Episode of My First Million with Sam Parr and Shaan Puri.
Transcript
Note: This transcript was auto-generated from YouTube captions. It may contain errors and lacks speaker identification. A full Gemini audio transcript will replace this.
Kind: captions Language: en look if you don’t figure this out you’re [ ] you’re broke i feel like i can rule the world i know i could be what yeah what’s up sean why we keep getting two things that’s kind of like keeping me up at night the first which doesn’t keep me up at night but weirds me out why do people keep confusing us and the second thing and the second thing that does keep me up at night is i don’t know if they’re saying it just about me or about both of us but they say that we look differently yeah and i think both are like i think both are insults wrapped in disguise like they’re not saying anything bad but the way they’re kind of like laughing makes me think uh it’s not a it’s not a good thing i don’t think it’s an upgrade for them someone said that i write like a bro but i look like a nerd and i’m like you’re you’re you’re insulting both my looks and i like how do you make me look i want to look like a bro maybe and talk or wait which one do i want to do i want to look like a bro and talk and and talk like a nerd maybe that’s hilarious um um yeah so it’s people mix up that means for months they’ve just been listening to this and they think i’m you and they think you’re me and when they follow us they uh you know they have it all wrong it’s kind of funny and then um i have uh do you know what e foiling it what what’s e foil what are you talking about i’m about to rent one so it’s a twelve thousand dollar device and it looks kind of like a wake board but it has like a three foot to four foot like rudder that sticks on the bottom of it and on the bottom of that rudder is a motor and it’s like a boosted skateboard with like a with like a handheld acceleration device and it you lift off and it you ride three feet above the water i’ve seen this uh now that you say i thought you were talking about something related to like i don’t know microphones or voices you just switched topics uh with a hard left turn but i appreciate that so i saw this because what’s the name of that one surfer guy who’s like uh super famous laird hamilton yeah laird hamilton i saw him doing this where he was go i don’t know if his i think his was like even taller but basically he was surfing with you know there’s like a there’s like an underground fin and then he’s elevated above the water and he was like and there’s it’s like a jet ski that he’s standing on it was kind of crazy sounds like that’s what this is yeah well i’m about to go do it in an hour i’m pumped this is the next before we get into ideas it might be it might be there i’m getting ads for it constantly on social media it might be um we have a good episode today because you brought something up incredibly interesting and i do i went deep on it but before we get into that can i tell you a quick story yeah go for it okay so a few weeks ago i got mocked on the internet for like doing this trapped in a closet for with andrew chen thing so this guy named andrew chen what is a partner at andreessen horowitz he’s got a cool startup e blog but i heard he told me one of the wilder stories i’ve heard recently so when he was in i think i could i might get uh some of the details like wrong by year or two but when he was in about sixth grade he took the sat and scored really high and when he did i think it’s the university university of washington does this thing where every five or ten they take five or ten students per year who are in sixth or seventh grade sometimes younger like 12 years old whichever grade that is and they asked them to come to college to come to university of washington and he was one of the students and so he at sixth grade i think he skipped seventh grade and went straight to college and he moved there in a dorm went to college and i asked him who else was in it and he actually said emmett emmett shear from twitch was one of the folks wait wait so he didn’t go to college he didn’t like become a college student he just went for like a camp or something or he’s no he’s like no doogie houser stuff like he literally instead of going to seventh grade he moved into a dorm went to college and and here’s where it gets even crazier so he like moved there moved away from home which i think his parents are from the state as well but it was like moved half an hour however far away from home lived there as a college student and he understandably was kind of embarrassed and didn’t really tell a lot of people and so they thought that even though he was however whatever age you are in seventh grade they kind of assumed that he was just another 18 year old and apparently he told me that he even dated a girl he um just kind of acted normal and they didn’t find out that he didn’t like hide it from them but he didn’t bring it up and they didn’t find out until senior year or something like that when everyone was turning 21 and they were like when you turned 21 he was like oh i’m i’m actually 17 years old or six whatever 16 yeah and i it’s a pretty wild story and i asked him like who else was part of this program he said the founder of twitch was some person running a huge hedge fund just like baby genius like real baby geniuses crazy fascinating story and apparently the university of washington still does this every year where they select i forget what they call the program but it’s like a thing where they have psychologists and therapists meet with the kids every quarter every month to discuss what’s going on and it was incredibly fascinating and in a very typical genius response i said isn’t that weird that you skipped high school and he was like well what do you think about it adolescence is really just like a societal constraint and i kind of experienced the same thing i was like oh yeah i mean i guess you’re right but like thanks for proving my point that you are just a figment of my imagination um yeah isn’t that wild that is wild also i don’t know if that’s true because emmett definitely went to yale and so did justin khan so i don’t know well maybe it was through yale but he said that emmett was part of the same