Sam and Shaan dig into how FTX built a $30 billion company with only ~30 engineers, using Sam Bankman-Fried’s hiring philosophy as a jumping-off point for a broader conversation about overhiring in tech. Along the way they cover the Nick Gray two-hour cocktail party method, Colin and Samir’s YouTube strategy, YouTube Shorts as an algorithm exploit, and a rabbit hole on surprisingly lucrative boring businesses like a TikTok watermark remover and egg cartons.
Speakers: Sam Parr (host, co-founder of The Hustle), Shaan Puri (host, founder of Milk Road), Jonathan (podcast producer, occasional on-air)
Cold Open [00:00:00]
Shaan: I read something very interesting — that FTX, as a $30 billion company, only has about 200 employees, and for the first year the product was built by just two engineers. Even now they only have sub-20, sub-30 engineers. Is that true, and what the hell is going on? Is FTX just a unique situation, or are the rest of us doing this completely wrong?
Sam: He’s like, “I can only think of one of two things. Either FTX has a unique set of problems so you can operate your business differently, or the rest of us are doing this completely wrong. Which is it?” And he goes, “The latter.”
Sam’s Birthday and the Happy Birthday Hack [00:00:20]
Shaan: What up, birthday boy.
Sam: Thank you! What’s good? How’s it going?
Shaan: It’s going okay. I was going to sing to you — you FaceTimed me earlier.
Sam: I FaceTimed you? Oh, I’m sorry. I didn’t even get the notification. I was in swole mode.
Shaan: You did miss out on what would have been a good serenade. Actually, can I tell you a funny story about that? Were your kids there?
Sam: No, it was just me and Ben.
Shaan: Oh man, what a bummer. I’d rather have seen your kids. I’ve got baby fever.
Sam: Well, my son was there, but you know, before the age of two they’re kind of just like an inanimate object that you carry around. I was working out, and when I work out I put my phone on focus mode — swole mode.
Shaan: So how old are you now?
Sam: Thirty-three.
Shaan: Okay, you’re getting up there. All right.
Sam: I like it. I think you’re a year younger than me. I was at a birthday party a couple weekends ago — I had to leave the house, which was crazy — and this guy did something that I was like, “What an amazing life hack.” It was some kid’s birthday party. They sing happy birthday, time to blow out the candles. The guy grabs the mic and goes, “Hold on, hold on, we’ve got a special birthday song for you.” He has his own version of happy birthday — it’s not like a singing thing, it’s more like a call-and-response. He’s Indian so it’s kind of like an indie vibe, but essentially he goes, “When I say happy, you say birthday. Happy!” And everyone goes “birthday!”
Shaan: “Happy!” “Birthday!”
Sam: And he’s like, “Who’s the birthday boy? Sam! Sam! Sam!” Like it just makes you feel good. And I was like, what a life hack — to just be the life of the party, simply by having a cool version of happy birthday you can do at any time.
Shaan: That’s amazing. That’s like having a joke that just always kills.
Nick Gray and the Two-Hour Cocktail Party [00:03:10]
Sam: Listen, I’ve got a friend named Nick Gray. Shaan, do you know who Nick Gray is?
Shaan: I know of him. I don’t think I’ve ever met him, but I’ve seen his website and you’ve told me about him. He looks like an entrepreneur, kind of looks a little slick. I don’t know who he is.
Sam: I call him grown-up Dennis the Menace, because he looks like what Dennis the Menace would look like at 40. He had a company in the aviation industry, sold it. Then he started this thing called Museum Hack — you pay like 25 bucks and you get a group private museum tour. He sold it. And he loves hosting parties so much that — I believe he used Scribe, like you did — he wrote a book on how to host the perfect two-hour evening party.
Shaan: Have you read it?
Sam: It just came out like two days ago, and he just sent me a copy. It’s called The Two-Hour Cocktail Party. This guy — whenever he hosts parties, he brings name tags, a kite, a frisbee, and a blanket. He’s like a 12-year-old. He goes to a park party with this stuff and it just works. And he brings the rules for the game Red Rover as an icebreaker. He brings a harmonica. When he wants to get everyone’s attention, he plays a few notes, goes “All right everyone, come to the circle,” and does these icebreakers. It’s hilarious.
