Shaan and Sam are joined by Steph Smith, former Hustle writer and new a16z podcast host, for a wide-ranging session on high-demand, low-supply business ideas. Topics include A/B testing software for restaurant QR code menus, the NIL athlete influencer marketing wave, the breakup economy, cheating scandals in chess and poker, anti-cheat as a business category, interactive internet portfolios as evidence-over-confidence plays, and two food-tech companies making healthy eating more palatable through electrical currents and scent.
Speakers: Shaan Puri (host), Sam Parr (host), Steph Smith (guest, a16z podcast host)
Cold Open: Restaurant Menu A/B Testing [00:00:00]
Steph: With the pandemic, a bunch of restaurants have gone online, quote-unquote. They have the QR codes, right? And something that I think of every single time as an internet marketer is: why are they not A/B testing their menus? Someone needs to go create A/B testing software that restaurants can ingest super easily.
Introduction: Steph Smith Is Back [00:00:20]
Shaan: What’s up, Steph! Steph is back — back in the house, one of the most requested return guests of all time. We should have you on more. What are you doing now, by the way? You left The Hustle slash HubSpot, you went to Andreessen — is that where you’re at still, or are you doing other things?
Steph: Yeah, exactly. I’m at a16z. I’m their new podcast host. They’ve had a podcast for like seven or eight years, then it went on hiatus. They looked for a new host and that’s me. We haven’t gone live yet, but we will be soon.
Shaan: Every time you come on, you bring this document that’s basically — it’s sort of what me and Sam do, but when me and Sam do an episode we have like two or three bullet points each, like three words. I have two and he has two and that’s how we prepare. You send this like Encyclopedia Britannica of topics, ideas, half fake things in your head. I’m looking at this — this is like seven or eight pages or something.
Steph: Oh no, twelve pages long.
Shaan: So we have a lot to choose from. Where do you want to start?
Idea #1: Restaurant Menu A/B Testing [00:01:10]
Steph: I wanted to share this one idea. I think I’ve actually talked about it on a couple other pods. But the QR codes, right? You pull up the menu, some restaurants have reverted back to the physical menu, but tons are still using QR codes. And something that I think of every single time as an internet marketer is: why are they not A/B testing their menus?
Someone needs to go create A/B testing software that restaurants can ingest super easily. The basis of this is — think about what has made so many internet companies successful. It’s the fact that they have these alternate worlds they can A/B test. Google homepage: are we using this font or this font? Netflix, Amazon — all of these large internet companies have used this.
But there’s a restaurant equivalent. The Hustle did a story on this woman, Michelle Banesh. You can look up “design restaurant menus The Hustle” to get the article. We wrote about this woman whose job was literally to go redesign physical menus. Based on her understanding of human psychology and orientation — there’s like this Z effect on the menu and the way people scroll — she was able to figure out how to get one restaurant to bring in nine dollars more per customer just by redesigning their menu. Same products, but just the orientation, the order, the design.
Why aren’t restaurants using this now? We have the QR code, which allows us to direct someone to any unique link. We have the digitization of this. You could hire someone like Michelle, or someone should just create software that lets restaurants do this — they don’t need to change their menu at all, but they can mess around with the design the same way you mess around with landing page design and get higher conversion.
The average restaurant owner is not going to know how to do this. That’s why there needs to be some sort of software that says, “Hey, we can increase your average customer value by three dollars” — whatever it is. I haven’t seen it anywhere.
Sam: This is amazing. I remember — so I started a restaurant back in the day, my very first startup was a restaurant. When we finally got to launch, long story short, we were like: do we want to launch a physical restaurant? We’d have to sign this 10-year lease with a personal guarantee — that sounds scary. And our mentor was kind of like, could you test your concept by doing delivery only?
Basically it was like a cloud kitchen is today, but this was more than ten years ago. No DoorDash, no Uber Eats at the time. It was like: what if people could just order online, what if you just had a kitchen nearby, no physical seating, no storefront, you just deliver. We were like, okay, let’s try it.
And when you do that, you’re very conscious of — our whole menu is online. So we could run a test to see what makes people order more or not. We did the most basic A/B test. First thing we did: we were trying to lower prices. We talked to this guy Dan Ariely, who wrote Predictably Irrational. We were like, “Dan, we’re three dudes trying to build this sushi restaurant startup — do you know anything about the restaurant industry?” And he’s like, “I know a lot about the restaurant industry. I get paid by companies to come in and help them with either the menu or—”
He told us about some experiment Panda Express had paid him to do. They said: we have healthy items on the menu, and people tell us the reason they don’t eat here is because it’s unhealthy, but nobody orders the healthy items. What gives? He’s like, “Humans are predictably irrational — they’ll tell you one thing and then they won’t do it.”
