Sam and Shaan break down a $26M/year sweepstakes business that sells merch entries for car giveaways, tracing the model through bold.org and Omaze. Shaan pitches Oasis, a deepfake-powered Zoom replacement that transfers pixel coordinates instead of video. The episode closes with Shaan’s predictions for what the next Apple, Facebook, Amazon, 7-Eleven, Netflix, Pornhub, and Domino’s will look like — and whether the future is closer than it appears.
Speakers: Sam Parr (host, co-founder of The Hustle), Shaan Puri (host, former Twitch/Bebo, founder of Milk Road)
Intro and Episode Overview [00:00:00]
Sam: All right everyone, we have a new episode. This one was pretty good. We talked about a couple things. The first thing we talked about was Oasis, which is this interesting new product — it’s kind of like a deepfake but for Zoom. That’s not the best description, but check it out. Shaan says it’s one of the biggest ideas he’s ever heard of.
Sam: Second, we break down the sweepstakes business. If you want to make a company that makes like half a million dollars a month in profit, and you want to have it start and launch inside the next two months and then grow over the next one, two, three years to half a million a month in profit, I think this is an interesting idea. We break it down.
Sam: And then we talk about Shaan’s predictions — he predicts what’s going to be the next Apple, Facebook, Amazon, 7-Eleven, Netflix, Pornhub, and Domino’s. Those are all separate predictions, not one company. That would be cool though. It’s a great episode, give it a listen.
Catching Up: Travis Kalanick and the Patience Episode [00:01:30]
Shaan: What’s going on? Look at me now, I’m in a chick palace here.
Sam: What’s a chick palace?
Shaan: I went from a manly industrial look to everything is glitter and gold.
Sam: That doesn’t look like your style. That doesn’t even look like it’s your wife’s style.
Shaan: I don’t know whose style this is, but that’s the style we got today.
Sam: Have you ever thought about creating a brick-and-mortar business, by the way? Actually, first — two things before we get into anything. Wednesday, do we have a guest?
Shaan: I don’t think so. Actually, yes we do.
Sam: Damn it. Okay, not this Wednesday — on Monday after that, let’s do the investor episode.
Shaan: We have another guest on Monday too. Dan Held is coming on.
Sam: All right, so we got two guests. Fine.
Sam: Second thing — I have this episode coming out. You know I’ve been doing these Monday things? What I’m doing is I’m splicing together clips, five to ten of them, and I’m going to talk in between each one. Each clip is from a YouTube video or a podcast, and the topic is time. I’m obsessed with time right now because I’m quite impatient and I’m trying to work on it. The theme is patience — how the great things I admire actually took much longer than I thought.
Shaan: What am I going to get if I listen to this episode?
Sam: You’re going to get me — okay, so turn your mic down a little bit. Travis Kalanick, before he started Uber, had this thing called Red Swoosh. You know what that was?
Shaan: I’ve heard of it. I don’t even know what it did.
Sam: I don’t either, honestly. It was peer-to-peer, like Napster but different. He sold it for like 20 million dollars but it took eight years. And I found this amazing YouTube video of him giving a 40-minute talk where the first three minutes are about Red Swoosh and he explains how hard it was. I’ve got eight or nine of those clips saved of people I admire saying it’s going to take a long time. I’m putting them together into a podcast with me giving the background of each story.
Shaan: I like it. We’ll see if it’s interesting.
Sam: Have you ever seen the Joe Rogan thing where he watches the internet?
Shaan: No. Is it good?
Sam: Yeah, they’re funny. It’s a compilation of Joe watching YouTube videos and reacting to them. The videos are really interesting random stuff, and his reaction is genuine — he’s not over the top. I kind of see this as the business version of that, where you take one theme and you see what a bunch of different interesting people have said about it. Sort of like Sam surfs the internet.
Sam: So over the next couple days, if you have an example of a talk you’ve listened to or a story that amazed you, send it to me.
Shaan: Sounds good. By the way, you mentioned Travis Kalanick — have you ever read his blog post about how to do South by Southwest on a budget?
Sam: Yes. I don’t even think you can find it anymore.
Shaan: He basically wrote tips for going to CES or South by Southwest on the cheap. Like, you don’t need a VIP pass to get in here, just wear an orange vest. He was really scrappy.
Sam: Yeah, very scrappy.
Raising Cane’s and the Brick-and-Mortar Fantasy [00:06:00]
Shaan: So I was listening to the Theo Von podcast, and he had the founder of Raising Cane’s on. Do you know what Raising Cane’s is?
Sam: Dude, I’ve met the founder of Raising Cane’s. I was at a table at a restaurant conference eating lunch one day, and the founder was right next to me. Just a nice, slightly older southern guy. I think it was the CEO — there are two guys who started it.
