Sam Ratner dropped out of the University of Missouri, built a mobile-first sports betting platform from scratch, and sold it to Fubo TV for $40 million at age 23 — before the product even launched. He joins Sam and Shaan to walk through that story, his post-exit rabbit holes (a lost riverboat casino, vending machines in rural Idaho, a water taxi business at Lake of the Ozarks), and his new AI shopping startup, Showroom. Along the way he shares three investing and life philosophies: never pitch twice, take people at face value rather than their “potential,” and remember that the value is always in the duck calls.
Speakers: Sam Ratner (guest), Sam Parr (host), Shaan Puri (host)
Welcome and Intro [00:00:00]
Sam Parr: All right, we’re live. We’ve got Sam Ratner. By the way, Shaan — I don’t know Sam that well. I think you think I know him well, but I don’t, so I was like, how did this guy get here?
Shaan Puri: He’s here because Ari talked to him on the phone. We do these pre-calls, and I have to say, out of every ten pre-calls we do with people we don’t know, eight out of ten are kind of like, “Hey, probably not a good fit for the pod.” She talked to you and she was like, “You’ve got to have this guy on.” I don’t even know what you did, but you did something — you have some kind of story, or energy, or ideas that she liked.
Sam Ratner: Yeah.
Shaan Puri: Basically what I know about you — and by the way, you’re shockingly young. How old are you?
Sam Ratner: 27. I just turned 27.
Shaan Puri: What I know about you is you had this company that was a sports betting site. You sold it for around $40 million to Fubo TV, like I think before it even launched. But you’ve also done all these other strange things. Like, I think you bought a riverboat casino? You’ve gotten into a bunch of strange things, and for such a young person you’ve done a lot of odd — I mean, just the fact that you’ve done a startup you sold for a lot of money, that’s already impressive. But even among the impressive people you’ve done a lot of really unique things.
All right, so let’s start there. You drop out of college, you start a company, you end up selling it. Can you say how much you sold for?
Sam Ratner: Yeah. It was $40 million.
Shaan Puri: Okay. So you drop out of college, you build a company, you sell it for $40 million. How old were you when you sold?
Sam Ratner: 23.
Shaan Puri: Great. So 18 to 23. What was the idea, and how did you make it happen?
The Sports Betting Thesis [00:01:45]
Sam Ratner: So I had gone to the University of Missouri for a year — Mizzou. Enjoyed my time there, but it wasn’t for me. I always wanted to start a company. When I dropped out, I didn’t have an exact plan yet. But I did always play a lot of online poker. I was very active — I was the kid with twelve monitors playing online poker in the dorm rooms. So I knew the community well.
I started hearing whispers about them legalizing gaming nationally here in the United States, lifting the federal ban. I thought the market would evolve much like it does overseas, where it’s very much part of the culture. You can bet when you’re 18, sometimes 16. You’re betting at the Arsenal game inside the stadium. But here there was a stigma to it. If grandma says she buys a lottery ticket, you don’t think anything. But if she says she took the bear spread, you’re like, “Grandma, what the hell are you doing?”
So I thought, if that’s the case, I sat down and wrote out for hours how I thought the market would evolve. My conclusion was that there would be early players — DraftKings and FanDuel, they have audiences and fantasy — but it would really end up being dominated by either the brick-and-mortar casino companies or the media companies, which is now just playing out with ESPN.
All the technology had been built overseas because it’s been around for fifty years, but it was built in the early 2000s. You had these desktop applications to place a bet, and when they got to mobile they just compressed it into a mobile experience. They didn’t rebuild it native iOS. It didn’t have any good API functionality for ticketing, merchandising, any of that.
So I said, what if I just rebuilt all that, then called these big companies and said, “Hey, don’t white-label this garbage from Sweden and pay some huge rev share — why don’t we just do a deal?”
Sam Parr: Can you pause that for a second? You’re describing what sounds like a pretty sophisticated process. You’re like: I heard there was an inflection point, gaming might get legalized, so I started thinking ahead of it. And instead of just jumping right in with my two dumb friends and starting to build a product, I wrote down how I thought the market would evolve, figured out my go-to-market would be to undercut these rev-share competitors with a mobile-first product. Dude, you were like 18 or 19 years old. I couldn’t figure out how my night was going to evolve, let alone how a market was going to evolve. Was this your first rodeo? Why were you so good at this?
Sam Ratner: In high school I ran a snow removal business.
Sam Parr: Natural pivot. Natural pivot.
Sam Ratner: And so you could call it being in business in a very rudimentary way. We were plowing driveways. But we had hundreds of houses. I kind of knew how to build a business. When you’re fifteen, you’re learning what insurance is because some woman slipped on salt. You’re learning how to finance trucks to get plows. I had this business sense.
