing, um, they’re helping people write, uh, books, or, uh, write Twitter threads, I mean. They’re helping people do a bunch of different stuff. Um, they’re helping people grow their YouTube, but those are all different companies. But Viral Cuts, he was like, “I’m just going to productize this one service.” And so he did a really good job of hiring like 20 people, and he taught them how to make the, the, the clips, and then he like created a very strict process on how to get the footage from people, how to chop it up, how to deliver them. And it was like very, very, very, very operationalized from day one, and it’s going great. I don’t remember exactly, uh, what we’re allowed to say about how big it is, but it got to seven figures in revenue in like 60 days, most of which came because at first I tweeted it, and then Cody Sanchez, another partner involved, she started sharing, and so now it’s like well into the seven figures. Um, it’s going great. You have to deal with a lot of headaches because it’s a people business, but, uh, and we’re not sure how churn will be, but it’s going really well so far. The hardest part about these businesses is operationalizing the, the service, so making it so it’s like a conveyor belt, so your workers know exactly what to do and have very strict deadlines. And then the second hardest part is getting customers. Viral Cuts, um, solved that problem by talking to me and Cody, and we just tweeted it out, and within a very short amount of time, they had seven figures in revenue. So it’s going really well.
Conclusion [31:32]
All right, so that was my rapid-fire Q&A. This is what happens when Sean’s not here. We do a little rapid-fire Q&A. Hopefully you guys enjoyed it. If you are listening on iTunes, Spotify, whatever, if you go to our YouTube, you’ll see some of the links to some of these examples and some of these topics that we talked about. And if you like this, let me know in the comments. Talk soon.