Sam and Shaan riff across a wide range of topics — from the history of hedge funds and incentive psychology to startup equity pooling ideas and the Figma seed pitch video. The centerpiece is Sam’s “Billy of the Week” deep dive on Roger Federer: how he went from underpaid Nike athlete to tennis billionaire by signing a life-changing Uniqlo deal, doing an equity deal with On Running, and betting on himself at every turn. The episode closes with a parallel story on Floyd Mayweather’s vertical integration playbook and Al Haymon.
Speakers: Sam Parr (host, co-founder of The Hustle), Shaan Puri (host, founder of Milk Road)
Cold Open: The Billionaire Athlete Club [00:00:00]
Sam: I saw that Roger Federer was one of — he’s part of the Billionaire Athlete Club. There are five athletes who have made a billion dollars: Tiger Woods, Floyd Mayweather, LeBron James, Ronaldo, and I think Michael Jordan — maybe Messi — so that might be six. I think it’s five. And now Federer is in that club.
Adam Levine Tangent [00:00:20]
Shaan: The whole Adam Levine thing is ridiculous. Is that in like the “Santa’s fake” section of the newspaper as well? It’s just the most obvious thing. People are acting like it’s a big deal. It’s like, dude, what do you expect? Look at the guy. Of course he cheats.
Sam: I don’t even know the story. Why did he cheat? What’s the controversy — did he do something really crazy?
Shaan: I only read the headlines. I think he just texted his yoga trainer on Instagram and said “I want to roll around naked with you all day,” and then he texted this other lady saying like “hey, why are you so hot?” or something. And then weeks later he texts and says “hey, my wife’s pregnant and we’re gonna name the baby your name — is that cool with you?” Which is super freaking weird. But I don’t know if he did anything wrong legally. He’s just doing what guys with body tattoos who live in L.A. do, you know? You just cheat.
Sam: He’s got the face of a cheater, right? I mean, this is obvious. The bottom of your tattoo sleeve is just a place to put your number. I wouldn’t have gotten this sleeve as a married man if I wasn’t trying to play the game.
Fitness Dip: Sam’s New Invention [00:01:30]
Sam: Speaking of bros — I think I’ve just invented something. I’ve been doing this for the past few weeks. I call it “fitness dip.” You know how people dip tobacco? They put stuff in their lip?
Shaan: Yeah, chewing tobacco — you put it in your lip. I’ve heard of it, but you’re the only guy I know who does it.
Sam: So lately what I’ve been doing is putting powdered peanut butter — have you seen PB Fit? It’s like powdered peanut butter.
Shaan: Yeah, that stuff’s great.
Sam: I just get a tablespoon of it and I stick it on the roof of my mouth and just suck on it for like an hour. It’s my fitness dip. It just keeps me from — it’s like a pacifier for you.
Shaan: Yeah, keeps you — it’s like chewing gum almost. You can’t eat anything because you got that on the roof of your mouth and you’re just sucking on it real slowly.
Sam: That’s my new fitness dip.
Shaan: All right, so how do you get an idea like this? I’m not saying it’s a good idea — why are you thinking “I need something on the top of my mouth, what can I do”? I’ve never even wanted to put anything on the top of my mouth. Like, taking foods and being like “what if I stuck this here for an hour — would that be better than just eating it?”
Sam: I go to the store and I look at all the products, looking at new stuff, and it says to add water and I’m like — what if I don’t? What if I just eat this as plain powder?
Shaan: Add water? Don’t tell me what to do.
Sam: It works. It works. You should try it.
Shaan: I definitely will not.
The History of Hedge Funds (A.W. Jones) [00:02:45]
Shaan: All right, what do we got today? You got ideas?
Sam: I’ve got topics, I’ve got a ton of stuff. Let me — we can start off with something. One thing that I don’t know is actually interesting or not — you tell me. I’m reading this book called More Money Than God. It’s about the history of hedge funds. You know anything about hedge funds?
Shaan: Not a lot. Tell me.
Sam: I’m only in the first half of the book so I can’t tell you much about how they operate now — we’re still in like the 1980s. But basically the guy who invented it was called a “hedged fund” and his name was Alfred Winslow Jones, A.W. Jones is what they called him. He was a journalist for Fortune magazine, just a writer. This was in the ’30s and ’40s.