Shaan: What a great idea. When you first said it I laughed, which to me already means this is kind of remarkable as a product — you had to remark on it, it was worth telling. That’s already a good sign. Second thing — it’s actually a real problem. Nobody teaches you how to do life stuff, and if you can hone in on a piece of life stuff — like the classic example, you know The Game, the book about how to pick up women — we all laugh and say “oh that’s kind of the loser thing.” But in reality it was a best-selling book, one of the best books I’ve ever read, genuinely helpful. A lot of people literally don’t know how to navigate those social situations.
Sam: Yeah, dude. And by the way, look at the link I sent you in Riverside — look at the reviews. It’s Nick Huber, it’s Kat from Best Self, it’s Ben who started a group on deck, and David Perell. They’re all reviewers on it.
Shaan: Isn’t that hilarious? What a funny niche to own. It’s like how Marie Kondo made “putting your clothes away” into like a Martha Stewart-sized business. That’s what this guy might be doing for cocktail parties.
Sam: So my first reaction: what a great idea. My second reaction: what a terrible idea. Why is this a book? Why isn’t this a Twitter thread? If there’s ever a thing where “this book could have been an email” — this is it. And also the book is going to take longer than two hours to read, in a book about two-hour parties.
Shaan: I kind of agree with you, but I think you have to forget that most people don’t have charisma. I definitely have a little social anxiety — I don’t like leaving my house that often, I don’t want to talk to strangers that often. But I can turn it on. Most people, like our nerdy-ass friends, they just stand around like, “What do I do with my hands?” They literally don’t know.
Sam: That’s amazing, actually. I still remember — I’ve been to a bunch of startup events. I was in this accelerator called Mass Challenge back in the day, Boston-based startup accelerator. I don’t even know how I ended up there. And at this point in my life I’ve heard at least 500 in-person talks to entrepreneurs. You know what the most memorable one was?
Shaan: Who?
Sam: This old-school guy who came in, probably in his late 60s. The best part — the very first thing — he started the talk from the back of the room. Everybody’s looking at the stage, chairs face one way, right? And he’s like, “I’m back here.” It’s like dodgeball — you gotta adjust. “Entrepreneurship: you gotta adjust. Are you stuck to the ways that society works? Are you just going to do what makes sense?” That’s how he started.
Then he goes, “Somebody stand up and pitch me your business — tell me what your business does.” A thousand hands go up because they’re entrepreneurs, you gotta be the courageous one. He picks the first guy. Guy stands up: “Hey, I’m the CEO of The Hustle, we’re a media company for millennials who love to learn about business.” He cuts him off. “No, you’re not.” He just keeps doing this — process of elimination, everyone trying one thing. Finally some guy says it right: “We’re SmartShade. You know when you’re in a room and the light through the window is too bright? We help you make sure you have a shade that doesn’t make your room look ugly.” The old guy goes, “Yes. That’s exactly right. You explain the situation and you use the key word ‘help.’ Your business exists to help someone do something. Help someone get some outcome, some benefit. All of you think you’re entrepreneurs and you couldn’t tell me who you’re helping do what.” And we’re all like, oh man.
Then he transitioned. He puts up a diagram of a meeting room — a six- or eight-chair table. “Biggest meeting of your life. Where do you sit?” People say different chairs. He goes, “No. You sit in chair two.” It’s the corner of the table. You’re not the head of the table, but you’re in the corner. You have about 80% of the visibility of the head of the table, but now you have both angles — you’re at the wide angle where people can see you and talk to you. Then he showed a round table: “Where do you sit if this is the door?” Then: “You have five minutes before the meeting, not everybody’s there yet. What do you say in the small talk?” And he’s like, “Do you talk about the weather and sports? No. You’ve already done eight hours of research on this person. You already know A, B, C, D, E, and you’re going to bring up this topic.”
Shaan: This guy was so opinionated, so crazy. But you remember it because he was answering things that nobody had ever instructed you how to do. That’s the “what do I do with my hands while I talk” problem. I definitely run into these situations and I’ve received zero guidance in my life on what I’m supposed to do. If you have the solution in a box, I’ll take it.
Sam: Nick’s going to love that, because cocktail parties is such a niche thing, but he’ll probably do well. He’s pretty successful. So we want to talk about Colin and Samir, Jonathan. And actually — you’re here, Jonathan. I don’t exactly know why you’re on air. I know what you do as a job, you grow the podcast. But I don’t know why you need to be sitting here. Why do you stay?
Jonathan: One, because this is fun. And two, this is the only time I can get face time with you guys to talk about these things. This is the only time I can carve out time on your calendars.
