Sam and Shaan dig into how Nick Saban is on track to become a billionaire through car dealerships — and trace the full John Elway dealership origin story, including Elway’s missed billion-dollar Broncos stake. They then riff on defensible AI business ideas, including an AI skills marketplace and AI-automated newsletters, before wrapping with a wildcard segment on Sperm Racing, a real startup raising awareness around male fertility decline.
Speakers: Sam Parr (host, co-founder of The Hustle), Shaan Puri (host, founder of Milk Road)
Shaan’s Bathroom Business Ideas [00:00:00]
Shaan: Where were you when you were thinking about this?
Sam: I have this room in my house where I have the best ideas. It’s a cool room because if you need a shower, you’re already there. It’s just the bathroom.
Shaan: Okay. So you’re in the bathroom.
Sam: All right. I’ve got a business I can tell you a little bit about that kind of blew my mind. So I was on TBPN with my good buddy John Coogan. I went on there and they asked me a question. They go, “So you’re a creator, you’ve got this cool business underneath you as a creator. Are you bullish on investing in creators right now?” And I go, “No, but I’m bullish on creators investing in businesses.” And they were like, “What do you mean?” I said, “Well, what I’m doing is it’s not that somebody invested in me — I’m investing. I’m buying pieces of businesses that I think should exist or that I can accelerate in some way.” And that’s going really well for me. So I think that’s going to be a model that people do.
And so I started thinking about this and I saw an example today that kind of blew my mind. Do you know who Nick Saban is?
Shaan: I smell what you’re stepping in. Yes. I love where you’re going with this. Yes, I do know who he is.
Sam: You’re tooting my horn.
Shaan: Beep beep, my friend.
Nick Saban’s Path to a Billion via Car Dealerships [00:02:00]
Sam: I like Nick Saban. So Nick Saban, who was the football coach at Alabama and LSU, is probably the most successful modern-day college football coach. The guy made probably $150 million as a coach.
Shaan: Amazing money. Is that real? $150 million as a college football coach?
Sam: Yeah. He’s like in his late 70s, so he’s been doing it for a long time. His last contract was basically a ten-year, $100 million contract. He was making 10 to 12 million a year.
Shaan: Wow.
Sam: But Nick Saban is actually going to be a billionaire — and he’s going to be a billionaire because of car dealerships. I found this pretty fascinating. I couldn’t believe what I was reading.
So here’s how it goes. Nick Saban partnered up with this guy — I think his name is John Agresti — and the headline of the article was “The Man Who Will Make Nick Saban a Billionaire.” It talks about how Saban, while he was still coaching, was deciding that he might go into car dealerships.
Car dealerships have had an interesting history with athletes. I remember growing up in Colorado, John Elway — all the car dealerships had John Elway’s name on them. He was our active quarterback for the Broncos. And I didn’t really know this because I was just a kid, but I went back and looked. I was like, what happened with John Elway’s car dealerships?
The John Elway Dealership Origin Story [00:04:30]
Sam: It turns out Elway had this insane story. While he was still a player, he started a car dealership brand selling Toyotas and Chevys or something like that. Before he retires, he sells his dealership group to AutoNation for $87 million, mostly stock. So he gets paid out about $90 million, which was more than he was making as a professional NFL quarterback.
And he also licensed them his face and name so they could continue using his brand for like another ten years — but he had a non-compete during that time.
Two crazy things happened. One: because of that deal structure, John Elway both made a bag and lost a huge bag at the same time. He made $87 million, but then when he retires, it turns out the owner of the Broncos offered Elway an incredible deal. He basically told him, “You can buy 10% of the team for $15 million today, and I owe you $21 million in deferred salary. I’ll let you buy another 10% for that $21 million.” And Elway was like, “I don’t know. That’s a lot of money.” And the guy goes, “I’ll make it even more of a no-brainer. If you change your mind and want to sell within the next five years, I will pay you back everything you put in plus $5 million and 8% annual interest.” So you literally cannot lose money in this deal.
Shaan: Who owned the Broncos at the time? Bernie Madoff? Because this sounds like a deal too good to be true.
Sam: Pat Bowlen. And so Pat wanted John Elway to be part of the team. He wanted him to work as an exec. So he was basically saying, “I’m going to pay you this money either way. How about instead I trade you equity in the team.”
Shaan: Got it.
Sam: So Elway actually turns the deal down. For two reasons. One, he’s illiquid — he sold for $87 million but it’s AutoNation stock. He didn’t have cash on hand. He also had just invested $15 million with some guy named Shawn Mueller, who was actually running a Ponzi scheme. He lost about half of that money and got half back.
Shaan: He listened to the wrong guy. I thought the Bronco deal sounded like the Ponzi scheme.