Shaan: I was listening to this podcast with him. He’s southern, lives in Louisiana, they have hundreds of restaurants at this point, north of a billion dollars in sales. The way he makes it sound — “I just loved running the fryer, I loved being at the place” — it sounds so much more fun than sitting behind a computer. Have you ever thought about doing a brick-and-mortar?
Sam: I did, and I regretted every second of it. But the part that is fun is the camaraderie. The kitchen crew — the bond is different from your normal friends or office co-workers. Like in tech, you’ve got co-workers sitting three desks down, headphones on, typing on a Mac, going to the cafeteria for free lunch. Totally different vibe than a restaurant on Friday night. You’re banging out orders as fast as you can, and at 1am when you finally finish cleaning up, you go eat somewhere and the restaurant is closed but they let you in because you’re from the industry. That’s just a different level of camaraderie.
Shaan: That’s what I’m saying. It’s exciting, you’re in the thick of it.
Sam: I love it. But I would never want to do it again. It’s like when people say going to the army was one of the most formidable times of their life — would you want to go back through boot camp? I read this book called Tribe, and the thing about the military is that when guys get out, a huge amount of them miss it like crazy. It was hard, they were risking their lives, but they had a crew, a mission, they were always doing something. And life seems lame and boring without it.
Shaan: I could see that. But also when you talk to people it’s like, “Man, that was the best and hardest time of my life — would I go back? No, I don’t want to do it again.” It’s like when astronauts come back from space. They’re like, “I went to the moon, that was my life’s mission, and now every day seems kind of boring.”
Sam: Anyways — brick-and-mortar. What would you want to do?
Shaan: I think I could crush a hotel or a restaurant. Hospitality. I think I could kill it. Maybe I will want to do that one day. I’m looking at buying another house and turning it into a rental — I already did it with this one, I’m seeing one later today.
Shaan: Anyway, what was Theo Von talking about?
Sam: He just interviewed the guy.
Shaan: Gotcha. Yeah, I’m more like — even with e-commerce, I’m like, this business is great except for all the physical products.
Supply Chain and the Shipping Container Crisis [00:11:30]
Sam: Right now there’s a situation — I forget the exact tweet, but there’s another port situation. The biggest port in China is backed up. There was a COVID outbreak and for a week they were operating at 30% capacity. The knock-on effects are going to last months.
Sam: Boats couldn’t get out on time, they were just idling in the water. Brian Peterson — who we’re going to have on the pod — tweeted about it. He said the average number of boats waiting is crazy. I asked him, “What’s the cost per day of that boat sitting idle with all this cargo?” He did the math and said it’s about a million dollars a day that the shipping company is losing just by being stuck.
Sam: And then for all the downstream people — if I have my goods on a boat that’s not here, I’m delayed, I’m out of inventory, and because I’m out of inventory I’m out of sales. One after another knock-on effects.
Shaan: So even e-commerce, which is pretty internet-y, the only bad part is all these physical goods.
Sam: Like, the customer is understanding of that? If something comes in seven or ten days are people okay?
Shaan: During COVID people were understanding because everything was backed up. But people’s COVID patience wore off. And even if they understand, if it’s just your stuff that’s delayed — not everything — you look really bad. You lose two weeks of sales, which is devastating for your monthly revenue when you’re operating on 10–15% EBITDA.
Sam: Right. By the way, the tweet said 5.5% of the world’s container fleet is waiting outside a port. And then he said a round trip from Asia on one of these shipping boats is 50 million in profit per trip. It’s a 30-day trip, so that’s about a million dollars per day that a ship is sitting idle. I was like, holy — these ships make 50 million in profit for a single round trip.
Shaan: People who know the shipping industry were replying — the top 10 shipping companies will make like 100 billion in profit this year. But in the last 10 years they’ve lost 100 billion in profit. It’s an incredibly volatile space based on volumes and costs. Right now a shipping container is twice as much as it was last year because supply and demand is so out of whack.
Sam: Crazy. I’m excited to have him on, we’ll nerd out about this.
Oasis: The Deepfake Video Call Startup [00:17:00]
Shaan: So you want to talk about some ideas? I have three. One is Oasis, which I think is one of the most interesting startup ideas out there. Nugs, which is in the fake chicken nugget market. And I have a prediction section where I’m going to predict what the next Facebook, Amazon, Google, and Netflix will look like. Let’s do Oasis, the giveaway business, and predictions.
Sam: All right, sounds good.
Shaan: So Oasis. I was on Twitter and I saw this guy Matt — he was teasing something the way people do on Twitter, kind of ambiguous but provocative. He had retweeted our mutual friend Sikhi, who said, “Dude, just got an Oasis demo. Mind blown. This is the future.” I was like, okay, hook, line, and sinker. How do I get that demo?