Sam Parr: And when you’re talking about plowing — you’re not talking about shoveling. You said “financing trucks.”
Sam Ratner: Yeah, the plows you put on the front of trucks.
Sam Parr: Okay. So you were sophisticated. You’re going door-to-door to get customers?
Sam Ratner: It was me and a good friend of mine, Ilya — who’s now David Dobrik’s right-hand guy, Ilya Fedorovich. We went to high school together at Vernon Hills. Ilya and I built the snow removal business. We’d be at used car lots negotiating.
Sam Parr: How much were you making? Fifteen, sixteen years old?
Sam Ratner: I think we did like fifty, sixty grand for the winter or something like that. And I couldn’t drive — that was a big problem. Ilya only had his permit. So we’d walk to the neighboring town, Mundelein, to go look at the plows. It was complicated.
But what I learned from that is you could scale that business and do really well from a cash flow perspective. Because candidly, most people don’t want to be in that business, or they’re sixty years old and have just been driving the same truck for the same couple commercial lots. But there’s no real value — it can’t scale that large. I was always interested in how big can I make something, and I had that itch.
So I thought, if it’s easy, there can’t be any value in it long-term. If you want to build a billion-dollar business, you have to find things that are a headache or capital-intensive enough that no one else wants to touch them. That was my thought. With gambling I knew I had to really sit down and think about how the market would evolve, then figure out which pieces of that evolution were so painful or capital-intensive that no one would want to do them — and because of that, they’d actually end up being slightly less capital-intensive to build because there’s no competition.
Dropping Out and Living on Credit Cards [00:07:00]
Shaan Puri: When you dropped out, was that an easy decision? And how did you live — because I always wonder this. College is a bubble: here’s your bed, here’s the bathroom, here’s the library. When you drop out you’re neither at home nor in school.
Sam Ratner: My parents were not thrilled, as you can imagine. When you go home after dropping out, it’s like when you grow up you’re my son and I love you, and then when you turn eighteen you’re like, “What are you still doing here?” So I went home and lived with my mom. But I essentially went to Starbucks every morning and worked from whenever they opened — five or six a.m. — until they closed at seven. Then I’d go to Lifetime Fitness. There were no yoga classes after eight, so I’d work in the yoga studio upstairs. They had free coffee, free everything, so I kind of had an office. It got to the point where I started leaving my stuff as a setup in the corner, and I think the instructors thought it was someone else’s class. It was just my laptop and monitor.
I worked out of Lifetime for about a year. And it was cheap — I was under twenty-eight, so I got the reduced membership.
Shaan Puri: How did you fund the company at that stage?
Sam Ratner: Credit cards, baby.
Shaan Puri: What happened to the snowplow money?
Sam Ratner: We had some cash from that, but essentially I knew I needed to go all-in. You have two options if you don’t have tons of cash saved: work a part-time job, or don’t. I was unwilling to do anything but spend every waking moment on the business, so I didn’t want to do that. I went all-in on credit cards.
I’ve always been a zero-backup-plan guy. I purposely failed every final before dropping out so going back was not an option. I’d be going back at twenty-three as a freshman. I’m always a “put it all on the line and you’ll figure it out” kind of guy.
Sam Parr: You purposely failed the finals?
Sam Ratner: That’s what I say too. When I dropped out, I came home early enough that it was kind of too early for my parents to believe I’d finished finals. So I didn’t show up to the finals and I got zeros. Going back was now out of the question, which removed the debate with my parents — they kind of said, “Well, he can’t really go back.”
Building the Platform and Closing the Deal [00:10:00]
Sam Parr: You sold the company before it even launched, right? Like eighteen months in?
Sam Ratner: Yeah, about that.
Sam Parr: All right. Who contacted you? How did they even know you were available?
Sam Ratner: What we had was essentially every component you could want in a gambling platform. We were an authorized gaming operator of the NBA and Major League Baseball. I just willed my way into convincing the leagues to do a deal with me. Candidly, I think they thought I was kind of crazy and kind of cool, and they’re not used to cool and crazy — they’re used to Disney. So they were like, okay, we’ll do the deal with you.
Sam Parr: Explain that. If a nineteen-year-old came to me and said, “Yeah, I’m going to become an authorized gaming operator for the NBA,” I’d be like, “Yeah, man. So what’s your other plan?” How did you pull that off?
Sam Ratner: By that time we had raised a little bit of capital from some venture funds in sports media and entertainment that the leagues knew well. So they were like, okay, this kid called us six months ago and sounds kind of crazy, but now there’s this article out, the people who invested are from 76 Capital who also invested in a bunch of companies we have deals with, and our lawyers represent ESPN and a lot of other people. You have to put the pieces in place that give them some gut feel — he’s not just crazy, he’s crazy and he has some people we know.
