Sam walks through the Martha Stewart documentary on Netflix, detailing her surprising arc from model to stock broker to caterer to media billionaire — and what brought her down. Shaan then covers a blog post about the short sleeper gene and the possibility of an OZempic-for-sleep drug. They wrap with the story of the anonymous French trader who bet $40+ million on Trump via Polymarket using a proprietary “neighbor method” poll, made $80 million in profit, and what that says about prediction markets as information tools.
Speakers: Sam Parr (host, co-founder of The Hustle), Shaan Puri (host, founder of Milk Road)
Martha Stewart: Model, Stock Broker, Caterer, Billionaire [00:00:00]
Sam: All right, Shaan, there’s a documentary that Ari and I were texting about. Did you see it? It was called Martha — it was on Netflix, it was about Martha Stewart.
Shaan: I haven’t seen it, but I actually don’t know really anything about her.
Sam: Great. This is so great, because Martha Stewart was a beast. I really couldn’t tell you five things about Martha Stewart. Was she kind of the first influencer — like a celebrity influencer who then started launching products? Or what’s the story?
Sam: Martha Stewart was a killer. She was a total shark. If you only know her as her put-together image of this housewife who cooks everything, what I’m going to say is going to blow your mind, because she was a total shark. Let me give you a little bit of her background.
Sam: She’s born and raised on the East Coast. She goes to Columbia University. While she’s going to school, she becomes a model, because she was a cute woman when she was young.
Shaan: Yeah, wow.
Sam: She was fantastic — very pretty woman. Go Martha. She gets married at a young age, like 19 or 20 years old, but graduates Columbia. Her father-in-law helps her get a job as a stock broker. By the way, she studied architectural history or something like that at Columbia — nothing to do with stocks. So at the age of like 24, 25, she gets this job. And you’re probably wondering how on earth did Martha Stewart become a stock broker.
Shaan: I am wondering.
Sam: When her father-in-law first met her, he was like, “You have this ‘it’ factor — you are so charming, you are so put together.” Because she had this vibe at a very young age. In her 20s, she dressed fantastically, she was very charismatic, clearly driven and hardworking. This small ten-person operation that was a stock brokerage needed a salesperson. It was all men at the time — I think this was in the 60s — a very male-dominated industry. But she comes into this interview and eventually works there.
Sam: They comment on how she’s dressed so perfectly — so perfectly that you’re sort of intimidated when you first meet her, because she’s like perfectly put together. But then she’s really charming and warm and you’re like, “Oh, I like you.” So she starts basically as a salesperson, working with clients and getting them to trust her. And she kills it.
Sam: At the age of 26, according to this documentary, she was making $135,000 a year — which equivalent today is a million dollars a year. At the age of 26. As a stock broker. Pretty crazy that she went from being a model to a stock broker in that short amount of time.
Sam: She kills it and does it for like six or seven years — it’s a legitimate career for her. She suggests that one of her clients buy this stock that was like a dollar, and it went to like ten bucks. Then they bought a little bit more and it goes to like fifty — this massive run. But then the fifty-dollar stock goes right back down to like eight or ten bucks. So technically her client had still made a bunch of money, but that roller coaster ride of making a little bit, then making a ton, then losing a ton left her kind of distraught. So she bailed.
Sam: When she’s like 30 years old — late 20s — she moves out to actually where I’m living now, Westport, Connecticut. She’s like, “I want to have a kid, I want to try this housewife life,” whatever. And she sits around for a very short amount of time and she’s like, “All right, I’ve got to do something. I can’t just sit here.”
Martha’s Catering Empire and the Birth of Her Brand [00:06:30]
Sam: They buy this kind of run-down house and she totally turns it around and redoes the whole thing by herself. She paints it, she builds this beautiful garden, she learns how to raise goats and chickens, plant her own garden, and creates this amazing estate out in Westport, Connecticut — which now is very fancy, but back then it wasn’t particularly.
Sam: She gets really into this and she’s like, “I kind of like this housewife life. What if I start hosting some dinner parties?” She creates these lavish, amazing dinner parties, and eventually all these rich guys who come are like, “Hey, do you want to cater my party?” So that’s what she starts doing. She builds a business as a caterer that she says made her a millionaire.
Sam: Her whole stick for this catering business was she goes, “I’m going to make everything from scratch.” Westport, Connecticut is about an hour and ten minutes from New York City. People start realizing she could operate on three or four hours of sleep. So she would go to the farmers markets in New York at 4 a.m., get all her produce, then come back in the morning and bake all her food.
Sam: The catering business is brutally hard, you know — really hard to pull off. But one time she saw this brochure that was doing a recreation of a pilgrim Thanksgiving, and there was a basket of fruit overflowing. She was like, “That’s what I’m going to do.” She was famous for creating these charcuterie boards of overflowing meats and fruits.
Sam: She said something that was actually really inspiring. She was like, “I wanted to turn this into an experience. I wanted to make these fruit boards overflow with strawberries to show that this table is where generosity and abundance live.” And it was a massive hit. She builds this into a big business.