Shaan: For some reason “hedged fund” is so funny to me. Like I know it’s real, but it just seems like something we would say wrong trying to be smart — like “yeah, I’m looking at investing in some head-” — and people would be like “is he putting a ‘D’ in there?”
Sam: So it was called a “hedged fund” and he was researching for an article on stock pickers. He found this small group of people doing slightly different stuff, and at the time rich people viewed Wall Street and equity investing as just a way to preserve wealth, not really grow it.
This guy A.W. Jones was in his 40s, a journalist, and he goes, “with these guys and this mathematical formula stuff they’re doing, it’s actually really interesting.” So he raises I think a hundred thousand dollars at the time. The dumb way of explaining it — which is the only way I understand it — is that he does a combination of going long on things with borrowed leverage. Like, if he invests eighty thousand dollars he borrows another fifty thousand, so he’s now a hundred and thirty thousand into a stock. Then with the rest he buys shorts, in a combination where his upside is much higher and his downside is a little protected.
But here’s where things get really cool. That itself wasn’t the revolutionary part. What he did that had never been done before: he hired these young stock pickers and instead of giving them a salary, he said, “All right, you work for me. I’ve raised a million dollars — you get fifty thousand, you get fifty thousand, you get fifty thousand. You can go hire two people to work with you. You’re your own group. Get after it. The person who does worst? You’re out.” And he created this cutthroat culture.
He was the first person to make it so they were only paid a percentage — twenty percent of future upside. At the time he did it because it was capital gains tax treatment rather than income tax, so the tax benefits were way greater. But he told his folks, “The reason we’re doing this is Phoenician sea captains used to keep a fifth of the profits of successful voyages.” He didn’t say “it’s just a tax thing” — he gave this weird historical justification. But that team incentive structure is what changed everything. Prior to that, Wall Street was just the stodgy sleepy place of “80 stocks, 20 bonds, let it sit there.” Once he changed that incentive structure, everything changed.
That’s kind of been sitting with me because at The Hustle we used to do something similar — for our sales quotas we’d say, “go out and get ad sales and you get a percentage of what you close.” But then they would close dumb stuff. They’d close a porn company, a weed company, a shitty service — didn’t matter to them. And then we’re like, “well, actually — is the click-through rate high? Do readers like this? Do they renew?” And I couldn’t figure out how to do that successfully.
Shaan: I thought for sure the story was ending with “so then I created a better system and it worked beautifully.” You’re like, “I couldn’t figure that out.”
Sam: That’s too bad. I would have bet anything you were about to pat yourself on the back. Nobody ever tells a story like that in tech — nobody says “we kind of hit this problem and didn’t solve it.” I love that you just told a story like that.
Sam: With my new business I’m trying to think, how do I solve this? And I was researching different ways to change incentives to get a different outcome. Have you ever had that — with Milk Road or anything you’ve done — where you just change the incentive and this other thing changed?
Shaan: I don’t have a great story off the top of my head. We did one where we needed to fill all the ads for some future month, we were a little light, and Ben was like, “if we just told our salesperson we’ll give him an extra 10K if they get us to this fill rate, I think they’ll do it.” I was like, “yeah, but that’s the same as their quota — if they just filled it they’d get that percentage anyway.” He’s like, “no, I think if we just say ‘I’ll give you ten thousand dollars on top of your quota if you can do this’ — I think they’ll do it.” And I was like, okay. And instantly they like way overfilled it. And I was like, okay — I don’t think you could do that all the time, because it worked to get them off their ass once, but still.
Incentives, Clawbacks, and Psychology [00:09:00]
Sam: You’re right that it does work — and there are research-backed ways to do it consistently. Charlie Munger or one of the rich smart guys said, “Show me the incentives and I’ll show you the outcomes.” There are a few successful ways to incentivize people.
One: a McKinsey study said you should give bonuses based on 105% performance, not just 90%, because research shows people tend to hit that higher bar versus fall below it.
Two: clawbacks. You get 50% of a bonus upfront, and if you don’t achieve the goal you said you’d get done, I do a clawback and take that money back. You can do this with kids — your allowance is a hundred dollars a month, I give you fifty now, and the other fifty when you do your chores. But if you don’t do your chores, you give me that fifty back. That loss-framed version actually performs better than “I’ll give you a hundred at the end of the month if you do X, Y, and Z.”
