In this episode, Sam Parr and Shaan Puri discuss the rise of Gautam Adani, who recently became the third-richest person in the world, and explore the business strategies behind his success. They also delve into the unconventional business ventures of MrBeast and analyze Kanye West’s recent public disputes with major brands like Adidas.
Topics: Gautam Adani, Adani Group, MrBeast, Kanye West, Adidas, Yeezy, business strategy, wealth, entrepreneurship, Danda.org
The Third Richest Man in the World [00:00]
Shaan Puri: Did you know about a certain man named Gautam Adani? Have you ever heard this name before?
Sam Parr: I don’t remember. What’s his shtick? What’s he known for?
Shaan Puri: So, Adani just became—this guy just became the third-richest man in the world. And so you have—
Sam Parr: Yes, the Indian guy from, uh, uh, he’s kind of like a—he owns like the huge mansion in downtown like Mumbai where it’s like it’s like a skyscraper.
Shaan Puri: Yeah, so he—so he, Elon Musk number one, Jeff Bezos number two, and now Adani number three. And so people, they watch this list and they’re like, “Who is—who is Adani?”
Team Zucks and MrBeast’s Business [00:40]
Shaan Puri: All right, in this episode, we’re talking about the third-richest man in the world, somebody who you’ve never heard of.
Sam Parr: We talked about Team Zuck. So basically, Zuckerberg has this new video of him doing MMA, and we did a little recap on how we feel about it. But also, we kind of looked at how he makes his decisions and what our perspective is on him, and I actually think it’s quite interesting.
Shaan Puri: We broke down one of MrBeast’s, to me, the most interesting business that MrBeast has that nobody else is really talking about, and I think is low-key a star business.
Sam Parr: So that’s the episode. Give it a listen and let us know what you think.
Shaan Puri: And write in the comments, go on YouTube, write in the comments. I’ll be replying to every single comment that’s in here with something that’s either smart or funny, I guarantee it. Go to the comments and leave one and I’ll reply.
Kanye West and Yeezy [01:20]
Shaan Puri: All right, I have a a a fun one. This will get us in the mood. So, Kanye West, uh, pop cultury. Uh, do you follow Kanye?
Sam Parr: Of course.
Shaan Puri: I don’t really pay attention to Kanye West, really. It’s not really on my, uh, radar, but he did something kind of funny, and we talked about him yesterday, and it’s business-related. But basically, you know, he’s having this like tizzy with Adidas. Do you know about that?
Sam Parr: No, and nice use of tizzy.
Shaan Puri: You like that? Uh, well, and frankly, I don’t entirely know about it, so I’m just going to kind of like summarize. But basically, you know, Kanye worked with Adidas to launch Yeezys, his line of shoes. Um, it’s collectively made like—or not collectively, but in 2020, Yeezy sales were $1.17 billion in revenue. He made around $200 million from that. So he made a lot of money. And basically, he’s having a fight with them. I don’t actually know what the fight is about, but the backstory is that he’s accused them of stealing his designs and leaving him out of meetings for their Yeezy shoe collaborations. Sean, uh, Combs, you know, Diddy said he’s going to boycott because of this, and Kanye has said, “I’m going to make things unbearable for you guys until you comply.” So I don’t exactly know what comply means, but what’s kind of—it’s both sad because like it looks like he’s going through some stuff, and it is funny, and he’s kind of trying to be funny and it’s working. But he basically said, “I’ve got no chill. It’s going to cost you guys billions to keep me. It’s going to cost you billions to let me go, Adidas. You stole my design among other things, and I’ll give you till Tuesday. Not until the seven months that I told you originally I was going to give you. Today’s the day.” Like he like went and like he’s going crazy. And on his Twitter, which he’s got like—I don’t know how many followers, tens of millions, I would imagine, he’s posting each person’s picture who’s on the board of directors, as well as a couple other boards, like they have a board of advisories, uh, of Adidas’s people. And so he posted this one woman who’s also, and he’s like—and he’ll say stuff about them. Like sometimes it’s funny, but sometimes it’s like, uh, “This woman’s on the board of, uh, Adidas. She’s also a chairman and investment banker at JP Morgan. I went to JP Morgan in order to raise money for my buyout and they wouldn’t do it.” Like, he’s going kind of bananas, and I and I thought that that was wild. And then I saw another thing that he’s he’s having another tizzy with, uh, his wife Kim, or ex-wife, about a school. And I went and looked at their school. Have you heard about this?
Danda.org [03:37]
Sam Parr: So he has his own school, right? Like he has his own academy or something like that?
Shaan Puri: Yeah, so he’s trying to start this thing called Danda, so Danda.org. If you go there, it actually looks weird but interesting and kind of fun. Like it looks cool. And if you go to about, uh, on how we learn, you’ll see like they describe the curriculum and it’s like it kind of makes sense, but then you see like weird things. Like if you look at what the daily schedule, it says “After school parkour.”
Sam Parr: First of all, I went to the site, Danda.org. It’s just like who we are, how we learn, admissions, and choir. Those are the top four links. It’s just choir. Yeah, which of these does not belong? I don’t know why choir is up here. Secondly, there’s just like a white—I don’t even know what kind of—it looks like a white pigeon, to be honest with you, just flapping its wings in slow-mo. Okay, it’s a—it’s like a fat dove, though. It’s not like it’s not like a sleek, graceful dove. It’s like a chunky dove.
Shaan Puri: Like a guinea pig, yeah.
Sam Parr: Yeah, it’s a guinea pig with wings that’s just flying up in slow motion. And that’s the website. I’m going to click “How we learn” because I can’t not. Um, okay, they got less than 12 students per per class. Rule number one: students should be confident in forming forming ideas. If not, their writing will suffer. Okay. So their daily schedule: full school worship. Okay, that’s a good way to start the day. How we similar to how we start the pod. Um, core classes, lunch and recess, enrichment classes including film, choir, and you’re right, parkour. A bunch of bunch of singing ninjas out here, just singing and flipping around.
Shaan Puri: So I thought this was interesting because, uh, it, you know, even though he’s—I I don’t like laughing at him, a guy if he’s going kind of insane, but he’s trying to be funny with this Instagram thing and it kind of is hilarious. Uh, like he posted like the a guy, I think the CEO of SA SAP, uh, or is it SAP? Yeah, the like the HR software that nobody actually understands what they do. He like tweeted out or, uh, Instagrammed his this guy’s face and goes, “You are a SAP.” That’s what he said. And it just it just he’s just He’s just doing the most childish, immature thing and it’s so funny. It is working. It’s awesome. And then this school thing I saw because of his other little fight with Kim, and he’s like, anyway, I don’t know how this is related to business, but I I I thought that you would know about this because you’re more of a pop culture guy than I am.
People with Giant Egos [06:10]
Sam Parr: No, but let me tell you, uh, I okay, so this is, here’s a theme for this episode. I’m going to call it “People with Giant Egos.” No, I’m going to call it—cuz I don’t actually know if these people have giant egos. I’m going to say “Creative Titans.” That’s better. Uh, our Creative Titans. So the first one is going to be my Billy of the week.
Shaan Puri: A billion dollars isn’t cool. You know what’s cool? A billion dollars.
Sam Parr: Did you know about a certain man named Gautam Adani? Have you ever heard this name before?
Shaan Puri: Uh, I don’t remember. What’s his shtick? What’s he known for?
Sam Parr: So Adani just became—this guy just became the third-richest man in the world. And so you have—
Shaan Puri: Yes, the Indian guy from, uh, uh, he’s kind of like a—he owns like the huge mansion in downtown like Mumbai where it’s like it’s like a skyscraper.
Sam Parr: Yeah, so he—so he, Elon Musk number one, Jeff Bezos number two, and now Adani number three. And so people, they watch this list and they’re like, “Who is—who is Adani?” And I actually, I don’t know if I met him, but we definitely pitched him. I think my dad pitched him, uh, a business thing many years ago. My dad always kept saying, “Oh, we just need to get Adani on board. Adani, Adani, Adani.” And so I had heard about this guy before, and I didn’t, you know, and his net worth has just skyrocketed because his stock is up like 13x in the last, I don’t know. Was this for Reliance Industries?