Sam: We are the issue. He slacks us, asks us to do stuff, and we just never respond. It’s like — why did you open the sushi restaurant? “Because I knew you loved sushi, and I just needed your approval on these three things.” We’re that much of an ass. Sorry Jonathan — we’re not very responsive in general. So he came on and said, “Hey, talk about the Colin and Samir thing, because there are some good takeaways we should implement into our YouTube channel.” But first — Jonathan, you said you hosted a Nick Gray party?
Jonathan: Yeah, and it was awesome. There’s so much nuance to hosting a good meeting, or a good party — where you sit and how the experience is for everyone else. You kind of do need a book to piece it all together. Chapter one: here’s the pre-party stuff. All that.
Jonathan’s Nick Gray Party Debrief [00:14:00]
Sam: Wait wait wait wait — you hosted a Nick Gray party? You did his method? Or you attended a party?
Jonathan: Dude, he’s like famous in Austin if you’re running in the same circles. He did a beta launch for his book, and a few people — myself included — hosted one of the beta parties.
Sam: Wow. Wow. Wow. Holy shit. You’re blowing my mind right now. First of all, how much of a fricking early adopter are you that you knew about a book that wasn’t even written yet and you were like, “I’ll be one of your test cases for your party thing”? Give us the rundown. Give me one or two golden nuggets — things you wouldn’t otherwise have done at a party that Nick helped you try out.
Jonathan: So I co-hosted it with another guy. We had it at my house — I’ve got a backyard. We got pizza. It reminded me of like a prom party to begin with. But the crucial pieces were: icebreakers. You start the night, everyone’s getting their drinks and getting comfortable, and then you blow the harmonica or play whatever you’re playing, you strum the banjo, you get everyone’s attention and go, “Hey, we’re doing icebreakers.” And the fun fact would be something like, “What was the first thing you did for money?” It gets people going a little deeper, and then that leads into the next conversation. There are two or three of those throughout the night. And then there’s the email before, the email after, and how you nurture those people — how you actually connect them.
Sam: I didn’t even think about an email as part of the experience.
Jonathan: Dude, he’s got a whole thing about it. The funny thing about Nick is he’s very flamboyant, very gregarious — loud — and a lot of people think that he’s gay. He gets more women than anyone I’ve ever met, and it’s mostly because of this party stuff.
Sam: Give me another one — something unexpected.
Jonathan: Okay, so he’s hosted a party called a “petting zoo party” — he hired a mobile petting zoo for like 400 bucks, I don’t even know the exact number. But it was the most fun at a party. You just sat around and petted like rabbits and guinea pigs. So he does themes. He just did a paddleboard thing where everyone went out on paddleboards in Austin. And he had a whiteboard — he gave a whiteboard to three different people and said, “We’re having a diving contest. The contestants are —” and he’d already planned it — “this person, this person, and this person. You get up front, do your cannonball, and these three judges are going to give you a review.”
Sam: So he directs the experience. He’s not just there hosting, he actually sets up mini competitions and events within the event?
Jonathan: Exactly. And then the second or third crucial thing he does: he has a very specific end time. He goes, “Come on over — the party’s going to end at eight o’clock.” At eight o’clock he goes, “All right everyone, thank you for coming, the party’s over. You don’t gotta go home but you gotta get out of here.” Parties need an end, otherwise they drag on for too long, people don’t want to go anymore.
Sam: That’s actually great because I go knowing I don’t have to sneak out — it’s going to end at a very particular time.
Shaan: Two-hour cocktail party, dude. We just sold the shit out of this book. I’m genuinely interested in this topic. I heard something once — charity: water is kind of known for their events, and they raise a ton of money. Most charity events are the same stale dinner-gala drag. You sort of go and it’s sort of a drag. But charity: water events, you feel like you’re at some Hollywood party. And it’s not because they spend more money — they’re just more creative with the way they create memorable things. Every year they top themselves, which is like this impossible standard. It’s like the Super Bowl halftime show: last year’s was this, this year’s gotta be even bigger. That’s how they treat their annual events. And they raise — I don’t know, like 75 million dollars in a night — and that funds clean water for a lot of people.