program or maybe he dropped out um but he said that age 13. i love it we said that emmett was part of his program i i don’t know what if program that they do in a ton of different schools but like a uh 13 year old freshman in college uh would you let your kid do this or would you want your kid to do this let’s say your kid’s 12 scores high on a test would you want him to skip high school and go and be a 13 year old college student and like amongst the you know amongst the crazy 18 year olds so it’s a good question because your my gut instinct is probably the same as everyone else’s which is high school is important you learn uh about yourself and and it’s important to go through all that normal stuff but we also complain that high school often or that like what you learn in high school is kind of [ ] and and you know what does the world look like if you do combine the two so like maybe it is i don’t so i don’t know but isn’t that isn’t that a wild story yeah that that’s crazy i um uh such a fun fact about someone yeah i also think it’s an interesting strategy for the colleges like why are they doing this um i think it’s kind of cool i remember the reason i ended up going to duke is because they had this thing called the tip program which is the talent identification program and you would take the i don’t know the psats or something like that and then if you scored above a certain thing duke would send you this kind of like kit this goody bag and it basically was like it felt like getting an owl from hogwarts and it’s like hey you’re 12 and like we want to invite you to this special school for the gifted and talented and it just said like you scored high on this we have identified you as a person we would love to you know like have you come visit our campus and like eventually and the [ ] worked i went to duke eventually i didn’t put two two together that’s why but like if i think about it that’s why i started paying attention to them and that’s why i started following the basketball teams that’s how i even heard about it otherwise as a 12 year old kid you don’t even you don’t even hear about colleges right so i thought that was pretty interesting and if you think about it you know these schools are for-profit these schools are trying to get um you know they’re trying to get tuition they’re trying to get people to come in and pay the uh 40 50 grand to go to school and so these little investments um and and you know who doesn’t like to be called talented who doesn’t like to be called kind of like a phenom uh what parent doesn’t want their kid to be identified as a special um that [ ] works and i’m surprised that more schools don’t do this and when i start my school i i too am gonna do this yeah i’m i’m trying to like do some research on it right now what we’re talking and it’s not really effective but uh you’ll have to look up this program when you’re done it’s just a really cool interesting thing uh and it was funny to meet someone who went through it and it was just such a silly fun fact about someone by the way my roommate in college um we when he got when we got to college i was like yeah yeah you know we’re all 17 or 18 whatever we were as freshmen and he was like yeah like um he would say like yeah but then like i noticed this expression i was like well what he’s like well i’m like 19 and a half about to turn 20. and i was like what why are you so old and basically they do the exact opposite when it comes to sports so in sports uh the common thing to do is to like sandbag your kid and basically hold your kid back a grade or like send them to school a year late so that they’re always bigger faster stronger than all the other kids in their grade and you’re always like the star athlete because you have like an extra year of development or you have a better shot i should say of being a star athlete and so he was from wyoming and he’s like oh dude in wyoming this is that’s par for the course dude every you know every sixth grader is like an eighth grader’s age because everybody wants to like have their kid be yeah my first two years of college i was an athlete and i would compete against these guys and there was two groups of people that we would like and i was friends with them but we would tease about they’re not really it’s like it’s a little unfair which is the first was kenyan so kenyan runners um i think that there’s i don’t know i don’t know i don’t think they were lying about their age but i think there’s a an exemption if you serve in the military so you get to compete in and college athletics i think until you’re this was ten years or eight years ago however long you get to compete until you’re 26 years old um and then the second is for um religious stuff so the mormons at age 18 would bounce for two years so they would be a 20 year old freshman which means there’d be a 24 year old senior in college so i was 18 my freshman year competing against 24 25 year olds and so yeah mo the mormons and the in the kenyans if they and uh anyone served in the military and uh i know this topic is basically nobody gives a [ ] about what we’re talking about but i will say there is a lesson uh that’s in life you get to choose are you gonna punch up or punch down and uh the andrew chen thing going to college at 12 or 13 that’s a kid who’s punching up you’re you know you’re in an unfamiliar circumstance you’re stretching beyond you know what you what you’re playing in the bigger leagues than where you are and then there’s the uh athletes that are that are held back years or you know come back and compete against people you know two to five years younger than them that’s punching down in weight and i would say like punching down has some benefits because typically you’re gonna score better do better um in these little like games you know in you know high school or college athletics but in the end you really want to be somebody who punches up uh you always want to i think you know for long-term success you want to be somebody who punches up who somebody somebody who’s always in a room where you’re just barely hanging on because it’ll push you to get better more so than just dominating people because you’re older and stronger than them well it works for andrew chen i think he’s 38 years old but i was