The test he made: when you walk into a Panda Express, instead of putting both items on the menu and having you choose, right when you walked through the door it would say — there was like a little angel path, like “if you’re gonna eat healthy, go this way,” and a devil path, “if you want full flavor, go this way.” When people make that choice upon walking in and then they only see a menu of those items, they were happier with their choice and they ordered more of those items. He figured out that was the only way he could design the restaurant to do that one thing.
Sam: Similarly, he goes, “Your prices are too low.” And we go, “What? Everybody says sushi is too expensive, we’re trying to make it more affordable.” He’s like, “Do you ever want to eat cheap sushi?” And he’s like, “No.” He’s like, just like the wine industry — people buy expensive things because it makes them feel good that they bought a higher quality thing. Just test the price.
So we did it. We upped the price 50% on one menu versus the other, just A/B tested it, and we had a higher conversion rate on the higher price. Not even just it netted more money — higher conversion rate on the higher price. That was the first time I saw menu A/B testing.
Think about how big a lift that is. If you can convert every customer at a higher rate at a higher dollar amount, that’s meaningful in an industry with 10% margins.
Then we tested other things. Instead of just saying “this is the Philadelphia roll, we use salmon,” we added stuff like “always fresh, never frozen Alaskan salmon, hand-caught by a farmer near you.” Nothing changed, they were all true, but we added these extra words. And people would buy more.
Sam: So you could see these little menu tricks. Now, what I didn’t think of — which is your genius idea — is how do you turn that into a business? You could become an agency that does this for companies, you could become a piece of software that does A/B testing of QR codes. You could do this with physical menus too, by the way — just give out two different versions and track the tickets.
“We know your current menu was designed by your niece who knows Photoshop, so we think we can do better than that. And if we beat your current menu, you pay us 50 bucks a month and we’ll keep running tests for you.”
Steph: Yeah. I think the key difference — you always look for inflection points or changes. Before, you’re right, you could do this with physical menus, but the data is so much harder to get. Now, a ton of restaurants are using QR codes and they’ve already taken the major step of digitizing the experience. So now you just need to apply those analytics.
Some company needs to create the software. Ideally it integrates into the POS so you can just pop out a report at the end. But even without POS integration, you can look at: how long does someone spend on this menu versus this menu? How are they scrolling?
Sam: What items are being sold.
Steph: You basically scan the QR code, it’s like Google Optimize, and you’re going to pass the final cart value to the thing — and in-restaurant they actually do order food, so you can bet heavily on that.
Shaan: I wonder if people would also do this with DoorDash or Uber Eats. Like, could I be a service that just optimizes your DoorDash listing — photos, menus, copy? If you’re a national chain in a thousand cities and I can get you an extra half point of conversion or an extra two-dollar cart size, that’s pretty meaningful.
Steph: Yeah, I was thinking about that too. Uber Eats menus are always so long, and there’s too many options — paralysis by analysis. And Uber Eats will have three or so “most popular” items at the top. I don’t know if Uber actually selects that for the restaurant, but if you had the option to A/B test that as a platform feature — that’s a value-add that makes restaurants more loyal to Uber Eats over DoorDash.
Shaan: I looked at a startup that was doing exactly this. What they were doing: they’d go to a local mom-and-pop restaurant — let’s say Chinese food — and say, “You’re on DoorDash, but your photos are kind of crap, your descriptions are off, you’re not saying what foods are vegan even though they are.” So what he would do is partner with the restaurant and create a shadow brand — a clone, but with a more catchy name, bright photos, trimmed menu. And when an order gets placed on that shadow brand, the same restaurant just gets the ticket. They don’t even know it’s from a different brand.
He’d say, “Yeah, we have 200 restaurants, we do like 17 million in GMV, and we operate none of these restaurants. They already existed. All we did was rebrand them for Postmates, Uber Eats, and DoorDash.”
And the restaurants loved it — they get 30% extra revenue just because someone’s better at marketing on those platforms than they are.
Food Pyramid Inflection + NIL Athlete Marketing [00:14:00]
Steph: Have you seen that the FDA’s food pyramid — or in Canada, we called it the food pyramid — they’re rethinking that? They’re really well overdue. Carbs as the foundation, fruit and vegetables sharing a little section like bunk beds at the top of the pyramid.
They’re coming out with a new food pyramid of sorts, and that impacts which brands can use the word “healthy” on their products. Like, you could actually have the word “healthy” on your cereal box based on some requisites from the old pyramid — and they’re changing that. There’s going to be a ton of content, a ton of changes coming because of this. I don’t know exactly what the business idea is, but there’s gotta be something here.
Shaan: That’s a good inflection. I’ll give you another one like that. So you know the law change that allows college athletes to monetize their brand, called NIL — Name, Image, Likeness? That came into effect this year. Now college athletes can get paid.