I remember asking Scott — I go, “What’s the secret sauce? How do you think about these events? Everybody always raves about them and I’ve never been to one.” He goes, “Oh, that’s my wife Victoria. That’s her thing.” He goes, “She has this phrase: it’s the moments between the moments. The moments between the moments matter.” Everybody thinks about when they plan their event: okay, for dinner we’re going to do this, for the dancing we’re going to do this. But they don’t think about the 20-minute period right before dinner when it’s getting set up, or the five-minute walk between this place and that place. If you do something there, people feel like, “Wow, I’m having a 10-out-of-10 experience — they thought of everything.”
For charity: water, I know that they really thought about the walk between the cocktail hour and the dinner. You could just traverse through a hallway. But what can you do in the hallway that sends the message? And they basically created — I’m making up this exact example because I didn’t go to the event. This is what I kind of remember from Scott telling me while we were drunk six years ago — but it was like a visual experience of a woman in Africa carrying these 60-pound gallons of water. And there’s one sitting on the ground that you could try picking up and carrying. By the end of the walk you’ve had this experience like, “Damn, that was heavy. That was hard. And I only walked 54 steps. She does that for three hours a day just to get clean water for her family.” Are you likely to donate by the end of that?
Sam: Yeah, right. They just used the hallway as this — by the way I appreciate the disclaimer because you just made up a really vivid lie about what they did at their event. Scott’s big on integrity.
Shaan: That’s not exactly what happened. That’s what I kind of remember from him telling me while we were drunk six years ago. But — the moments between the moments is just a good phrase to remember when you’re going to host an event.
Sam: I might write my own book. Screw you, Nick Gray. All right, let’s talk about Colin and Samir.
Colin and Samir: YouTube Strategy Takeaways [00:22:00]
Sam: So these guys came on — they’re like these YouTube guys, they’re popular on YouTube, people seem to like it in the comments. My takeaway, Shaan — do you think being a YouTuber is a good life or not? I can’t decide.
Shaan: I think it’s a good life the way they did it. The daily vlogger style I think is tough. The gaming streamer who’s going to sit in their chair and play video games for seven hours a day, every day — that’s not a good life. Nor is the Mr. Beast model where you have to up your pranks or stunts every month — I gotta come up with a new miracle every month or I lose relevance. That to me is stressful. And to be fair, that’s like 75% of YouTube success. Daily vlogging, stunts and pranks, gaming. Colin and Samir are not in that. They’re an interview show that’s paced out well — one or two a week or whatever. Not as treadmill-y as other content things.
Sam: What I’m learning about through them — what we need to do, and what more people should do — our friend Rebecca texted us and was like, “Our friend Rebecca” — sorry Rebecca — she told us that this guy she worked with went from zero to eight million subscribers in eight months. Or was it three million in eight? I forget the number but I think it was eight million in how many months — twelve? A year?
Shaan: Yeah, all from YouTube Shorts.
Sam: That’s crazy. I never watch YouTube Shorts.
Shaan: I actually do watch YouTube Shorts. The thing is, once I’ve worked inside a tech company, I get it. At every quarterly offsite you’re hearing about the latest TikTok numbers: wow, their growth is crazy, wow they’re blowing us away, wow the stars are going there, TikTok is your biggest threat. TikTok is your main priority if you’re one of these big social media companies right now.
So you release a competitive product — Shorts — you announce it, you put your best people on it, you can’t let that feature fail right away. So you pump the engagement. How do you do that? You put it at the top of every time you open the app — engagement jumps from 10 to 40. Then you add a little Shorts banner every three scrolls. You change your recommendation engine to recommend a Short after every long video. You game the system to give yourself the best shot at that feature becoming successful.
So at least in the short term, if you’re a creator, you say: “Oh, Instagram’s priority was Stories, then Reels — I’m going to make great Reels because that’s what they’re pushing. That’s what the algorithm wants. They’re going to favor that in the UI and the algorithm.” So you get faster growth by piggybacking on the platform’s priorities. I think that’s actually a really good strategy for getting popular on YouTube — just exploit the ego of the social media platform. Give them exactly what they want, and sometimes they’ll give you exactly what you want, which is more followers.
Sam: Are we going to do it?
Shaan: Maybe. It’s clearly a good idea that we may or may not execute on. Just hilarious.
The Grindset Meme Account [00:27:30]
Sam: Here’s a hilarious thing I saw. There are meme pages on Instagram that get a ton of followers — like “Friday Beers,” I follow so many of them, they post great memes. They did a collab with something called — the word “entrepreneur” spelled completely wrong, like some phonetic disaster — and I went and clicked on it. The bio cracked me up. It was like: “Cultivating that multi-trillionaire mindset.” And then the next line: “Mindset is grindset.”