like but you’re really like 45 [Laughter] right like in my experience like a 45 year old all right let’s get to the top first full-time job okay let’s get to the first one so sean put something on here that i actually think i was telling a friend as i was researching i actually think that this is one of the better ideas that we and you you’ve ever come up with the michael jordan thing all right yeah you want me to explain it okay so um i’ve been looking at this house for a long time michael jordan’s house has been for sale for like a decade and it hasn’t sold and this is his house uh kind of like you know in illinois near chicago where you know michael jordan was on the bulls and he had this 56 000 square foot home in highland park and so this thing originally he put it up for sale and like i don’t know nine years ago for 30 million dollars 29 million dollars and now it’s you know the price has been cut in half and the thing is still not selling and if you look at the photos you can just go it’s like on zillow so you can go look at the photos he’s got like an indoor basketball court you know the gate leading up to the driveway has his big 23 number like embossed in it he’s got you know everything you would want like huge you know closets because he’s got you know all his air jordans or whatever and so his house is it’s pretty unbelievable right there’s there’s all kinds of um epic [ ] here but it’s not selling and it’s not selling for i think a couple reasons it’s like you know it’s very custom to michael jordan um like it just it’s like it was custom made in many senses so you know that other rich people don’t necessarily want to live in a house that’s like made for another dude um it’s also you know it’s very expensive for the area the property taxes are really expensive all that stuff but i was thinking okay the price is now cut in half now it’s now it’s a 13 million dollar house or a 12 you know 13 million home that you could buy 13 14 and now it’s in range where maybe there’s something fun you could do with it now you might be getting a value by so i was thinking all right there’s a bunch of people obviously that are basketball fans that love michael jordan um there’s a bunch of you know new ways to crowdfund that we’ve been talking about nfts or kickstarter or different different crowdfunding platforms so the question is should we buy michael jordan’s house should we start a crowdfunding campaign and buy michael jordan’s house so if you could get 5 000 people to each put in 2 500 then you could own a fractional share of michael jordan’s house you could you you could own a piece of of this history and we could just buy it out take it off the market and we could own this thing and then the question is like what do you do with it um and so i wanted to brainstorm with you a should we buy michael jordan’s house and b what could we do with it if we did buy it what do you think so the whole nft thing i wouldn’t do that i think that i think you’ve had two ideas here one is to buy his house and two is to end do the nft thing uh one of those ideas is great i think the other one is over complicating it i would 100 buy it and the reason why i think it’s such a great idea is immediately after you seeing you write this my thought right away went to graceland you know what graceland is no that’s funny that you don’t know what that is it’s because it’s such a big deal in my family or elvis is at least so graceland is elvis presley’s house uh it’s in memphis it’s in downtown memphis it’s actually in a pretty crappy neighborhood now or the neighborhood is not nice and it’s like kind of gross but it’s just like a cutesy thing to do if you visit memphis and i went and did research on it and so around 600 000 people a year go to graceland which brings in something like where i have the numbers here okay so graceland just in attendance uh just in ticket sales brings in 21 million dollars so it’s yeah pretty wild just on tickets and then 600 000 visitors a year uh 36 a ticket right yes and i got interested in this so i thought what are the most visited homes in america so i came up with a few and i want to fill you in on them so the white house doesn’t count because you can just you i think you can get a tour but you could also just walk outside of it but graceland 600 thousand the second one i’m you guys are gonna make fun of me i don’t know how to pronounce this what is it monticello i think so okay monticello that’s uh thomas jefferson’s house and so the interesting thing about this place as well as a few other i’m going to mention is that they’re non-profits which means all of their numbers are public and so uh the revenue for monticello which includes a ton of investment revenue was around 200 million dollars in 2010 but around uh eight million seven million came just from ticket sales so eight million a year in ticket sales which is crazy and they have around 500 000 people another uh most visited home is never uh like homes that people drive by neverland ranch people don’t go there but the other another great one is mount vernon which is uh i think uh what’s our first president george washington’s house uh and they do in in in uh food sales alone this is crazy just in food 17 million dollars a year wow is that crazy insane the whole operations and then they do 15 million dollars a year in admission sales and in total they do about 51 million in total income which includes 10 million from contributions is that crazy no that’s absolutely insane so let me ask you these okay so this all of a sudden this starts to get really interesting right because i think michael jordan is on par with elvis and you know thomas jefferson michael jordan’s got tj beat by a long shot so you know mj over tj i think is is part of the the slogan that we have when we when we buy this thing but um if they’re doing this much in traffic i got to know is there something else meaning like are these in really hot like popular areas uh where there’s already just a lot of tourists or something like that and this is just a pit stop because you know michael jordan’s house in a neighborhood you’d have to only be going to go to this place i looked up michael jordan’s address guess how far away it is from chicago airport one of the most