At the time it was DraftKings, FanDuel, MGM, Barstool, and then us. The league was also a little careful — like, “We’ll do this with you, just don’t tell anyone right now.” So we had all these assets: authorized gaming operator status with those leagues, market access — the licenses — and we’d passed compliance in most of the legal states. Back then it was seventeen states.
If you wanted to be in the gaming business, most public boards of directors had no interest in going through a regulatory process. They have to disclose their financials and go sit in a room in Atlantic City with regulators and convince them why you deserve the license. It’s an old-school process. We spent the money and went through the pain of building the platform, getting it through compliance, getting the licenses, getting the league deals. And we knew what we really wanted was an existing audience in sports. If we went and raised $100 million, DraftKings at the time was spending $100 million on corporate travel alone — that wasn’t going to move the needle without existing users.
So we started talking about joint ventures with a handful of companies. Fubo TV had just gone public, put out a proxy saying they wanted to be in the gaming business, and my phone rang. It was Fubo TV.
Sam Parr: And they bought you for close to $40 million?
Sam Ratner: Yeah.
What He Did With the Money [00:15:30]
Sam Parr: What did you do with the money?
Sam Ratner: I have it.
Sam Parr: I mean — that’s a lot of money for anyone, particularly a 23-year-old. What did you invest in?
Sam Ratner: I’m mostly in the market. I have these small, random, crazy investments that I feel really good about, but I’m mostly in the market. Here’s why I’m long: if I want to do other things with the money, I’ll simply take a loan against my portfolio and take the risk. If you sell the stock, you have a taxable event. You get less. If you wanted to put a million bucks into something, you can either sell a million dollars in stock — huge taxable event, paperwork headache — invest it, and if it goes to zero you’re screwed. Or you take a line of credit against your portfolio in an index fund like the S&P. They keep a million-two as collateral and I get to take my million-dollar shot. If it doesn’t work, all I have to do is wait, because in eight years the stock would have doubled anyway, given interest rates.
So I was down millions and millions during COVID, but if you’re never selling, it just doesn’t really matter. I kept what I needed in cash, but other than that I’m pretty much in the market.
The Riverboat Casino Story [00:18:00]
Sam Parr: That’s where your story gets kind of interesting. I read in our notes you bought a riverboat casino? What the hell is that?
Sam Ratner: When you’re in the online gaming business, everyone who’s in it for the most part is the old Trump gaming people. All the regulators are the same. One time we got a document and they sent us the wrong copy because my partner Scott’s name was in it from when he was president of Trump Entertainment Resorts — The Regulators had just never changed. So while the business is techy, the industry is not.
Everyone you meet has been in the casino business for fifty years. And I stumbled into this riverboat because, to get a gaming license — unlike a cannabis license where you can just apply as a dispensary — you have to get what’s called market access. You’re subleasing licenses from the ones that have them, and the only people that have them are the brick-and-mortar properties.
Here’s why: we took land from Native Americans, allowed them to have casinos on reservation property. Then in 2018 the government said, “We’ll just legalize online gambling.” The tribes said, “No one’s going to come to our properties anymore — you just screwed us, so you should give us the license to sublease.” Then MGM and Caesars and everyone went crazy: “We’re the biggest tax revenue drivers in the country besides oil, so if the tribes get them, we get them.” Everyone got them. Riverboats counted as brick-and-mortar properties.
Sam Parr: And I grew up in St. Louis. So when you say “the casino,” we wouldn’t even say “casino.” We’d say “the boat.” “Let’s go to the boat.” Some of them actually are boats, but a lot of them are just a proper structure that’s floating — they built a building on a barge. No engine room. It’s like building a house and shoving it out into the water and tying it there.
Sam Ratner: Exactly. So I was talking with a buddy after I left Fubo, and he was showing me a picture of his grandfather in Atlantic City. In the background are these riverboats. He said, “What happens to these things when they’re done with them?” I had no idea. I hung up and thought, that’s kind of interesting. I’m unemployed, I don’t have much to do.
So I emailed the general counsel of a casino company we’d done a license deal with at Fubo. They were a riverboat property in Iowa. I called him and said, “Hey, Bill. Your boat’s really old. I heard you guys were thinking about building a property on land. What are you going to do with the cruise ship sitting in front of the property when you’re done?” He said, “When you couldn’t build brick-and-mortar properties, there was a market for them. But now no one wants them, so they kind of just end up in junkyards.” I said, “You scrap them?” He said, “Probably. Who would ever buy them?”