Sam: Exactly. And by the way, that 20% stake — that’s about a billion dollars today. The team just sold for $5 billion. So Elway missed out on that.
After the non-compete ended, he went back into the car dealership business. Now that dealership business does over a billion dollars in sales and he’s worth a few hundred million from his second rodeo on the dealership side.
So I didn’t put enough respect on the car dealership game. Let me tell you about the Nick Saban one.
What caught my eye was a story that came out saying they bought two dealerships in Miami. Two car dealerships in Miami. Guess the price.
Shaan: $20 million. I don’t know. $10 million?
Sam: You’re only off by $680 million.
Shaan: Wait, why?
Sam: They bought two dealerships for a reported $700 million in Miami.
Shaan: Oh my god.
Sam: And they’re Mercedes. I’m looking at the article now. Mercedes dealerships. I think they have like an exclusive. They’re in the ultra-rich area of Miami. I actually spent 30 minutes this morning figuring out: is this a typo? Because I was like there’s no way individual dealerships could be worth $350 million. I’m still like 25% convinced it might be a typo and it’s really $70 million. But I couldn’t find anything after 30 minutes of digging.
Their dealership group now owns something like 10 to 15 dealerships across Alabama — where he was the coach — to now Miami. The partner says they sell 22,000 cars a year.
Shaan: 22,000 Mercedes a year.
Sam: And he says they do about $2 billion in revenue. The partner is now worth a billion dollars on paper and Saban will probably be worth a billion dollars after these deals. Isn’t that wild?
Shaan: It’s crazy. I brought up car dealerships a while ago, right? I think I read some stat about them.
Sam: And you told me you wanted to cover car dealers. Interestingly, Forbes recently did an article with a beautiful title. It was called “The Car Dealership Billionaire No One Knows.” It’s about this guy named Terry Taylor, who owns I think 120 car dealerships and also lives in Florida.
They came across him because they’re like, “This guy doesn’t do any interviews. We’ve never seen a photo of him. We don’t know anything about him.” But what they do know is that someone recently bought Tommy Hilfiger’s $30 million mansion in New York City, and turns out the same LLC owns $250 million worth of real estate. Who’s behind this? They find out it’s this auto dealership owner.
And they eventually get a hold of him and he goes, “I heard you’ve talked to all my associates. Fine, I will answer just a few questions.” And the whole story is how he purposely tries to be low-key and under the radar — but they uncover he owns an $80 million jet, all this amazing stuff.
Shaan: Turns out car dealerships are shockingly amazing companies.
Why Car Dealerships Are Such Great Businesses [00:11:00]
Sam: Yeah. I think they get little local monopolies because you get a territory. You might become the only dealer for that brand in that area, and then people tend to buy from a local radius if they’re not buying online.
Shaan: And the way they work is the car manufacturers basically do floor financing — they finance you to own the inventory. So you’re not out of pocket as much as it would sound. It’s very bank-friendly. The guy in the article was talking about how once you’ve proven to Mercedes — or whoever — that you’re a decent operator, they’re like, “Yeah, we would love to expand with you. You’re trustworthy. Let’s go.” And the banks will be like, “Yeah, this is a very predictable business. We’ve seen it for 100 years. We will loan you money once you’ve proven yourself.” It’s a very loanable business.
Sam: The way this happened for Saban was he was a Mercedes sponsor. He’d just done some event and he goes to these Mercedes events and he’s like, “Huh. I think Mercedes is great.” So he talks to them. He’s like, “Yeah, I’m interested — maybe I should do a dealership.” And they go, “Listen, you’re not going to want to operate these things. You keep being Nick Saban, god-tier football coach. You go obsess over that. We’ll introduce you to four or five of our favorite franchisees that we think really kick ass. We have all the data. We know who kicks ass. You might be able to partner with one of them.”
So he does a four-hour meeting with the first guy they introduce him to — this guy John. And he takes no more meetings. After four hours, he agrees: I’m going to partner with this guy. He said it’s like interviewing an offensive coordinator. When you know, you know.
Shaan: I thought he would use a love analogy, but he went with offensive coordinator.
Sam: And this guy John is a hustler. In addition to the car dealerships, they have a new bourbon company they started — a Kentucky bourbon company. And during COVID, they created a medical supplies business called Dream Medical Group. So they have Dream Auto Group and Dream Medical Group, and they sold over $100 million of PPE during COVID.
Shaan: This guy’s doing it. By the way, whenever I hear a story about someone doing PPE during COVID, it can go one of two ways. You’re always a hustler in that circle, but it’s like either good hustle or bad hustle.