Sam: A few years in, she goes and caters, I think it was Penguin Publishing or something like that — one of these publisher parties. She’s doing the Met, all these art museums in New York. They start talking to her and they’re like, “You’re amazing. Do you want to write a cookbook for us?”
Sam: So she does it. It takes her like three or four years because she’s super hands-on. They were like, “Hey, we just want you to put in a bunch of recipes and some black-and-white photos.” She was a nobody at this point. And she goes, “Not a chance. We’re doing colored photos. We’re actually going to do like 500 photos. Give me the budget and I’ll hire a photographer friend and we’re going to go take all these lavish photos at my house.”
Sam: Because at the time, cookbooks were just recipes. She was like, “No, we’re going to add my lifestyle. We’re going to add these photos.” One of the photos is of her kitchen — look how lavish it is. There are literally thousands of pots and pans hanging above her. Her kitchen looks like a charcuterie board, and she’s like a piece of salami in the middle. That’s her whole stick.
Sam: She says, “I’m going to sell perfection.” Because she was a perfectionist — she was actually a pain in the ass to work for. The first book was called Entertaining, about hosting guests and creating an atmosphere of warmth. It was a massive hit. Sold 650,000 copies.
Shaan: What do you think? I feel like Nick Gray is the new Martha Stewart. I’m just going to put that out there. What Nick Gray is doing with the two-hour cocktail party — he’s just a young Martha Stewart right now.
Sam: Yeah. And she was one of the early influencers, because this was in the 80s — when mass media was really becoming a thing. And it’s a massive hit. Women buy these books because it’s not just about cooking. It’s about being better, being aspirational, perfecting a craft.
Sam: She sold the hell out of this lifestyle, and it was her lifestyle. She basically said in the documentary, “I had visions early on of creating the Martha Stewart Media Company — all about me, because I’m great.” Like, she was very confident about that.
Shaan: Opening up the business plan: “Martha Stewart Media Company. It’s about me. Next page. Because I’m great. Next page.”
Sam: But there’s a lot of bad stuff that happened too. Her husband cheats on her, she cheats on her husband. Her daughter is like, “Dude, she was a cold mom.” People complain about working for her — “She’s just a perfectionist.” And throughout the documentary they get her on camera being rude to her employees. And she was like, “I’m not sorry for that. I’m a perfectionist.”
Martha Goes Public, Then Goes to Prison [00:14:00]
Sam: So fast-forward through the business side. She does the cookbook, massive hit. One thing leads to another — Kmart, which was a lower-status store at the time, she partners with them to create a line of bedding. People are shocked. They’re like, “Why would this upscale woman do this?” Turned out to be a great move.
Sam: Then she partners with Time and creates a series of magazines. She’s the editor of the magazine. It goes really well, but she’s like, “I want to own this thing.” So she raises $85 million and buys the magazine. Three or four years later, takes it public.
Sam: The financials — I think it was called Martha Stewart Living Omnimedia — in year three, they’re doing $130 million a year in 1997. And it’s a behemoth. They’ve got the TV show, tons and tons of magazines, and the Kmart deal just crushes it. And she goes public and becomes the first ever self-made female billionaire in America.
Sam: But then something really bad happens.
Sam: So basically she’s worth like $400-600 million at this point — the stock was going up and down. Apparently she calls her stock broker and says, “I want to sell this one stock.” She sells it and makes like $30,000 off it. Turns out a lot of people think it was insider trading. So the DOJ investigates.
Sam: Turns out the charges of insider trading are dropped. They’re like, “You did not insider trade.” But she sold someone else’s stock, not her own. Only $30K — so why was it a big deal?
Shaan: Yeah, why was it a big deal?
Sam: It was a big deal because there was Enron and a bunch of things like that happening at the time. The DOJ was like, “Any insider trading, any corruption, we’re going to go really hard against this.” So she sells some stock, it’s suspicious. Turns out the CEO of the company whose stock she sold was in fact corrupt. And they’re like, “But you knew him. You knew that this drug wasn’t going to pass, you sold the stock.” The DOJ investigates and says, “Actually, that looks clean — it looks like you didn’t know anything. However, when we interviewed you, you told us a small fact about how you were on a schedule to sell this stock. Turns out you weren’t on a schedule. You lied to us.”
Sam: So they put her in federal penitentiary for five months — for lying, not for insider trading. Just lying about this somewhat not-that-big-of-a-deal fact. She’s like 50 years old, and kind of screwed. Kind of not — like she did lie, but five months in the federal penitentiary.
Sam: And at the time when all the trial stuff happened, that’s when people realized Martha Stewart is a little bad. All these stories come out — she was rude. For example, her stock broker had an assistant who would talk to Martha mostly. One time she called and the assistant had to put her on hold. She goes back on the line and Martha goes, “Hey, if you don’t change that tacky waiting music by the next time I call, I’m going to have you fired.” And just hung up.
Sam: She goes to jail for five months, and it sucked for her. She gets out of jail and ends up doing Justin Bieber’s roast — which changed public perception of her, because at this point everyone was kind of enjoying her downfall. Like, “I knew she was too perfect.” But she roasts Justin Bieber and she’s hilarious. She talks about how she shanked someone in prison and how she made a shank out of a pencil and some bubble gum. “You can do one too at home — I’ll show you how.” It humanized her.