Sam Parr: No. So Reliance, it was the top kind of like company there, and the guy who runs it, Mukesh Ambani, was the, I think he was, he was the richest man in India. And now Adani has passed him up in the last year because his stock went up 13x. So, so who is this guy and what does he do? Okay, so, um, what he does, you’ll you’ll appreciate this. Is he a software guy? Is he a Mark Zuckerberg? No, no, he’s not. Is he Elon Musk? Is he trying to create the future of, uh, you know, space travel and, you know, like brain computer interfaces? No. This guy operates in a place that Sam likes: power. So he does coal, ports, plastics, you know, shit like that. So basically, this guy’s like, they do they do like industrial work. And so he owns, when so when he was a he was a kid, he was in school, he went to go visit this port. It was the largest port in the country at the time, a port, you know, where literally like ships come in and out. And, um, he’s like inspired by it. It was like, “One day, I’m going to own the biggest port ever.” And the biggest port in India. And now he’s sure enough, he owns the biggest port in India. He owns the most ports in India, too. Um, when the deal we were trying to do with him, we were trying to get Adani to come to Australia to build a port for our our startup that was based in Australia, because these guys were the kings of ports. But his story is pretty cool. He’s a he’s a college dropout, so 18, drops out. He becomes a diamond sorter. I don’t even know what that means, but he became a diamond sorter. He got an interest in the diamond business. And after a couple of years of sorting diamonds, he then goes in and he starts his own diamond brokerage, and he’s like, “I will trade, I will basically, age 20, as a diamond broker.” Brother calls him up, brother says, “Hey, brother, I have a, uh, a small plastic factory here that I I I own now. I’ve I’ve I bought or I run.” And so he helps him go scale up the plastic factory. And then as he’s doing that, he’s like, “Oh, let’s start importing the like the the materials that come up, you know, upstream of plastics.” And so he starts doing he creates like an export company. And so he just keeps creating these companies. So now he has seven publicly listed companies. He’s got the Adani Group, which is like the the mega one, and then they’ll start like Adani Power, Adani, um, you know, like trading, Adani, um, real estate, or whatever. And they’ll start all these different companies, and they’ll take them all public. And what’s interesting about it is that And he’s got a beautiful mustache, by the way. He’s got a great stash. Yeah, he looks like, you know, the meme account Dr. Park Patel. He looks like the meme account’s photo, actually. So I don’t know if it’s if it’s him or it just looks a lot like him. He looks like a like an Indian Mario. You know, like Mario and Luigi. He looks like an Indian Mario. Like, you know, He look he does he you know when Mario does that little squat, like right you know when you want to you want to do that trick where you go behind the thing you’re standing on and you run and you get the magic blue. He’s like squatting. He’s a little squatty squatty version of of Indian Mario. So, anyways, this guy has now become, you know, whatever, the third richest man. He’s got these crazy stories. He was, I don’t know if you know, there was like this, um, sort of like an Indian 9/11 thing where there’s like a terrorist attack on a hotel. He was in that hotel and he was like in the hostage group that was there. Wow. He was also kidnapped at one point in time and taken ransom for $2 million, and they paid it and got free. And so this guy has just lived this like kind of crazy life. And even now, he’s doing really well, the group’s doing really well, he’s the third richest man on earth. There is a set of people who are very, very skeptical about what these guys are doing because they have so much debt in their companies. Like he is basically constantly trying to acquire companies. Like they just bought the largest cement producer in India. But they buy these companies using debt, and he’s got this intricate like set of companies. And so there’s a big question of like, is this all a house of cards that’s going to fall over? And you’re going to see a guy go from the number three richest to like, you know, falling off the list completely? Or is he actually going to pull this off? Because what they’ll do is they’ll say, “Okay, the the the parent company has some profits, we’ll take a loan on that.” And then they take like one of the new companies public, like, “Oh, Adani Green Power.” And they’ll take the green company public because it’s got the Adani name, stock price goes up. And then he’ll invest in it from the parent company, and then he’ll sell those shares, and then he’ll borrow against the the the stock, and then he’ll issue a bond, and he’s got like all these different debt instruments. And so they have, I think more debt than like any other company in India. And now there’s a question of, is this all going to fall over or is it all going to work? It’s pretty fascinating.
Self-Conscious About Business [12:15]
Shaan Puri: Dude, when do you ever feel—I feel self-conscious when I hear about these things because my like my thing with business is like just the very simple of buy low, sell high, you know? Like I purchase a widget for, you know, $1 and I put some type of value or I just buy tons of them and I so I get a discount and then I sell them for like $1.50, that 50 cents is my profit. I use a quarter a quarter of that to pay myself, a quarter to go buy more. And like it’s like a relatively like simple straightforward process. And then I hear about like you just used the word debt instruments and how he, you know, he like he does this thing and gets a loan across this thing and this thing. And when I hear that stuff, I just think like, so like where’s the dollar that goes into his bank account actually come from? You know what I mean? Like Right. Like I I try to think about I’m like, I don’t understand how this person then eventually collects the money and how the people who are owed money, where they got the money from and when they’re going to get paid back. Like, do you know what I mean? It it’s like it’s so complicated for me because I’m such a simpleton. Or is it just bullshit?
Sam Parr: Dude, when I was in seventh grade, my parents got me a piano teacher, and I wish that instead I just learned how to play debt instruments. Like that would have just been so much better than learning how to play, you know, chop sticks on the piano. What do you mean a debt Oh, debt instruments. Yeah, no shit. Like where do people learn this stuff? Where do people learn this sort of financial engineering? I think that a lot of it happens if you’re like on the inside, so you work at a investment bank or you work somewhere there, but like this guy didn’t have that background. But this guy didn’t do that. Yeah. Yeah, so you know, I think he hired people who who do that and they sort of say, “Hey, look, here’s what we’re going to do. We’re going to we’re going to issue this bond, and we’re going to take this company public, and then we’re going to like take a loan, pledge the shares, and we’re going to get a loan against the shares.” And basically, somehow $1 of EBITDA has become $8 of, you know, cash flow for us. And like we got to figure out how to do that without it all collapsing. But people who understand financial engineering, they have such an edge, such an absolute edge.
Shaan Puri: But when I like originally like made some money and I remember like our banker saying like, “Yeah, you could borrow money now at 1%.” And I’m like, “Yeah, I don’t want to go into debt.” And and they’d be like, “Well, no, sometimes it’s like it could be wise for you to do that. For example, if you have to pay taxes.” I’m like, “Why?” He goes, “Well, because you’d have to sell this thing, which then you’d take like a, you know, 40% discount on that because of taxes.” And I’m like, “Wait, I don’t understand this. Can you like lay this out? Like can you write this on a piece of paper?” So like it and then my banker, Griffin, he ended up flying to New York to visit me to like he goes, “Dude, I just need to sit down with you, see if you understand this.” I swear to God. I swear I go, “Why are you coming here? You got meetings?” He goes, “No, I’m coming to explain this to you.” So he came and he explained it to me and I was like He’s like, “Yeah, sure, meetings.” Uh, Yeah. I’ve cleared my day to explain the one concept of borrowing against stock. Like I I just didn’t understand it. Were you the same way where you’re like, “I just don’t get this. I this doesn’t make sense to me. Who where is this?” No, because you and others explained it to me, right? So like, yes, it’s true. I didn’t understand. I didn’t know about it at first, and then when I knew about it, I didn’t understand why it was good. And then somebody’s like, “Hey, so you notice why this is amazing, right? You could either sell your stock, pay taxes, and no longer own the stock, or you could keep owning the stock, never pay the taxes, just borrow at a 1% rate against that money and like you’re good.” And I was like, “Okay, so that’s good, right?” They’re like, “All right, you dipshit. You didn’t understand? Like let’s do this again.” And he like showed the numbers. It’s crazy.
Shaan Puri: Yeah, I just like, so these financial engineer—you know where I learned a lot about this stuff is from Ben, our Ben Wilson, his, uh, podcast with Rothchild. Like, I and and like I started like learning about this a little bit, but then I also learned that I think some people, I don’t know like what skill set it is. I do think it’s rooted in just like they’re just good at math and they understand, um, just like complicated algebra, to be honest. Just like exponential exponential. Like that that that that’s a concept that’s like it sounds like I’m joking, but that’s actually quite hard to understand. Like to understand what a 7% or 10% or 12% growth for 50 periods, what’s that actually look like? Like, I remember listening to this podcast and I was like, “Oh, you’re just like just like LeBron is just taller and can dunk better. Doesn’t matter what I do. Like there’s some people they’re just better at this.” And I don’t know what that skill set is, but there is something there there. It’s like you’re just you’re better than me.