Shaan: So I hopped on a Zoom and he showed me something that was honestly pretty mind-blowing. He said: “I’m talking to you on Zoom right now, here’s my face. But the problem with Zoom is you always have to look good, and people get nervous about that. Over 60% of people in North America don’t actually turn their camera on because they’re self-conscious. So what if instead you had a representation of you that wasn’t cartoony — it literally looks like you?”
Shaan: The gif he showed says “never worry about how you look on camera again.” It’s a video of him in the shower holding his phone. On the left is what he actually looks like — a dude in the shower. On the right is his digital representation. He looks like himself, just in front of a perfect backdrop, and it’s tracking his mouth perfectly.
Shaan: I thought, if I could be on video without actually being on video — like a filter, but automatic, like the best-looking version of myself — that would save me so much time and energy.
Shaan: Then he said it gets even better. Not only can you do that, you can show up as a different person. If you’re a minority and you don’t want to be discriminated against, you could present as, you know, a tall white male and nobody would know. This empowers working anonymously.
Shaan: And then the best part: this works on the worst connections, the worst phones. I asked how that was possible given the processing power required. He said there’s no video being transferred. Like a video game, the screen on his side tracks his face — every pixel, how his lips are moving, his nose, his eyes — and instead of sending his video across the internet, it just sends how those pixels are moving. On the other side it recreates the video using those pixel coordinates. Even on really bad, low-bandwidth internet, you could have awesome-looking video without even being on video.
Shaan: What do you think?
Sam: I think I was pitched this too and I passed.
Shaan: Did you pass or — I mean, I didn’t even really get to investing. I had a call scheduled with the guy but I saw the demo months and months ago. They weren’t in an investable spot at that moment, or weren’t raising. I’m looking at it now — it has a pretty high valuation. Six guys working on this.
Sam: What do you think about it?
Shaan: Here’s what I think. The way it’s set up now is not the way that it could be a huge thing. A lot of times when I invest in something or want to get involved, I’m comfortable saying one of two things: I know how it’s going to end — like, I want to create a massive media company that covers X, Y, Z, I’m going to start with an email, I don’t know the middle ground, but I’m pretty confident I’ll figure it out. Or I’m okay with not even having an ending point — I created something cool, it feels powerful and strong, I think I can figure out where to go.
Shaan: This was the second one. I saw the technology, got the demo, and I thought: the options here are pretty much unlimited. The bet I have to make is: is this founder great and can they figure out how to deploy this technology? I wasn’t sure.
Sam: Also the price matters. You don’t want to pay a “we’ve figured it out” price when they haven’t figured it out yet. You want to pay the “this is cool and promising” price, which should be ten times lower.
Shaan: I get why it has a high valuation though. Zoom is a 100 billion dollar company. It lets you do video calls for business purposes across the internet. I think the leapfrog of Zoom is not Zoom with slightly better features. The leapfrog is: video calls where I don’t actually have to be on video but it looks like I’m on video. Everybody looks great regardless of how they look at home. And secondly, it works on extremely low bandwidth because it’s not transferring video — just pixel coordinates.
Shaan: What does that mean? If Zoom is 100 billion today, and somebody built the thing I’m describing — it would be a better Zoom. Obviously doesn’t have the network effects or brand, but it has the magic trick. And when you have a magic trick you can get a lot of users pretty quickly.
Sam: The magic trick is impressive. We were both pretty impressed. But if I was them, I’d be using this for movies, not business calls. I actually don’t even know what I’d use it for, but I can’t imagine business calls would be the number one thing.
Shaan: Dude, Zoom is massive. 100 billion dollar company. How much bigger do you want?
Sam: One trillion. But this is a plug-in for Zoom.
Shaan: I think you could make the new Zoom using this. Why would you use Zoom when you can use this where you always look great and it works better on any internet connection?
Sam: Regardless, I’m into this. I just wasn’t willing to bet my own money at that valuation.
Shaan: That’s totally fair. The reason this stuck out to me is I have this doc I’ve talked about before — “the biggest idea in my head right now.” If I were totally free and could drop everything and work on the biggest startup idea in my head, what is it? I keep track month by month. Sometimes it’s the same for two or three months straight, sometimes it changes. This became the biggest startup idea in my head. Novel technology, really big market, and it does it in a way where the incumbents would have to re-architect their whole operation to do this. You can’t just make a plug-in. So I just wanted to bring it up.
The Sweepstakes Business: How a $26M/Year Car Giveaway Works [00:27:00]
Sam: All right. Let’s move on. You want to talk about something way less of a big idea but a surefire way to make a lot of money?
Shaan: Yes. Let’s talk about the giveaway business, also known as the sweepstakes business.