Shaan: Yeah, it feels worse to lose money you have than to not gain the same amount of money. It should be the same thing, but it’s definitely not.
Sam: I had this when we did a deal once where we got a million-dollar signing bonus contingent on staying for a year. If I left before then, I wouldn’t get it. And I think if they’d just said “hey, do you want to stay a year to get this million dollars?” I’d be like, “sounds good, but there might be other opportunities.” But once they just put the money in my account and said “if you leave early you pay all that back” — I was like, oh man. My brain knew exactly what was going on and it still felt real. Definitely not losing a million dollars. Whereas if they’d just said “stay a little longer and get this extra bit,” I’d have been like “eh, maybe I can get that some other way.”
Shaan: What’s a really messed up industry is private prisons — you’re incentivized by how many beds you fill, which doesn’t align with what we want as a society. What it should be is: you’re paid a little for how many beds you fill, but if the inmate goes back to prison within four years of being released, you give me that money back. And if they stay out, I give you the second half of your payment.
Sam: The problem with incentives is A, it’s bold to change them and to be the first to really try something new, and B, tracking the results is a huge task in itself. That’s what we had at The Hustle — I could design it but I’d have to build all this infrastructure to track it.
Shaan: They call them second-order effects. Usually the first thing you’re trying to incentivize does happen — it’s the second thing that goes wrong. You got your ads filled, but they filled it with content that upset readers, which led to churn. You have to predict the second-order effect.
Sam: The Cobra thing.
Shaan: Yeah, go ahead. I don’t remember the story exactly, but basically — in India there was a cobra problem and they said, “we’ll give you fifty dollars for every dead cobra you bring us.” Thinking: great, we’ll have no more cobras. But schemers said, “let’s breed cobras and kill them and bring them in — free money.” So now there’s an overpopulation problem.
Sam: I actually have no idea if that’s a true story, but it’s like one of those Malcolm Gladwell stories that just becomes known by everybody whether it’s real or not.
Shaan: Have you heard his David and Goliath one? Basically: everyone talks about it as the underdog versus the big shot, but it turns out Goliath was like eight feet tall because he had a pituitary gland problem, which means low IQ and he was like big and couldn’t see. And at the time, Davids of the world were shepherds who had slings — basically a rifle. So it was already a deadly lead BB hitting a big guy who was stupid and blind.
Sam: So David’s actually a bully.
Shaan: Yeah.
Startup Equity Pooling Idea [00:14:30]
Sam: All right, let me give you an idea. I don’t have a name for it — working title here. Isn’t it crazy that you take a job at a tech company, you get your portfolio of stock options, and then you’re fully exposed to just that one startup? What if you could pool it?
You basically create a credit rating agency where you rate stock options. All right: you’re getting in at this price, at this valuation — we know that’s set. And secondly, there’s a community desirability to these options. Maybe everybody really wants Stripe options because they’re like “Stripe is great,” but I’m not working at Stripe right now. So you kind of get a valuation and a trust rating for the options. Then you put your stock in, and you end up with, say, forty percent your own stock and sixty percent becomes a blend of other stocks that you either pick or index into out of the startup community.
So as an engineer or a designer, you get de-risked a little bit out of just your one thing. Maybe you got a crazy CEO — you got an Adam Newman, you thought WeWork was a good idea, now three years later your stock options are worthless. Does it have to be that way?
Shaan: Sam, I have two questions. One: how good of an idea is this on a scale of one to incredible? And two: we need a name.
Sam: I’m already gonna skip the name — I called my company The Hustle, this podcast is called My First Million, I’m not exactly good at naming things. I told Sarah I want to name our kid Buck and she wasn’t feeling it.
Shaan: I told my wife since college I wanted to name my kid Jumper, and I was committed because I’d told like twelve people and I had to stick with it. And it made no sense.
Sam: I’ve suggested Biff and Buff and she’s not into it.
Shaan: I mean, if you could pull this off operationally — one thing I learned running my company was I thought “it’s a privately held business, I can do whatever I want with the shares.” I didn’t realize there are rules. Like, I can’t sell you a share for a dollar and then six months later give another employee that same share for fifty cents. You can’t just do whatever you want.