Sam: But her getting arrested decimated the stock. She said in the documentary she thinks she would have been worth $10 billion. When she got arrested, the stock went way down. They ended up selling the company for like $300 million. It could have been a great company, but it kind of wasn’t.
Shaan: That’s all I’m hearing — good-looking lady, goes from model to stock broker, amazing. Then self-made first major tradwife influencer, does the cookbooks her way, is ruthless with the details, has a no-nonsense attitude. She’s a stickler. These are like your safe words. Like these are all the things you enjoy.
Shaan: So how do you feel about Martha Stewart right now? Because it sounds like even when she’s bad, it just made her more good in your books.
Sam: I mean, she paid the price. Her husband left her, her kids — she’s got a bad relationship with her children because of the way she behaved. She’s 83 now, by the way. I didn’t realize how old she was. And she hasn’t had a relationship since her husband and her broke up. So she paid the price. There’s a cost to be the boss. She paid it. But she is in fact the boss. I do have a lot of respect for her.
Shaan: Did you know any of this?
Sam: Not really. I knew she had like a cookbook or was on TV and that she sold stuff to women. That was kind of the extent of what I knew about Martha Stewart.
Shaan: Dude, she’s great.
Sam: And another big takeaway — and I’ll wrap up here — is how big of a company you could start just off the back of one person. It was the Martha Stewart brand and she was totally into that. A lot of people would be fearful of having that burden on your back — literally a thousand-plus employees and billions of dollars of value. She loved it.
Shaan: It sounds like this company wasn’t that good, though. Your numbers table here — by 2001 it says total revenue $295 million, net income $21 million. Which is not nothing, but that’s not a billion-dollar company, making $21 million a year of net income. And then it says from 2003 to 2015 — three presidents — consecutive annual losses every year except for one year. So was this really a good business, or was this a lot of work for not much?
Sam: No, it was good. You have to think of a few things. It was making $300 million a year in revenue, and a lot of it came from publishing — subscription magazines. That’s pretty solid. But then the internet came and completely obliterated that industry. Magazines are probably the worst industry to be in. So yeah, a lot of what-ifs. The timing was such that she got arrested, and then Amazon was created and the internet happened. A lot of what-ifs.
Sam: I feel like she was like 30 years too early. If she had the internet, she could have become a juggernaut. Her talent and her ruthlessness — that combination was going to serve her well. She just needed a better medium. If she could have owned her own Instagram and TikTok channels and built everything off the back of that — I think she would have been the number one women’s or mom influencer. She arguably was that anyway for her era, but the market is 100x now.
Shaan: Yeah. A lot of these big celebrities, I think it was a little bit easier to be a big celebrity in the 80s, 90s, early 2000s because there were fewer of them. Now anyone with a cell phone can become a celebrity in six or twelve months.
Sam: But by the way, her businesses still do like a billion a year in sales.
Shaan: Okay, gotcha. You have something on your notes — typical day of 60-year-old Martha Stewart?
Sam: Yeah. It says she’s 60 but looks a decade younger. She’s been up since 4:30 a.m. She answers her email at 5, takes a three-mile walk with her trainer at 6, tours her garden at 7 — and when she tours her garden she’s thrilled to discover a duck and 13 ducklings in the swimming pool. By 7:30 she’s whipping up corn gruel for the visiting waterfowl and building a wooden ramp to help them get in and out of the pool. Her TV crew arrives at 8, hair and makeup at 8:30, shooting her TV segment by 9:00 a.m.
Shaan: Dude, she’s crazy.
Sam: I literally woke up like 19 minutes ago. I rolled out of bed and put on this hat and then clicked play. I don’t think I’m built for this.
Shaan: She’s a machine. You know how people say Trump can only operate on three hours of sleep? That’s actually a real thing — there’s a name for it. She’s another person famous for only sleeping like three hours a night.
The Short Sleeper Gene and OZempic for Sleep [00:26:00]
Sam: Perfect segue — can I tell you what my best topic was that I wanted to talk to you about?
Shaan: Yeah.
Sam: OZempic for sleep. So there’s a guy — his blog is isaac.net — and he wrote this post about sleeplessness. He basically says there’s a set of famous people who have the short sleeper gene — a set of genes where four to five hours a night is a full night’s rest for them. He says Mozart, Thomas Edison, Sigmund Freud, Margaret Thatcher, Obama, and even his lab mate have this thing called short sleeper syndrome.
Sam: People thought short sleeper syndrome would mean you sleep less and maybe you can operate that way, but it’s got to be bad for you — sleep, we know, is the best thing for you, it restores the brain and body. So these people must be dying younger and having more disease. Right?
Sam: And it’s like — no, actually they don’t. These people simply have the benefit without the cost. They need about three hours less sleep than the rest of us, and they don’t pay the price in terms of health consequences.