Sam: Yeah. How fascinating. I didn’t realize it was that big. It seems like the key to this is two things. Partnering with the right dealer — and it seems like Mercedes has been booming for the last ten years. They have some accessible models that many people can buy. But also he picked the right cities. He picked Nashville in like 2016. You know what I mean? Picking the right geographies that are growing with richer people to support a dealership.
And where your name, if you’re an athlete or a coach, carries weight. It’s kind of silly but — what is Elway’s one called?
Shaan: I think it’s John Elway Chevrolet.
Sam: It’s the number one Chevy dealer in the country. Because guess what — we like our hometown hero. We like the local quarterback who brought us to the Super Bowl. That’s a heroic guy. And John Elway Chevrolet does $50 to $100 million a year in revenue. Just that one dealership.
The Dealer’s Obsession with Data [00:16:30]
Sam: By the way, here’s a quote from the Forbes piece about this guy John. He’s even more obsessed with the financial details. He’s a former accountant and he compiles his own monthly statement for every single store.
Quote: “If you say to me, how’s March going? I can look and say Cutler Bay sold 13 cars last night — eight new, five pre-owned. I can tell you who the salespeople were. I can tell you that Evelyn bought one. I know every name, every car we sold, how much money we made, and I track them on parabolic curves to make sure we’re not overcharging or undercharging anybody.”
Shaan: What a beast, man. The only thing is — what is he talking about with “parabolic curves”? What could that even mean?
Sam: I tracked them on parabolic curves. Is a parabolic curve like the beginning of exponential growth?
Shaan: Yeah, but what does that mean in context? I tracked them on parabolic curves. What does that mean?
Patrick Collison’s Local Maxima Tweet [00:18:00]
Shaan: Patrick Collison tweeted this thing the other day and he used the phrase “local maxima.” Did you see that?
Sam: Love that. Love breaking through a local maxima.
Shaan: I had to go figure out what all of it meant. He said something like, “I think worry about local maxima comes from imagining the 3D world, where it is in fact easier to get trapped.” I didn’t know what that meant. I had to look up each word individually. And then he goes, “But company space has many more dimensions. So most critical points are, as you say, just saddles. There’s almost always a positive gradient. You can trundle along.”
I did not know what any of those sentences meant at all. And so I asked someone to explain it, and it’s actually brilliant.
Here’s what it means. People often worry that they’re going to grow their company a bit, hit a ceiling, and get stuck — reaching a small success and thinking that’s as far as it can go. But the original quote says business isn’t like climbing a simple hill where you can easily get trapped on a small peak. Business has many moving parts: product, team, market, pricing, strategy, etc. And that creates lots of directions to explore. So even if growth stalls, it’s rarely the true limit. There’s almost always another path forward, something you could tweak or change to unlock more growth. Most stuck points in business are just temporary plateaus, not dead ends.
And the saddle thing kind of blew my mind. It’s a mathematical thing. When I saw this photo — it’s hard to explain to the listener, but it’s basically looking at a normal X and Y axis, but now there’s a third dimension and it’s 3D. And it kind of was mind-blowing.
I felt like Tom Haverford in Parks and Rec where he sees a piece of art and he’s like, “This makes me feel something. That’s so strange.” And I sat there thinking, “I feel special after reading this.”
Sam: I think he just reality-distortion-fielded you hard.
Shaan: I think he RD’d my ass hard. Telling somebody they’re at a local maxima is always one of those like pat-you-on-the-head things. It’s like, wait, are you patting me or are you telling me I’m a little boy? If you ever use that on somebody, it’s a great backhanded diss. You’re doing great, but you don’t realize you’re still at the kids’ table right now. There’s this other game that’s the global maxima. You’ve got to throw in a “bud” there. Local maxima, bud.
Sam: In fact, this article about the car dealership guy — at the end of it they go, “Joe loves dealmaking so much that in the middle of our interview he has to apologize. ‘Sorry, pal, don’t mean to be rude. I really got to close this deal.’” And I was like, “Oh, damn. He just pulled you and you put that in the article.”
Shaan: Joe sounds cool but also like a douche. Did you call him Joe? His name’s John.
Sam: Oh, I was just local maxima, bud. I don’t remember names.
Shaan: That was the virtual version of slapping someone on the ass and saying “go get ‘em” — calling them by the wrong name.
Defensible AI Business Ideas — The AI Marketplace [00:22:30]
Sam: All right, what else we got?
Shaan: I have some other stuff. So in AI there have been these waves where four or five of the same company get started and they all get an incredible amount of traction. A few years ago — when GPT-3 or 3.5 was out — it was copywriting services. Jasper, Copy AI, a whole bunch of companies that just exploded past $10 million in revenue very quickly with the same idea: hey, we’ll help you write blog posts and marketing copy. Then they got kind of wrecked when ChatGPT just became good enough that you could do all those things without a separate tool. I shouldn’t say wrecked, but they ran into headwinds where the explosive growth didn’t last forever.