For example, when we did our MFM camp, we paid Puff Johnson, this basketball player at North Carolina, to come drop in and play pickup with us. We paid him, I don’t know, like 200 bucks or something to show up for an hour. He’s like, “Cool, I got nothing else going on on a Saturday, I’ll pick up 200 bucks.”
Shaan: So I was asking Ben, “How did you book him? What’d you use?” He’s like, “I just DM’d him on Instagram.” And I was like — interesting. There’s no great marketplace yet connecting college athletes to people who want to pay them for an appearance or a sponsorship. Some people are trying, but nobody’s like, “We’ve got all the athletes, because of that we’ve got all the brands, we handle all the transactions, you don’t need to use Instagram DMs and Venmo.”
I think the big idea is: create the AngelList for the NIL marketplace. And then the second thing is: what opportunities does this open up?
Dave Portnoy and Barstool jumped on this pretty early. They’re like, “Great, we’ll have a Barstool Athlete Program where you can sign up to be a Barstool athlete.” They came out saying they’re taking zero percent cut on these deals — they don’t know how or why, but they did — and he said they now have 200,000 college athletes in the program.
Shaan: So thinking about this — so many brands have been built off influencer marketing. Movement Watches were early to Instagram influencer marketing and built a $100 million watch brand. Sugar Bear Hair got the Kardashians to take pictures with a gummy bear supplement, and that became a $100 million brand.
Now, all of a sudden, overnight, you can tap into influencer marketing of college athletes across the country — and probably very few brands are doing this yet. You could almost create a company by working backwards: if I could get every influential college athlete to post something, what product should I make that fits their audience and trust?
Sam: What would you do? If you were choosing that as your channel, what product would you create?
Shaan: On the e-commerce side, I was thinking: the best products for this have high margin, high repeat purchase rate, low shipping. Think about why Native deodorant was such a great product — it weighed less than a pound so you could ship it in a normal envelope. It’s repurchased because you wear deodorant every day and you run out every two or three months. High margin.
So I’d look at the winners of current e-commerce and retrofit them for a college audience. Would it work with a college crowd? I think an energy drink would be amazing — if you could do the next vitamin water or energy drink through college athletes. Or some kind of subscription product like deodorant.
Sam: Deodorant would work. You can be like, “Don’t smell on the court.”
Shaan: You could also make it specific to the campus. The scents could match each school — so you have “Longhorn” for UT, and the names of the scents fit that market. It’s the same scent, you’re just labeling it differently. And you’re pulling into that brand affinity they already have with their campus. It makes sense for the athlete to promote it because they’re a college athlete for that school.
Sam: I kind of love that. There are so many taglines. “Sniff out your competitors.” People actually competing on which college has the best scent. “For every stick bought here we drop one stink bomb at your rival school.” That’s some way to juice how attractive it is.
Breakup Economy [00:22:00]
Shaan: Okay, let’s do a quick one. I actually saw this in the Trends newsletter a while ago. The stat: the average person spends $1,500 after a breakup. I have no idea where the stat came from, but it definitely got the wheels spinning. They came up with a bunch of different ideas — divorce party ideas is something that gets search volume, breakup cake, people throwing their own breakup parties.
I don’t know if there are specific brands taking this on, but there’s something there. That $1,500 — if I’m F. Jerry, that Instagram account that’s kind of built a little media empire with products — I would be jumping on this. It’s already viral, it’s meme-worthy, it’s remarkable. How do I make the best breakup cake delivery service? Or a “Revenge Body Kit” — we send you a seven-day detox, a healing crystal, a juice cleanse. Something called “Bad Juju” to get that person out of your life.
I think it’s on brand and there’s enough demand. You could see this doing two to ten million dollars a year, all organic. The product is so viral. It’s probably not going to be enormous, but there’s enough of a niche — especially if you’re one of these accounts with distribution, or you partner with them and do a profit share.
Steph: Yeah, I’m imagining all the tropes of someone who gets broken up with and becomes super fit, gets a PhD, becomes the best version of themselves. You could do something like a voodoo doll — you upload a photo, we print you a doll that looks close enough like them, and you can do what you want with it.
Shaan: That reminds me — did you see that startup “Empti”? I think it was fake. It had the silly spelling, like E-M-P-T-I. It was a fake startup that people thought was real. They sent people empty boxes. The whole idea was: we send you empty boxes, there’s some motivational quote from Buddha inside, and you’re supposed to take all your junk from that person, put it in the box, and send it to this company. But it was a joke. And all these people were writing about it like, “Oh this is so smart.”
Steph: You could do that with this — send them the breakup box. Put all their stuff that reminds you of them in it, send it to us, and we’ll send you a video of us burning the box in some epic way. That’s it.
Shaan: Those are the types of ideas you could do with this.