popular airports in the world i’m gonna guess 45 minutes 20 minutes it’s 20 minutes away okay so it’s at like have you been in memphis memphis is like there’s not that much going on in memphis and all these people are going to memphis um people are chicago’s what the fifth most populous city in america or maybe third something like that something is interesting here so what i would do is i wouldn’t do the nft thing i would raise uh two or three million dollars from a bunch of rich people um or i would try to use my own money if i had two or three million dollars that i wanted to spend on this and i would buy it and then it would probably cost a fair bit of money to get it set up it would probably cost a lot of money another many more millions but then you’d have to convince collectors to lend you the stuff and you create a michael jordan museum yes and that’s how you do this and the companies that we’ve just mentioned graceland monticello and um mount vernon so those obviously those folks lived in the 1700s or probably died in the 1800s so they’ve been around those properties have been around as tourist destinations for a hundred plus years but they’ve done 50 million revenue which is a [ ] ton but even if you’ve just um two or three million dollars in revenue and you could do that and adjust for inflation for 50 plus years kind of like graceland has done it for 60 years that’s incredibly fascinating right yeah i’m with you so so i think you you know you’re [ ] on the nft thing a little bit but it’s not about nft what i’m saying is crowdfunding um so i think that there’s a benefit to crowdfunding which is that crowdfunding is a way to make the story more viral um it is a it’s a more pr worthy story uh you know people from the internet people from reddit whoever got together and bought michael jordan’s home off the market for for 15 million dollars they raised 15 million dollars and bought the house versus a rich guy went to his rich friends and raised some money the second thing is those become you know the your evangelist to spread the word and to come make the uh the pilgrimage to go see and i think you could do two or three things with it i think you could make it a museum that’s like a modern museum that we’ve been talking about like the museum of ice cream or something like that where the tour is very heavy um photo based and so you’re you know you’re going through and it’s all these different photo exhibits of you know you in michael jordan’s bed and you know wearing you know a pair of his air jordans or standing in a pair of giant air jordans or something like that and you make it like a museum of ice cream where you’re going to walk out with you know 10 photos that are instagram worthy at the end of it i also think give give people background on an ice cream museum yeah bray you can pull the latest numbers but i think these guys uh raised it like 100 million dollar plus valuation and if you if you ever go to one they’re pretty cool it’s you know it’s not the most amazing thing i honestly was a little bit disappointed but the photos do turn out cool it’s a museum that you walk through uh so it’s like a guided path and you go through maybe like 13 different rooms and every room is something cool and you get a little you know you get an ice cream cone of some flavor and then you can take photos next to some like exhibit that they’ve set up and the idea is not for you to look at the art like a traditional museum but for you to like take a photo in the art uh and post it on instagram and that’s their marketing that’s the free marketing that they get and so museum of ice cream oh yeah here everybody has it they raised 40 million they raised a 40 million dollar series a at a 200 million dollar valuation last year and um and i think this could be bigger i think this could be much much bigger as a brand um the other thing uh the other thing that you could do is uh sports cards are having this incredible boom right now and i think what you could do is you could have certain collectors put their collection um in in the house the house could be basically the vault to store some of the most rare memorabilia in the sports world sign basketball shoes and sports cards and that could be part of the museum and you you basically store it and you um you store it for some of these collectors so i think i think there’s a bunch of stuff you could do to make this work but the idea is like can you buy this thing for 13 million put another four or five million into um you’re getting it all set up and then could you make five million dollars a year could you make 10 million dollars a year like you’re saying these other guys do um as a pilgrimage for you know tourists going to chicago and basketball junkies i think the answer is definitely yes and i think it’s so interesting um i found a i found another example of one and it’s called the um it’s called the national trust for historic preservation and it’s a non-profit and all they do is historical buildings and their historic i looked at their numbers they’ve been doing like 50 or 60 million in revenue for years and i’m still trying to figure out how to entirely read uh non-profit statements but they have a buy a line item that’s revenue less expenses which i guess that just means prop i mean i don’t know how they define yeah i don’t know how they define either of those but it was 26 million and it’s been doing that for years is that nuts so i like this idea i like this idea a lot and i kind of want to dig a little further into how these um homes home museums work because i think this is pretty interesting the other good thing about this by the way is that the basketball hall of fame sucks uh nobody cares about it nobody goes to visit it um all the other sports like you know canton for football these are like tourist destinations you know tons of people go there every year it’s really cool and the basketball one is known to be super lame because they let way too many people in and um and it’s not like it’s not a thing that basketball fans really care to go do can i give you two more examples that we what we could consider doing instead of even doing a museum maybe this is even simpler yeah so i’m staying at my friend jack’s house it’s a badass house um five