And then the current batch of AI companies doing this is website builders. Lovable is one of them. Replit is another. Bolt is another. So there are these website builders — very simple. The way you had Squarespace and Wix where you drag and drop and make a website without code, now you don’t even have to drag and drop. You just say what you want. You’re like, hey, I want a website for a law firm, and it just gives you a beautiful website. And these businesses have now exploded. They’re some of the fastest-growing companies.
Sam: Is Cursor one of them?
Shaan: No, Cursor is a little different. Cursor is a tool for existing developers. But Lovable hit 4 million ARR — it was doing basically a million dollars of ARR every week for the first four weeks, and it’s now at $20 million-plus. Bolt is at $20 million. Lovable is at $20 million. They’re growing really really fast.
But I also kind of predict that’s going to be a very shaky space to build on. I don’t know — it’s going to be like a Groupon. It might become the next Squarespace, which eventually became a public company, but I personally don’t think so. I think that’s going to be just a feature inside of ChatGPT. Like, “make me a website” — and they’ll be able to do that. Replit’s a little different because it’s got a whole back end or whatever. Anyway, that’s all nuance.
What I’m trying to get to is it got me thinking: what would be a more defensible AI business? What’s a simple business that’s about AI but is not going to just get wrecked by the next ChatGPT update?
Some of the most defensible businesses are marketplaces. And nobody’s really built a good AI marketplace yet. We all know that marketplaces are super valuable when they get built — eBay, Amazon, Airbnb, Uber. Supply and demand. Where were you when you were thinking about this?
Sam: I have this room in my house where I have the best ideas. We have tile on the floor. It’s a cool room because if you need to poop or pee, you’re already there. If you need a shower, you’re already there. It’s just the bathroom.
Shaan: Okay. So you’re just sitting in the bathroom thinking about defensible AI companies. As one does.
Sam: And so I’m thinking — why isn’t there a high-end marketplace for this? One of the hardest things about AI right now is just keeping up with the tools and being able to do something with them. I was thinking: somebody should make an Upwork or Fiverr that is just for highly skilled AI doers. A place where I can go and put up a task that I know somebody with AI can either do, build for me, or show me how to do on a recurring basis. A very skilled marketplace where people can earn a ton of money for their AI enthusiasm.
I know a bunch of people who are really enthusiastic about this stuff. They build their own pet projects. They try every new tool that comes out. But they don’t really have businesses that need them because they’re just AI enthusiasts — kind of bored on Twitter all day. And I think if you had even just 150 people on the supply side, a lot of businesses know they could benefit from AI. And if you could just state your problem and have people tell you what they could do with AI to solve it, and you pay them to do that — I think you could build a marketplace around skilled AI practitioners right now.
Shaan: It’s like the upscale version. The top 1% level of quality on Upwork or Fiverr or 99designs.
Sam: Dude, I always thought something like this should exist — where I can hire an expert and they come spend three or four weeks looking at my company and say: I can make this better, this better, this better. Because I see things like Shopify making this announcement — they go, “Instead of hiring, you first must say: can AI do this? If it can’t, then you can hire a human.” And I’m like, “Oh man, I feel left out. I don’t know how to do any of this.” When you say AI, to me I’m still on level one. It’s just me talking to ChatGPT. But then I hear about vectors and agents and all this other stuff and I’m like, I know it’s important, but I don’t know how to do any of it. It’s like saying, do you want the V6 or the V8 car? And you’re like, I don’t know what any of that means, but I know the V8 is better. That’s how I am with AI, and I wish I could pay someone to just come and do this.
Shaan: I think this is an excellent idea. There are consultants who will do this — they’ll shadow your work, come into your company, do a discovery phase. All the way up to Accenture, which I think is going to do a billion dollars this year in AI consulting. Big companies are hiring McKinsey and Accenture for this. Small companies can hire indie shops to basically say, “I’ll pay 5 to 10 grand for a six-week program where you figure out where you can optimize and then optimize.”
Sam: But a lot of that’s so speculative. What if you don’t find anything? That sounds like work on my end.
Shaan: Here’s kind of how I’d want it to work. What would you call it?
Sam: I’d call it… Top Slice.
Shaan: That’s not bad. That’s actually kind of cool. Do you remember when we talked about A-Team? I thought that name was so good.
Sam: A-Team is fantastic. I like that name for everything.
The “Marry Me Chicken” Marketing Principle [00:30:00]
Shaan: Let me just give out some absolute marketing gold here. Have you ever heard this phrase? I’m almost scared to say this because I love the marketing genius of it so much. Nobody ever talks about it, and I really want to use the same principle on something — but I’ll give it away here.