I have decided that on this podcast, our new intro is going to be about cultivating that multi-trillionaire mindset, hashtag grindset. I’m going to start every single podcast by saying that. Somebody who doesn’t know what I’m talking about will be so turned off. But the people who listen to this podcast are going to know that’s the funniest thing ever.
Shaan: Their latest post says: “You keep your money in the bank. I keep my fish in the tank. Think about it.”
Sam: I mean, look — we named this My First Million, and the reason we get flack for it is because it’s in the middle. It’s not trying to be humble and thoughtful about life. But you want to make a million dollars — it’s only a million. When you say “we’re all about that trillionaire lifestyle,” all of a sudden it’s like, hey, we are clearly not trying to be the guy who sells you a dream of making a billion dollars. I think I realized the mistake in the name. The brand should not have been “million.” It should have been My First Trillion. We’re a community of future multi-trillionaires who gather to trade stories.
Jonathan: Read that again.
Sam: Go back and listen again. What was that phrase? Rewind for the two-time double time. Get that multi-trillion mindset, hashtag grindset.
FTX: How a $30 Billion Company Runs on 30 Engineers [00:30:15]
Shaan: Where do you want to go from here? I’ve got one or two topics.
Sam: What do you have?
Shaan: I have a couple. Option one: a really interesting thing I heard about how a big famous company runs — I thought it was kind of mind-blowing. Option two: an idea that I don’t even fully understand but maybe it’s cool. Option three: a random business idea.
Sam: Number one.
Shaan: Okay. So the Milk Road — our main sponsor right now is FTX. Do you know what FTX is?
Sam: Dude, in my topics I have a thing about how they run their company and how it’s weird.
Shaan: Is it about how many employees they have and how many engineers?
Sam: Yes! Look at the doc — I have the exact same topic. Go ahead.
Shaan: Okay. So as part of the sponsorship, we were doing a deep dive on FTX, and I said, “You don’t get to tell us what to write about. I’m going to talk to your head of strategy, I’ll talk to whoever, and whatever’s most interesting to me is what we’re going to do the deep dive on.” I ended up doing it on the seven growth-hacky strategies they used to grow, because they went from zero to a $30 billion company in like three years. I thought that was amazing. Then I discovered something even more amazing, which is that for the first year or so they had two engineers. Even now they have about 25 to 30 software engineers total. And I think they only have 250 people total.
Sam: Yeah, exactly.
Shaan: So Sam Bankman-Fried did this talk at the SOHN Conference — spelled S-O-H-N, it’s a big annual economic conference. If you’ve never watched SOHN talks, they’re basically TED talks but for investors and Wall Street. Bill Ackman goes on there. The format is: a world-class investor gives a talk about a thesis they’re really bullish on, basically pitching a big bet they’ve already made. It has two-fold effects: if you’re in the audience you get investment ideas, and for the speaker they get to build their brand and also pump their bags — they’ve already made the bet, they get a bunch of people to invest, it might cause the price to go up.
I went to watch Bill Ackman talk — our buddy Andrew Wilkinson says Bill Ackman is the best. I went back and found old YouTube videos of Bill at SOHN talking about, I think it’s the Howard Hughes Company, like a homebuilder. And by the end of 40 minutes you’re like, “There’s never been a better investment on earth than the Howard Hughes Company.” You’re so convinced because these guys are very convincing and have a great track record. If you actually go look at the results — the stock chart for whatever Chamath talked about, like Box.com, how it’s going to benefit most from the cloud movement and AI — it’s been down and to the right since that day. But they put together very convincing cases and occasionally they’re correct.
Anyway, at this year’s SOHN, there was a really interesting talk. Sam Bankman-Fried is interviewed by Patrick Collison — one of the Stripe brothers.
Sam: The redhead one.
Shaan: Yeah. And one thing that stood out is: when you watch these Stripe brothers do an interview, it’s basically like, “What if a world-class brain became a podcaster?” These guys are some of the smartest, most well-read, best-executing, most well-connected people on the planet. They were millionaires at like 17, built a $100 billion company. They’re the best YC founders and YC is the best group of founders. You hear their talks, see how they frame questions — that alone is worth the price of admission.