doors down or ten doors down something like that nearby is what’s they call it the obama house and when obama was in office from uh when was he in office oh the oh the second the second term um or whatever it was he would stay at this house down here and the owners let him stay i think for a massive discount now it’s like it has its own wikipedia page and it’s called like the obama and it sold 10 years ago for 7 million after he had already stayed there which sorry 7 million i said i say 7 for 7 million which is a lot of money but they rent it out right now on airbnb for six thousand dollars a night or if it’s booked all the way up 180k a month and it’s branded as the obama i think that you could absolutely crush it with a jordan airbnb house would you and a group of friends be willing to pull together three thousand dollars a day to stay there maybe i think the way you’d have to do it is you’d have to make it like a vegas alternative for bachelor parties and stuff like that birthdays it’s like what is the man cave man dream vacation it’s like dude we’re gonna go stay in 14 of us are going um and it comes with like all the amenities and you know all that stuff this is where you go this is where you want to go if you want to live like the sports fan’s dream i think you could do that i do like the museum one better what was the second idea you had you said you had two oh what wasn’t the second i guess it was more so uh just another example the fresh prince of bel-air house um it’s it’s kind of interesting but do you remember living in san francisco how there’s like the what’s it called the painted ladies which is the whole the full house house and then there’s the missed out firehouse um i would just want to buy all these and turn them all on so i lived a block away from the uh from the full house house and uh literally 24 7 there is somebody standing outside of that house during the daytime uh taking a photo of it so there’s just a constant and it’s not like it’s not like a huge line of people but there’s always like four people standing outside taking a photo in front of the full house house every single day for the whole year it’s kind of crazy and then it just sold actually and it’s sold at basically like i think 1.5 or 2x the market rate in that area so um they got basically like a double premium because it is the full house house which i think is you know kind of interesting um but okay i think we should uh i think we should buy michael jordan’s house i think we should crowdfund uh i think we should crowdfund five thousand people together we should own this thing or we could go to rally road and we could say hey rally let’s put michael jordan’s house on rally and uh you know let’s sell this baby out i think if five thousand right now if you go on rally roads you’ll get two thousand or three thousand people buying a fractional share of you know a pair of jordans or a signed autograph or a signed rookie card or something like [ ] all that let’s own the guy’s house so i think you could easily get 5000 people on rally road to buy a fractional share of michael jordan’s house i’m surprised they don’t already do this if they’re listening to this uh you know go go for it just give us credit and give me a share of the house i actually think that they wouldn’t do that because how do you liquidate that it’s been on the market for 20 or how long 10 years no one is obviously no one’s buying it so like how do you get liquidity from that after seven years i don’t think you don’t i think the game right the point of rally is that they take things that are not assets and they make them not liquid assets they make them liquid assets so because you can own a fractional share now there’s liquidity any one person who owns a piece of michael jordan’s house can swap it for anybody else who wants to own a piece of it so you don’t need a 15 million dollar buyer because you can sell them in blocks of a thousand or fifteen hundred dollars and so when you bring that price point down there’s people who wanna own a piece of the a piece of the art a piece of the asset which is how they do like you know they’ll sell um you know a harry potter first edition signed you know set of books and uh you know instead of selling it for 25 000 they’ll get you know 2 000 investors to each put in or whatever whatever the math comes out to 150 bucks to go buy uh you know to own a piece of that thing so they introduce liquidity by making it fractionally owned yes but there’s still no cash flow you have to create an operation around this cash flow there’s no cash in a basketball card there’s no cash flow and air jordans there’s no cash flow and and harry potter first asian investor who’s willing to buy it no dude you’re still thinking like the old world you haven’t seen what’s going on in raleigh you’re staying with jack smith you should go ask jack smith about how this stuff works uh he’s the one who who taught me and he’s one of the biggest investors in this stuff he’s not buying it for cash flow um you know he’s buying it because yeah there are there is another there is another collector and when you make it fractional now way more people can get in on collecting it versus just the rich deep pocketed people who could buy the whole asset 100 yeah bro but who lik who liquidates it after a handful of years on rally road uh someone actually buys the car after a few years very rarely occasionally somebody comes and offers to buy out the whole the whole lot um and then they put it to a vote i don’t know if you’ve seen this but like you know let’s say a box of pokemon cards went on there uh like a super rare pokemon card set they i don’t know what the ip what the ipo was but on rally they ipo owed it let’s pretend it was 50 000 and then what happened is a is a big you know asian investor came in and said we’ll buy this thing out for 85 000 now so you’ll all get a profit but we want to own this thing and they put it to the vote of all the share owners and they said no they said we’re going to hold it we think it’s going to go up so they voted no they voted to keep it so they’re not all trying to liquidate um soon you know some some people who are buy and hold investors will want to own these assets for a long time because they think