Have you ever heard of “marry me chicken”?
Sam: No. Is that a nursery rhyme?
Shaan: No, it’s a chicken recipe. It’s like — this chicken dish is called “marry me chicken” because if you make it for a man, he will say “marry me” right away. And it’s this thing that women say. And if you just think about that — there are a thousand ways they could have described this creamy chicken recipe. It could have been the main ingredient, the cooking process. No: marry me chicken. I love that phrase. I think for any business you should come up with a “marry me chicken” level description of what the person really would want. Like, how good must it be that they say “marry me” at the end of it?
Sam: I love that. So I’d love to come up with something like that for this marketplace idea.
Shaan: Yeah. I think there’s a real opportunity to create something like this. Here’s how I’d want it to work. I have a buddy who invests in an e-commerce company. I was like, why’d you invest? He goes, “He’s doing interesting stuff with AI. I wanted to invest just to see what he’s building.” He’s trying to build the whole company AI-first — trying not to hire anybody, doing AI for pretty much every job. It’s an e-com brand — they make a product and sell it on Shopify.
And I was like, oh, fascinating. What’s he doing? I really want to know. And this is kind of a good hook: instead of saying “let me study your business,” or “describe the problem you know AI can solve” — which already presupposes you know quite a bit about what AI could do for you — what if I just subscribed to something, and once a week it tells me what somebody paid somebody to build for their e-com brand, and shows me how it works.
Then as an e-com store owner I’m like, “Oh, I don’t have to do product photography anymore. I can just use this thing to do all my photography. It actually works. Wow.” Or, “Oh, they set up this agent that manages the supply chain — it takes every freight forwarder invoice and puts it into a spreadsheet, then checks for overages, and posts it in Slack. That’s great. I have a person doing that today. I’d like to give that task to AI instead.”
The problem with most businesses adopting AI is a problem of imagination, not capability. You could sit down and figure it out, or you could hire somebody to do any of these things. It’s an imagination problem. Most people don’t realize where they could be doing things differently.
Sam: For you, with Hampton for example — maybe it could be as granular as memberships or paid communities. Or just somebody who’s doing sales. Like you subscribe to the sales feed. Anytime somebody pays for an AI job that improves their sales process, I want to know what they did.
I’ll give you an example. In one of my companies, it’s growing so fast that we literally can’t get enough proposals out the door. Customers want to pay, but the sales guys have too many proposals to create. So our CTO created this little agent that listens to the sales call and knows what our capabilities are, and it auto-generates a draft invoice of what services we should package for this customer. As soon as the sales guy gets off the call, the draft proposal is ready — he just needs to tweak three things. I was like, this is genius.
And I think that should just be a startup idea altogether. A tool for salespeople where by the time they get off the call, the AI agent has already figured out the follow-up email, the draft proposal, the CRM entry, all of it.
Shaan: This is kind of a 10 out of 10 idea.
Sam: Yeah, I think so. I don’t know — the AI marketplace or the sales thing — they’re both kind of dope.
Shaan: I don’t know anything about the second one, but yeah, that’s cool. The first one though, because I’m like… I would easily give money to someone right now if — because a lot of times with AI, I feel like I don’t know what I don’t know, but I know it’s important. And if someone could just give me all the examples of how this is helpful for me and just do it, you know what I mean?
The hard part about a business like this is, of course, marketplaces are incredibly difficult to spin up. It’s a chicken and egg problem. How do you get supply when there’s no demand? How do you get demand when there’s no supply? The initial cranking of the crank is really hard. This is not something a B-minus entrepreneur can do. You basically have to be an A+ entrepreneur to do marketplaces. But when you build them, they’re very valuable. So if anybody wants to work on this, feel free to email me at sea at shaan.com or DM me.
The AI-First Newsletter and Local News Empire [00:40:00]
Shaan: How is Fiverr taking advantage of the AI stuff? Have you seen anything?
Sam: Dude, I used to use Fiverr so much. I don’t use it at all anymore. It’s still the same old junk. I bet a lot of their business was graphic design and now it’s basically just taking advantage of people who don’t know ChatGPT exists.
One thing I heard people do is there are people rolling up the top Fiverr accounts. They’re like, “You have top real estate under graphic design on Fiverr, so you’re just automatically getting hundreds of jobs a week.” They’re buying those accounts and then replacing the creator with AI and running a managed service underneath it.
Shaan: Sounds like buying beachfront property on the world’s worst island.