Sam: He goes on this post and outlines who these people are. His favorite family is the Johnsons from Utah — a set of researchers who have this short sleeper genetic makeup and have been researching it for a while. About one percent of people have this thing where you don’t need as much sleep, and it does not seem detrimental to health or productivity.
Sam: They’ve studied why this is. There are four kind of protein changes they’ve noticed in the glutamate receptor grm1 and related genes. They’ve done tests in mice where they knock out one of the genes and see if it makes the mouse sleep less or more, trying to understand if you can do that in a living being or at the embryo level.
Shaan: When you say knockout, does that mean in a living being? Or when they reproduce a living being you could —
Sam: That’s how the body works. You could do that. I said that with so much confidence for somebody who has no idea. I’m a biomed major — you can check that. But I don’t know if it’s done at the embryo or in the living thing. Point is, they’ve tested this in mouse models.
Sam: Mouse models don’t always apply to human models. There’s some question there. But the researcher points out that usually when things work in mice don’t work in humans, it’s because they tried it first in mice and then it takes a long time to try it in humans. In this case, he’s like, “We’re actually observing this in humans and then going back to mice to try to recreate those genetic mutations.” So this is really exciting.
Sam: What he’s talking about is: in the same way we found drugs like OZempic that could modify your appetite — change your need for food in a way that had all these downstream health benefits — you change your need for food, you reduce it, obesity goes down, and they’ve seen it helps with things like addiction to alcohol. There are all these other things people are noticing with these drugs. That’s the OZempic case.
Sam: This guy is saying you could do the same thing with sleep. Like — could we create something that does what OZempic did for food but for sleep? Make you like those people who already have this gene where they don’t suffer the consequences of less sleep.
Shaan: And is this guy Isaac the researcher, or is he just blogging about this?
Sam: He’s a researcher who is blogging about this.
Shaan: Wow. Got it.
Sam: He’s basically saying that potentially we could create something that does the same thing OZempic did for appetite but for sleep. And he’s like, “You do the math and you’re like — if you’re saving three or four hours a night of sleep, it’s the world’s best longevity trade.”
Sam: Most people trying to do with longevity is: if I’m living till 80, can I live till 90? If I’m living till 90, can I live till 100? They’re trying to push off that last marginal decade of poor health where you can’t walk as much, can’t see as well, you’re in pain. You’re trying to push that back as far as you can.
Sam: This would make it so you actually just live better. The days where you’re healthy — you have more of them, you’re awake for more of your time. It’s the equivalent of an extra ten years, but you get those ten years not at the end — you get it all along the way, while you’re in your best health of your life.
Sam: That would be the promise of this. And so — how exciting is that? It’s possible that somebody is going to make an OZempic for sleep, and it’s going to allow us to sleep five hours instead of eight and feel just as good.
Sam: He says it’s like adding ten more years to your life. An 80-year lifespan at eight hours of sleep per day, compared to an 80-year lifespan at four hours — that’s ten years. And on top of that, there are people who suffer from insomnia and narcolepsy and sleep apnea — all these things that affect people’s sleep. Maybe you could alleviate those along the way.
Shaan: First of all, this is amazing. This is a great find. I’m reading his blog — his writing is really great. It doesn’t write like a researcher.
Sam: That’s why I was shocked he’s a researcher. There’s like a quote where he goes… yeah, they don’t normally say things like that.
Shaan: They don’t have personalities usually.
Sam: This has profound implications. By the way, he’s 22 years old. He’s a PhD student at MIT exploring brain simulations as an alternative path to beneficial AI. In his past, he skipped out of high school in rural Austria to graduate early. In his gap year, he created a $1 million nonprofit and ran the most viral tech conference of the year, where Sam Altman and others came. He’s self-taught in Mandarin, did his undergrad at Berkeley in two years.
Shaan: Guy’s a winner.
Sam: He owns isaac.net — great domain name. Isaac with a K. This guy’s great.
Shaan: What I was going to say is — this is the first time I’ve ever heard about this. Is this something that actually has press releases? Is it actually legitimate?
Sam: Now we just broke it. This was the tipping point. You’re going to see other people working on this, you’re going to see people talking about this, there’s going to be misinformation everywhere. It’s going to be great.
Sam: This story is awesome just because I like Isaac. And also — I would like to not sleep. Would you rather be skinny like OZempic and eat less, or sleep only five hours instead of eight?
Shaan: I don’t give a — I would be the fattest man on earth to get that. I’m joking. But that is a way better superpower — to need less sleep, to get back three hours every single day.
Sam: That’s debatable. I think people will always prefer to be skinny over sleeping less.
Shaan: Oh, people are dumb. That is so dumb. If they prefer to be skinny over having an extra three hours of life every day — if the average 25-year-old is told, look hot or live an extra ten years — they’re going to choose hot over sleep any day of the week.
Sam: Well, this is why we don’t ask 25-year-olds questions. The brain is not fully formed yet.
Shaan: This is a great find. His blog, according to SimilarWeb, just shot up to 125,000 visitors in October.
Sam: What was it before?
Shaan: Nothing. He published this in November. So that’s kind of cool.