Sam: If you could figure out how to operationally pull this off, I think it’s badass.
Shaan: There are secondary markets where you can sell them, but I think you’d need some financial contract, some derivative product that says “I pledge or assign my shares to this portfolio, and in exchange I receive shares of the portfolio.” With some consequence for reneging — like if your startup hits huge and you’re like “oh, I don’t want to do this anymore.”
Sam: I wave my hands in the air and that part’s done. Now we just need to start the company and have it take off.
Shaan: That’s how I actually run my businesses. I go talk to the lawyer or accountant and I’m like, “I don’t know what the contract says, but I already agreed to this deal — you figure out how it works.”
Sam: The leadership principle — you’re supposed to give people autonomy. I always say: I’m empowering you to figure this out. You’re welcome.
Shaan: Congratulations. Your ass has been empowered.
O’Reilly Media and the Figma Seed Investment [00:18:30]
Sam: So I was reading about the Figma thing. Figma just sold for twenty billion dollars. Have you heard of O’Reilly Media?
Shaan: Yeah, they publish books and conferences.
Sam: What’s the guy’s name? Tim O’Reilly. They call him the Oracle of Silicon Valley — he’s been in the game since the ’70s and ’80s, originally started writing books on programming. His mission statement was actually really cool: “work on interesting stuff with interesting people.” He’s like, “we’ll try books for a while” — and then he just stuck with books. He didn’t necessarily care about books; he just wanted to fund his ability to work on cool stuff. They make like two to three hundred million dollars a year now with books, conferences, and a fifty-dollar-a-month content subscription for engineers.
Anyway, they started a little fund using profits from their business. I was looking at some of their investments, and they were in Figma’s seed round. So if you assume figma’s seed round was around a fifteen-million-dollar cap and it sold for twenty billion — that’s roughly a 1,300x return. A $250,000 check turns into something like three hundred million dollars. And it’s crazy because the main thing didn’t even make the most money — the side investment made way more than the core business.
Shaan: There are so many examples of that.
Sam: Remember when we stayed in that house for Camp MFM? Did you walk up the back staircase by chance? On the wall there were all these plaques — I thought they were just kids’ trophies, basketball club stuff. No — they were share certificates. The guy whose house it was, he’s a venture capitalist in North Carolina. On that stairway, one of them was Beyond Meat: “this guy, whatever his name was, owns 45,000 shares priced at one cent a share,” and then Beyond Meat going public at eleven dollars a share. I took out the calculator app and I was like — wait. I had to turn the phone sideways because the number was too big.
Shaan: Turn it sideways — Game Changer. I’ve been doing my math wrong this whole time.
Sam: He had like twenty of these on his wall. “Issued shares at twenty-two cents, now going public at twenty-two dollars.” You own ten thousand shares, fifty thousand shares, and you just do the math. This is a staggering amount of money being generated.
It is really funny how some of the most successful people made their wealth not exactly from the main thing they did. Tim Ferriss is another example. Someone asked me the other day, “How much do you think Tim Ferriss makes a year?” I said five to eight million dollars a year probably — podcasts, newsletter, book royalties, something like that. They said, “Oh, that’s good, but I guess that’s not that big.” And I said, “Yeah, but because he was Tim Ferriss, he got to invest in Shopify and Uber. He probably made hundreds of millions off those angel investments. My guess is his net worth is north of one-fifty, maybe north of two hundred liquid.” Which means ninety-plus percent probably came from like four angel investments, not from the podcast or the books.
Shaan: Nas the rapper shows up on a ton of cap tables. The Figma guy himself — one article said he’d made ten million dollars owning one of the major cryptos early, bought it for nothing, sold it — had ten million before he even sold Figma.
Billy of the Week: Roger Federer [00:24:00]
Sam: All right, so my Billy of the Week: Roger Federer, the tennis player.
Shaan: A million dollars isn’t cool. You know what’s cool? A billion dollars.
Sam: The US Open was on, got me thinking about tennis, and I saw that Federer is now in the Billionaire Athlete Club. Same five we mentioned at the top.
So give him like a three-hundred-million-dollar bump because he married — wait, no, that’s Andy Roddick. Andy Roddick married Brooklyn Decker.
Shaan: That’s just bonus points anyway.