Sam: I’m interested in this because I’ve used it a lot, it seems easy and awesome, and you’ve dabbled.
Shaan: Yeah. With The Hustle, one way we grew was: we would give stuff away. We gave a Tesla away, a 3D printer. If you share your email or get other people to join using your unique URL, you get more entries. If a car costs us 30,000 dollars and we acquire 30,000 emails, that’s a dollar per email — a really good deal because we make roughly ten times that off each email. No-brainer.
Shaan: The second thing we did is we paid some of these companies to send us leads. Do me a favor, go to bold.org right now.
Sam: I’m on it. What is this — “Fighting student debt”?
Shaan: So what bold.org does is they go get scholarships — either create them or find people who have them — and aggregate them onto one platform. Then they go get loads of people to sign up for those scholarships. They advertise in Facebook groups for nurses, on Google, whatever, and get people to apply and enter all their information.
Shaan: Here’s how they make money: if you have tens of thousands of people applying for an MBA scholarship, that’s a very qualified lead list. Same with nurses, same with any niche. As you sign up, at the end they say, “Would you also like to opt in for these?” And companies like The Hustle would pay them. At one point we were paying them something like 50 to 100 dollars per month — per lead.
Sam: Wait. So they spend money to get people to apply for a scholarship, and then while the person is applying they present offers?
Shaan: Right. You just see offers that are interesting to you. I believe it’s also that you’re automatically opted in unless you opt out. And you might get more likelihood of winning if you opt into stuff.
Sam: Dude, how did you even find this? How do you make the leap from scholarships for nurses to sweepstakes giveaway email growth?
Shaan: So there’s this guy named Dinis Grosz. We’re going to have to get him on this podcast. He started Wise Geek, which was a web 1.0 thing that made a lot of money, then he started loads of other companies and invested in things like Thumbtack. He then created this thing called Mechanism, which is like an idea lab — he’s an SEO guru and lead gen guru. The co-founder of Mechanism is Brendan, who’s the founder of Toptal. I’m friends with both of them, I saw what they were getting into, and Brendan pitched me on using bold.org as a customer. It worked well.
Shaan: But what really got me interested in giveaways was the legal side. You actually have to call them sweepstakes — there’s a lot of legality around it. Your rules have to be approved by a lawyer. You have to let someone enter by just mailing in a form — you can’t make it purely pay-to-play, otherwise it’s like a lottery. There’s all kinds of technicalities to follow.
Shaan: I got really interested and did research on a bunch of these businesses. I see three ways the model works.
Shaan: One: you sell entries directly. I’ve seen things like buy-this-house.com, where a company buys a San Francisco house, puts ads on subway billboards, and sells entries for a hundred dollars each — it’s a raffle.
Shaan: Two: your audience is the product, like bold.org, where you sell their information. You know those cars at malls? A marketing company pays the mall a rental fee for the space. Loads of people enter their information to win the car. The company collects all those names, birth dates, and so on, categorizes them, and sells those leads to other companies who cold-call them.
Shaan: Three: you sell merch where buying merch gets you extra entries into the giveaway.
Shaan: I found one company doing car giveaways and got hold of their financials. And by the way — the second takeaway here is to sign up for broker websites that sell online businesses. You go to Quiet Light Brokerage, Flippa, Empire Flippers, FE International, any of them. If you’ve never been inside a successful business, you can go on these sites and see how businesses work. They’re packaging everything up to sell, so they have their P&L, their top SKUs, their growth strategy — all of it. And the beauty of the online ones is they don’t know if you’re a serious buyer or a 21-year-old kid just trying to learn about business.
Sam: That is amazing.
Shaan: So I was interested in sweepstakes, and I just happened to see one for sale. Here’s the company: if you Google “car sweepstakes” you’ll likely see them on the front page, which means they’re one of the big dogs. The last 12 months of revenue was 26.7 million dollars. The last 12 months of net profit was 5.8 million dollars.
Sam: Let me Google that right now.
Shaan: In the document I have, there’s a Q&A where someone asks them how it works. They have a warehouse and about 30 employees, mostly warehouse workers. They run ads and sponsored videos on YouTube car channels — before a guy shows off his car, he says, “By the way, this is sponsored by blank, they’re giving away a car, click the link below.” You go to that link, and it says you’re entered to win this car. But if you buy this sweatshirt for forty dollars, you get ten more entries. Buy this hat, you get X more entries.
Shaan: So it’s basically just an e-commerce store. And the repeat customer rate is 50%. Half the people who sign up for one eventually do another. And they have guys who will spend eight thousand dollars on merch to get more entries into the car giveaway.
Sam: Wow.