So Patrick asks Sam Bankman-Fried: “FTX — I can only think of one of two things. Either you have a unique set of problems so you can operate your business differently, or the rest of us are doing this completely wrong. Which is it?”
Sam: That’s such a good way to frame a question.
Shaan: And Sam goes — he laughs — “I think it’s the latter.” He goes, “The more I’ve looked at tech companies, Facebook, Google, successful tech companies, I think — I don’t know for sure, I can’t say I know their exact business — but from what I can gather, they employ an order of magnitude more people than they need to.” And Patrick goes, “How many?” Sam goes, “Well, let’s say Facebook has 50,000 employees. That’s somewhere between five to thirty times too many.”
Sam: Which is kind of shocking to hear, but I’ve believed this for a long time. When I interviewed at Twitch for our acquisition, one of my questions was: “How many employees does Twitch have?” They said 1,800 to 2,000. I said, “How many do you think is the right number? How many do you actually need to be firing on all cylinders?” And I got basically three reactions.
First: shock. Like, are you insinuating we hired too many people? No matter how I interpret this question it’s not good.
Second: genuine answer — probably about 15 to 20 percent less, but you don’t know over time who the top performers are, and it’s good to have buffer and redundancy.
Third was Emmett the CEO, who said, “I think 2,500.” Because his plan was to hire and grow.
Shaan: What was your reaction when you found out FTX has like 20 engineers running this large tech platform?
Sam: I think people overhire. I wrote a tweet that said I’m really fascinated with the idea of just hiring fewer people who are higher quality and paying them a lot more, versus hiring a ton of people where by definition most of them are pretty average and you pay them market rate. I like that idea of doing the first thing. But is that actually practical? And even if you get the highest-performing people in a room, does the 80/20 still emerge where 20% of the people do 80% of the work? I think that would still exist, just at a higher caliber.
Also, I understand why you want redundancies. If you rely on five people and three of them quit, you’re screwed.
Shaan: Let me give you the examples. Someone tweeted out Sam Bankman-Fried’s actual tweet after that talk. He wrote: “I’ve looked into hyper-growth companies, and time and time again, growing from 200 employees to 2,000 doesn’t seem to 10x your product productivity as a company. In fact sometimes it doesn’t even increase productivity. Sometimes the more you hire the less you get done.”
Why doesn’t hiring scale the way it should? A: coordination becomes really hard. B: diffusion of responsibility — five people could theoretically do something, but maybe no one actually feels like they have to get it done.
He goes on: companies lower the bar as they hire more. Over time the average co-worker experience becomes worse. Incentives become harder to align as people have less and less of a sense of what each person is doing.
Sam: I completely agree. I think a large percentage of jobs, at least in tech, are bullshit jobs. They’re only there because the person running a particular division has to request more budget and hire more, so they get more responsibility and more credit and they seem more important. So when they go to their next company, they get paid more. The number of people under you is a power consolidation technique inside large companies.
Even if people aren’t doing it for malicious reasons, it’s the incentive. You get a larger group of people to manage, so your incentive is to hire people, promote them to managers, have them hire people, promote them to managers, and have layers and layers. If everybody got the same budget and was measured on how much they got done — and got to keep the extra — companies would work wildly differently than they do today.
Shaan: Sam says, “As far as I can tell, this is the most common reason that successful companies decay. It’s a race between how quickly new employees can understand the culture and how quickly people are hired. The faster you hire, the harder it is to keep everyone on the same page. If you’re growing at 50% a year, maybe you can still mentor each new recruit. But if you’re growing at 300% a year, each employee only has four months to learn before they have to start teaching.”
I remember this even inside a startup. Going from one person to two people, productivity almost always increases. One to two is almost always a win. Two to three is usually a win, but there’s a cost: now you have to have meetings. One person — the whole project is in your head, you don’t have to talk to anybody. Two people — by default you share everything with the other person because there’s only one other person. Three people — no longer does everybody know everything. And I think there’s a rule that for every doubling of your employee base you roughly square the amount of communication required. Four to eight doesn’t just double the communication, it multiplies it by four or more. It’s a nonlinear investment you have to make in coordination. Suddenly you have a 12-person team and it’s really hard to keep everybody on the same page. You’re having all-hands meetings just to keep 12 people organized. Imagine that at 1,200. Imagine that at 12,000. Miserable.
StreamYard: $30M ARR with 7 People [00:42:30]
Sam: Do you want to give the other example?