Podcast Theory: Contagious Laughter and What Makes MFM Work [00:26:30]
Steph: Before we started recording you were starting to tell me — here’s my theory of why people like this podcast. What is your theory?
Shaan: Okay, so there are many reasons to love My First Million. But I think there’s something you guys have done especially recently where you and Sam just go back and forth and you tell a really funny joke, and then Sam starts laughing hysterically in this contagious way that most people would hold back on a podcast. It’s literally, as people say, like you’re in the room with him.
It reminded me of this subreddit I found recently called r/ContagiousLaughter — 4.5 million people subscribe to it, it’s in the top hundred subreddits. It’s literally just a feed of people laughing. There’s dozens of posts every day. And I went down it and I was like, there’s gotta be a post of Sam and Shaan.
Sam: I think this subreddit must be new or growing faster recently, because I hadn’t heard of it before. But I’ve also seen this trend on TikTok — somebody will be like, “I’m a clinical psychologist, I can make you happier in the next 10 seconds, repeat after me: ha.” And there’s a duet, the other person goes “ha,” and by the end both people are just cracking up, ten deep, because you can’t help yourself. The body will just start genuinely laughing from making the sound. It goes both ways — it’s not like something funny happens therefore you break out laughing. If you break out laughing intentionally, it’s like something funny just happened.
Sam: I’ve thought about this contagious laughter thing in two ways. One: I was watching the All-In pod — I love that podcast — but they do something that really bothers me, which is one of them will crack a joke and the other guys don’t sell the joke. They don’t laugh. And I don’t know if they don’t think it’s funny, if they’re trying to keep it serious, or if they edit out the audio from someone reacting. But it totally changes the vibe when in a podcast the other person doesn’t sell your joke.
Sam: On My First Million I call this “the homie move” — where Sam would be like, “Do you know how many people buy this thing?” And I know it’s probably a high number if he’s telling me like that. But I’ll be like, “I don’t know, like a hundred?” Just to give him the setup. And he’s like, “No dude, a million.” I give him the assist.
There are several things like that where you’ve gotta sell the other person’s thing. Be expressive — laugh hard, react big. That stuff works for content. People are very shelled up about that sort of thing.
Steph: One of the funniest moments on My First Million was your Orlando Bloom story. If I just heard you telling it by yourself I’d think, yeah, that’s pretty funny. But Sam’s laughter layered onto that — you could just tell he was dying as you were telling that story. That made it honestly top-five moments in My First Million history for me.
Steph: That’s why I think this subreddit is so great. In their community guidelines it says: “Report this if you’re laughing at a joke or some sort of incident and not the laughter specifically.” They only want you to be there to hear other people laughing. That’s why I think some people love My First Million. It’s just so authentic.
Sam: You’re about to do a podcast — do you remember what I told you when you first mentioned it? This was a couple years ago.
Steph: I actually don’t. You should tell me.
Sam: I was like — you’re too normal. The ideal podcast guest is like half insane. And what I mean is there are things they’re not even aware of that are inside them. Sam has a ton of these moments — he’s like, “Dude, I was thinking: what happens if someone broke in right behind me right now and tried to kill me?” And I’m like, no, I don’t think about that. The fact that he thinks I do means he’s kind of insane — he’s not even aware that’s a weird thing. He thinks other people do it too.
The second is being willing to say crazy stuff. And the third is they don’t hedge. They don’t try to downplay. Most people are taking their own little volume knob and turning it down all the time because they want to fit in. The best thing you could do if you want to be a personality on the internet is you can’t have that “turning the volume down” thing. You’ve gotta turn it up.
Now, I might be wrong — there are people like Lex Fridman who are successful and his volume is basically at two. Very monotone, calm, normal. People love it. So I don’t think my theory was entirely correct. But I do think having a bit of a screw loose helps. You’re a very stable, smart person — you’re kind of playing from behind when it comes to internet content.
Steph: No, I think you’re right. In preparing for every episode I go listen to that person on other podcasts, and it’s crazy how they get asked the exact same questions everywhere they go. There’s a template: okay, tell me about your life, tell me why you went this direction in your career.
And I think you’ve even talked about this on My First Million — you’re like, “We don’t do that. We ignore all the questions we know everyone’s gonna ask. We ask the real stuff: how much do you make, what keeps you up at night, when have you failed.”
Sam: There’s this great thing that happens if you always ask questions like that — it’s like a get-out-of-jail-free card. “Well, that’s just what he does.” If you try to spring that on one person it might feel intrusive, but “that’s just the show’s stick — that’s what they do.” Then you can get away with being a little more blunt. Cultivating an image of being a “don’t give an f slash blunt personality” has all these advantages. People just create new rules for you. “If a normal person did this I would feel weird, but that’s just Shaan being Shaan, that’s just Sam being Sam.”
Steph: That is awesome. Wow. Okay, that’s good.