Shaan: Yeah. It’s definitely polarizing. Some people will say it’s shady. But I find it fascinating that a business like this even exists — 25 million a year in revenue, 5 million a year in profit, very simple business. This is what I call “knowing how internet plumbing works.” Like: I can plug a pipe into YouTube, that gives me a lead. I plug that lead into an e-commerce store, that gives me this. I plug that into sweepstakes law, which allows me to do this legally.
Shaan: I’ve seen the same model in the gun space. People are very passionate about guns and ammo. There are also house giveaways — I actually looked into raffling my house when COVID hit and it was the worst time to sell. But there are all these rules against it. Churches can do it, not many others.
Sam: So there are more of these than you’d expect.
Shaan: A lot. And I have a friend of a friend who was doing this with cars. There were three months where they were like, “This is printing money, this is the best business in the world.” Then I checked back six months later and they were like, “Dude, this is such a hard business.” So it’s not as easy as it sounds. There’s a thin line where at some point you fatigue out your customers — they get disillusioned that they’re never going to win. Or ad costs go up and the business goes from working beautifully to being upside down.
Sam: So this business is doing close to six million in profit and the asking price was 24 million? Five times profit?
Shaan: Five times profit is actually quite good for this kind of business. The only true assets are the website — which anyone could probably copy with 10 to 40 grand — a 300,000 email list, and 300,000 SMS subscribers. Which is baller.
Sam: That’s huge. And SMS must work extremely well for this. SMS gets like an 80% open rate versus like an 8% open rate for email. If you’re on the bus and you get a message like “look at this amazing car, do you want it?” you’re not doing anything else anyway.
Shaan: Yeah, I could see how that hook works.
bold.org Deep Dive: Lead Gen as Internet Black Belt [00:40:30]
Sam: Similar to your thing — I don’t really have ideas for this because they seem limitless, but I wanted to bring it up because it’s a little bit on the dark side of the internet that most people don’t know about.
Shaan: bold.org isn’t that dark. I know the guys who run it. I’m a customer of theirs. It’s pretty ethical and straightforward.
Sam: How was the experience as a customer?
Shaan: Really good. Okay, so let me do the math. Let’s just say I acquire a user from Facebook for two dollars and they have a 50% retention rate — I’m spending four dollars per reader who sticks. Internally at The Hustle we categorized users as gold, silver, bronze — a gold user who read the first five issues, we knew they’d stay for 18 months. So a gold user just cost us four dollars.
Shaan: Now with bold.org, I might need to acquire ten people to get one gold reader, but I’m getting those ten people for a dollar each. So I just paid one dollar for a gold reader. You get a lot of volume but it’s cheap, so you make up for it.
Sam: Did you have a set rate with them, or how did pricing work?
Shaan: The smart guys at these companies don’t have a set rate. They give you a ballpark and first they want to hear: “What’s it worth to you?” And then they try to set it at your number. Then you go do it for a month and renegotiate.
Sam: I just went through the funnel while we were talking, by the way. I got halfway through the scholarship flow and earned 50 bold points. Five more for signing up for this, ten more for doing that, what’s my income, what’s my dream job, how much money do I want to make — they ask so many questions.
Shaan: It’s all about enriched lists. Enriched data.
Sam: How big is bold.org?
Shaan: They never told me the revenue, but I imagine it’s very large. If you told me it was making half a million to a million a month in profit I wouldn’t be surprised. This is somebody who has a black belt in the internet. Feel-good story on the front end, dope lucrative business model on the back end.
Sam: I love it. This doesn’t sound sexy, it doesn’t sound like something you want to say you do when you grow up, but it makes loads and loads of money.
Shaan: Another one is Omaze — O-M-A-Z-E.
Sam: Yeah, it’s like a platform to do raffles?
Shaan: It acts like a charity thing. Snoop Dogg is going to give away a car, and some of the money goes to charity. In reality, Omaze gets their cut the same way I just outlined — through the three business models.
Sam: I feel like we should do a separate episode as a deep dive into sweepstakes and giveaways. I think that would go pretty viral, honestly.
Nugs / Simulate: Fake Chicken for Gen Z [00:46:30]
Shaan: All right, I’ve got another one. Have you seen this company Nugs?
Sam: Yeah, they changed their name.
Shaan: I think the parent company is called Simulate and the product is Nugs. It fits into this category of alt meats. You have Beyond Meat, you have the Impossible Burger, and what Nugs is doing is fake chicken.
Sam: If you go to simulate.com it says “the Tesla of chicken.”
Shaan: Oh my god. You can see the landing page — forty-five dollars for a box of a hundred nuggets, two flavors, original and spicy. The page is kind of cheeky — instead of saying “good for you” it says “kills you slower.” Higher in protein and lower in fat than animal-based nuggets.