Shaan: Yeah. Have you heard of a company called StreamYard?
Sam: They’re in your world. Go ahead.
Shaan: StreamYard.com — “the easiest way to create a professional live stream.” It’s basically a broadcasting tool. You go live from a browser.
Sam: Okay cool.
Shaan: So this guy Gage — amazing name, Gage clearly rode a dirt bike to school as a kid — and his co-founder Dan started this company. I think it was for Twitch folks or just streamers to stream, and eventually they pivoted to make it professional so companies could do it too.
They launched in 2019 or 2020 with just two guys. Got it to $3 million ARR — just the two of them. Then the pandemic hits. In one year they go from $3 million to $30 million annually recurring revenue. Zero outside money. Just these two guys.
Sam: Wow.
Shaan: And when they sold — which was in 2020 or 2021 — they basically scaled the company to $20 million in ARR with five people. By the time they sold they had $30 million ARR and had just hired a seventh person. This whole business was built with seven people. Really built with two or three, and the second half they were like, “Our customer service is just getting out of control, so we had to have someone manage an agency doing our customer service.”
Obviously the pandemic accelerated it, but they were doing $3 million ARR with two guys about a year and a half into the business. They sold to Hopin for $250 million in cash, and these two guys owned the whole thing.
Sam: That’s an amazing story. Right place, right time — being ready to surf the wave.
Shaan: You should Google what the founders look like. I’m pretty sure I met these guys at a conference. Gage and Dan — we’re going to call Dan “Dirt.” Gage and Dirt, co-founders of StreamYard.
Deceptively Big Boring Businesses [00:46:30]
Sam: Can I tell you about another business like this that’s just deceptively big?
Shaan: Yeah.
Sam: My buddy Corey — Corey Nicholson, his Twitter is @CoreyNCEO — he tweeted: “Next time you’re stressing over a business idea, just remember there’s a website that simply removes the TikTok watermark from a video and receives 37 million monthly visits and has ads everywhere.”
It’s called SSSTik — three S’s and then “tik.” S-S-S-T-I-K.
Shaan: I’m looking at the traffic now. Almost 40 million monthly visitors for the last six months straight, and it’s just plastered with ads.
Sam: TikTok is a great way to create videos but it always keeps the TikTok watermark. If you post a watermarked TikTok video onto Facebook as an ad — those TikTok videos do great as ads, by the way — Facebook won’t let you run it because it’s got a TikTok watermark, you’re basically promoting their competitor. So you have to get the raw video.
Shaan: This is crazy. It gets like 40 million a month. The US only makes up 8% of the traffic. Colombia, Philippines, Mexico, Peru — Peru is the biggest source at 10%. What a crazy business. Do you think this makes money?
Sam: Surely it makes some money. By the way —
Shaan: Go ahead.
Sam: Okay, I tried to get in touch with who runs this. I don’t have the full story. But — you’re going to love this — go to eggcartons.com.
Shaan: What? Egg cartons dot com?
Sam: It’s just a website that sells the actual packaging you need for eggs. Every form factor — the 12-pack, the 24-pack, plastic, foam, the eco-friendly one. And when that phone number is in your logo, you know this business prints cash. It’s like, every grocery store in America, every corner store in America, they’ve just got eggcartons.com in their phone book.
So I was like, who owns this? If you look up “eggcartons.com owner” you find this woman named Sarah Moore. Her LinkedIn says “Sarah — egg carton and packaging fanatic.” She’s been doing this for four years. Before that she went to Harvard Business School.
Shaan: What?
Sam: There’s this other guy, Paul B. something, who was the owner for 19 years. He’s now semi-retired. I think she bought it from him. And she did this in her 20s. She’s got a private equity company that does eggcartons.com, Fall Harvest Products — which also serves the egg producing industry — and King Supply, which provides plumbing materials to campgrounds and parks.
Shaan: What the hell? Who is this person?
Sam: That’s what I said! I emailed her — subject line: “Holy shit.” First line: “Egg cartons — who would have thought?” I said, “I want to know more about you, I don’t want to schedule time for you or me, so here’s a Google Doc — would you mind just answering these questions?” I’m waiting on her to answer.
Shaan: So this model-looking Harvard grad owns an egg carton business. She owns a plumbing supplies business. In Sutton, Massachusetts. If you look at her picture — what’s your guess what this woman does?
Sam: Enterprise sales at Salesforce, exactly.