Sam: Ben found this and sent it to our friend. Our friend invested in a company that made a GLP-1 drug and sold for millions of dollars. So he sent this to him — like, “Oh, you did that early OZempic thing before OZempic was a known thing.” Seven years before, he invested in this company. So he sent it to our friend and that guy was like, “I don’t know how you found this. This is the best thing I’ve read all year. I’m so excited about what you just sent me.”
Sam: And it was such a great example of Ben being Ben. On one side he has a really curated feed where he’ll find interesting things like this. He doesn’t follow many people, but he’ll be following a guy like this Isaac. And then he knows who to route the information to.
Sam: He’s like FedEx. When I get something I immediately start doing research, I write notes, I go talk about it — I’m not passing it to somebody smarter. Ben is like a FedEx guy. The package comes off the conveyor belt, he grabs the box, tosses it in the truck, drives it to the address, drops it off, and doesn’t ask any questions about what’s inside. He just knows that’s useful for you. He just does that all day.
Shaan: I had him add me to all these group chats. He was always texting people, and I said, “Yo, just add me — I just want to be a part of these.” So now I’m in probably like 60 group chats where it’s me, Ben, and a mutual acquaintance or friend. And he’s just doing this all day — routing packets to different people. He’s like, “I think you’re into this kind of thing.”
Sam: That’s ridiculous. How is he going to monetize it?
Shaan: Dude, we monetize this phenomenally. This is the secret of Ben. He just tries to be useful. And then he’ll be like, “Hey, remember that guy you met a year ago who you then didn’t talk to ever again?” I’m like, “Yeah, I think I remember that guy.” He’s like, “Yeah, so I’ve been texting him — we text daily. He’s got this new thing and it’s taking off. He wants us to invest, he’s not letting anyone else in.” And then we invest in it.
Shaan: It’s incredible how this karma just comes back tenfold for Ben. And he never asks for anything.
Sam: He texts me a fair bit — just like, “Saw this thing you might like.” So I’m the recipient of some of these. And I hate texting. I hate constantly having to go back and forth with ten different people, which is how a lot of people’s computers look right now — between Slack and Messages you’re just going back and forth with fifteen or twenty people all day. And you’re like, “What did I do all day today? I just shitchatted.”
Sam: Do you fall into that trap throughout the day — where you’re like, “I just texted people all day”?
Shaan: I like Slack because I like my projects, but I don’t text much. I’m a very bad texter. If anyone’s out there texting me, I really apologize. I probably have not texted you back.
Sam: Ben is prolifically great at it. And that combination has really helped. Now people bypass me altogether and go to him. It hurts my feelings sometimes. I’m like, “Wait, I thought I was friends with this person.” But now I understand why — he’s just a better person, a better texter.
Sam: In fact, he was like, “I need to make a shirt that says ‘I reply.’ Because that’s my thing — I reply.” And I was like, you should write the modern-day How to Win Friends and Influence People, because that’s what he does. He wins friends and influences people with the most basic things. The thing you do creates tens of millions of dollars of value. You couldn’t even teach people this because you would say out loud what you do and they’d be like, “That was it? I showed up for the seminar for that?”
Shaan: It’s basic as hell. But it works.
The Polymarket Whale: A French Trader Bets $40M on Trump [00:46:30]
Sam: Okay, you said you had a bunch of exciting things to talk about. Let’s do the Polymarket whale.
Shaan: Okay, this is the Billy of the Week. Million dollars isn’t cool, you know what’s cool — a billion dollars. So you’ve heard the story, I think. Let me just explain a little bit of the detail.
Sam: I read about it a little bit. Go ahead.
Shaan: The election was happening about ten days ago. And the big news was Trump versus Kamala. Great. They were supposed to be head-to-head. But there was an undercard to the pay-per-view. The undercard was — a lot of it was mainstream media versus social media. Twitter and blogs versus MSNBC and whatever. They were giving you different narratives. Trump and Vance go on Joe Rogan, Kamala goes on Saturday Night Live and the View and 60 Minutes. That was one battle.
Shaan: By the way, who would have thought that Theo Von would be like a needle mover?
Sam: Insane.
Shaan: I was saying this the other day — I think going on Theo Von needs to be part of the standard for an election. I need to know if my president is going to be a good hang or not, and I think Theo is the one who can tell us.
Sam: That was insane.
Shaan: So under that you have the billionaire backers — Elon on one side, Mark Cuban on the other. They’re going around, promoting, using their money and their voice. Then one of the other battles was polls versus crypto prediction markets.
Shaan: The polls were telling one story: razor-thin margin, toss-up, these swing states too close to call, 50-50 election. The prediction markets — people betting money — were saying something different: 65-35 Trump going to win.
Shaan: They’re different things. A poll is you go ask people who they’re going to vote for. A prediction market is who’s going to get the most votes. So they do tell different things. But the reality is: if the polls were accurate and this was a 50-50 tossup, a razor-thin margin, then the betting markets shouldn’t have such a big spread. There shouldn’t be a big favorite and a big underdog.
Sam: What was the Polymarket spread?