hey you know if i just hold this now you know what’s michael jordan going to be what’s michael jordan’s fame going to be 20 years from now if michael jordan passes away how much is going to be worth and uh there’s people who are in it for the long term so i think there’s i think the collectibles thing is a little bit different than i think about it differently than you do i would say you basically need jordan to have like a tragic accident or like for example dance came out so so the last dance is ten part documentary that came out on netflix and espn um you know millions and millions of people watched this thing and jordan’s brand you could see all the price of jordans went up jordan’s like brand visibility and brand sentiment went up um because this documentary came out and he’s still alive it wasn’t a tragic event but somebody told the jordan story to the the younger generation who you know grew up where you know they were two years old when jordan was at his prime and so jordan brand got stronger with the last dance coming out and i think that’s just going to continue you know over time because he’s got all these different you know the legacy becomes bigger than the person itself but i have a different thing that’s sports related okay yeah can i do this one so the different thing that’s sports related and ties into the idea of um making assets out of things making liquid assets out of things that were non-liquid assets so there’s this company called big league advance did you see this thing no keep going all right i’m looking it up so um so shout out to uh joe pompliano uh you know pomp’s pomp’s brother one of one of his brothers um who you know does these twitter threads all the time so he did this twitter thread that caught my eye and it was about this player fernando tatis so this guy’s one of the young i don’t follow baseball anymore because baseball’s slow and boring to me now but i used to and you know back in the day i remember fernando tatis his is that for is it for nano testing junior because okay when i was a kid the senior played in st louis and he was like a huge deal i think he hit like he hits three grand slams in one inning and he was like our hometown hero for years okay that sounds crazy but um uh yeah basically this guy’s like one of the youngest star baseball players and now um he you know signed one of the big contracts he signed a 340 million dollar with the padres and the interesting thing that came out of that was that this company that i had never heard of called big league advance made 30 million dollars off of that deal so who who is big league advanced so basically what these guys do is they go to minor league baseball players of which there are thousands and they say look you’re making you know you don’t make [ ] in in the minor leagues um you you know you you’re riding the bus you you get paid nothing um and you’re hoping to one day get to the league and you’re hoping one day to become a star you’re hoping for the fernando t story where someday you’ll sign a huge contract and what they do is they go and they offer you a deal so they’ll say hey we’ll give you a hundred thousand dollars for one percent of your future earnings so it’s an income share agreement like we’ve talked about with lambda school and whatnot and they’ll go and they’ll say you know three hundred fifty thousand dollars for eight percent of all your future earnings so we’ll bet on you we’ll take a risk on you so you get some money today you can give your family a better life today you don’t have to keep like roughing it while you work your way up but hey if you hit it big like we’re going to get paid out and they basically do a bunch of analytics on their side to try to guess which players to invest in what what what is the exact deal to offer them so it’s like a startup investor who’s coming up with the valuation of every minor league baseball player and um they know they’ll lose many money on like 80 percent of the deals that don’t pan out and they’re hoping that the 20 that do turn into huge returns like a fernando tethy’s junior and so um i think this is an awesome idea this actually is similar to a company that we’ve talked about called pipe pipe is uh they basically take companies that have sas revenue and they say hey you got all the sas revenue um let’s turn that into a tradable investable asset let’s take your contracts you have with customers let’s make it so that anyone can just buy some of your sas contracts off you and uh you get money today up front for for those contracts you don’t have to wait the 12 months for for your customer to pay you every month and um and for that that investor they’re going to get a premium you know so they’ll pay you the years worth of the contract and in exchange they get like a return on on their money and you get money up front which you can reinvest into your business so i really like these companies that are taking things that were not investable tradable assets and making them investable tradable assets and i think big league advance is a cool one because it it’s basically betting on minor league players that might turn into stars what do you think of this well i’m looking at their website so how can a minor le does that ruin the amateur stat or is there still amateur status with an uh my monday is pro minder league is is that you’re a pro you’re a professional player you’re part of a team’s farm system and you get paid you’re out of the college system by then by then so you can only do the you can’t do this for college kids correct that’s cool so i think that you i’m looking at their website now so you i imagine this would work for golf baseball tennis basketball tennis i guess anything that’s like crazy numbers related right like you can kind of like i wonder which sports do you think are the most predictive in terms of baseball is known to be the most predictive um and the most like kind of statistically modelable because your teammates kind of don’t matter when you’re up there batting it’s just you and there’s no like team dynamics whereas in basketball a player can be better or worse because there’s five other people on the court all moving around and it all affects each other but you know that doesn’t really matter in this case but here