Sam Parr: Well, I think you just get curious about that thing, which most of us who are like builders, makers, entrepreneurs, you know, like the stereotype about, let’s say, um, you know, who cares? What you know, corporate structure, uh, bookkeeping, taxes, like, you know, whatever, raising debt. That wasn’t never the reason I got into business. That’s not what I found interesting at the time. I was like you. It’s like, “Oh, we could buy this thing for X and sell it for Y.” You know, that that’s that’s the game plan. Or we can make this thing that doesn’t exist and wow, look how cool it is, look how it works. That was always more fun. And it’s just like a level up a progression in the game to be able to understand how do I A, keep more money that I make, and B, how do we leverage money so that we can do more interesting things, you know, in a less dilutive way. So, so I I I think these people are amazing, you know, like Xavier who who runs Enduring Ventures. He told me this once. He’s just he was just like, “You know, if I died, I’d be reincarnated as a CFO, not a CEO.” And I was like, That’s so funny. It was like the weirdest brag I’d ever heard. I was like, I never heard somebody like bragging about wanting to be a CFO, and I was like, “What do you mean?” He’s like, “He’s like, I don’t know. I just really like learning about how to be efficient and smart on this like financial like financial engineering.” And he had done, you know, real engineering before that. He built basically like these like so he built a solar company in in Africa, the largest solar company in Africa. Dude, that’s so funny that he’s interested in that stuff though, because like he comes off He’s like a hippie. He’s to he’s totally a hippie, right? He he did that because he’s like, “Dude, there’s people suffering in Africa. Like I want to like that seems like the problem to go fix.” But then along the way, he’s like, “All right, well, how do I create, you know, how do I finance all of these solar panels and battery packs without having to go raise venture capital?” And so in order to do that, like the necessary evil was he needed to learn how to access cheap debt. He needed to learn how to like issue debt and underwrite for other people, because what he did was he was like, “You know, these people should basically, they don’t have the $21 to buy the solar panel that goes on top of their house that’s going to power their fridge. And like if they don’t have a fridge, their life really is tough and they need this, but they can’t afford the $21. So like let’s just do it at $4 a month or whatever.” And like, “I will underwrite a loan against their like income.” And it’s like, “How do you underwrite a loan for somebody who doesn’t even have electricity in their house?” And he would figure these things out. And so I think it became a necessary evil and something he got fascinated with. And so now they’re doing this whole holding company. And so he does this this one thread he did went viral, which was like, “How to have a holding company like Warren Buffett.” And basically like, you know, make a massive amount of money, pay as little taxes you need to, and like, you know, have have more and more money to do acquisitions as you go. And he basically outlines Warren Buffett’s corporate structure and why that’s at why that’s advantageous. And uh, you know, I read it and I still only understand 25% of it, but I’m just glad that there’s people like that that I can go to whenever I have a question about stuff. That’s hilarious.
Shaan Puri: Dude, that’s great. Well, I like this guy. I got him. I’m going to I want to learn more about him. You have more on him or you want me to go?
Sam Parr: Uh, I have another person like this. Or I have another person and idea like this. Okay, so now let’s switch gears. Another creative titan that we talked about, Mr. Beast. So we hung out with Mr. Beast. I don’t know if you guys are sick of us talking about that yet, but, you know, uh, producer Ben is literally sitting here in a Mr. Beast, uh, t-shirt. So, you know, he’s a fan. Uh, by the way, that’s good, Ben, because you know, when when we were sitting in that meeting and they brought in the swag, uh, Jimmy, who who who is Mr. Beast, he goes he goes, “Ah, man, they’re not like kids, dude. They don’t need they don’t need this stuff.” Like, you know, “Oh, they’re not going to be like” cuz the guy came in and was like, “Guys, I got treats for you.” And he’s like, had a bunch of swag and nobody moved. And Mr. Jimmy was just like, “Ah, no, they don’t care about this stuff, man. They’re they’re they’re adults.” And then like all of us were like, “The fuck you talking about, dude?” And like we just like I just like I literally rolled my chair over to him like, you know, like a kid, I’m like, “Wee!” I like just like rolled my rolling chair over to that part of the table cuz it was like a long boardroom. And I was just like, “I’m going to go get some swag.” And I went and got it and the other guys like, “I got kids, man. I got they’re going to need like if I don’t bring back swag, they’re going to be pissed.” And so, and now Ben is wearing his.
Shaan Puri: Damn, I Jimmy drove me like when we were going to the I took a ride with them and I found that shirt that you’re wearing, Ben, in the back of his car and I just go, “I’m fucking taking this.” He’s got tons of them. So I stole mine from him. I I I didn’t know that we had the opportunity to take it like ethically. Never considered that.
Sam Parr: Um, so Jimmy, okay, so I wanted to bring something up that he had talked about that we didn’t mention on the podcast, which to me is the most interesting business that this guy has. You might be thinking, is the most interesting business his YouTube channel? No. Is it his chocolate company, Feastables named Feastables? No. Is it his drop-shipping burger company, his cloud kitchen called Mr. Beast Burger? No. Do you know which one I’m going to talk about? Do either of you guys know? Give me a Sam, do you know which one I’m going to talk about?
Shaan Puri: I think.
Sam Parr: Ben, do you have any idea which one I I might be referring to?
Shaan Puri: Uh, well, uh, no, but are you going to talk about his burger? Did you guys see his restaurant just open?
Sam Parr: Yeah, yeah, yeah, but let’s talk about this other thing first. Okay, okay, no, no, I don’t know you’re talking about. I’m like I wrote down what I think it is and then you you say it. All right, I’m going to say it. It’s his like kind of translation internationalization company. Translation, Sam got it. There it is. Yes. This idea is amazing. So, when we’re sitting there, he’s like, “Yeah, I got basically, whatever, the number number one, number two, whatever, biggest channel in in America.” And he’s like pulling up his like YouTube stats on he’s like air playing onto the TV like his YouTube stats. And then he goes, um, “I also have this channel in Portugu—you know, this my Portuguese channel is growing really fast.” And he puts up a video, it’s got 20 million views in Brazil. And I was like, and it it starts talking and all of a sudden, he’s talking in fluent Portuguese. And I was like, “What is this?” He’s like, “Oh, yeah.” Like it Like AI? No, so what they did was they were like, “Look, one of the things we we already put a million and a half dollars into this video where I built this chocolate factory and I’m going to give it away to one of these people. How do we get more juice out of that fruit?” And so what they realized was, we can go international into markets where YouTube is huge, like Brazil. Um, Brazil’s got this massive population, it’s huge on YouTube, and they don’t have content like Mr. Beast is doing. Like he’s ahead of the game for the US. He’s light years ahead of the game for like Brazil or the Philippines or different places like this. And so, but the challenge is it’s a language challenge. So what they did was they went, they basically hired somebody to create a YouTube channel. They said, “Hey, you’re going to be our YouTube channel manager for this country. You’re the country manager for Brazil. You got to have our Twitter, our TikTok, our YouTube, all of it. Um, you know, Mr. Beast Brazil or whatever it’s called.” Then secondly, we’re going to when we have a video here, you need to get it translated by a local like a like a dubbing service, so like a local translator. And I want it translated, I want the description translated, I want uh all of it done. And then you upload it there, you respond to the comments, you manage that community, all of that good stuff. And what they did was they would not like they didn’t just go get like, you know, some random crappy person on Fiverr to do it. They got like the guy who dubbed Spider-Man in in Brazil, they got him to do the voice acting for this. They paid him a lot of money. They paid him like a couple hundred grand. And I was like, “I feel like you didn’t need to do that. You could have just got anybody.” And he’s like, “Check this out.” Like basically, you don’t know shit about shit, Sean. And so then he goes to the comments and every comment is, “Oh my god, Mr. Beast is Spider-Man!” Like they just thought, he must be that guy. Like that’s him, that’s that voice I recognize. And so it got like all this extra, you know, social juice. It was a little more remarkable. And again, back to our principle from last podcast, which is just do the doper thing. Just do the dope shit instead of the lame shit. Like what’s cooler? The cheaper guy from Fiverr or all right, you paid 100 grand or whatever, and you got Spider-Man to do it. It’s like, of course, of course. What am I what am I thinking? And so that’s what they’re doing in all these countries. Dude, whenever, by the way, when I listen to audiobooks like on Audible, I every if I if I see a famous person’s the author or the narrator rather, I listen to it. So like I’m listening to Huckleberry Finn. Not that I really care about Huckleberry Finn, but Nick Offerman is the narrator. You know, the guy from Community. Uh, you know who that is? He’s like the Oh yeah. Is he the main guy in Community? Yeah, Ron Swanson. He plays like an angry like white country guy. Or like it’ll be another guy like it’ll be just like whenever I see an author who I rec uh a narrator, if I recognize they’re a famous person, I listen to it. So Tom Hanks doing Da Vinci Code. I didn’t really even want to do Da Vinci Code, but Tom Hanks. So like the whole narrator thing, yeah, that’s pretty