Then almost like a movie, I’m hanging up and I hear, “Hey, Sam — Sam, Sam, Sam.” And he said, “We don’t know where it is, but we think somebody somewhere in Iowa has the Catfish Bend.” He was talking about the Catfish Bend Riverboat Casino.
I’m unemployed, I have nowhere to be until noon, it’s 10 a.m. I’m going to give myself an hour and a half to try to find this boat just for the pure fun of it. So first I called every junkyard in the tri-state area — Chicago and Iowa. There was this place in Des Moines, and this guy answered. I said, “Who’s the oldest guy at the junkyard? Who’s been there the longest?” Everyone on the line starts yelling: “Oh, it’s Ricky! Go get Ricky!” This Ricky guy gets on the phone and he says, “Catfish Bend? I would never forget if Catfish Bend came through this junkyard. We’ve never seen it.”
I talked to twelve Rickys. The boat had not gone to a junkyard. So I assumed it’s still out there. Then I remembered: one time I got a ticket on my uncle’s boat and wave runners in Chain O’Lakes. If you don’t pay it, it ends up on the fishing and gaming ticketing site. I thought, whoever is goofy enough to buy this thing definitely got a moving violation — this is a cruise ship, not a Corolla. So I went to the site and clicked through hundreds of pages of tickets looking for a random entity. On like page 190-something, I saw “CFFB LLC” or something like that — some acronym. I kind of went past it, then thought, “Catfish Bend… that kind of fits.” Clicked it. Boom. Big vessel moving violation, $222,000 ticket, from the company that bought it at auction.
I read the court filing. Essentially, Catfish Bend built a brick-and-mortar property, left the boat to rot — knowing the city would pay to clean it up. They auctioned it off to a marina construction company in Northern Iowa that does work with the Army Corps of Engineers fixing submarines.
I called a buddy in Iowa. I said, “What do you know about this XYZ Enterprises?” He said, “What are you buying a boat?” I dropped everything — I was like, “How did you know I was talking about a boat?” He said, “That company — they fix everyone’s yachts.”
So I called them. Their website was from the nineties, the phone number was floating at the bottom. I called and said, “Who’s the oldest person at this company?” They put this ninety-year-old man on. I said, “I’ve got a crazy question for you.” He cut me off and said, “Tell me you’re looking for the Catfish, baby.”
I said, “Do you have it?” He said, “Yeah. I’ve been looking at it every day for twenty years.” I said, “No one knows you have this — why?” He said, “We’re quiet.” Then he said, “Why are you calling? Do you want to buy it?” And I think my wife heard in the other room and looked at me like, “You are not buying this thing.” I smiled and said, “Maybe.”
He said, “Why don’t you come see it?” So long story short, I drove to Northern Iowa. It was sitting in a quarry. He had planned to scrap it for parts but it became too cost-intensive to get the engines out. I persuaded myself to buy it.
Sam Parr: What’s the game plan?
Sam Ratner: So first of all — it’s three interior stories, all connected by elevators. It’s a full-blown casino vessel. It’s 40,000 square feet of some of the most unique real estate ever. When you walk in you think you just walked into Las Vegas with Elvis Presley — the walls, the floors. When I bought it, all the blackjack tables, all the craps tables were still there. So I thought: it could be a movie set, I could open up a casino, I could turn it into a restaurant or nightclub. I had some loose ideas.
I spent about a year going down the path to open up a casino. There aren’t many riverboat licenses left in America. I was meeting with the chairman of one of the largest gaming companies in Goa, India — he controls the vessel casinos there. Long story short, that became too cost-intensive. He introduced me to a deal in Southeast Asia, and we had it on the one-yard line. Some of these countries are pretty corrupt, and they made a big ask. My lawyer said that ask is not happening. So now I’m pivoting toward partnering with someone to open a really cool restaurant or entertainment venue and moving it somewhere down south — Florida, Nashville, the Cumberland River, something like that.
Sam Parr: What did you end up paying?
Sam Ratner: I might want to tell you that off the pod. Over or under seven figures?
Sam Parr: Under?
Sam Ratner: Under.
The Vending Machine Deep Dive [00:30:00]
Sam Parr: This seems like a crazy thing to be working on when you could be building websites or doing other things. But you’re interesting in that you root out these really off-the-wall ideas. You were looking at vending machines too, right?
Sam Ratner: Yeah. Everyone was talking about vending machines all over Twitter — “Vending machines are the next gold.” I was like, okay. But like anything else, before I say no, I go down this path of doing some diligence. I found a listing on BizBuySell or one of those sites where you can buy a company. There was this rural operation in Lewiston, Idaho — not even Boise, Lewiston, there’s nothing there. I had looked at twenty companies and they all did about the same margins. This company did like three times the margin. I thought, either they’re lying or something’s going on.