what you’re basically saying is let’s say there’s a like this guy spencer dinwiddie tried to do this on the nets he um he he had signed like let’s call it a 30 million dollar contract and what he tried to do was offer people token shares in his future so he said look i i think i’m today i’m a like a b-level player i think i’m going to be an all-star someday so if you invest in me now you’ll get a share of my future contract and so you’re just betting on a player you’re just saying i think that this player is going to be a star and i think this player is going to earn this much in his career so i will um i’ll invest now in an income share agreement of his future earnings and so for the player they get money up front they don’t have to wait to earn their contracts and they get a little bit of insurance like if anything happens they get hurt or you know something bad happens in their career hey at least they didn’t risk it all they got paid some up front and for a fan it’s a way to kind of bet and invest in players that you think are going to have more future earnings than uh than what they’re offering today as a this is so amazing i’m looking at their uh so they’ve raised 150 million dollars i think that from the looks of it it looks like they only have like 30 employees do you think that’s accurate and if they made 30 million from from this this one guy alone so this was like the big home run um and you know they’ve had other things where like they they got sued by a player because they offered him 360 000 for ten percent of his future earnings and then he you know he tried to sue them being like oh [ ] that was like a predatory deal i didn’t want to give up ten percent of my all my future earnings for just 360 k but in actuality the guy only made 1.2 million in his career so it actually turned out to be a profitable deal you know he took 360k up front and ended up only paying 120k out uh to these guys in the end so so he dropped his lawsuit why why is there so little information about these guys online you think there’s really not a lot of flying like face page they’re not a tech company uh it’s just a financing company basically they um they tried to fly under the radar they also got like kind of disavowed like the major league baseball doesn’t like them the players association said we do not like con we don’t like like we don’t say that this is a good thing but for the player you know it’s they’re cutting a deal with an individual player and um and i guess it’s allowed in baseball whereas in basketball the nba blocked the thing i was talking about they blocked spencer dinwiddie tokenizing his future contract and and basically selling off future future earnings so some leagues are not allowing it but major league baseball still uh still does allow it and minor league baseball still allows it so my question is this and you’re more of a sports guy than i am and i’m looking at this and it seems awesome my question is what actually would make this fail and not work well so bad predictions so you invest in a bunch of players that don’t pan out you could go underwater like i don’t know i don’t know how favorable their um i don’t know how much room margin of safety they have when they do this stuff like with startups for example just like just like startup investing a lot of people um are angel investors or a lot of you know average vc funds actually can’t even beat the stock market in terms of returns and um they’re illiquid and they’re risky and they don’t they don’t outperform and so it really comes down to these guys ability to pick and value players accurately um if they can’t do it well they’re going to go they’re going to go broke and if they can do it well they’re going to make a bunch of money and i think that’s a healthy setup how challenging is it to to do this because i don’t know anything about sports but i feel like this whole moneyball thing seems kind of like table stakes at this point for for professional teams right i don’t think it’s that challenging to be honest with you i think that there’s uh you know you’re getting you’re collecting data all the time you have scouts you have all these different ways to value players and in this case it’s such an inefficient market because the minor league players just make nothing and the baseball teams don’t want to pay them a lot it’s like hey dude you know do you want to live out your dream or not and so we’ll pay you the absolute minimum required for you know just to have you in our minor league system and so what these guys are doing that’s smart is they’re taking a percentage of all the future earnings and uh and so i think they’re they’re basically going up against nobody right now but i think and i think there’s even an easier way to do this in the nba because the nba has guaranteed contracts so let’s say i sign a five-year 100 million deal i’m an nba star cool that means i’m going to get 20 million dollars a year uh dripped to me and so somebody could come and offer this guy 80 million dollars up front or 75 million dollars up front lump sum here’s your money today and uh good you can use that you can go ball out nba does the nba does the nba have big as big of a minor league they i know they have the d league but i feel like i know so many i’ve got three friends that go into minor league baseball yeah so the nba g league is not anywhere near like all baseball players stars and don’t stars and not go through minor league stars in the nba go straight to the nba they skip the g league g-league is like journeyman and so um it you wouldn’t do this with minor league in the nba you’d do it with the actual nba athletes and for them what you would be doing is saying cool you’re on your first contract i’m betting that your second and third contract are going to be bigger and i’m willing to pay you up front on this multi-year contract because hey it’s guaranteed you could go and break your leg tomorrow and you’re still going to get all this money from your team so the nba has guaranteed contracts so it’s way less risky uh you could just say look i’ll give you this money up front so you can go invest it and you can go ball out you go buy your mom a house you can go buy that buy that i think you always wanted um and in exchange i want to get