Shaan: It was about 63-37 Trump. But then it got to 65. And then as the election started — when the news was saying, “It’s still too early” — the odds were just jetting in Trump’s direction. They knew earlier than the exit polls or the news was willing to report how much of a landslide this was going to be for Trump. Which it was.
Shaan: Okay, so before it happened, there was a question: is the prediction market actually predictive? There was some legitimate skepticism. The pro side: these are people betting their own money, so skin in the game. If you see a lot more action coming in on one side, that means the wisdom of the crowds and the actual free market believes the odds are this. That might be better than just the polls, where there’s no skin in the game.
Shaan: On the other hand — Polymarket: never heard of it, banned in the US. So all the betting action was from international users. Over $3 billion was bet on the election, none of it from Americans. And it’s also crypto holders, right? Because Polymarket is a crypto betting thing. So maybe there’s a bias — crypto holders are more libertarian, more right-leaning. And Trump is pro-crypto.
Sam: So maybe they’re voting on what they wish for, not what they think is actually going to happen.
Shaan: Exactly, right? So there were some question marks. And then the news came out and said, “We can’t trust Polymarket because it’s manipulated.” Manipulated how? A couple of whales were betting heavily on Trump and swinging the odds. So this wasn’t what the crowds think — it’s a couple of whales influencing it.
Shaan: And you can see on Polymarket the size of individual bets. You can go on Polymarket right now and look at the top ten bettors — what they’ve bet, how much volume they’ve bet this year, and what their P&L is. Are they up or down?
Shaan: So Theo4 — I think he’s the biggest one on the platform — has made a profit of $22 million this year. That’s one user. You can go user by user. So what they found was there were a couple of bets in the tens of millions on Trump, and they actually all came from the same guy. What they found was there were four big accounts that bet $28 million, and then it turns out — after the fact, the guy came out and revealed himself — he had 11 accounts and bet $40 or $50 million. And he made about $80 million in profit.
Sam: A French guy?
Shaan: A French guy. They were like, “Who is this French whale?” And the story behind it is pretty interesting.
Shaan: This guy was a trader, in finance. He lived in the US at one point. He’s trying to remain anonymous. But on Polymarket you can see the bets — you can go see a huge bet, then you look at the account, try to figure out whose wallet this is. Because crypto has a public ledger, you can trace back and try to find the root wallet. And there’s a company called Chainalysis.
Sam: I’ve heard of it.
Shaan: They’re basically: the government goes to Chainalysis and says, “We need to know who owns this wallet,” and they do the forensic analysis of every transaction and try to figure out the root wallet and who owns it. It’s like a $10 billion company.
Sam: We have to do a breakdown of this company. This sounds fun.
Shaan: They’re a fascinating company. So they come out and do this analysis — there’s this whole web of accounts. It’s like all the best stuff: crime and crypto stories are the best stories. Working at this company would be super exciting.
Shaan: So they come out and say, “How did you know? Why did you make such a massive bet on Trump?” And this is where it gets really interesting. He says, “I didn’t trust the polls. But I trust polling.”
Sam: What do you mean?
Shaan: He says, “I commissioned my own polls.” This French guy commissioned polls in America to inform his own bet. He paid a polling company and said, “I want you to go ask people — but don’t ask them who they’re going to vote for.” Traditional polls ask: are you likely to vote, and if you are, who are you likely to vote for?
Shaan: He didn’t want that. He did something called the neighbor method. He says: “Don’t ask them who they’re going to vote for. People are indirect. They don’t want to reveal their own preferences. But if you ask them a specific question — who do you expect your neighbor to vote for — they will indirectly reveal their own preferences and beliefs.”
Shaan: He believed the neighbor method is a more predictive approach. When he commissioned this poll — paid a major US pollster to run it, just like the DNC and RNC pay pollsters for independent polls they don’t share with the public — he wanted to measure this neighbor effect. And what he found was that the results were, quote, “mindblowing” in favor of Trump. It showed a Trump landslide.
Shaan: So he thought: this is mispriced. The media is telling you this is 50-50, razor-thin. My polling is showing this is going to be a major landslide for Trump. The bet is mispriced. So he places this huge bet on Trump.
Shaan: He turns out to be correct. And his final quote was, “Public opinion would have been better prepared if the latest polls had measured using the neighbor effect.” And he specifically didn’t just bet on the overall victory — he bet on specific swing states where he thought people’s estimates were closer than they were actually going to be.
Sam: Beau… my guy.
Shaan: First of all, what I respect about this — everything. Well, I don’t love gambling like this. But people who have conviction, who do their own analysis and say “No, this is the answer even though all the quote-smart people or the establishment is saying this” — and then do the hard part, which is bet $30 or $40 million of their own money on it. Those types of people fascinate me.
Shaan: Yeah, the guts. The brains and the guts. And that’s kind of the theme of the year — you see someone like Elon, who basically swings the election, catches a rocket with chopsticks, is working on self-driving cars, helped co-found OpenAI. The guy is firing on all cylinders. And you’re like: why? What is different about this guy? It’s the combination of the brain and the balls. There are other people as smart as Elon Musk. There are other people with as much risk-taking guts. But the combination is rare. Then you add the willingness to absolutely work to the bone, and the willingness to sacrifice your own life.