Sam: They started as a D2C brand but either right before or during COVID they switched to selling mostly to retail.
Shaan: I saw them because they raised 50 million dollars recently — like a month ago. And the guy behind this is Ben Pasternak. He’s a young guy, maybe 21 or 22 now — was 17 or 18 when I met him. He’d built this app called Monkey, which was kind of like Chat Roulette for iPhone. You’d randomly match with someone in a video chat and skip to the next person.
Shaan: I saw it and thought it was kind of clever. Liked the branding, liked that he was able to game the App Store charts. But you could tell it wasn’t a sticky product. So I reached out, had a chat — super smart guy. I remember thinking this kid is a future superstar. I gave him the highest compliment I could give, which was: I didn’t even try to recruit him. I said, “You’re ready to just do this on your own. Don’t waste time coming to work inside my thing. If we work together we build one company. If we work separately you’ll build two.”
Shaan: Anyway, the actual insight here isn’t really about the fake chicken.
Future Contracts on Founders [00:51:00]
Shaan: People like Ben Pasternak — clearly special, going to do big things. It’s probably not going to be their first app, it’s probably not Monkey. It’s probably their second or third attempt that hits. That got me thinking: could you basically buy an option on a founder? Could you buy future contracts on founders?
Shaan: Most people think of this as income share agreements. But I’m not even saying that. The founder market is juicy enough that you could actually sell the right to invest in your next thing. Because otherwise it’s hard to even keep tabs on people — you don’t know when they’re pivoting, you don’t know when they have a new idea, you don’t know when they’re launching.
Sam: So it’s basically: put me in the pre-seed round?
Shaan: Right. And at the lower valuation. I think I would have paid ten grand just for the option to invest in this guy’s next company over the next five years. Ten, twenty-five grand for the right of first refusal to invest in my future company. It’s not equity, it’s not an income share agreement — I don’t even have to start another company. But I think real investors would have a budget of maybe single-digit millions just to place options on high performers they see in the tech industry. “Hey, next time you start something, I get first dibs at investing.”
Shaan: I get 150k floor to go search for my next thing. They get guaranteed locked-in deal flow. Maybe I’m underpricing it, maybe it could be an annual thing, I’m not sure. But out of a fund I think they’d allocate a few hundred thousand dollars to placing bets on 25 founders they see.
Sam: This is something I’ve been looking up. I think it was Jerry Seinfeld or Joe Rogan talking about the 90s in TV — they mentioned Roseanne and this thing where it was the golden age because if you wrote an okay script, a studio would pay you a quarter million dollars a year and the only thing you had to do was not do it. They bought the option. Sometimes they’d buy the option and never even use it. You’d just be getting a quarter million a year for three years without doing anything.
Shaan: It’s like a retainer. Like an advance on a book deal. I think this is actually a fantastic idea. How would it work? Like, anytime you raise money or anytime you own more than 50% of an entity, I get right of first refusal.
Sam: Yeah, I think it’s a really really great idea. It turns entrepreneurship into a job and gives you a floor.
Shaan: Like, if I did this — as of today I officially am no longer employed anywhere, I’m a free man.
Sam: Wait, congratulations. I wasn’t sure when we were going to bring that up.
Shaan: Thank you. So if I said, “Hey, I don’t know when I’m going to start my next company, but if anyone’s interested, here’s a website where you can buy a future option on being in my pre-seed round” — let’s say I sold slots for 15k each. I sent that to every VC and every seed fund I know. I think I could get ten people. They’d say, “Cool, 15k right now, easy.” In the next 18 months I’m going to be thinking about a business, and when I’m ready, you get first dibs. The round might be a 3 million dollar round and you get to invest. I get 150k floor, they get guaranteed deal flow.
Sam: Maybe you’re underpricing it. Maybe it could be more or maybe it’s an annual thing.
NCAA Name and Likeness Ruling [00:57:30]
Sam: Could you also do this with athletes? Did you pay attention to what happened with the NCAA?
Shaan: I know what happened. The Supreme Court unanimously ruled in favor of former college players in their dispute with the NCAA about compensation. The doors are now open for how NCAA athletes can make money.
Sam: I’m reading it now — they unanimously ruled that the current cap on education-related benefits like scholarships, graduate school, musical instruments, and tutoring violates federal anti-trust laws and must be lifted. So that’s just the education-related stuff — it’s not yet salaries. But there’s also a separate rule coming around athletes being able to monetize their name and likeness.
Shaan: Right. Like, if you’re in a college town in North Carolina, the local car dealership can use your name and face on their ads and you can make money from it. That’s what’s coming.
Sam: I think there’s definitely a big opportunity there for the founder option framework applied to athletes.
Shaan: Yeah, future contracts on athletes. I’m on board. I think it’s great.