Cheating Scandals: Chess, Poker, Fishing [00:34:00]
Sam: Cheating scandals. Everyone’s talking about it — chess, poker, fishing, I even saw Irish dance in a newsletter recently. Cheating is everywhere.
Steph: If people are out of the loop — okay, so I don’t know all of them in depth but I’ve been following the chess one pretty closely. Magnus Carlsen, world chess champion, played Hans Niemann several weeks ago. Niemann beat him. But then there was all this controversy: Magnus was acting sketchy, then eventually came out with this statement saying, “I believe Hans cheated. I can’t speak to exactly why.” And there has been a history of Hans cheating in the past as well.
So there are people on the internet taking sides. “No, Hans has been really good — how could you cheat over the board?” And then people who believe Carlsen — “He has a history of cheating, we just don’t know how.” There’s been a similar poker controversy, and then a fishing one where they were stuffing fish with lead balls.
I have a couple of ideas around the idea of cheating, but first I want to hear your take. What do you think about these cheating scandals?
Shaan: There’s something very seductive about them. I don’t normally follow chess, but when this came up I was like, God damn it if I don’t have to get to the bottom of this. Four hours of YouTube rabbit holing. It’s a better entry point for me than “this person is great” or “this was a great match.” It’s “here’s the controversy” — oh, what is it?
It goes back to something Dana White said once. They were like, “UFC is still a small thing, why do you believe it’s going to be huge?” He goes, “If you go to a park or a playground right now — basketball court, football field, soccer, baseball — and somebody screams ‘fight,’ guess where everybody’s head is turning.” That was his whole thesis. And it played out — the UFC became a global sport, a $5 billion-plus company.
Shaan: I think controversy is the same thing. I wasn’t into chess until I found out there might be a scandal. “What’s the scandal, I gotta know.” And then you look at the evidence and there are two interesting components. One is: how would somebody cheat? That’s kind of interesting, like an Ocean’s Eleven thing — how did they rob the bank?
Because you’re sitting at a chessboard, it’s not online. This guy had been caught cheating online, admitted to it. AI can play chess better than a human — so online cheating, you have a program running. But how is he cheating over the board? And then somebody threw out this crazy theory — the anal beads.
Sam: He’s got anal beads vibrating and telling him what move to make.
Shaan: And the way Magnus did it kind of added to the whole thing. He first tweeted out a meme, like a quote from a soccer coach: “If I say what I want to say, I’ll get in trouble.” People were like, what is he trying to say? Then he comes out with a statement: “I think he cheated.” Then he plays him again and one or two moves into the match he just resigns. Just quits and walks away. Sort of saying, “I’m not gonna play with this cheater.”
Some people are like, is this just sour grapes? Others are like, “No, he knows something.” I don’t think he knows how — that’s probably why he hasn’t been descriptive about it.
Steph: Right. There’s two pieces of evidence. One: Magnus said he didn’t look like he was trying. “I’m the greatest player in the world and I know what it looks like when people try to beat me. They’re very focused. He barely looked like he was paying attention yet he played basically a perfect game.” That was the first thing.
And the second: people went back and looked at all his past games as he ranked up, this crazy rise to grandmaster, and they put his game history through a chess solver engine to see how close to perfect he played. The greatest players of all time have played at like 62 to 72 percent of their moves matching what the AI would do. And he’s had several games at 100%. The greatest players ever have no games at 100 during their rise to the top.
Shaan: So that’s fishy. This guy is making 100% game-theory-optimal moves, when the greatest players ever are at best at 70%.
Steph: I used to play chess competitively as a kid, and both arguments are compelling. The first one especially — if you’ve ever played chess across the board and you’re in a tough situation, certainly if you’re playing the world chess champion, you are concentrating so hard. There are stats saying a full chess match can burn like a thousand calories if you’re sitting for several hours.
My question is: how do you even prove that someone’s cheating? I don’t think you can. You can prove intent if you catch them with anal beads or something in their shoe. But how do you prove someone actually cheated? And how are the chess federations going to change the way they operate to catch cheating in the future?
Shaan: Yeah, you can make people walk through a metal detector. But in the Olympics, with WADA — guys go to the Olympics, test clean, break all the records, “what a natural athlete.” Then six years later WADA updates their tests, goes back to old samples, and finds out they were doping the whole time. This has happened a few times. It’s a cat-and-mouse game between cheaters and anti-cheat — and anti-cheat is actually an interesting business category.
Anti-Cheat as a Business [00:42:00]
Shaan: So I didn’t really know much about this until we started building a startup in the gaming space — the company that ended up getting acquired by Twitch. We’d play games in the office just for fun: Fortnite, Overwatch, games like that. And you see two things. One: the importance of aim, hand-eye coordination, being able to aim and shoot is critical. Two: you’ll play somebody and every single time you peek around the corner — boom, headshot. Perfectly. One time, every time, by the same guy. It’s an aimbot. Basically software that aims for your head automatically, better than any human can.