The broker convinced me to fly out. I get into this remote airport, drive forty minutes to this warehouse, and when we open it up it is a full-blown operation. They had hundreds and hundreds of vending machines they didn’t even have out yet, already stocked. More inventory than I’ve ever seen. Like they ran a hospital.
I said, “There’s no way the numbers I read match this business.” He said, “Yeah, they own five regions. We listed one, but if it was the right person we’d probably sell them all.” I tried asking a bunch of questions and he kept saying, “You just have to go out with Roger” — or whatever his name was — “and you’ll know why everyone loves vending machines.”
So I spend all day in Idaho in the pouring rain. We drive around Lewiston, and I realize: there are no grocery stores, no convenience stores, no Foxtrot coffee. They rely on vending machines. It’s FedEx distribution centers, it’s where they build all the turbines for the wind fields. It’s working-class America, and every lunch break, people just go to the vending machines. A warehouse will have fifty of them — snacks, cold food, hot food. Everything they eat on the working day comes out of a vending machine.
So I said, “Okay, every meal of the working day is coming out of a vending machine.” Then I dug into how the business works. Usually you’re buying a contract from Coke or Pepsi and you’re obligated to sell their product. They give it to you at a rate and you have to use their machines. Those are on five or ten-year deals.
During diligence I asked for all the contracts with Pepsi and Coke, because I knew the local warehouse didn’t want to deal with getting new machines — it would just be disruptive. But here’s what I realized: all of his contracts with Coke and Pepsi were expiring soon. The biggest line item was the cost of goods from Coke and Pepsi. I thought: what if I just didn’t renew with them? I can buy a store-brand Twinkie wholesale for ten times less than I have to buy a Twinkie for. So I read all the contracts, called lawyers in the vending business, asked if I had to renew. They said, basically, no — you need to get new machines, but there are companies that’ll finance them.
I went in and talked to the workers at a distribution center. “Do any of you guys care if it wasn’t Fritos anymore?” One guy said, “Would it be fifty cents less?” I said sure. He said, “I don’t care what it is.” And I thought: the margin is there if you strip out the branded product.
Near the end of diligence I’d just had the idea for my next company, and I came to the conclusion: I don’t want to end up having to move to Lewiston, Idaho because I bought a vending business and need to save it. While I think it’s an unbelievable opportunity, I chose not to do it.
Sam Parr: How big could it have been?
Sam Ratner: It was 5,000 machines. I probably would have made like a million-two, million-three a year. But I’d have to run it. I’d have to pay drivers to go service the machines, have inventory in Lewiston. I thought, am I going to move to rural Idaho?
Sam Parr: If that business is doing a million a year in cash flow, what does it sell for?
Sam Ratner: I think they wanted four million, five million for the business. I went to a bank, they wrote up a loan, I was going to finance it. And then I thought, what if I end up having to move to Idaho? That’s a problem.
Sam Parr: Your due diligence on these things is pretty in-depth. Most people, myself sometimes included, will do a few Google searches and it kind of ends there. You’re flying to places and meeting people.
Sam Ratner: I mean, within five minutes on the back of a napkin you know if a deal makes sense. But I always try to figure out: how do you make this business five times better? Not ten percent better. Everyone tries to make it ten percent better. I only go after it if I can see the five-times path.
With the vending business, the answer was obvious once I read the contracts — strip out Coke and Pepsi. With vending it works because people at the job will buy whatever’s in the machine. I talked to the workers. They confirmed it. That’s where the value is.
The Water Taxi Business at Lake of the Ozarks [00:40:00]
Sam Ratner: There was another business that would actually, in my opinion, have been a lot easier than the vending business in Idaho.
About two summers ago, a lot of my friends went to Mizzou, so we go to Lake of the Ozarks for Fourth of July. The Redneck Riviera — home of the wet t-shirt contest and lost GoPros at the bottom of forty feet of water.
Sam Parr: That’s actually a good business, Shaan. You hire divers — there’s probably millions of dollars of GoPros at the bottom of Lake of the Ozarks.
Sam Ratner: So I’m at Lake of the Ozarks and I hadn’t been since I left college. We needed to get from our Airbnb to a place called Shady Gators, which is — Sean, if you Googled Shady Gators, I think you would say you’re not going. It’s classic spring break.
The bridge at Lake of the Ozarks is on the far side from our Airbnb, and the only way to get there is to drive all the way around the lake — like a fifty-minute Uber. Instead, they have water taxis. My buddy said, “Just call a dispatcher, they’ll send one.” I was like, what am I, in Venice? So we call, and seven seconds later this guy pulls up to our Airbnb on the water. We just get on.