Shaan: He’s top 0.1% in like five different things. And then it’s like: oh, if you multiply 0.1% by 0.1% by 0.1% five times over, you end up with one in ten billion. Which is actually the ratio. There is literally one Elon out of the entire human population.
Sam: I thought it was impressive. Like Justin Timberlake — he can sing, dance, act, and he’s funny. The combination.
Prediction Markets as Information Finance [01:00:00]
Shaan: Is Polymarket going to sustain after this?
Sam: I’ve been a big Polymarket fan. I was using Polymarket before they banned it, way back in the day. You called this gambling — I don’t believe this is gambling. Like, you own stock. Do you believe you’re gambling when you buy a stock?
Shaan: I guess — what are you doing when you buy a stock? Yeah, I guess you are, kind of. I mean, it’s not as binary, but it exists on a spectrum.
Sam: So like — the old-fashioned way of looking at it: I’m not gambling, I’m buying a piece of ownership in a company that produces goods. Yeah, all right. But nobody in practice treats it like that. You’re not sitting there waiting for dividends. You’re basically saying, “I believe the future earnings of this company are going to be X, and the share price is going to go up because their earnings are going to go up faster than the current price indicates.” That’s what you’re supposed to do — buy a stock you think is going to appreciate over time.
Sam: I think Polymarket has the ability to do interesting things. First there are the speculation and betting use cases — speculating on prices, on sports outcomes. Sports betting is obviously a huge deal. But there’s an interesting other thing.
Sam: I’m guessing you didn’t read Vitalik’s blog recently about this?
Shaan: That’s an accurate guess.
Sam: Vitalik — who’s the creator of Ethereum — wrote a great blog post. One of my favorite entrepreneurs and thinkers. The blog post is called something like “From Prediction Markets into Info Finance.” He’s like: I know I’ve written a lot and supported Polymarket, and many of you who know me might be surprised, because Vitalik is notoriously not into the crypto-casino side of life. He’s not price-based, not trying to get rich. He’s a purist. So you’d think: why do you care so much about prediction markets?
Sam: And he’s like: “Because I don’t see it as gambling. I actually think there’s another category here that’s overlooked — info finance, information finance.”
Sam: He gives examples. He says Polymarket was two things at once. On one hand, it’s a betting site for the few people who want to bet. But for the rest of us, we could look at how the gamblers are betting — and that served as a news site. “Oh wow, Trump is doing better, Trump is improving.” In the same way that polls are supposed to be part of the news, the prediction markets were actually better news information. That’s information finance.
Sam: He’s like: “That’s the first level. Even if you’re not participating in the betting, it is very useful that other people are doing that, because it’s another source of information. It should not be the only source, but it should be one of them.” He talks about the elections in Venezuela — how Polymarket was actually a very useful source of information for understanding what was going on there from an informational point of view.
Sam: Then he says: “What’s the other use case?” Imagine a company — like Starbucks just hired the Chipotle CEO. That guy is famous for trimming the menu, cutting costs, improving margins. When he switched teams, they paid him a bunch of money — a huge stock package — but the stock jumped like $20 billion on the news that this guy was coming over. A great trade for them to overpay the talent, because it immediately improved the overall value of the company just from the announcement.
Sam: Vitalik was like: just as we’re looking at these as prediction markets today, you could actually use them as decision markets. A company could set up a prediction market and say, “What will the share price be in six months if we hire Brian Niccol?” And if the share price expectation is really high, it tells you in advance — without having to hire him yet — what the market reaction is going to be to that decision. You can create decision markets. It would be worth paying participants to make a bet in order to gather information that helps you make a better decision.
Shaan: Does that make sense?
Sam: And then he talks about scientific peer review. Right now in science you submit a paper and there’s something called the replication crisis — famous results that end up in books and in the news often can’t be reproduced. That study can’t be recreated, which is the definition of good science. But there’s not a big incentive to go reproduce existing studies, because the incentive is to come out with a new finding — you get published, you get the glory, you get the funding. Spending your resources to reproduce somebody else’s big news is not a good use of time.
Sam: He talks about how prediction markets could create incentives for people to go and try to reproduce these studies. You could have people betting on whether this is reproducible or not. You’ll be able to profit off of knowing that this study is going to be reproduced. It’s pretty interesting to see how that might be applied in all these ways.
Shaan: I haven’t read this, other than what you just told me. First of all, this is an amazing blog post. Second — if you go to his blog, he’s publishing an in-depth post like every three days. How amazing is it that we have access to a genius who just shares his thoughts? And they’re not half-ass blog posts. They are in-depth, thousands of words each.
Sam: How special of an era are we in, that we can just go read his thoughts?
Shaan: And the beautiful thing about his stuff — I was thinking about this with podcasts. It’s amazing that there are now podcasts from people who’ve actually done it. When we started this, I felt like there was a slight differentiator in the business podcast space: we were not just journalists, nor were we never-has-beens. We had started companies, failed at companies, sold companies. We had done real things.