Sam: So Federer has had a great career. He’s considered the GOAT in tennis — twenty Grand Slam wins. But less than ten percent of his money came from actually winning tennis tournaments. He’s made around 130 million dollars from official prize money. Most of the money he makes is off the court. In his last year before retiring, he made about 300,000 in prize money but ninety million from sponsorships. Which is kind of insane.
Here’s how his story goes. Early on, he was not getting paid much — even when he was the best player. Nike was paying Andy Roddick more than Federer because: “Andy Roddick is American, America is a bigger market. Federer is Swiss, tiny population, he’s this clean-cut, kind of boring guy, doesn’t have a big personality.” Even though Federer was ranked number one, they’d tell him he wasn’t as marketable.
So he was making very little from Nike. Then he works up to a ten-million-a-year deal, and it’s kind of like: well, you made it. You should be happy with this ten-million-a-year deal. Your family’s set. But he made two decisions — really one decision that led to two things — that made him an extra six hundred million dollars.
Federer’s Uniqlo Deal and the Nike Shoe Gap [00:27:00]
Sam: His contract with Nike is coming up. The expectation is he’ll just renew. He goes to Nike and says, “I’m one of the best tennis players in the world, what can you do for me?” And they basically offer him something similar to what he was already making.
He decides: I’m going to pause. I’m not just going to take this deal. I’m going to shop around. And then Uniqlo comes at him with this insane offer. Uniqlo, who’s not even really in the sports apparel game, is trying to break into the West, and they offer him a ten-year deal worth three hundred million dollars that pays him even when he retires.
Shaan: So he signed this deal knowing he would retire during it, and he’s going to get paid thirty million dollars a year.
Sam: He goes back to Nike and says, “Hey, I got this offer. Can you do something like it? Doesn’t even have to be as much.” Nike says no, basically throws in a free t-shirt, and he leaves.
But here’s the key thing he knew: Uniqlo doesn’t make shoes. So he signs the Uniqlo deal, starts wearing Uniqlo, but keeps wearing Nike shoes. At a press conference someone asks, “Roger, I notice you’re still wearing your Nikes — are you allowed to?” And he says, “Oh, yeah, I don’t have a deal with them. I’m shopping around, let’s see what’s out there.”
So for three years he’s essentially wearing Nikes for free. He doesn’t have a shoe deal. And then finally he does a shoe deal with On Running, which —
Shaan: Oh yeah, they were one of our advertisers when we first started — they kept spending more each year. I think they make over a billion in revenue now. They went public. At its peak, about an eleven-billion-dollar valuation, now back closer to six billion with market corrections. But that’s still —
Sam: So Roger owned three percent of On in exchange for — he did an equity deal. He said, “All right, I get it, you guys don’t have the same cash. How about a piece of the company?” He owns three percent. At its peak, his stake is worth three hundred million dollars.
So: bet on yourself, do an equity deal, don’t just trade dollars for time. Trade your brand for shares. That becomes three hundred million dollars.
Then he takes matters into his own hands. He cuts ties with his representation company, starts his own player management firm to represent himself and other players. Then he creates his own tournament — his own version of the Ryder Cup, Europe versus America for tennis.
He builds this whole empire, makes over a billion dollars total, ninety percent of it off the court.
Federer’s Playbook: Lessons [00:31:00]
Sam: There are a couple of really interesting things about how he did it. One: he went upmarket. His sponsors are Mercedes-Benz, Rolex, Lindt chocolate. He didn’t do what Jordan did — Coca-Cola and McDonald’s. He was like, “Where’s my niche? Where’s my market? Let me go to Rolex.”
Two: he played a very patient game. Most people, during those three years without a shoe deal, would just be counting the dollars they’re missing — like “I could make five to ten million a year if I just signed this contract.” But he waited.
This is a great LeBron James story too. LeBron is eighteen years old, just graduated from high school. That same day — or that same week — Reebok shows up at a meeting. He’s sitting at the longest boardroom table he’s ever seen, LeBron at one end, they slide a check over. More money than he’s ever seen in his life. He came from a single mom who had him at sixteen, couldn’t pay electricity bills — dirt poor. They offer him ten million dollars a year as an eighteen-year-old kid who hasn’t played a single NBA game yet. “Sign this now and you become our signature athlete. It’s the biggest deal we’ve ever offered a kid out of high school.”