All my buddies are drinking, on their way to Shady Gators. All I can think about is: how much is this guy making right now? I whispered to my buddy, “How much are we paying?” He said, “$250, split between five of us.” I said, “I’m sorry — this is like a three-minute ride.”
When we arrived, all my buddies ran into Shady Gators and I am locked on this guy. I said, “Hold on a second. Do you own this thing?” He wanted to feel like it was a company — he had the brand on the boat and everything — but yeah, he owned it. He said “we,” and I was like, okay, there’s a “we.”
I asked him what “spewing cash” meant exactly. He said, “I have three boats. All I do is have a dispatcher. She sits behind a monitor with a live feed — they’ve got a drone over the lake — and she can see where all the boats are, plus GPS. When people call, she can see their location because of some platform. She loads the destination into the boat’s thing, the driver clicks accept, and they go. Just like Uber.”
He said each boat made him about $400K a summer. Three boats: about a million-two a year.
He built it from nothing — started with one boat, used the money to buy another. But he didn’t know you could just finance a boat. He’d wait until he could pay $90K cash for a speedboat. I said, “You can just put down nine grand, like a car, and have ten tomorrow.”
He said if he had twenty boats it’d probably be too many, but he could probably fill ten as much as he fills these three. He just didn’t want to spend the cash — he used it to buy a lake house. Classic.
So I called him later and said, “Hey, would you sell me this business?” He said, “Sell you this business? I never thought about that. I don’t even know what it’s worth.” My thought was: blow this up to fifteen boats on Lake of the Ozarks, then go to Orange Beach, Alabama, then Baton Rouge, Louisiana — where you need to get from Tiger Stadium to Fred’s bar — and build out the water taxi business town by town.
Water is the one vertical Uber and Lyft don’t have. I called executives at those companies and they said it’s too regional, weather’s a problem, they’d have to own boats, dock them — too complicated. But they also said, “We’d buy it if it existed. We just won’t build it.”
I ran all the numbers. But I had decided when I left Fubo that the next thing I worked on, I had no interest in it if it couldn’t be worth at least a billion dollars in five years. The water taxi business, at the absolute ceiling, if you executed perfectly — it was maybe a billion. Too much physical liability, too many logistical issues. So I chose not to do it. But I think it’s a big opportunity, and I think we’ll see Uber buy some water taxi company around 2028.
The Blue-Collar Teal Fellowship Idea [00:52:00]
Sam Parr: You’re like the walking blue-collar side hustle. All these ideas are so Middle America — just hustle and ingenuity. You’re finding interesting opportunities that are off the beaten path. It’s like: you want to do things that 99% of people in the top 20% of IQ aren’t looking at. So now you’re operating in a field of your own.
I kind of wish this existed nationally — because what you’re finding is a bunch of opportunities you know how you’d execute, but they’re no longer worth your time or the schlep you’d have to eat to do it. You were willing to do that with your first business, but now on your third business you’re less willing.
Peter Thiel did this thing called the Thiel Fellowship where he paid kids to drop out if they were exceptional. Out of that came Figma, Ethereum, some multi-billion-dollar companies. I feel like there should be a blue-collar Thiel Fellowship where we go post a flyer on campuses that just says, “Sick of this? Drop out and make millions.” Let’s see who shows up. It’s going to be the person who says, “I’m probably down for this. What else am I going to do — go to organic chemistry right now?” Five of the eight people at the seminar leave halfway through because they think it’s a timeshare presentation. Of the three remaining, there’ll be one person who says, “You’re telling me you’ll help me find a business within a mile and a half of this campus that could make me $9 million if I just focus for three years? I’m sitting.”
At Duke there was this bar called Shooters — our version of Shady Gators. If anybody went and bought Shooters, you now have a monopoly on the nightlife scene of Durham. Every single student will go there. The place just hasn’t changed. If the mechanical bull took Apple Pay your revenue would go up ten percent. There’s just a bunch of easy wins by thinking about things slightly differently. During the day it needs to be a yoga studio. At night it becomes the nightclub. Now you’re going from maybe ten percent usage to forty-five percent. That’s how you do your five-x.
Sam Ratner: The problem with the businesses I found is that if the value is in the fact that it’s remotely located, it’s difficult. You can’t scale Lewiston, Idaho out of Lewiston, Idaho. But the reason I loved the water taxi thing is there are ten or twelve great water-lake towns in America. I liked that better. My concern was: when I really forecasted it, it’d take five to seven years, and I just wasn’t willing.
Sam Parr: Yeah. But for a lot of people, that’s not necessarily about retiring — it’s that when you’re at zero, $7 million sounds like all the dollars. And once you have $7 million at twenty-four and your friends are paying off student debt, you learned so much and you have financial freedom. You can go chase down a river for nine months where other people wouldn’t think to go. It’s a gateway drug into doing more and more interesting things.