So games have all these anti-cheat mechanisms built in. At the highest levels these games have huge competitive scenes — Esports — and they have to figure out how to catch this. And so you have software game and software anti-cheat. Each game individually can’t build the security system to stop every potential form of cheating, so there are companies that are just anti-cheat providers for all games. Every game becomes their customer.
I think that’s what’s gonna have to happen with chess, poker, fishing — they’re going to have to have anti-cheat companies that are security systems for competitive integrity. And honestly, the irony is this is the best thing that’s ever happened to chess. More attention than ever since the Queen’s Gambit.
Steph: Yeah. And there are even conspiracy theories that Hans and Magnus are in it together — they’re associated with Chess.com and they’re doing this to hype up chess. I don’t think that’s true. But when you think about fishing: how was the fact that there were lead balls in a fish not caught earlier? Some of these in-person sports are just way behind on the concept of anti-cheat.
Steph: I was thinking — you guys had Peter Levels on the podcast before? He has Nomad List, and for ages people kept trying to copy it. Companies would be like, “We’re going to hire ten engineers and smash you, you’re one engineer.” And he would, just for fun, put in fake data — this city called Dorobo — just to catch who copied his dataset. He could see which competitor had the fake city in their data.
Could you apply that to chess? What if a chess engine just had a couple of incorrect moves embedded that would catch the cheater? “Oh, you played G4 — you weren’t supposed to play G4 if you were a great player, you would have known otherwise.”
Shaan: I saw this Elon tweet this morning about something similar. Somebody asked him, “Back in 2008 you had someone leaking internal data to news outlets — how did you find them?” And he goes, “Actually, it’s an interesting story.” He said they sent everybody in the company the same email, but with one slightly different space somewhere — two spaces or one space in different positions. It was a long email so they could create a unique fingerprint for everybody. When the leak got out, they could tell immediately whose version it was. Fastest path to catching the person.
Steph: Yeah. I’m interested to see who wins — the cheaters or the anti-cheat measures. Historically in gaming, the best cheater is always one step ahead. The bigger the pot of money, the bigger the incentive to cheat. That’s why PayPal and Facebook have so much staff dedicated every day to catching cheaters. That’s why people love Bitcoin — if somebody could have hacked it or done a double spend, there’s a literally half-trillion-dollar prize for the taking. The absence of a hack shows the security.
Steph: If you followed the poker scandal — there’s this high-stakes game in LA that they stream, like a Twitch channel. Each person has like 100 or 300K on the table, so you get half-million-dollar pots. This woman makes this hand where she has Jack-four offsuit and there’s no way you’d even be in the hand. The board has a flush draw, a straight draw — the other guy has both. He bets, she calls all-in when she has nothing, and she wins. People are like, “There is no way you make that call. The only explanation is you looked at your cards wrong.”
But she kind of said in the audio, “No, I don’t have it.” She’s basically saying, “I don’t have anything,” while making the call. And the other guy’s face — he’s stone-faced for a minute and a half. Looking between the table and her. You could tell his brain is breaking. “There’s no way this could have happened. You don’t make a $200,000 bet with those cards unless you knew what my cards were and what’s coming.”
Shaan: So they launched an investigation, and Reddit and YouTube crowdsourced it — finding old clips, doing more work than any police officer could. The most likely explanation people arrived at: there was a human in the production team feeding her information, and she had some kind of vibrating device — if it vibrates, you’re good, call the bet; if not, fold. Just like the anal beads theory.
Steph: The thing is, that’s hard to catch because it’s human engineering, not sophisticated hacking. I was going down this rabbit hole of DEFCON — you know the hacker conference in Vegas? They showed how much of the big hacks is not brilliant computer engineering. Somebody just calls you and says, “Hey, I’m just verifying some information with the bank — could you tell me your mother’s maiden name and your date of birth and your last four of your Social?” Then they call the bank: “Hey, I need to change my password, I forgot it. My security questions? My mother’s maiden name is this.” They didn’t hack the system. You gave them the keys.
That’s why SIM swapping is unfortunately so common. Someone walks into an AT&T store: “I’m this person, I lost my SIM, can you give me a new one?” That’s it.
Shaan: There’s a great business that came out of this insight. A business that goes to companies and says, “90 percent of these hacks happen just because your employee is going to type their password on the wrong page.” “Yeah, I guess that’s true.” “So here’s what we’re gonna do: we’re gonna send false phishing emails to your employees. When they type their credentials in, we just give you a report — this employee clicked this link, this would have been a breach. Now you can educate them better.” Those companies do extremely well. It’s way cheaper to prevent the hack that way — just stress test your employees and say, “Here is where we found a vulnerability.”