He doesn’t have an agent, doesn’t have anything. And he basically says: “Appreciate the offer, man. Let me get back to you.”
Shaan: Ten million dollars a year — what are you thinking?
Sam: He tells the story later — he says in his head he’s thinking, “Man, this is more money than I’ve ever seen. But if Reebok’s offering me this much, I wonder what Nike would offer.” He’s like: “I must be worth something to these guys.” And just by being patient he ended up with a much larger deal.
The Marshmallow Test and Delayed Gratification [00:34:30]
Sam: You know what trait that’s called? There’s this book by Angela Duckworth called Grit. It’s centered around a study where they give a bunch of kids a marshmallow, sit them down, and say, “You can have one now, or in a couple of hours I’ll give you two. I’m going to go out of the room — when I come back, we’ll see what you decided.” Then they track these kids for thirty to fifty years. And there’s a correlation between traditional financial success and the children who chose to wait for two marshmallows.
What you just described with Federer and LeBron is a perfect, rare, real-world example of that — being willing to not do the thing now in exchange for a better alternative later. Delayed gratification.
Shaan: I’m a marshmallow eater, man. I would have had it in my mouth while they were explaining the instructions.
Sam: I always get frustrated when people talk about Warren Buffett and Jeff Bezos and their patience. Like — Jeff Bezos is fifty-seven, go have fun now. There is no long term. But I mean, it does look like it’s working for him. He’s turned into a frat boy. Doing roids, drinking beers on a boat.
Shaan: It does look like it’s working for him.
JP Morgan’s Fed Rate Prediction [00:37:00]
Sam: All right, let me tell you about this thing I read right before we started. Today they’re announcing what the Fed rate raise is going to be. I don’t know anything about that stuff so I’m not going to pretend I do. But I read this article about JP Morgan — you know, the amazing bank that’s supposed to know what they’re talking about — and their predictions.
They had this day-of scenario where they laid out three possible outcomes. And the range was: if they raise the rate by a full percentage point, we’re potentially going to have a five percent drop in the market. If it’s a 0.75 percent raise, we’re going to have one of the best days on record for the S&P 500. So: one of the most prestigious banks on Earth, with thousands of people studying this, says it’s either going to be the best day ever or a really bad day.
Shaan: That’s basically like someone saying “well, it’s a fifty-fifty. It’s either gonna happen or it’s not gonna happen.” No — just because there are two options doesn’t make it fifty-fifty.
Sam: And then tomorrow the analyst is gonna be like, “well, I saw that going one of two ways but did not expect it going that other way.” They released an eighty-two-page report and it just — yeah, I don’t know, man. NM, not much. That’s basically what the whole report should say, because that’s what they just said.
Shaan: What’s your opinion? Not much.
Sam: I thought that was ridiculous. These guys are smart but kind of just guessing. One time I was playing roulette and I was so down on my luck — I’d gotten bored of poker, lost money in five minutes at blackjack, had an absolute roller coaster at craps — and at some point I was just betting both red and black to feel a little bit of a win. Just hoping a green doesn’t show up. That’s what this JP Morgan report was.
Shaan: There was this tweet I saw: “I never realized my entire net worth was dependent on an interest rate hike until this year.”
Sam: I remember people talking about the Fed and I was like I don’t know what the Fed is. It’s like when people talk about the FBI on Breaking Bad and Narcos — I have no idea. I thought the “Feds” was just “they” — the official pronoun.
Shaan: I saw a guy on Twitter and for his pronouns he put “we/damn/boys.”
Sam: That’s the best one. Jack and the Dam Boys.
Figma’s Seed Pitch Video with Dylan Field [00:41:00]
Sam: All right, I have something interesting. If you search YouTube for “Figma seed pitch,” there’s a video from — I think it was filmed in 2013 — of Dylan Field pitching Daniel Gross, who was actually on our pod early on. It’s an eighteen-ish-minute video, and I had five takeaways.
One: he’s young. Even if the video is recent, he looks eighteen. He talks kind of young but he’s really wise. You hear him speaking and you’re impressed.
Two: the pitch was almost entirely product demos, not a deck. And during the pitch he photoshopped Daniel’s face, made him look like a different person, and Daniel was like “oh my God, this is hilarious, this is awesome.” That was so much better than just a slide deck.