Sam: This sounds like a horrible idea. But the key with any rollup is either you get extreme durability and pay a higher multiple, or you get unknown durability. But if you’re buying at 1x or 1.5x, you can make it work. These people have never been offered anything before. It’s like, “Oh, you’ll pay me a year or two years of earnings to just walk away?” And as long as it holds for two years, every year after that is profit. You could make it work.
Shaan: My mother-in-law has this pillow business and it does many hundreds of thousands — close to seven figures a year in revenue, and it’s quite profitable. She’s paying herself a good salary. But now that she’s got a bunch of grandkids, she’s like, “I guess I’m just going to shut this down.” And I was like, “Smithy, I don’t know anything about e-commerce, but you could sell a business.” And she was like, “What do you mean?” I was like, “Well, someone will pay you something — could be 1x, could be 8x your owner’s earnings.” And it blew her mind. She was like, “Someone will buy this?” It was pretty cool to see her go through this exercise.
Are you actually using AI in a meaningful way in your company? Are your employees using it on a daily basis in ways where your company has gotten significantly more productive?
Sam: The example I just gave on the sales side — that’s probably the most impressive example. Other than that it’s more like ChatGPT Plus. You know what I mean? “Review this email.” “Draft this thing.” “Research this thing.” That’s the daily stuff. We haven’t replaced job functions yet with AI. What I’m waiting for is basically: oh, we don’t need to hire this person because an AI agent — or this person with AI — is better than this person without.
And that’s where something like this service plays an interesting role. Because you know it’s important but you haven’t implemented it. The people who run my businesses — their heads are in the business. They’re not as AI-curious as I am. And they have the same mindset: either I’m too busy right now, or I don’t exactly know how to do this, or this sounds like a project I’m a little ignorant on but I know it’s interesting.
Then you have all these guys who’ve been raised on this stuff for the last three years and they’re like, “Are you a fool? Why aren’t you doing it this way, this way, this way?” And that connection would be very valuable.
Shaan: I remember — we both did the newsletter business. The workflow for The Hustle was probably similar to Milk Road.
Sam: Dude, it was so janky. The output: you’ve got to write an email that’s going to go to hundreds of thousands or millions of people tomorrow morning saying, “Here are the most important stories you should care about. Here’s what happened, here’s our quick commentary, let’s make you laugh.” And there needs to be the right ads in the email.
Shaan: And when you say “the right ads” — what do you mean by the right ads? Just explain the complexity for somebody who’s like, “Why do you need a full-time person? Just put the ad in.”
Sam: Because if you’re sending an email to, say, three million people, and you make $100,000 every time you hit send, sometimes Target will say, “I want to spend $1 million with you over the next three months.” And Warby Parker will say, “I want to spend $20,000 with you over the next three weeks.” You have to figure out how to mix and match. Today’s email to three million people: 500,000 are going to see the Warby Parker ad, 2.5 million are going to see the Target ad — and next week it’s swapped — and you have to make sure the same people aren’t seeing the same ad twice. No technology, at least when I started, did any of that automatically. So I had one person manually doing all of it. It wasn’t crazy complicated, but when the stakes are high and it’s your whole business — you needed an ad ops person.
And even if you take the ads out, just the content itself — every day somebody’s figuring out what are all the top stories. There’s search, then curation, then research, then summarization, then commentary, all of it. We did it with one or two writers. I think you did it initially with a few writers. Let’s say the cost of production was, on the lowest end, $250,000 a year. When we sold The Hustle, it became close to a million dollars a year of editorial cost.
Shaan: We were definitely spending seven figures.
Sam: So I met a guy who was doing this entire workflow with AI. He was using AI to scan specific sources to figure out what stories are hot. Then using AI to summarize those articles. Then using AI to check which influencers were reposting those articles on Twitter as a signal of what’s generating buzz. Then he’d take that final output and send it to a human in Japan who would proofread it overnight and fact-check it — making sure the AI didn’t hallucinate — for like $50 to $100 a day. He never wrote it himself. He never had a writer.
And then it auto-formatted into an HTML email, inserted the ad, sent it out, tracked results, and sent him a report.
Shaan: To take it even further — I know a guy doing the same thing but for local newsletters. The thing about local newsletters is it’s a fantastic business, except the profits are totally destroyed because you have to have local ad sales and local writers for every market. But if you could just have lots of newsletters for Raleigh, for Nashville, for Louisville — without the writers — it would be a great business. And he’s doing what you’re describing but for local news. It very quickly spins up a newsletter. It makes an ad saying, “Hey, Danville in California — do you want news just for Danville?” He’s built this whole local newsletter empire, all automated.
Sam: How’s it doing?
Shaan: It does six figures a month in revenue. And it’s just him. He’s buying ads on Facebook, targeting local people to get subscribers.