Shaan: Yes! That’s exactly what I was going to say. She sells high-end enterprise software or runs an ad agency. She’s crazy good-looking. Harvard person. I would not expect her to do any of this.
Sam: And then if you look at the previous owner’s LinkedIn — it’s a dude, neck sideways, on the phone, someone snapped a candid photo of him at his desk and that’s the best photo he has. His desk has, like, a 1970s World Series baseball from the game.
Shaan: Yeah, his desk has a marble rolling around in his mouth. That is exactly how I would imagine this. This is crazy. How’d you find it?
Sam: I saw the tweet about the watermark remover, went down the rabbit hole, found a PDF that says she purchased eggcartons.com in 2017 after getting her MBA from Harvard. And now she’s got this private equity company doing these three businesses. I was like, “What a fascinating path for somebody who’s just smart and is like — you know what, I’m going to fish where nobody else is fishing. Instead of trying to build the next social app or the next crypto thing, let me identify one of these businesses that’s been around for 20 years, buy it, modernize it, and grow it.”
Shaan: This is a really good find. I love Sarah Moore. Sarah Moore is great.
Sam: My wife’s name is Sarah. I love women named Sarah.
Shaan: Not where I thought you were going with that.
Sam: No — this woman’s awesome. I’m a big fan of the Harvard woman who somehow knows the egg carton business. We’ve got Sarah Blakely, founder of Spanx. Love when pants make you look thinner. Another great Sarah.
The Tweet Behind the Find [00:56:00]
Shaan: Why did the person tweet about it? What was the thread?
Sam: It was kind of a “boring businesses are the best businesses” thread. And then somebody named Patrick B. Johnson replied, “I’ve got one that’s even better — eggcartons.com, this is a multi-million dollar business.” And that was the only reply to the thread. It wasn’t even a popular thread. Some one guy tweeted the first tweet, this guy knew about egg cartons.
Shaan: DM that guy. He knows something. Heat-seeking missile.
Sam: I didn’t reach out because he’s got a picture that makes him look a little crazy. His bio is: “Teen Vogue called me a visionary. Elite Daily called me a genius. Link in bio. Also — at Ramit blocked me is my biggest accomplishment. I’m the founder of Progress Labs.” Yeah, I don’t know. Either he’s awesome or he’s completely not awesome and I just didn’t have the energy to find out.
Shaan: That’s a badass find.
Sam: I’m all about eggcartons.com. If anyone wants to give me a birthday gift — please find Sarah Moore and tell her to come on the pod.
Shaan’s Whole Foods Sourdough Story [00:58:00]
Shaan: There’s this one woman — did you see the tweet where I saw this lady at Whole Foods and I thought it was cool and tweeted about it?
Sam: No, what happened?
Shaan: There was this lady giving out samples at Whole Foods. The product was called Jesha — J-E-S-H-A. It’s like a sourdough mix. Do you know anything about sourdough? There’s one ingredient that’s missing that makes it feel easier on your stomach — it doesn’t have yeast the same way, so it doesn’t make you as bloated. She made a sourdough mix that you can use for pancakes and muffins.
I was just walking through Whole Foods, tried some, was like, “This is great. Is this your business?” She said yeah, she just started it six months ago. Cold-emailed someone at Whole Foods asking if they could sell in the store, and they said yes. Now they’re stacking it on the shelves. I asked about her background and she said, “Oh, I just worked at a fintech startup for a bunch of years. I always wanted to do this. I saved up some money, quit, launched it, cold-emailed them, and figured it out.”
I just tweeted that — a picture of her, the story: worked at fintech, quit, started this in six months, cold-emailed Whole Foods, got in. Two million people read the tweet. She’s me and I had no idea who she was. At the end of the tweet I put, “If you know who she is, send this to her,” and she apparently knocked it out of the park with sales — all from that one little tweet.
Sam: I did the same thing with a pool company — Trek Pools. They sold a ton of pools from that mention. These silly little tweets actually move the needle for people.
Shaan: So if you’re out there and you’d like your needle moved — your boys are available for hire.
Sam: Bribes, actually. Not even for hire. Just bribes. Send us awesome stuff, or cash in a briefcase, and we will move the needle for you. Needle movers.
Outro [00:59:50]
Sam: All right, that’s the episode, I think.
Shaan: Hey, we’re just a couple of needle movers, cultivating that multi-trillionaire mindset. Hashtag grindset. Go back and listen again.