sick. I’m on board with that. I can find this client info. Have you heard of HubSpot? HubSpot is a CRM platform, so it shares its data across every application. Every team can stay aligned. No out-of-sync spreadsheets or dueling databases. HubSpot, grow better. So, so basically, what he’s done is he’s like, “Cool, now that’s Okay, so he was doing that for himself. So he’s like, “Oh, good. I’m I’m blowing up in Romania. I’m blowing up in Philippines. I’m blowing up in Brazil. I’m blowing up everywhere.” He’s like, “I already did 80% of the work. It’s that last 20 that is foreign to me, feels feels like a lot of work, but I but I can hire the people to do this.” But the smart part was, he’s like, “This is not just a way for me to expand my brand. That’s already a smart business move.” He then created this as a service for other big YouTubers. So now, if you’re whoever, you know, you’re Erac or you’re you’re you know, some Yes Theory or something like that, that you could basically just use his service. He’ll just go to you and be like, “Hey, do you want to be big in Brazil? We’ll just do all the work for you and like we’ll keep like 30% of the ad revenue.” And they’re like, “That’s crazy.” Okay, yeah, like I’m not going to hire I’m not going to go and do this interview process to hire all these people and figure it out and manage this all myself. That’s kind of inefficient. But what he can do is like he can have one team in Brazil that’s going to manage 15 YouTubers channels there. And so I think this is one of the smartest businesses that he has. I think it’s going to be one of the most successful. It’s going to be pure profit essentially. And um, I think he’s got the distribution locked down because if he goes to any YouTuber and explains, “Hey, here’s what I’m doing and you get access to my machine,” they’re all going to say yes. And it’s an it’s a good idea for them. It’s a win-win for them because they’re just not going to capture this extra value. Um, and so he’s doing this and it’s just another example of turning a cost center into a profit center. And I actually want to talk about some examples of those. So basically, things where this would normally just be a cost to him to run this, to have all these people on staff, but once he turns it into a service for other YouTubers, now it becomes a profit center. And so there are a bunch of examples. Which which I think this would make way more money than the chocolate bars. Like I remember I ate the chocolate the chocolate that he had and I was like, “Well, you know, like, a, it’s good, but I don’t it’s not like that different than any other chocolate that I’ve had. And b, it kind of sucks that I’ve got to feel bad about myself if I consume a lot of your product. And c, it’s only like 40 it was $40 I think for a box. Like that’s hard to build a big business $40 a pop. You know what I’m saying? At least when you’re not if you you got to be in Walmart or something. Yeah, which I’m sure he could do also. Like uh to Ben’s point, he he opened up a brick and mortar location for his burger joint. And normally you’re like, “Ah, you know, opening up a restaurant in a mall, maybe not the best idea.” And then he like posts this video, there’s like literally, I don’t know, 50,000 people in the mall that like lined up. It was like people were lined up up and down each concourse, just like, you know, the the the restaurants on floor one or whatever, like people were on floor four just lined up in this line and it was insane. So you know, this guy’s got pretty massive pull. So what are the other examples of of turning cost centers into Okay, so so the first one that came to mind for me was AWS. So AWS today is basically Amazon. Amazon’s most of its profits come from AWS. And AWS is basically when Amazon had to have a really robust set of servers to run their own website, and then they were like, “Hey, the way we use this kind of like server infrastructure and it’s just like this big expense for us to have this server farm, what if we just rented this out to other companies who want to have like Amazon level servers without having to go rack their own servers in some data center?” And that became AWS, and basically AWS spits off billions and billions in profit now, which started as what would have been a billion-dollar loss. And so, you know, that’s a huge swing. But I have some others, uh, that I want to explain to you. So, uh, Michael Girdley, who came on the pod, he goes, “My favorite is, um, this company called Freight Alley. They did what what HubSpot kind of did with the hustle. They basically have this thing called Freight Waves, which is Freight Waves is basically a, um, media company, and Freight Alley is the like the SAS company. So basically, they’re a SAS company that created a media arm that goes and, uh, you know, normally a media company, you know, has expenses, but they turned it into a profit center. Basically, that acquires customers for the SAS business at a negative customer acquisition cost. So the media company is profitable and brings in customers to their own SAS, you know, at the bottom of the funnel. So that’s one example, not exactly the full thing, but Dude, that guy, the guy who started that company, his name’s Craig. I’ve hung out with him a bit. He, um, bought a big piece of property in Tennessee, and he’s the one who’s turning it into like an airport. It’s like a country club, but instead of a golf course, there’s an airport. So he’s selling, he bought a huge plot of land, now he’s sub-selling or he’s selling smaller plots of land and there’s going to be an airplane strip and a hangar that everyone has access to. So if you’re a flying enthusiast, you buy a home there and you can use this. And he bought a magazine, I think it was called airplane.com or something like that. He bought a magazine, and he’s like, “I’m going to buy a magazine and do the same thing that I did, but instead of software, we’re going to do it with these houses.” Wow, that’s that’s it’s amazing. Another, um, another example. So, uh, any D2C company that eventually takes their own warehouse and starts fulfilling for other customers. So they turn their own warehouse, which is a cost for them for fulfillment, into a profit center because they’re doing fulfillment for themselves and others. It’s very similar to to AWS. Okay, here’s another one. Uh, this guy George on Twitter just sent me this. He goes, “Ford decided to own the timber supply for their vehicles. So there was lots of wood in the early cars. They ended up with they ended up with so much leftover wood, they started selling charcoal, and that’s Kingsford Charcoal Company.” That’s my favorite, man. That’s my favorite story. That’s a that’s kind of amazing. I didn’t know that. Uh, is there more to know about that or did did we kind of nail it there? No, you nailed it. So basically, they were so Ford was making frame car frames and they had to burn a whole lot of wood in order to, you know, bend the steel or do whatever they had to do. And they had all this leftover charred wood and they’re like, “What do we do with this?” And I think it was Henry Ford’s idea. I forget exactly whose idea, but he goes, “Hey, let’s let’s start selling this. Let’s make something out of this.” And that’s where it kind of came from. There’s a bunch of entrepreneurs that have kind of like done things like this. Uh, Standard Oil did something like this where they’re like, this gets more complicated and is less interesting, but like, “Hey, this off-put of kerosene is like this weird like fluid that’s like really greasy. Is there anything we could do with that?” And like WD-40 or something like that. Like they like there’s like stories like that with with Standard Oil as well. And so here’s a couple others. So, FourSquare, FourSquare had an API for businesses because they needed all this data about businesses, where they’re located, all that stuff. And they needed that for to power their own FourSquare app. And FourSquare kind of went up in this hype cycle, then went down, many years, sort of forgotten, sort of written off. But a new CEO joined and almost oriented the company around this. It was like, “Look, the more valuable thing is not people using FourSquare the app and playing the game, it’s all the data we’ve collected about businesses, where they’re located with like hyper precision. And so we actually just need to make that API available to everybody.” And they productized the API and they make, I think more money off the API, I think, they make more money off the API than they do off the core app at this point. Um, so so I think that’s a that’s another great example of this. Amazon has a bunch, like Amazon was a bookseller, right? So their main cost of goods sold was their books. But then they create Kindle and Kindle self and the self-publishing business and the public, you know, and all that. And so now Kindle itself became a profit center. What so what used to be a cost, which was selling books, now they sell ebooks that they kind of own and, um, you know, they turn that into a profit. Same thing with payments, right? Amazon had to pay a a merchant like a fee every time they processed a payment. So they created their own payment software, Amazon called Amazon Payments. And now like, you know, for our e-com store, I just went, I I was like, “Oh, I think we should take Amazon payments. Where does that money go?” And I went and found an account that we have with Amazon Payments that had like 400 grand sitting in it, because we use that service, Amazon Payments, to take payments for somebody who wants to pay with Amazon. And so they turned it into a profit center along the way. That’s crazy. Another one is, um, Slack. So Slack started out as a game, and when they were working on their game, they it it wasn’t actually doing that well, but they created a way in order to communicate effectively with their with their coworkers. And they said, “Ah, fuck this game. This thing is actually way cooler. Let’s actually turn this internal tool into a, uh, a proper tool.” We thought about doing that. So here’s but here’s the problem with this. This all sounds sick. A lot of people, uh, say, “Yeah, let’s do this.” And so a lot of publishers are doing this. And so they are like, “Let’s sell our CMS.” So BuzzFeed, Vox, Washington Post, I forget who else. It’s like they build these custom website builders and they say, “Let’s sell this.” And I think oftentimes it’s a distraction, and they always