Sam: That’s awesome. Very cool, dude.
Newsletter Reflections — Would The Hustle Succeed Today? [00:51:00]
Sam: Our business is like, “Oh my god, thank god we got out.” But why do you say that? Is it just way more competitive now?
Okay. When I started in 2016, people laughed at us. I know you hear that story a lot, but people were literally laughing. You yourself said why are you doing this stupid thing.
Shaan: Yeah. You said people left. You said people were like, why are you doing this silly thing?
Sam: And I was like, no — if you run the math, it could be big. Now, “I know these hip hipsters have newsletters” — it’s everyone has a newsletter. And it’s way more complicated inside someone’s inbox to stand out. I think I succeeded because it was a silly business that I took seriously and there weren’t that many serious operators in it. You could say I wasn’t even that serious of an operator, but I still succeeded. Now there are actually really smart people trying to win the game. It’s just harder.
Let’s say you were motivated to start The Hustle this year. What do you think would be the outcome four years from now? Assume you’re committed to doing it, working hard on it.
Shaan: Does it have to be the same genre of content?
Sam: Could be different.
Shaan: I think I could build a significantly larger business. I think it would look a lot closer to Industry Dive — lots of different newsletters built for job titles that are kind of forgotten and ignored. And to monetize it would be newsletter advertisements plus community peer groups, sort of like Hampton on the back end. I think it wouldn’t grow as fast, and I could own it forever. It would be very hard to grow as fast as I grew The Hustle.
Sam: What if you did the exact Hustle idea again?
Shaan: I don’t think it would succeed. I got to 300,000 subscribers organically in like two years. It was so easy looking back on it. That would never happen again. There’s too much noise.
I think buying subscribers on Facebook is actually shockingly the same price — I hear it’s still like $1.50. But we grew organically because we got popular on Reddit, Hacker News, places like that. We were doing something considered outlandish and silly and remarkable. It was noteworthy. It’s not noteworthy anymore. Too hard to have something spread virally now. Do you agree?
Sam: Yeah, I think all the things you said are true. But I do think you could do it again and win because you’re good at that type of content and that type of business. And you’d have other advantages — newsletter advertising is a lot more sophisticated and available than it was back then.
Shaan: But it’s also cheaper now. We used to charge something like $25 to $40 per 1,000 sends. I’m hearing now it’s much cheaper because there are so many options.
Sam: Interesting. Huh. I didn’t know that. When we were doing Milk Road, I think we were charging that or more. And that was only two, three years ago. Maybe it’s changed, or maybe it was crypto — financial newsletters definitely command a premium. But I would never do it again. It’s a way harder business than people realize. It’s hard.
Sperm Racing: The World’s First Sperm Race [00:57:00]
Sam: Can we wrap up with me telling you something funny?
Shaan: Okay, let’s do it.
Sam: Go to SpermRacing.com. Have you seen sperm racing?
Shaan: What do you mean go to it? Is it my homepage?
Sam: Yeah, I mean, you seem like a sperm racing guy. They were probably trying to figure out who to send the sponsorship offer to. They’re like, “Shaan seems like a sperm guy.”
Shaan: I guess, guys, two words: blank check.
Sam: All right. The world’s first sperm race. One of the most epic little videos behind it. So click “manifesto” and just read the first couple lines.
Shaan: All right. “Sperm racing. When people hear it, they ask me the same thing every time: wait, is this really happening? And the answer is always: hell yeah, it is. But here’s the thing. Sperm racing is not just a joke. It’s not just some viral idea for the internet to laugh at. It’s something much bigger.” All right, let’s see if they can pay off that promise.
Sam: Male fertility is declining — a lot. It’s happening quietly, steadily, and nobody’s talking about it. And then there’s a diagram of the average sperm count in a man from the 1970s to today, and it’s basically cut in half. So we have half as much sperm per milliliter of semen.
Shaan: Wow. A metric I didn’t even know I could measure. Didn’t even know that existed. All right, TIL.
Sam: And sperm motility — which is how fast it moves, which is a massive factor in fertility and getting pregnant — is a measurable, trackable thing, just like running a race or lifting weights. Something you can actually improve. And nobody cared about it until now. So they’re turning health into a sport. They built a racetrack for sperm. Two competitors, two samples, one microscopic finish line. And they have an MS Paint diagram of the track.
Shaan: Is this a real thing or is it a joke?
Sam: It’s 100% real. Listen to what they’re doing. From an article on The Times: once the samples are taken — which I assume means the competitors have to go backstage because it’s got to be ready to roll right away — the samples will be placed into the middle of the stadium and a live video feed magnified 40 times will track the sample’s progress. The sperm typically swim 5mm per minute, meaning this race is going to take 40 minutes because they’re swimming through this whole course. The event will run over three races in front of a crowd of 4,000 spectators and feature play-by-play commentary, instant replays, and leaderboards.