Steph: I have a coworker that fell for one of those recently and she was like, “Oh man, I’ve got to do this training.” And I was like, “Really? That’s all? We just do a little bit of training?” I kind of love the idea of ethical hacking.
Steph: Have you heard of Wiz? I think it’s some sort of enterprise security software. It might be the fastest company to hit $100 million ARR in recent memory.
Shaan: Yeah, Wiz with cloud security. They came out and I’d never heard of them — and then they were like, “Hey, we’re the fastest-growing company in the world.”
Steph: Exactly. Quietly the fastest-growing company in a while.
Internet Portfolios: Evidence Over Confidence [00:56:00]
Shaan: Alright, enough hacking and cheating and stealing. Let’s do internet portfolios. I think these are good inspo for people. You wrote something in the doc — “evidence greater than confidence.” What does that mean, and why do these interest you?
Steph: In the age of social media, it’s really easy to be seen as an expert in something. Someone who’s done no marketing can look up Wikipedia articles, start tweeting threads on it, and a bunch of people who don’t know any better say, “Wow, this person has a lot of confidence.” That’s fine. But what I think is important, especially in this era where everyone can seem like an expert, is evidence over confidence.
Don’t tell me you’re a business expert — show me the businesses you’ve built, how successful they are, how you built them. One version of this for individuals is these personal portfolio sites. You can have a site that says “I’ve written for Fortune and I have this many followers on Twitter” — all these things you’ve made up that tell people you’re confident — or you can just show me your skills.
Some of these portfolios, as soon as I go to them I’m like: this person is a badass, I want to hire them, just based on the evidence that they’re a killer creator.
Shaan: Pull up this one from Bruno Simon. Tell me what you see.
Sam: Okay, it’s Bruno-Simon.com. You land and it’s literally a Jeep on the screen. You hit click, it says “use your keys to move around” — and you can just drive. It’s a 3D game. It’s basically his resume, but you drive around, crash into stuff. I’m driving to the projects section — okay, I’m in the projects section, I can see their different things. If I park on the parking spot it opens that link. This is one of the best portfolios I’ve ever seen. Stunning.
Steph: Pull up another one — click the one that says “interactive resume” from Robbie Leonardi.
Sam: Oh my God. It’s like a game of Mario. There’s a character and I’m scrolling and all of a sudden I’m in level one — that’s his “about.” This is sick. It’s basically like a chart of “I’m good at design, illustration, whatever” but I’m running through the level and learning different things about the person. NBA fan. Oh my God, now I’m underwater, doing the underwater level. This is crazy.
They basically took a resume, designed it beautifully, and made it play like a Mario game. At the end of the level it’s like “contact me here if you want to work with me. You’ve won.”
Sam: What I love about this: I assume these people aren’t applying for jobs. But can you imagine if you had a job opening, a hundred typical resumes — “I’ve worked here for three years, I have this degree” — and then one of them was this? How could you not hire this person?
Steph: So I made something like this when I applied for a job. When I moved to Silicon Valley, I applied to two jobs: Stripe and a place called Monkey Inferno. Stripe — everybody knows — turned into whatever $100 billion company. I would have been like employee 35 or 40. That would have probably made me $10-30 million as a mid-level sales biz-dev type. Unfortunately I crashed and burned in the interview. He was like, “Sell me this pen,” and I just fumbled.
Steph: But the other job, Monkey Inferno, was a really cool company. And when a company shows they’re unique, you read the room — you’re cool and unique and you appreciate creativity, so that’s how I’m gonna apply.
I didn’t send a resume. I made a website. I can’t code — I’m not anywhere near as technically talented as these Mario-game-resume people — but I made a basic website and sent an email. The first line was something like, “Hey, I’m applying for the product manager role. Even though I have none of the qualifications you’re looking for, let me explain why I’m the man for the job.” That gets his attention just to see if I’m a complete clown or if there’s something here.
Steph: My website wasn’t about me — it was about why I should work at Monkey Inferno. Tailored to him. I had this skills chart, but I included stuff I wasn’t good at. Hard work — 40%. I was like, I’m kind of lazy, actually. I can’t force myself to do things I don’t love. And in the interview, one of the guys was like, “Why would you apply for a job and write that your hard work is low?” And I was like, “I’m glad you asked, I can explain.”
He told me later: “If you hadn’t done that website, there’s no way we would have hired you. On paper you had literally none of the qualifications. But that website was really unique — nobody else had done something like that — and it made us feel like we’ve gotta talk to this guy.”
Sam: I think I’ve hired a decent amount now, and there are so many people who mass-apply. The times I’ve been really impressed is when you can tell someone really wants to work there and has done their research. From the second they get in, you almost don’t have to train them on the company.