say, “Well, Amazon did it.” And I looked into this. Amazon did launch AWS, uh, pretty early on. But do you know how many employees they had when they did it? How many total employees are on AWS? Yeah, total employees. There was about 5,000. So they were already a multi-billion dollar company with and so they the way the story is told is like, “Oh, they were just this little guy.” Dude, no, they had about 5,000 people when they launched AWS. Like it was like a, you know, it was a it was a thing. It wasn’t just like a scrappy startup. And a lot of times people like will say, “Well, let’s also sell this.” It’s like, “Dog, we’ve got eight people working here. Like who’s going to do this?” Uh, so that’s always like I’ve always been conflicted with this strategy. Yeah, that’s that’s true. Uh, you guys considered it. You would have done it for what? Is it your, um, Our email sending platform. So like we built our own for a little while and then we made it really easy. So like if it so basically, hypothetically, which there aren’t that many people doing this, if you had a daily email, it was really easy for you to talk to your advertiser, make the ad and insert it into the thing, have them approve it, and like it was simple and easy to use. But the problem is is like there’s not that many people doing it. You know what I mean? And B, like Well, there weren’t then, but like Beehiiv basically does that now. And they’re actually growing pretty well. Well, maybe I could have been wrong, but I don’t think I’m going to end up being wrong. I think that I think that I’m not convinced that what they’re doing, at least ads for a daily email, that business, I don’t think will be ever be that particularly big. And Beehiiv, so Beehiiv is kind of like Substack, uh, and so it’s these services that you get subscribers and they take a small amount of revenue based off of how much you’re making from subscriptions or you just pay them like a fee on how many subscribers you have. Do you think that some of those businesses actually can become huge venture-backed size companies? So I just invested in Beehiiv, actually. Initially, I didn’t invest because I was like, “Uh, I don’t know how big this gets.” And then two things sort of changed my mind. The first is every time I needed something for Beehiiv, the founder was an absolute animal on my request. Like, because we use it for Milk Road. So Yeah, he’s great. His name’s Tyler. He’s awesome. Tyler was so he’s like, “It’s already on a like he’d be like, “It’s already on a roadmap.” The question I have is A or B, this like nuance about it that shows he’s been thinking about this noodling on it. And then he’d be like, “When do you need this by?” Because normally like it’s scheduled to be out in three weeks, but if you need three days, like, you know, the weekend exists, I might be able to do, you know, like whatever. So he was able to like rip off feature after feature after feature that we needed. And everything that was like, you’re like, “Hey, we have this question.” It’s like him and his team would dig in. So so I saw that he kind of had that grit that you like in an entrepreneur. So I got to basically test drive the entrepreneur, which I normally don’t get to do with most investments. Um, you know, with most investments, you meet them, you do a call with them, they say all the right things, they send you the deck, you look at it, you check, you look at the product, and like you got to make an educated guess at that point. You don’t get to spend months working with the actual entrepreneur as a customer and see how quick they are with features, how how fast they’re responding, the quality of the product, all that good stuff. So, so that was the first reason. The second reason was I’ve come to realize that the that the best investments I’ve made have been ones where what looks like a small market, what looks niche, turns out to not be niche. So we got acquired by Twitch in our last company. Twitch was a kind of the quintessential example of this, right? Like, “Yeah, but like how many people are going to watch other people play video games on the internet? Like how many people are going to stream themselves playing a video game and how many people want to watch that?” Looked niche and turned out to be a massive behavior. Um, this is also true with like, you know, uh, now Shopify seems really obvious. I remember talking to the VC who led Shopify’s early rounds, uh, you know, maybe six, seven years ago. And Shopify at that point was still like legit, but it’s not what it is today. It’s not like seen as it is today as like one of the like blue chip startups. And it was the same thing. It was like, “Ah, okay, you know, like just like Etsy, like, you know, how big do these actually get? These kind of like indie maker seller type things. Is an Amazon and big brands just going to like dominate this? Like how many mom and pops are there going to be on the internet that can actually do this well and how much money can they make?” And I remember listening to this podcast. I was like, “Oh, you’re just like just like LeBron is just taller and can dunk better. Doesn’t matter what I do. Like there’s some people they’re just better at this.” And I don’t know what that skill set is, but there is something there there. It’s like you’re just you’re better than me. Well, I think you just get curious about that thing, which most of us who are like builders, makers, entrepreneurs, you know, like the stereotype about, let’s say, um, you know, who cares? What you know, corporate structure, uh, bookkeeping, taxes, like, you know, whatever, raising debt. That wasn’t never the reason I got into business. That’s not what I found interesting at the time. I was like you. It’s like, “Oh, we could buy this thing for X and sell it for Y.” You know, that that’s that’s the game plan. Or we can make this thing that doesn’t exist and wow, look how cool it is, look how it works. That was always more fun. And it’s just like a level up a progression in the game to be able to understand how do I A, keep more money that I make, and B, how do we leverage money so that we can do more interesting things, you know, in a less dilutive way. So, yeah, so I I I think these people are amazing, you know, like Xavier who who runs Enduring Ventures. He told me this once. He’s just he was just like, “You know, if I died, I’d be reincarnated as a CFO, not a CEO.” And I was like, That’s so funny. It was like the weirdest brag I’d ever heard. I was like, I never heard somebody like bragging about wanting to be a CFO, and I was like, “What do you mean?” He’s like, “He’s like, I don’t know. I just really like learning about how to be efficient and smart on this like financial like financial engineering.” And he had done, you know, real engineering before that. He built basically like these like so he built a solar company in in Africa, the largest solar company in Africa. Dude, that’s so funny that he’s interested in that stuff though, because like he comes off He’s like a hippie. He’s to he’s totally a hippie, right? He he did that because he’s like, “Dude, there’s people suffering in Africa. Like I want to like that seems like the problem to go fix.” But then along the way, he’s like, “All right, well, how do I create, you know, how do I finance all of these solar panels and battery packs without having to go raise venture capital?” And so in order to do that, like the necessary evil was he needed to learn how to access cheap debt. He needed to learn how to like issue debt and underwrite for other people, because what he did was he was like, “You know, these people should basically, they don’t have the $21 to buy the solar panel that goes on top of their house that’s going to power their fridge. And like if they don’t have a fridge, their life really is tough and they need this, but they can’t afford the $21. So like let’s just do it at $4 a month or whatever.” And like, “I will underwrite a loan against their like income.” And it’s like, “How do you underwrite a loan for somebody who doesn’t even have electricity in their house?” And he would figure these things out. And so I think it became a necessary evil and something he got fascinated with. And so now they’re doing this whole holding company. And so he does this this one thread he did went viral, which was like, “How to have a holding company like Warren Buffett.” And basically like, you know, make a massive amount of money, pay as little taxes you need to, and like, you know, have have more and more money to do acquisitions as you go. And he basically outlines Warren Buffett’s corporate structure and why that’s at why that’s advantageous. And uh, you know, I read it and I still only understand 25% of it, but I’m just glad that there’s people like that that I can go to whenever I have a question about stuff. That’s hilarious. Dude, that’s great. Well, I like this guy. I got him. I’m going to I want to learn more about him. You have more on him or you want me to go? Uh, I have another person like this. Or I have another person and idea like this. Okay, so now let’s switch gears. Another creative titan that we talked about, Mr. Beast. So we hung out with Mr. Beast. I don’t know if you guys are sick of us talking about that yet, but, you know, uh, producer Ben is literally sitting here in a Mr. Beast, uh, t-shirt. So, you know, he’s a fan. Uh, by the way, that’s good, Ben, because you know, when when we were sitting in that meeting and they brought in the swag, uh, Jimmy, who who who is Mr. Beast, he goes he goes, “Ah, man, they’re not like kids, dude. They don’t need they don’t need this stuff.” Like, you know, “Oh, they’re not going to be like” cuz the guy came in and was like, “Guys, I got treats for you.” And he’s like, had a bunch of swag and nobody moved. And Mr. Jimmy was just like, “Ah, no, they don’t care about this stuff, man. They’re they’re they’re adults.” And then like all of us were like, “The fuck you talking about, dude?” And like we just like I just like I literally rolled my chair over to him like, you know, like a kid, I’m like, “Wee!” I like just like rolled my rolling chair over to that part of the table cuz it was like a long boardroom. And I was just like, “I’m going to go get some swag.” And I went and got it and the other guys like, “I got kids, man. I got they’re going to need like if I don’t bring back swag, they’re going to be pissed.” And so, and now Ben is wearing his. Damn, I Jimmy drove me like when we were going to the