And this company, according to the article, is run by like three 17-year-olds, and they’ve raised $1.5 million.
Shaan: This is incredible. Everyone else out there who is working on a product that isn’t working — take notes. The hype video was amazing. I genuinely think we should be sponsoring this or we should be the presenting podcast. “Presenting podcast of Sperm Racing.” Or “Bias Baby.”
So what are they really trying to do? Is this just an awareness thing, or do they want to make this a sport?
Sam: I don’t know. But they’ve done the right thing so far, which is they haven’t relieved the tension from the joke. They haven’t acknowledged that it’s a joke. And look at the photo of this guy Eric, and he says “the future of technology.” And I assume this is all about content marketing for some type of male fertility startup. But they’ve done the best thing ever, which is they’ve not admitted it’s a joke.
And apparently the founder is Eric Zhu. But that’s a pretty common name.
Shaan: Actually, I know this guy. I did a phone call with this kid. He was doing a different startup before this that I didn’t think was the one.
Sam: Did you advise him? You’re like, “I said just dream about the future you want to build.” And this is what he came up with.
Shaan: What’s a secret, Eric, that you know that no one else knows?
Sam: We wanted flying cars and instead we got sperm racing. Wow. This is crazy.
The Value of Silly Projects as Starter Businesses [01:02:00]
Shaan: Fun project though. And I think silly projects like this — not to be insulting because obviously this is actually greatness — but things that to others might seem silly are amazing starter businesses. I think one mistake a lot of people make when they’re early on as a founder is they try to do what they think will work. So they end up doing some boring business they don’t really understand very well but it sounds good on paper. Or they shoot for the moon without a rocket — without the skills, capability, network, whatever.
I’m not saying don’t do those things. But I think another path — which is what I did — my first business was a sushi restaurant chain. Most outlandish idea. Yours?
Sam: Hot dog stand. I worked for the American Pickers guy. I did a bunch of random things.
Shaan: The business itself isn’t great — three out of ten, four out of ten — but at the time you don’t know any better. The important thing is you’re going to build a bunch of random skills. With our sushi restaurant, I learned how to pitch investors. I learned Photoshop. I learned After Effects a little bit. iMovie. We created a YouTube channel. We learned door-to-door sales. A bunch of random experiences I wouldn’t have gotten had I a) had a traditional job or b) done a startup that was more serious in nature.
Because the startup was a little bit fun, I was willing to do things that felt normal once you start like that. Your marketing idea can be a little fun and out there. Your hiring practice can be a little fun and out there. You can just sort of stack on from there. When you have what feels more like a sandbox where you can be creative, versus feeling like you’re on tight rails of what you’re supposed to do.
Sam: I don’t know if that makes a lot of sense, but that makes a lot of sense and I agree with it. And it reminds me of me. We didn’t do something anywhere near as interesting or cool as this, but we’ve talked about Henry and Dylan — those guys who were doing clip content, they have this little animation service business, they did funny newsletters, they came to our house and built our podcast studios. They’re just doing a bunch of random stuff that’s building little skills for them. They weren’t experts in any of those things, but they became expert-level by doing them. And they’re sort of pivoting from one idea to the next. To others it might look like they’re lost, but I’ve seen it work out very well for myself and my friends who were doing the same thing. So if you’re already doing that, I would say don’t sweat it. It can pay off.
Shaan: And Eric Zhu is listening to this podcast right now and he’s saying, “I need to clip this and send this to my Chinese immigrant parents who are not on board with sperm racing.”
Imagine being 17 years old and selling out a 4,000-person stadium. That’s pretty baller.
Sam: Although they’re just saying it’s sold out. Is it actually sold out? When you go to Ticketmaster to buy a ticket there’s a lot of blue — a lot of open seats. I’m not exactly sure.
Shaan: I could see this being a pretty fun thing for a bunch of college kids. Are you going to go watch the sperm race?
Sam: Even the logo is so good. Everything about the branding is extremely well done.
Shaan: Oh no — event cancelled? What?
Sam: Oh no. An update from the sperm guy. I go, “Is the event cancelled? I don’t see it on Ticketmaster.” He goes, “No, we got effed over by the Palladium. The venue wasn’t happy with the TMZ interview and some other stuff. But it’s still the same day — we moved it to LA Center Studios. Tickets will redrop Tuesday.”
Shaan: Oh my god. What is going on? Ask him what “the other stuff” is.
Sam: Sounds like a sticky situation.
Shaan: I don’t think I want to know.
Sam: Yeah. All right, that’s it. That’s the pod.