Three: clear technical skills. This guy is obviously technical. We often talk about how you technically don’t need that, but God damn it helps.
Four: it’s an MVP. It doesn’t look good. It’s pretty ugly and mildly effective. But effective enough that you can see the future.
Shaan: I watched this. You can find it on YouTube — “Dylan Field pitches seed stage Figma to Daniel Gross.” Like thirty thousand views, probably all in the last two days.
Sam: My observation was very much like yours. It doesn’t feel like a pitch. Most pitches are like “here’s our company, we’re going after a really big market — did you know there’s a TAM of three trillion dollars spent on healthcare?” And you’re like “well, you sell weed, so I don’t think that’s the three trillion.”
They always have this stupid quadrant thing with themselves in the top right. The y-axis is stupid-to-smart, the x-axis is lazy-to-hard-working, and it’s like “I don’t know, everybody else is lazy and dumb and we’re hard-working and smart.” And then there’s the twenty-billion-dollar company in the “poor product” quadrant that you just put there. Makes me really irritated.
What they should do is put themselves in the bottom left and say “but look at this trajectory. Six weeks ago we were here, now we’ve moved an inch. Imagine five years.”
Shaan: So he’s doing this pitch, and the first slide is literally a picture of him on a boat. “Here’s me, I used to work at Flipboard — twice. This is my co-founder, my friend from school, we dropped out.” Then he shows a talk by Brett Victor called “Inventing on Principle” — by the way, the same talk the Webflow guy said was his inspiration for building Webflow.
The core idea from that talk: there’s a moral imperative to help people create, and the difference between choosing options from a menu or writing code and then pushing “run” versus just editing something live in real time — what you see is what you get. How much more creative you can be when you’re just shuffling things around in real time.
Sam: He doesn’t pitch it that well — you’d have to basically ignore eighty percent of what he said and just lock onto: this guy is smart, WebGL is a game-changing technology, and this idea of recreating the Adobe Creative Suite in the browser and making it free for everybody — that’s a great idea. You had to see the great pitch through the forest.
Shaan: The real signal was: the technology change. WebGL had come out, which let you do cool graphics in the browser that you couldn’t do before. Normally if you wanted to play a game with cool graphics you needed to download the game, run it on your computer’s hardware. WebGL was this web framework that let people build 3D, real-time, graphic-heavy stuff in the browser. That’s why in Figma, if I’m working on a document with you, you could see my mouse moving around in real time. At the time that was a magic trick.
All our developers were intrigued by WebGL when it came out. The question was: now what’s the application? And where he landed was: I think we can recreate the whole Adobe Creative Suite in the browser. That actually made a lot of sense. He just didn’t pitch it that articulately.
The “Make Big Plans” Dilemma [00:50:30]
Sam: Remember Brett Adcock — the billionaire guy who built a bunch of different companies including a flying car business? He tweeted out “here’s what I’ve learned about entrepreneurship” and one of his five things was “pick really really big ideas” because you attract more investors and better employees. The “make no small plans” thing.
And that always makes me self-conscious because every plan I make is pretty small. I only want one marshmallow right now, not two later. Compared to that kind of plan.
But it’s kind of cool that Figma — it doesn’t actually seem that grand early on. Like, you don’t look at that seed pitch and think “ah, twenty-billion-dollar company someday.” That makes me feel better about my deficiencies.
Shaan: When people say “grand ideas” I’m like, yeah, but writing a newsletter is kind of fun, right? I don’t know how to make robots.
Sam: But I do dream about that sometimes. In an alternate life I’m like — why am I not building the next big thing, making a flying car? And I could do it. I know I could do it. And I do think about doing it, maybe I will end up doing it. But for me it’s like — how hard do I want to work?
Shaan: If you made a quadrant, where do you put yourself?
Sam: I’m putting myself in the lazy quadrant. I don’t need to do the hardest thing to impress myself. I like being home with my kids. I don’t have an office of a hundred employees where everybody’s hard charging and about to die at all times. I kind of like that I don’t do that. I just need to find a way to impress myself that fits in my framework.
Shaan: Well, but you gotta do that. And who’s doing your stuff for you, right? Who’s Roger Federer doing his stuff — who’s doing his stuff while he’s doing Roger Federer things?