Shaan’s Predictions: The Next Apple, Facebook, Amazon, 7-Eleven, Netflix, Pornhub, and Domino’s [01:01:00]
Sam: Okay. Cool. I don’t have anything else to say except — great. Last topic.
Shaan: I want to give you some predictions. I’ve been thinking about this.
Sam: I think you’re bold for doing this. You’re making it very easy to look stupid.
Shaan: That’s the beauty of predictions. The best predictions — when you’re wrong, people forget. Unless you’re Scott Galloway. When you’re small, you should make predictions because the cost of being wrong is very low, but the cost of being right is: all of a sudden you’re the guy who called it. Like my clubhouse thread — as that gets proven right, it’ll be like “he called it.” But if I was already big, everyone would be waiting to rub it in my face if I was wrong.
Sam: When did you come up with these?
Shaan: I saw the timestamp on my notes — 11:27pm. This is the stuff I think about at midnight.
Shaan: Okay, first: what is Apple becoming? Apple is shifting into health in a pretty big way with wearable devices. The core benefit today is they give you this ultra-personal device — a personal supercomputer to help you with life. I don’t think the next Apple is a phone company. I think the next Apple — a trillion-dollar company that gives you a consumer device — is going to be a healthcare monitor. Something measuring what’s going on inside your body and feeding that data back to you. That’s my prediction.
Shaan: Next: Facebook. People think Facebook is an app, a social network. But the core of Facebook is cameras — content sharing. Photo-taking or video-taking and sharing with people you care about. That’s why Instagram and WhatsApp fit under that roof. So I think the next Facebook is not going to be an app or another social network. It’s going to be some kind of hands-free, always-on camera. Something you wear — glasses, a lapel pin, a drone floating above you. Probably glasses because they’re at eye level. It’s going to be basically a super memory — it lets you capture photos and videos of whatever you’re looking at, hands-free and instantaneously, and then share or save as a super memory for yourself or with friends.
Shaan: If you’re trying to create the next Facebook, you shouldn’t be making an app where you add friends. You should be making a hands-free camera that makes it way easier to capture content. It’ll bypass Facebook altogether because the capture device will just be for sharing. Similar to what Snapchat did — when you open Snapchat, the camera is on right away. You take the photo first, then share it. They skipped the whole Facebook process.
Shaan: Next: Amazon. This one’s stolen from Marc Lore. Amazon is a place to shop, but the next Amazon is not a website where you type in a word and get 5,000 images you have to sort through. The next Amazon is conversational shopping in your house. You just say what you need and something goes and gets it for you. “Hey, we need more pee pads for the dog.” “Do you want the same ones as last time?” “Yes.” Boom, ordered. Didn’t have to type anything, didn’t have to enter a credit card. And when you don’t know exactly what you want, you could say, “I need the best webcam” and it says, “Do you want the ones that most YouTubers use? The ones your friends bought? The best value? The highest price?” And it says, “Actually, Sam has this one — want me to ask him how it is?” Sam says it’s amazing, you buy it. Conversational commerce.
Shaan: Next: 7-Eleven. This one’s easy. A cloud corner store. You don’t need a real location — it’s just 500 square feet within one mile of you, maybe in a back alley. It doesn’t need good real estate. Small lightweight drones deliver to you within 15 minutes of ordering, no human being involved. The whole 500-square-foot place doesn’t need good real estate and is fully automated — when you push the button to order, it pops out like a vending machine, the drone takes it straight to you, lands on a landing pad in your front lawn.
Sam: I’m just listening. I’m taking notes. I’m going to tweet these as you’re talking.
Shaan: You’re stealing my thread!
Sam: Go ahead.
Shaan: Next: Netflix. I think the next Netflix is one of two things. Either it’s in VR — you put the headset on, you enter the world, and you walk around and experience a movie, it’s a hybrid between watching and playing. Or it’s machine-generated movies, something personalized to you. Right now a movie is a specific story that gets filmed, edited, produced, with actors. I think you might be able to just say “I want something that’s like Breaking Bad but with casinos” and it just generates a movie for you. Google released this thing called Magenta — an AI that writes classical music that sounds like Bach and Mozart. It just takes everything that exists, studies it, and creates remixes and mashups. A one-time movie generated just for you.
Sam: Remember the band Girl Talk? The mashup albums?
Shaan: Yes! Feed the Animals — that’s my go-to workout track. Love that.
Sam: Same, I love that.
Shaan: Okay, next: Pornhub. The next Pornhub is not a website where you go see pre-made movies. I think it’s all deepfakes — you just go in with a fantasy. You put on your VR device, you think of what you want, and it basically deepfakes a porno for you. A computer-generated movie where the actor on screen was never actually there. And by the way, that’s why deepfakes are scary — you can put Obama’s head on anything and it looks real. Video can be faked just like a photo can be Photoshopped. Any video can be “video-shopped” now.