Showroom: The AI Shopping Startup [00:58:00]
Sam Parr: All right. You have a new company now. Is this the one you think is going to get to a billion?
Sam Ratner: So — Showroom. When I was at Fubo TV, when I left, we were doing about a billion dollars a year in revenue. About $700 million was monthly subscriptions, and about $300 million was advertising. When you scale a streaming business, the advertising is the whole business.
I thought: why are these brands coming to Fubo TV? We’re big but we’re not massive. What’s the play here? Traditional cable is too expensive. Disney Plus, ESPN Plus, and Hulu — all owned by Disney — are at a scale where pricing is similar to being national. We were small enough that if you wanted six zip codes in Nashville, we’d give it to you.
The sentiment from these brands was: it’s very hard to get in front of consumers. Google Shopping — while okay for users — is unusable for merchants because no one’s outbidding Calvin Klein for the word “underwear” or “black denim jacket.” It’s become way too corporate. I think something like eighty percent of the brands that buy keywords for fashion and footwear on Google Shopping are a few hundred brands, but there are tens of thousands of brands. Most of them aren’t there.
I was in a meeting with the former CMO of a direct-to-consumer cowboy boot brand. She made this interesting comment: “We waste about fifty cents of every dollar we spend on Google.” I said, “What do you mean?” She said, “We pay about four dollars to own the word ‘cowboy boots,’ and half the time someone looks it up it’s a third-grader looking for a photo to cut out for a poster. They have no intent of buying $700 boots.”
Then she said — this was the first time I’d heard this concept — “That’s why vertical search is so great.” She’d been a senior executive at Cars.com. She said, “People look up Toyota on Google for all kinds of reasons. But if they look up Toyota on Cars.com, they’re a buyer or a seller. There’s high intent. They’re not just browsing.” That’s Google’s real competition — all these vertical places to find what you want that have a better experience than traditional search.
So I called as many engineers on the Google Shopping team as I could get to talk to me. The sentiment was: “We want Google Flights to be a great experience for users, but not at the detriment of stepping on the toes of our largest advertisers — Expedia, Kayak. We want them to pay and battle it out.” My conclusion was: could this be done better now?
I was very anti-crypto — still am — and when AI started coming out I had that same initial sentiment of “Eh, this is crypto again.” I changed my mind.
If I showed you two black T-shirts, one from Lululemon and one from Gap, and removed the brand names, the product descriptions are shockingly similar. They’re both just describing a black T-shirt. The sentiment of the brand is what tells you what that shirt is for. Lulu’s shirt is for one thing; Gap’s could be an undershirt.
Without a language model that understands brand sentiment at scale, you’d just end up with Google Shopping again.
What we’ve built is a huge infrastructure — thousands of merchants, tens of millions of SKUs — that organically comes into this dataset. We’ve trained a language model to understand nothing besides what’s in that dataset. A consumer can have an ongoing conversation with what is essentially an inventory of every brand in the world.
The reason shopping has always had these big opportunities is that everything else has been dominated by Amazon or Alibaba. They dominate the cheap-fast-fashion sector. But Gucci’s not on Amazon. Burberry’s not on Amazon. Every brand at Neiman Marcus, Away luggage — they’re not on Amazon. So companies like ShopRunner came along saying, “We’ll be the Amazon Prime for everything Amazon doesn’t have.” They scaled and sold to FedEx for hundreds of millions. The founder’s on our board at Showroom.
There’s always been this opportunity in fashion for product discovery. And prior to language models, this would have been very, very hard to build — because you lacked the brand sentiment layer.
We’re launching the beta shortly. We have thousands of people on the waitlist. We have revenue-share deals with every merchant on the platform, ranging from five to twenty percent depending on the brand.
Sam Parr: It sounds like what you did before with the betting site — you went to the brand side. You’re thinking about what’s the problem for advertisers, but it seems like with consumer products the hardest part is getting the consumers.
Sam Ratner: I’m not scared because inherent in the platform is the transaction. So there are transaction fees, merchants pay revenue shares. If you’re a consumer platform for entertainment, engagement is your metric — and social entertainment is a commodity now. That’s why Netflix does originals but everyone else — Fubo, Hulu, ESPN — just has the same channels. But if you’re a platform where there are transactions, inherent in the experience is transacting. That’s where you make money.
Companies like Pinterest got a big audience and then went social instead of commerce. To me that’s a huge mistake. Nobody minds paying fees on things they were already going to buy. People complain about Airbnb fees but they were already booking something.
Focus on the consumer. Forget everything else. If the consumer wants it, everything else is noise. You can push it through.
Life Philosophies [01:12:00]
Shaan Puri: I want to ask about the way your brain works. Before you came on, you gave us a couple of life philosophies. I want you to explain them.