Sam: We had Marc Lore on the podcast. I talked to a bunch of people who worked with him and they said he’s really good at raising money, then he hires people and kind of — it’s exaggerating to say he chills, that’s not true. But they kind of said he did a lot of the work early on and then got all the leverage by getting the money and having the idea and starting it, and then hired really well and let people do their thing. Same with Roger Federer — he ain’t the one running all that stuff.
Floyd Mayweather: Vertical Integration [00:54:00]
Sam: The other one I was looking at was Floyd Mayweather. He’s got an amazing “bet on yourself” story too.
Boxers in general make basically nothing, with one or two exceptions. Boxers can make ten to twenty million a fight, once or twice a year — that seemed like the top. What Floyd Mayweather did was ask: “Who the hell is making all this money? I see the crowd is full of people and the pay-per-view number is huge — but where does the money go?” The reality was the money went to the promoters, the cable companies, all these other people.
So he decided to bet on himself. He takes seven hundred and fifty thousand dollars out of pocket and buys himself out of Top Rank, the promoter that promoted Oscar De La Hoya and Manny Pacquiao. And he starts Mayweather Promotions. His business model is basically vertical integration: I’m not just going to be the talent, I’m also going to be the production for the show, which means I collect the live gate revenue, I write the check for the other fighter, I own a piece of the pay-per-view. “I’m gonna make money on every hot dog sold in this venue. I’m gonna make money on the merch. I’m gonna make money everywhere.”
Because of that, when he does fights like the Manny Pacquiao fight or the Conor McGregor fight, he pulls in somewhere between two hundred fifty and four hundred million dollars himself. More than ten times — more like twenty times — what he could have made as just the fighter. Because he bet on himself and built the brand.
Then he created his own clothing line: The Money Team. Why am I promoting these other brands? I’ll own my own. LeBron did the same thing — why am I promoting McDonald’s? He bought equity in Blaze Pizza. “I’ll own a piece of this chain rather than just be a sponsored athlete.”
Shaan: And Floyd really leaned into the self-branding. Changed from Pretty Boy Floyd to Floyd Money Mayweather. He knew people were going to hate it and he started doing hateable things — posting a photo of himself at a dinner table with no food, just stacks of cash everywhere. “This is how I eat.” Or throwing a wad of cash at somebody. Making fun of people for being poor. People would pick it up because it’s like ten grand.
In reality he owned strip clubs but never smoked, never drank. Trains at three in the morning. He built this brand as this party-guy badass, but in reality he’s an extremely well-conditioned, extremely disciplined athlete.
Sam: And he hired Al Haymon. We have to do a whole episode on Al Haymon. If you Google his face, there are like four pictures of him on the internet. He’s one of these guys who you never meet in person — he does everything on the phone — and he’s always in the background of the most powerful boxers in the world.
Before that, you know what he was doing? The same thing in the music industry. He represented Janet Jackson, Whitney Houston, helped build their whole business empires. Then he taught Floyd how musicians make their money. “Oh, I need to do that — my fight is me on tour. I need to own the tour.” So Floyd owns the shows, makes money on the tickets, not just being the fighter who goes on the stage.
Al is his business guy on that side, and then Leonard Ellerbe runs Mayweather Promotions. The joke about Floyd is that he can’t read. He’s like: “I can’t read, but I know numbers.” He understood the core fundamentals of a business, put the right people in place, and generates an enormous amount of money.
Some people think he’s going broke because he spends so much. I totally believe that’s possible.
Closing: The Internet Dork Renaissance [00:59:00]
Shaan: Dude — I mean, this podcast. We are the internet dork Renaissance. We started with Adam Levine cheating on his wife, then we went to the history of RSU option shares, then we talked about the Fed and JP Morgan, and then back to Mayweather and Al Haymon. You can’t get this anywhere else.
Sam: We are the Chinese buffet of podcasts.
Shaan: They say true wealth is being an inch wide and a mile deep. Not here. We are a rain puddle — we are just going to cover everything, just a little bit.
Sam: Well, you’ve built your whole life off being four inches long, so it all worked out for you.
Shaan: Average at best at lots of different things — you’re kind of above average. It works out.
Sam: All right, that’s the show. I’m exhausted. I gotta take a nap after this.