Shaan: Last one: the next Domino’s. The next pizza company is going to be a fleet of self-driving cars that are just circling around with an oven baked into the trunk. Your food is going to be baked fresh and arrive via driverless car. You come out to the front, the trunk opens, and there’s a pizza that was baked during the drive time.
Sam: Like a mobile food truck.
Shaan: Actually, our friend Gagan launched a company called Sprig — I think only in San Francisco or maybe Chicago. He raised 60 million dollars and launched in 2014. He said exactly this: “I want to have ovens in the car. That’s the future.” I think he was right, just early.
Sam: This guy David Langer, he started Zesty, a food catering company that was super fast-growing. I asked him about food delivery and he jumped straight to the end: “The answer is cars with ovens in the trunk. It’s the only solution that will work at mass.” Food baked in the car, kept hot in the car, ready hot coming out of the car. And it also reduces delivery time because you’re not going to a brick-and-mortar place, loading food, then driving to a destination. The car is constantly circling an area, and as you get an order you pop the food into bake. When it’s ready you’re at the door. Zero lag time. Deliveries get faster and fresher.
Shaan: This is my segment of Shaan time-travels to the future. I was born in 1988. From 1988 to maybe 1996, Michael Jordan was winning championships, and for the average person there was no internet — or we were just getting AOL chat rooms. I was putting AOL CDs into the one computer in the computer room. Because the house had one computer.
Sam: Right, we had computer rooms!
Shaan: Exactly. And then that changed. Computer rooms became laptops, laptops became phones, phones have HD video streaming live basketball games to my phone while I’m in my car. That seemed absurd. I remember the first time I saw someone reading on their phone — I had a Nokia with Snake on it and I thought, “Who would want to read on your phone? Who would watch a video?” Because all you had was nine buttons and you had to click three times to get another letter.
Sam: Yeah, predictive text, T9 or whatever it was called.
Shaan: Right. And that seemed so far-fetched. But that was only like 20 years ago, and in 20 years some amazing things have happened. If I fast forward 20 years, these things that today sound far-fetched — they’re going to happen, because the consumer benefit is there. If delivery is faster and fresher, people are going to do that. If shopping gets easier and I just say what I want when I want it and get it in less than an hour, Amazon two-day delivery is going to seem incredibly slow. Ordering everything from Amazon will be as fast as ordering DoorDash is today — “It’ll be here in 45 minutes.” Oh, you need an HDMI cable? Push the button, it’s here in 40 minutes, delivered via drone.
Reactions and Closing Thoughts [01:18:00]
Sam: Okay, which one did you think you were most on or off about?
Shaan: I think you’re most on about Apple. I think you’re most off on —
Sam: Facebook, the hands-free always-on camera?
Shaan: What was Facebook again? Hands-free, always-on camera, instant capture of anything going on in your world.
Sam: Yeah. I think you might be wrong about that actually. I think there’s a world where we go in reverse and get less tech-driven. People want less contact with technology. The pendulum could swing the other way.
Shaan: That could happen. But —
Sam: I think you’re totally right about Apple. 7-Eleven — you’re right. Netflix — actually I think you’re right. Pornhub — I think you’re right. Domino’s — I think you’re right. Facebook I think you’re wrong.
Shaan: I think I got them all right, bro. It’s just a question of timing. The great quote is: “Don’t confuse a clear view for a short distance.” If you see something on the horizon, it’s just because you can see it doesn’t mean you’re near it. Objects in the front view may be further than they appear.
Shaan: And that’s what often happens with the future — you can kind of see what the world is going to do, you just overestimate how soon it’s going to come. Then you get disillusioned, and eventually it does show up.
Sam: I think I’ll grant you that. But what I’ve learned reading history is that it typically repeats itself — what’s old becomes new, what’s new becomes old, and it goes back and forth. People our age and younger who are always connected are going to eventually want less of it. That’s why motels in America are booming right now — it’s nostalgia, it’s interesting again. The pendulum swings.
Shaan: I think both happen at the same time. The world gets more on-demand and more digital, and at the same time people crave physical experiences. Both exist simultaneously.
Shaan: It’s kind of like the clear view / short distance thing. A great example is Webvan. Year 2000 — grocery delivery online. It gets all this hype, then it crashes, and for like 20 years nobody really touches it. Then here we are with Instacart as a multi-billion dollar company taking that same idea and putting it in a fresh way with new tools and mobile phones.
Sam: I’m on board with a lot of that. All right, we should call it here.
Shaan: Yeah, all right. That’s the end of the episode.