I took a ride with them and I found that shirt that you’re wearing, Ben, in the back of his car and I just go, “I’m fucking taking this.” He’s got tons of them. So I stole mine from him. I I I didn’t know that we had the opportunity to take it like ethically. Never considered that. Um, so Jimmy, okay, so I wanted to bring something up that he had talked about that we didn’t mention on the podcast, which to me is the most interesting business that this guy has. You might be thinking, is the most interesting business his YouTube channel? No. Is it his chocolate company, Feastables named Feastables? No. Is it his drop-shipping burger company, his cloud kitchen called Mr. Beast Burger? No. Do you know which one I’m going to talk about? Do either of you guys know? Give me a Sam, do you know which one I’m going to talk about? I think. Ben, do you have any idea which one I I might be referring to? Uh, well, uh, no, but are you going to talk about his burger? Did you guys see his restaurant just open? Yeah, yeah, yeah, but let’s talk about this other thing first. Okay, okay, no, no, I don’t know you’re talking about. I’m like I wrote down what I think it is and then you you say it. All right, I’m going to say it. It’s his like kind of translation internationalization company. Translation, Sam got it. There it is. Yes. This idea is amazing. So, when we’re sitting there, he’s like, “Yeah, I got basically, whatever, the number number one, number two, whatever, biggest channel in in America.” And he’s like pulling up his like YouTube stats on he’s like air playing onto the TV like his YouTube stats. And then he goes, um, “I also have this channel in Portugu—you know, this my Portuguese channel is growing really fast.” And he puts up a video, it’s got 20 million views in Brazil. And I was like, and it it starts talking and all of a sudden, he’s talking in fluent Portuguese. And I was like, “What is this?” He’s like, “Oh, yeah.” Like it Like AI? No, so what they did was they were like, “Look, one of the things we we already put a million and a half dollars into this video where I built this chocolate factory and I’m going to give it away to one of these people. How do we get more juice out of that fruit?” And so what they realized was, we can go international into markets where YouTube is huge, like Brazil. Um, Brazil’s got this massive population, it’s huge on YouTube, and they don’t have content like Mr. Beast is doing. Like he’s ahead of the game for the US. He’s light years ahead of the game for like Brazil or the Philippines or different places like this. And so, but the challenge is it’s a language challenge. So what they did was they went, they basically hired somebody to create a YouTube channel. They said, “Hey, you’re going to be our YouTube channel manager for this country. You’re the country manager for Brazil. You got to have our Twitter, our TikTok, our YouTube, all of it. Um, you know, Mr. Beast Brazil or whatever it’s called.” Then secondly, we’re going to when we have a video here, you need to get it translated by a local like a like a dubbing service, so like a local translator. And I want it translated, I want the description translated, I want uh all of it done. And then you upload it there, you respond to the comments, you manage that community, all of that good stuff. And what they did was they would not like they didn’t just go get like, you know, some random crappy person on Fiverr to do it. They got like the guy who dubbed Spider-Man in in Brazil, they got him to do the voice acting for this. They paid him a lot of money. They paid him like a couple hundred grand. And I was like, “I feel like you didn’t need to do that. You could have just got anybody.” And he’s like, “Check this out.” Like basically, you don’t know shit about shit, Sean. And so then he goes to the comments and every comment is, “Oh my god, Mr. Beast is Spider-Man!” Like they just thought, he must be that guy. Like that’s him, that’s that voice I recognize. And so it got like all this extra, you know, social juice. It was a little more remarkable. And again, back to our principle from last podcast, which is just do the doper thing. Just do the dope shit instead of the lame shit. Like what’s cooler? The cheaper guy from Fiverr or all right, you paid 100 grand or whatever, and you got Spider-Man to do it. It’s like, of course, of course. What am I what am I thinking? And so that’s what they’re doing in all these countries. Dude, whenever, by the way, when I listen to audiobooks like on Audible, I every if I if I see a famous person’s the author or the narrator rather, I listen to it. So like I’m listening to Huckleberry Finn. Not that I really care about Huckleberry Finn, but Nick Offerman is the narrator. You know, the guy from Community. Uh, you know who that is? He’s like the Oh yeah. Is he the main guy in Community? Yeah, Ron Swanson. He plays like an angry like white country guy. Or like it’ll be another guy like it’ll be just like whenever I see an author who I rec uh a narrator, if I recognize they’re a famous person, I listen to it. So Tom Hanks doing Da Vinci Code. I didn’t really even want to do Da Vinci Code, but Tom Hanks. So like the whole narrator thing, yeah, that’s pretty sick. I’m on board with that. I can find this client info. Have you heard of HubSpot? HubSpot is a CRM platform, so it shares its data across every application. Every team can stay aligned. No out-of-sync spreadsheets or dueling databases. HubSpot, grow better. So, so basically, and what he’s done is he’s like, “Cool, now that’s Okay, so he was doing that for himself. So he’s like, “Oh, good. I’m I’m blowing up in Romania. I’m blowing up in Philippines. I’m blowing up in Brazil. I’m blowing up everywhere.” He’s like, “I already did 80% of the work. It’s that last 20 that is foreign to me, feels feels like a lot of work, but I but I can hire the people to do this.” But the smart part was, he’s like, “This is not just a way for me to expand my brand. That’s already a smart business move.” He then created this as a service for other big YouTubers. So now, if you’re whoever, you know, you’re Erac or you’re you’re you know, some Yes Theory or something like that, that you could basically just use his service. He’ll just go to you and be like, “Hey, do you want to be big in Brazil? We’ll just do all the work for you and like we’ll keep like 30% of the ad revenue.” And they’re like, “That’s crazy.” Okay, yeah, like I’m not going to hire I’m not going to go and do this interview process to hire all these people and figure it out and manage this all myself. That’s kind of inefficient. But what he can do is like he can have one team in Brazil that’s going to manage 15 YouTubers channels there. And so I think this is one of the smartest businesses that he has. I think it’s going to be one of the most successful. It’s going to be pure profit essentially. And um, I think he’s got the distribution locked down because if he goes to any YouTuber and explains, “Hey, here’s what I’m doing and you get access to my machine,” they’re all going to say yes. And it’s an it’s a good idea for them. It’s a win-win for them because they’re just not going to capture this extra value. Um, and so he’s doing this and it’s just another example of turning a cost center into a profit center. And I actually want to talk about some examples of those. So basically, things where this would normally just be a cost to him to run this, to have all these people on staff, but once he turns it into a service for other YouTubers, now it becomes a profit center. And so there are a bunch of examples. Which which I think this would make way more money than the chocolate bars. Like I remember I ate the chocolate the chocolate that he had and I was like, “Well, you know, like, a, it’s good, but I don’t it’s not like that different than any other chocolate that I’ve had. And b, it kind of sucks that I’ve got to feel bad about myself if I consume a lot of your product. And c, it’s only like 40 it was $40 I think for a box. Like that’s hard to build a big business $40 a pop. You know what I’m saying? At least when you’re not if you you got to be in Walmart or something. Yeah, which I’m sure he could do also. Like uh to Ben’s point, he he opened up a brick and mortar location for his burger joint. And normally you’re like, “Ah, you know, opening up a restaurant in a mall, maybe not the best idea.” And then he like posts this video, there’s like literally, I don’t know, 50,000 people in the mall that like lined up. It was like people were lined up up and down each concourse, just like, you know, the the the restaurants on floor one or whatever, like people were on floor four just lined up in this line and it was insane. So you know, this guy’s got pretty massive pull. So what are the other examples of of turning cost centers into Okay, so so the first one that came to mind for me was AWS. So AWS today is basically Amazon. Amazon’s most of its profits come from AWS. And AWS is basically when Amazon had to have a really robust set of servers to run their own website, and then they were like, “Hey, the way we use this kind of like server infrastructure and it’s just like this big expense for us to have this server farm, what if we just rented this out to other companies who want to have like Amazon level servers without having to go rack their own servers in some data center?” And that became AWS, and basically AWS spits off billions and billions in profit now, which started as what would have been a billion-dollar loss. And so, you know, that’s a huge swing. But I have some others, uh, that I want to explain to you. So, uh, Michael Girdley, who came on the pod, he goes, “My favorite is, um, this company called Freight Alley. They did what what HubSpot kind of did with the hustle. They basically have this thing called Freight Waves, which is Freight Waves is basically a, um, media company, and Freight Alley is the like the SAS company. So basically, they’re a SAS company that created a media arm that goes and, uh, you know, normally a media company, you know, has expenses, but they turned it into a profit center. Basically, that acquires customers for the SAS business at a negative customer acquisition cost. So the media company is profitable and brings in customers to their own SAS, you know, at the bottom of the funnel. So that’s one example, not exactly the full thing, but Dude, that guy, the guy who started that company, his name’s Craig. I’ve hung out