Shaan: But now you have All-In, you have billionaires doing this, Reid Hoffman has a podcast, Zuck is going on podcasts — who doesn’t have a podcast? And that’s really cool. The same thing’s happening in sports — athletes, current and past, now have sports podcasts. So there’s this third thing now: somebody who’s actually been there and done that.
Sam: But the problem with something like All-In or other podcasts like that is you always have to parse the agenda. So it’s like, “Wow, this guy is really bearish on nuclear and really pro-solar.” You go look at Chamath’s portfolio and it’s like, “Oh wow, he’s made enormous bets on solar.” He’s talking his book. It’s okay to talk your book, but you as a listener constantly have to do that underwriting — are they biased here?
Shaan: The beautiful thing about Vitalik is that the guy is such an uber-nerd that you can actually take him at face value. It’s so nice to have somebody you can take at face value. This guy has done nothing to make me think he’s just trying to pump his bags. In fact, he actively does things against his bags — not pumping Ethereum, talking about where it lacks, what’s slow about it, under-promising what it’s going to be. That’s great. We have access to this guy who is not trying to take something from us in the process.
Sam: That’s a very good speech.
Shaan: He publishes on vitalik.eth. Listen — October 29th, October 26th, October 23rd, October 20th. He’s been writing a lot of posts. And I just put them into a word counter — one of them was 6,000 words.
Sam: The dramatic look you just gave me when you said that, like I was supposed to audibly gasp.
Shaan: Dude, that’s so much work. I’ve written a lot of blog posts. A 6,000-word blog post would take me 40 hours probably.
Sam: When you’re this guy and you created Ethereum — is this one of those things where you’ve created it and can now walk away? Or does it require active maintenance?
Shaan: He’s actively working on it. Ethereum was like a ten-year roadmap. It’s not re-roofing a house — it’s like building a hotel one floor at a time while people are staying in it. You told them from the beginning, “This is a 50-story hotel,” and you haven’t even built all the things you’re going to need — like there’s no elevators yet. For now you take stairs. That’s like the transaction fees and all that.
Sam: The reason I’m asking is: how on earth is he writing this much stuff while doing a full-time job? Because Ethereum doesn’t work like that — he’s not sitting there coding all day or managing people. It’s not a company. It’s a nonprofit foundation, open source, of which he’s a steward and a champion. He doesn’t have like 25 direct reports.
Shaan: Does he have a girlfriend or wife yet? I’m not sure. I’ve seen a bunch of pictures but it’s so hard with him to tell what’s a meme and what’s reality because he’s so memeable.
Bitcoin Update: Was Shaan Right? [01:12:00]
Sam: It’s November 13th — we’re recording this. Exactly one month ago I came on this podcast and I said, “Can I give you my one-minute case for Bitcoin?” And you literally rolled your eyes and groaned at me. “Haven’t you already done that?” I just want to say — the price is up 47% since I did that rant.
Shaan: All right, well — are you the French guy? Were you smart and ballsy, or just smart? Go back and listen to it and ask: did I get lucky or did I have reason?
Sam: What I’m asking is: did you make the bet?
Shaan: Oh, of course. What do you mean?
Sam: I mean, did you just say it was going to be good, or did you actually invest your own money into it?
Shaan: Dude, I’m Polymarket, bro. I’m skin in the game. I put my money up and said what I thought was going to happen.
Sam: Yeah, it’s had a hell of a run. Almost as good as Palantir.
Shaan: Everything’s crazy right now. Everything. When I look at everything, it seems like it’d be a good time to make the opposite prediction. I don’t know anything about anything, but it feels like it’d be a good time to be on the other side.
Sam: Yeah, you were right. It’s just — how long are you going to be right for? Right now everything is just insane.
Shaan: And of course, one-month fluctuations are nothing. But the reason I thought it was bullish was the same reason the thing is pumping right now. There were a whole bunch of big things — for example, the government was going to be pro-Bitcoin, which was always the biggest risk: “Even if you’re right about the technology, the government will never allow this.” And I was like, dude, the guy who’s going to become president is not only saying he’ll allow it — he’s bought and sold by the crypto donors. Both sides are.
Shaan: There are like 140 pro-crypto people now in active government. That number was basically zero seven years ago. And now they’re talking about a Bitcoin strategic reserve for the country itself. Once you go in, it’s almost impossible to unwind. I just thought that when a top two or three risk gets de-risked, that should change your underwriting on the price. And I thought that wasn’t happening — the price was flat and people weren’t paying attention to that one fact.
Sam: What a world. So in summary — you were right.
Shaan: Thank you.
Sam: You absolutely were right. Everything is insane at the moment. I hope your prediction will be true for many more months and many more years. But it’s making me nervous. Everything is insane.
Shaan: Is that where we end?
Sam: That’s where we end. It’s been a fantastic podcast. From Martha Stewart to Bitcoin to the Polymarket whale — that’s called “thank you for your service.” Hot heat was served.
Shaan: You’re welcome.
Sam: All right, that’s it. That’s the pod.