Number one: “Never pitch twice.” What is that?
Sam Ratner: Every investor I’ve ever had, the moment I pitched them and walked out of the room, they called me twelve times and showed up at my door in Chicago. Same with employees — everyone who ever wanted to join the company wanted to drop everything to join the moment they made up their mind.
In my opinion, raising capital is an informative process, not a persuasive one. Within five minutes of getting on a call, I think you have a ninety percent cemented view of what you think of the person. When I’m pitching, I’m informing them of what we’re building. If they have legitimate diligence questions as follow-ups, fine. But I never ask twice, because I know that everyone who’s ever really wanted it didn’t need to be asked twice. They loved it.
If you’re ever trying to persuade them, you’re on the wrong side of the table from a negotiation standpoint. I know that if I need to sell it again, they didn’t want it. That doesn’t mean luck can’t follow from ruthless follow-ups — there are stories like that — but there are thousands of funds. Capital is pretty cheap if you have a great business. I move on to the people who are so excited that they’d get on a phone on Christmas.
Shaan Puri: Here’s another one: “The potential you see in others is not real — it’s rarely realized. It’s simply a mirror of what you would do if you were in their position.”
Sam Ratner: I have this massive list on my phone of concepts, and I’ve been trying to boil this one down to two sentences for a while. I saw someone on Twitter say it perfectly: the potential you see in others is rarely realized — it’s simply a mirror of what you would do if you were them.
I’ve spent a lot of time in my life feeling like I could see so much potential in someone, but it’s like dragging a bag of bricks. If they don’t want it on their own, you just can’t change them. What I see in them is really what I would do if I were them — not what they want to do. That’s different from coaching people up, which you can absolutely do. But if they don’t want to be there, they’re not going to show up to the gym and box for twelve hours a day. If you think they’re a great boxer and they show up every day, okay, you can coach them. But if they don’t want to be there, you’re wasting effort.
What do they love doing as much as I love running businesses? Find that, get that task into your business, and they’ll be great. Otherwise they’re better off somewhere that actually wants that skill set.
It’s like when your high school coach looks at the 6’8” kid on the volleyball team and says, “You could play center at Duke.” But he just likes volleyball. Anytime they’ve ever gotten that kid to play basketball, he doesn’t care, he doesn’t come to practice, he’s never very good. He doesn’t realize the potential because he doesn’t want to realize it.
Shaan Puri: All right, last one. You have one that says: “The value is in the duck calls.”
Sam Ratner: Me and my best man, Jonah Roberts — he’s from Memphis — he wanted to take me to the Bass Pro Shop, which is like the Holy Grail. We’re walking around for what felt like hours and we cannot stop dying laughing. Every product you could ever imagine for hunting and fishing and home tools. Right when we think we’ve seen everything, we come around a corner to the back of the store and there’s this big room — almost like when a guitar store puts the expensive ones in a separate room. There’s a sign that says “Duck Calls.” There’s a glass door. We open it, and there are what felt like 100,000 duck calls. Metal duck calls. Polyester duck calls. Stone duck calls. Duck calls with two heads. Different colors. It’s like this whole economy of duck calls we didn’t even know existed.
What I realized is: the reason I dig into vending businesses and riverboats and water taxis is because the value is in the duck calls. The value is in the things that no one knows about — the odd things that have these niche ecosystems of communities. The people who love duck calls trust me, they love duck calls. They’ll pay a thousand dollars for a duck call they collect but don’t even hunt with. It’s a big thing. I never knew about it.
So whenever I hear about something that could be really big, and then I hear people around me say, “I’ve never heard of that — who would ever want that?” I go find some random brand’s site in that space, and they have 800,000 followers and do $5 million a year. That cements to me: the value is in the duck calls. It’s in the things people don’t know about, or are too complicated to find, or are regional, or niche.
Me and Jonah always say: the value is in the duck calls.
Closing [01:24:00]
Shaan Puri: Are you going to call your shot now? Your new business — in five years, worth a billion dollars?
Sam Ratner: That would be the goal. I wouldn’t not work on it any other way. Every day I wake up, it’s like owning a building or owning a stock — you’re choosing to buy it. And every day I choose to work on this, I think more and more that this is definitely going to work. The moment I think it’s going the other way, I will not work on it.
Shaan Puri: We’re going to look back on this December 2028 and see if you nailed it. But I have a feeling you’re going to do something amazing. We appreciate you coming on, man. You’re awesome.
Sam Ratner: Thanks for having me. I’ve been following the pod since you started in 2019 — I used to watch from the Lifetime yoga studio.
Shaan Puri: That’s amazing. Thank you for coming on. All right. That’s a wrap.