with him a bit. He, um, bought a big piece of property in Tennessee, and he’s the one who’s turning it into like an airport. It’s like a country club, but instead of a golf course, there’s an airport. So he’s selling, he bought a huge plot of land, now he’s sub-selling or he’s selling smaller plots of land and there’s going to be an airplane strip and a hangar that everyone has access to. So if you’re a flying enthusiast, you buy a home there and you can use this. And he bought a magazine, I think it was called airplane.com or something like that. He bought a magazine, and he’s like, “I’m going to buy a magazine and do the same thing that I did, but instead of software, we’re going to do it with these houses.” Wow, that’s that’s it’s amazing. Another, um, another example. So, uh, any D2C company that eventually takes their own warehouse and starts fulfilling for other customers. So they turn their own warehouse, which is a cost for them for fulfillment, into a profit center because they’re doing fulfillment for themselves and others. It’s very similar to to AWS. Okay, here’s another one. Uh, this guy George on Twitter just sent me this. He goes, “Ford decided to own the timber supply for their vehicles. So there was lots of wood in the early cars. They ended up with they ended up with so much leftover wood, they started selling charcoal, and that’s Kingsford Charcoal Company.” That’s my favorite, man. That’s my favorite story. That’s a that’s kind of amazing. I didn’t know that. Uh, is there more to know about that or did did we kind of nail it there? No, you nailed it. So basically, they were so Ford was making frame car frames and they had to burn a whole lot of wood in order to, you know, bend the steel or do whatever they had to do. And they had all this leftover charred wood and they’re like, “What do we do with this?” And I think it was Henry Ford’s idea. I forget exactly whose idea, but he goes, “Hey, let’s let’s start selling this. Let’s make something out of this.” And that’s where it kind of came from. There’s a bunch of entrepreneurs that have kind of like done things like this. Uh, Standard Oil did something like this where they’re like, this gets more complicated and is less interesting, but like, “Hey, this off-put of kerosene is like this weird like fluid that’s like really greasy. Is there anything we could do with that?” And like WD-40 or something like that. Like they like there’s like stories like that with with Standard Oil as well. And so here’s a couple others. So, FourSquare, FourSquare had an API for businesses because they needed all this data about businesses, where they’re located, all that stuff. And they needed that for to power their own FourSquare app. And FourSquare kind of went up in this hype cycle, then went down, many years, sort of forgotten, sort of written off. But a new CEO joined and almost oriented the company around this. It was like, “Look, the more valuable thing is not people using FourSquare the app and playing the game, it’s all the data we’ve collected about businesses, where they’re located with like hyper precision. And so we actually just need to make that API available to everybody.” And they productized the API and they make, I think more money off the API, I think, they make more money off the API than they do off the core app at this point. Um, so so I think that’s a that’s another great example of this. Amazon has a bunch, like Amazon was a bookseller, right? So their main cost of goods sold was their books. But then they create Kindle and Kindle self and the self-publishing business and the public, you know, and all that. And so now Kindle itself became a profit center. What so what used to be a cost, which was selling books, now they sell ebooks that they kind of own and, um, you know, they turn that into a profit. Same thing with payments, right? Amazon had to pay a a merchant like a fee every time they processed a payment. So they created their own payment software, Amazon called Amazon Payments. And now like, you know, for our e-com store, I just went, I I was like, “Oh, I think we should take Amazon payments. Where does that money go?” And I went and found an account that we have with Amazon Payments that had like 400 grand sitting in it, because we use that service, Amazon Payments, to take payments for somebody who wants to pay with Amazon. And so they turned it into a profit center along the way. That’s crazy. Another one is, um, Slack. So Slack started out as a game, and when they were working on their game, they it it wasn’t actually doing that well, but they created a way in order to communicate effectively with their with their coworkers. And they said, “Ah, fuck this game. This thing is actually way cooler. Let’s actually turn this internal tool into a, uh, a proper tool.” We thought about doing that. So here’s but here’s the problem with this. This all sounds sick. A lot of people, uh, say, “Yeah, let’s do this.” And so a lot of publishers are doing this. And so they are like, “Let’s sell our CMS.” So BuzzFeed, Vox, Washington Post, I forget who else. It’s like they build these custom website builders and they say, “Let’s sell this.” And I think oftentimes it’s a distraction, and they always say, “Well, Amazon did it.” And I looked into this. Amazon did launch AWS, uh, pretty early on. But do you know how many employees they had when they did it? How many total employees are on AWS? Yeah, total employees. There was about 5,000. So they were already a multi-billion dollar company with and so they the way the story is told is like, “Oh, they were just this little guy.” Dude, no, they had about 5,000 people when they launched AWS. Like it was like a, you know, it was a it was a thing. It wasn’t just like a scrappy startup. And a lot of times people like will say, “Well, let’s also sell this.” It’s like, “Dog, we’ve got eight people working here. Like who’s going to do this?” Uh, so that’s always like I’ve always been conflicted with this strategy. Yeah, that’s that’s true. Uh, you guys considered it. You would have done it for what? Is it your, um, Our email sending platform. So like we built our own for a little while and then we made it really easy. So like if it so basically, hypothetically, which there aren’t that many people doing this, if you had a daily email, it was really easy for you to talk to your advertiser, make the ad and insert it into the thing, have them approve it, and like it was simple and easy to use. But the problem is is like there’s not that many people doing it. You know what I mean? And B, like Well, there weren’t then, but like Beehiiv basically does that now. And they’re actually growing pretty well. Well, maybe I could have been wrong, but I don’t think I’m going to end up being wrong. I think that I think that I’m not convinced that what they’re doing, at least ads for a daily email, that business, I don’t think will be ever be that particularly big. And Beehiiv, so Beehiiv is kind of like Substack, uh, and so it’s these services that you get subscribers and they take a small amount of revenue based off of how much you’re making from subscriptions or you just pay them like a fee on how many subscribers you have. Do you think that some of those businesses actually can become huge venture-backed size companies? So I just invested in Beehiiv, actually. Initially, I didn’t invest because I was like, “Uh, I don’t know how big this gets.” And then two things sort of changed my mind. The first is every time I needed something for Beehiiv, the founder was an absolute animal on my request. Like, because we use it for Milk Road. So Yeah, he’s great. His name’s Tyler. He’s awesome. Tyler was so he’s like, “It’s already on a like he’d be like, “It’s already on a roadmap.” The question I have is A or B, this like nuance about it that shows he’s been thinking about this noodling on it. And then he’d be like, “When do you need this by?” Because normally like it’s scheduled to be out in three weeks, but if you need three days, like, you know, the weekend exists, I might be able to do, you know, like whatever. So he was able to like rip off feature after feature after feature that we needed. And everything that was like, you’re like, “Hey, we have this question.” It’s like him and his team would dig in. So so I saw that he kind of had that grit that you like in an entrepreneur. So I got to basically test drive the entrepreneur, which I normally don’t get to do with most investments. Um, you know, with most investments, you meet them, you do a call with them, they say all the right things, they send you the deck, you look at it, you check, you look at the product, and like you got to make an educated guess at that point. You don’t get to spend months working with the actual entrepreneur as a customer and see how quick they are with features, how how fast they’re responding, the quality of the product, all that good stuff. So, so that was the first reason. The second reason was I’ve come to realize that the that the best investments I’ve made have been ones where what looks like a small market, what looks niche, turns out to not be niche. So we got acquired by Twitch in our last company. Twitch was a kind of the quintessential example of this, right? Like, “Yeah, but like how many people are going to watch other people play video games on the internet? Like how many people are going to stream themselves playing a video game and how many people want to watch that?” Looked niche and turned out to be a massive behavior. Um, this is also true with like, you know, uh, now Shopify seems really obvious. I remember talking to the VC who led Shopify’s early rounds, uh, you know, maybe six, seven years ago. And Shopify at that point was still like legit, but it’s not what it is today. It’s not like seen as it is today as like one of the like blue chip startups. And it was the same thing. It was like, “Ah, okay, you know, like just like Etsy, like, you know, how big do these actually get? These kind of like indie maker seller type things. Is an Amazon and big brands just going to like dominate this? Like how many mom and pops are there going to be on the internet that can actually do this well and how much money can they make?” And I remember listening to this podcast. I was like, “Oh, you’re just like just like LeBron is just taller and can dunk better. Doesn’t matter what I do. Like there’s some people they’re just better at this.” And I don’t know what that skill set is, but there is