Shaan: Let’s rapid fire through some other ones. The Neal.fun one — this is n-e-a-l dot fun. The headline is “a tiny website on the internet” and he’s got a bunch of little interactive projects. I went through the Absurd Trolley Problems one — basically you know the classic trolley problem, train on the tracks, five people, you can pull the switch and kill one instead, would you do it? And then it changes it. “But the one is a baby — would you do it?” “The five are cats — would you?” It takes you through 30 absurd variations. Each time you say yes or no it says “74% of people agree with you, 26% disagree, there’s been 2.1 million votes.” You can see where you differ from the masses.
Sam: It feels like he just took all of his curiosities — which are the same curiosities many people have — and turned them into internet games. One of them: explore the scale of space. Another: “see who was alive” — you pick a year and see what famous or influential people were alive at the same time. “The internet’s greatest debates” — is it GIF or GIF, stuff like that, the internet votes and you get the answer.
He’s built so many. “Design the next iPhone” — just drag and drop, put a camera off to the side, put an Android logo on it. This guy’s a creative coder. His name is Neal Agarwal. This is what he does.
Steph: You had a pretty good portfolio website that you built. Do you maintain it, or what happened to it?
Sam: I haven’t updated it in a while. But I will say, the page that gets the most traffic — and gets the most people contacting me — is my “open” page. A lot of startups have an open page: we make this much revenue, we have this many page views. I created an equivalent. It’s like: this is how much I make from my personal projects. But it’s also my goals. If my goal is to exercise 50% of the days in a year, I hooked it up to my spreadsheet and it publicly tracks it daily. What books I’m reading. Silly things like that. And people love it for some reason.
Shaan: Yeah, people love it. They wish they were as organized and on top of their goals as you.
Sam: I have been wanting to write an article about my monetary ascent through life. Like: five years ago I was making X, then I made X, and here’s what I learned. I’ve seen celebrities do this, like “look at my tax returns from 20 years ago.” But I want to do it now and publicly share how much I made, what jobs, what I learned. I just know I’m gonna get trashed.
Shaan: Yeah, I’ve thought about those same things. I don’t need to put myself out there for the attention anymore. Here’s my thinking: it’s in your interest to share your numbers when you’re not making that much but it’s growing. Once you’re making a bunch, the risk-reward flips. The kind of person who benefits from sharing is the person who shows the climb — and then you stop sharing once you’ve arrived, because at that point it’s more liability than asset.
Sam: I noticed there’s no 2022 goals. What happened?
Steph: I know, I gotta post them. But I will say I’m way behind on them. Maybe that’s why.
Shaan: Are you a goal hitter? Do you hit most of these goals?
Steph: I mean, I hit some of them. But that’s how it should be, right? If you’re hitting 100% you’re not setting ambitious goals. If you’re hitting nothing, you’re probably lost. I hit maybe 50% every year.
Sam: At Amazon they said something like if you’re hitting more than 75% of your goals you weren’t sufficiently ambitious. If you’re hitting less — you didn’t execute well enough. Something like that.
Idea: Salty Bowls and Smelly Water [01:10:00]
Steph: Okay, business ideas. Some quick ones. I don’t know if there’s one big idea here, but I thought this was interesting — I’m calling it “salty bowls and smelly water.”
Basically: two companies are doing something interesting around the universal human want to eat healthier. Kirin — K-I-R-I-N — is a company in Japan, and they partnered with a university. They found a way to use a super weak electrical current in bowls and chopsticks. Something about the ionization or the electric current makes food taste saltier. So you can eat food with less sodium but it tastes salty.
And the second one — I’m calling it smelly water. It’s a company called Air Up, which has found a way to create a scented ring around a bottle’s lip. They found a way to make something taste better through scent instead of electrical current. The water itself is not flavored — the ring is scented, so when you drink you get a hint of citrus or whatever you’re looking for. And they reportedly raised $68 million and may be doing $100 million-plus in revenue — according to Glimpse, I wasn’t able to reproduce that number, but they definitely raised a bunch.
The trend: how do you make something taste good without actually changing the caloric intake of the food?
Shaan: Wow. The salt taste without extra salt — that’s kind of genius if you could do that.
Steph: I saw the chopstick and bowl one very recently. I kind of want to order one. Haven’t tried Air Up either.
Sam: These are fascinating. I did not understand “salty bowls and smelly water” until you explained it — but that’s crazy.
Wrap-Up [01:14:00]
Shaan: Alright, where should people find you and follow you?
Steph: You can find me at stephsmith.io or on Twitter @stephsmithio. And we’ll hopefully be launching the podcast soon — the a16z podcast. You can find it anywhere you find your podcasts.
Shaan: Do you have a name yet?
Steph: It’s called “The a16z Podcast.”
Shaan: Okay, yeah. Alright. Thanks for coming on, Steph, and best of luck with the pod.
Steph: Thanks.