something there there. It’s like you’re just you’re better than me. Well, I think you just get curious about that thing, which most of us who are like builders, makers, entrepreneurs, you know, like the stereotype about, let’s say, um, you know, who cares? What you know, corporate structure, uh, bookkeeping, taxes, like, you know, whatever, raising debt. That wasn’t never the reason I got into business. That’s not what I found interesting at the time. I was like you. It’s like, “Oh, we could buy this thing for X and sell it for Y.” You know, that that’s that’s the game plan. Or we can make this thing that doesn’t exist and wow, look how cool it is, look how it works. That was always more fun. And it’s just like a level up a progression in the game to be able to understand how do I A, keep more money that I make, and B, how do we leverage money so that we can do more interesting things, you know, in a less dilutive way. So, yeah, so I I I think these people are amazing, you know, like Xavier who who runs Enduring Ventures. He told me this once. He’s just he was just like, “You know, if I died, I’d be reincarnated as a CFO, not a CEO.” And I was like, That’s so funny. It was like the weirdest brag I’d ever heard. I was like, I never heard somebody like bragging about wanting to be a CFO, and I was like, “What do you mean?” He’s like, “He’s like, I don’t know. I just really like learning about how to be efficient and smart on this like financial like financial engineering.” And he had done, you know, real engineering before that. He built basically like these like so he built a solar company in in Africa, the largest solar company in Africa. Dude, that’s so funny that he’s interested in that stuff though, because like he comes off He’s like a hippie. He’s to he’s totally a hippie, right? He he did that because he’s like, “Dude, there’s people suffering in Africa. Like I want to like that seems like the problem to go fix.” But then along the way, he’s like, “All right, well, how do I create, you know, how do I finance all of these solar panels and battery packs without having to go raise venture capital?” And so in order to do that, like the necessary evil was he needed to learn how to access cheap debt. He needed to learn how to like issue debt and underwrite for other people, because what he did was he was like, “You know, these people should basically, they don’t have the $21 to buy the solar panel that goes on top of their house that’s going to power their fridge. And like if they don’t have a fridge, their life really is tough and they need this, but they can’t afford the $21. So like let’s just do it at $4 a month or whatever.” And like, “I will underwrite a loan against their like income.” And it’s like, “How do you underwrite a loan for somebody who doesn’t even have electricity in their house?” And he would figure these things out. And so I think it became a necessary evil and something he got fascinated with. And so now they’re doing this whole holding company. And so he does this this one thread he did went viral, which was like, “How to have a holding company like Warren Buffett.” And basically like, you know, make a massive amount of money, pay as little taxes you need to, and like, you know, have have more and more money to do acquisitions as you go. And he basically outlines Warren Buffett’s corporate structure and why that’s at why that’s advantageous. And uh, you know, I read it and I still only understand 25% of it, but I’m just glad that there’s people like that that I can go to whenever I have a question about stuff. That’s hilarious. Dude, that’s great. Well, I like this guy. I got him. I’m going to I want to learn more about him. You have more on him or you want me to go? Uh, I have another person like this. Or I have another person and idea like this. Okay, so now let’s switch gears. Another creative titan that we talked about, Mr. Beast. So we hung out with Mr. Beast. I don’t know if you guys are sick of us talking about that yet, but, you know, uh, producer Ben is literally sitting here in a Mr. Beast, uh, t-shirt. So, you know, he’s a fan. Uh, by the way, that’s good, Ben, because you know, when when we were sitting in that meeting and they brought in the swag, uh, Jimmy, who who who is Mr. Beast, he goes he goes, “Ah, man, they’re not like kids, dude. They don’t need they don’t need this stuff.” Like, you know, “Oh, they’re not going to be like” cuz the guy came in and was like, “Guys, I got treats for you.” And he’s like, had a bunch of swag and nobody moved. And Mr. Jimmy was just like, “Ah, no, they don’t care about this stuff, man. They’re they’re they’re adults.” And then like all of us were like, “The fuck you talking about, dude?” And like we just like I just like I literally rolled my chair over to him like, you know, like a kid, I’m like, “Wee!” I like just like rolled my rolling chair over to that part of the table cuz it was like a long boardroom. And I was just like, “I’m going to go get some swag.” And I went and got it and the other guys like, “I got kids, man. I got they’re going to need like if I don’t bring back swag, they’re going to be pissed.” And so, and now Ben is wearing his. Damn, I Jimmy drove me like when we were going to the I took a ride with them and I found that shirt that you’re wearing, Ben, in the back of his car and I just go, “I’m fucking taking this.” He’s got tons of them. So I stole mine from him. I I I didn’t know that we had the opportunity to take it like ethically. Never considered that. Um, so Jimmy, okay, so I wanted to bring something up that he had talked about that we didn’t mention on the podcast, which to me is the most interesting business that this guy has. You might be thinking, is the most interesting business his YouTube channel? No. Is it his chocolate company, Feastables named Feastables? No. Is it his drop-shipping burger company, his cloud kitchen called Mr. Beast Burger? No. Do you know which one I’m going to talk about? Do either of you guys know? Give me a Sam, do you know which one I’m going to talk about? I think. Ben, do you have any idea which one I I might be referring to? Uh, well, uh, no, but are you going to talk about his burger? Did you guys see his restaurant just open? Yeah, yeah, yeah, but let’s talk about this other thing first. Okay, okay, no, no, I don’t know you’re talking about. I’m like I wrote down what I think it is and then you you say it. All right, I’m going to say it. It’s his like kind of translation internationalization company. Translation, Sam got it. There it is. Yes. This idea is amazing. So, when we’re sitting there, he’s like, “Yeah, I got basically, whatever, the number number one, number two, whatever, biggest channel in in America.” And he’s like pulling up his like YouTube stats on he’s like air playing onto the TV like his YouTube stats. And then he goes, um, “I also have this channel in Portugu—you know, this my Portuguese channel is growing really fast.” And he puts up a video, it’s got 20 million views in Brazil. And I was like, and it it starts talking and all of a sudden, he’s talking in fluent Portuguese. And I was like, “What is this?” He’s like, “Oh, yeah.” Like it Like AI? No, so what they did was they were like, “Look, one of the things we we already put a million and a half dollars into this video where I built this chocolate factory and I’m going to give it away to one of these people. How do we get more juice out of that fruit?” And so what they realized was, we can go international into markets where YouTube is huge, like Brazil. Um, Brazil’s got this massive population, it’s huge on YouTube, and they don’t have content like Mr. Beast is doing. Like he’s ahead of the game for the US. He’s light years ahead of the game for like Brazil or the Philippines or different places like this. And so, but the challenge is it’s a language challenge. So what they did was they went, they basically hired somebody to create a YouTube channel. They said, “Hey, you’re going to be our YouTube channel manager for this country. You’re the country manager for Brazil. You got to have our Twitter, our TikTok, our YouTube, all of it. Um, you know, Mr. Beast Brazil or whatever it’s called.” Then secondly, we’re going to when we have a video here, you need to get it translated by a local like a like a dubbing service, so like a local translator. And I want it translated, I want the description translated, I want uh all of it done. And then you upload it there, you respond to the comments, you manage that community, all of that good stuff. And what they did was they would not like they didn’t just go get like, you know, some random crappy person on Fiverr to do it. They got like the guy who dubbed Spider-Man in in Brazil, they got him to do the voice acting for this. They paid him a lot of money. They paid him like a couple hundred grand. And I was like, “I feel like you didn’t need to do that. You could have just got anybody.” And he’s like, “Check this out.” Like basically, you don’t know shit about shit, Sean. And so then he goes to the comments and every comment is, “Oh my god, Mr. Beast is Spider-Man!” Like they just thought, he must be that guy. Like that’s him, that’s that voice I recognize. And so it got like all this extra, you know, social juice. It was a little more remarkable. And again, back to our principle from last podcast, which is just do the doper thing. Just do the dope shit instead of the lame shit. Like what’s cooler? The cheaper guy from Fiverr or all right, you paid 100 grand or whatever, and you got Spider-Man to do it. It’s like, of course, of course. What am I what am I thinking? And so that’s what they’re doing in all these countries. Dude, whenever, by the way, when I listen to audiobooks like on Audible, I every if I if I see a famous person’s the author or the narrator rather, I listen to it. So like I’m listening to Huckleberry Finn. Not that I really care about Huckleberry Finn, but Nick Offerman is the narrator. You know, the guy from Community. Uh, you know who that is? He’s like the Oh yeah. Is he the main guy in Community? Yeah, Ron Swanson. He plays like an angry like white country guy. Or like it’ll be another guy like it’ll be just like whenever I see an author who I rec uh a narrator, if I recognize they’re a famous person, I listen to it. So Tom Hanks doing Da Vinci Code. I didn’t really even want to do Da Vinci Code, but Tom Hanks. So like the whole narrator thing, yeah, that’s pretty sick. I’m on board with that.