some some margin on the because i’m willing to wait the four or five years for your contract to play out and i can bet on your next contract and i can you know give you some future some money today in exchange for some percentage of your future because i think you’re going to be a star i i think that this is this is awesome would you value this at a software company because how like if it’s like a if the light if the average length of an mlb or nba player i don’t know what it is but i bet it’s in the eight to ten year range which means you’re you have a really high ltv you have i imagine a quite predictable stream of income would you value this at software or close to software no i don’t think so because it can’t scale that’s the be the beauty of software is that it scales sort of infinitely and um you know for every additional customer you have you don’t have that many additional costs in this case i think this is more like real estate i think it’s just people as property um you’re buying this asset this multi-family property that has this much rent and um it’s gonna it’s gonna cash flow for this many years and so you basically are i think you’re just buying properties yeah but real real estate sells for almost sas like multiples real estate sells at like what like a five or six percent cap rate yeah but software is like 50 dude like if you go look go look at salesforce or slack or go look at these guys multiples you know it’s it’s like you’re at hubspot hubspot is doing a billion dollars a year of top line revenue uh that’s not profit and you know even on the revenue i think hubspot is valid at what it’s like a 30 billion dollar company or something like that um so it’s a 30x 30x of revenue in that case so software has better better multiples than real estate sure well you want to talk about one more thing yeah go for it let’s talk about uh we don’t have enough time i think to really dive deep into the studio model but i’m really interested in this so there’s two companies that i’ve been eyeing the first is atomic which is uh sorry by this guy named jack abraham and he has launched maybe 10 different startups one of them being hymns which is a multi-billion dollar company but the more interesting person is this guy named josh kushner kushner his brother everyone might know as jared kushner he’s the guy who was uh on trump’s cabinet uh josh kushner is married to this model what’s his her what’s her name carly kloss i think so he’s like can have quite of a fascinating lifestyle or a fascinating life but with he started um a small fun he was born into a wealthy family so he he had money early on invested 400 000 into instagram made a significant sum from that and then has since uh not invested in companies through his his fun but really started them and one of them or she has two of one is oscar which just went public and his stake in that is 1.2 the other one is called cadre i think it’s called which is a rich person’s investment platform but what do you think and the reason i brought this up is because you kinda had that experience a little bit like your uh bibo was kind of a startup studio do you like this model of starting companies and operating them but doing more than one at a time or do you think that just passively investing is better um okay so the thing we did which was called monkey inferno bibo was one of the companies inside monkey inferno was definitely a studio and in fact before jack started atomic um we met up in our office and he said hey i’m thinking about doing this studio tell me everything you’ve you’ve learned good and bad about running the studio so i can kind of learn from those mistakes and i told him hey like here’s what i think is great here’s some of the things that trip us up um if i was you starting from scratch here’s how i would do it and then he’s you know he took that and he wait so jack came to you yeah he came to our office and we hung out and we we brainstormed and i kind of told him look these are the strengths and weaknesses of the studio model how are you planning and to his credit he already what he had as an idea coming in was already the exact advice i was recommending and it’s not like oh i told him you should do xyz then he went did it he was already planning to do it that way but um but yeah and at the time i was like you know good luck because very few studios there are many many studios the studio is like the the reason studios happen is like successful entrepreneur wins they take some of their lottery winnings and they’re like all right [ ] it i’m gonna do a studio this time because i can’t pick one idea and i just want to do a bunch of [ ] i want to do a bunch of cool things and like now i have my own money i don’t need other investors so much or i can i can easily raise money from investors because i have this big reputation and so you saw you know garrett camp the co-founder of uber he starts a studio mark pincus the founder of zynga he starts a studio kevin rose that you know sold his company to google then he starts a studio uh michael burch does bebo sells it to aol he started the studio that i i ran um you know there’s a whole bunch of these guys that do this stuff and very few of them have success um we didn’t have any breakout wins um garrett camp from uber he didn’t win mark pincus he didn’t win kevin rose he didn’t win so so you know there was for a long time there was literally zero like breakout winners from studios and recently there’s been a few that have worked atomic has had a few that have worked hymns is like the big win for them it’s a public company now i believe and uh multi you know a multi-billion dollar win that they incubated in their studio um then there’s uh the bark uh barkbox guys so they think they’re in their studio is called pre-hype so they they you know they took barkbox uh public and um they’ve done very well and i think they also have uh row which is a competitor to him so now there’s been a few like there’s somebody got on the scoreboard so it definitely can work uh i would say the odds are that studio thrive and now thrive yeah thrive with oscar going public is great um and so i would say the odds are still you know it’s just like startups where startups 90 of startups you know fail similar uh similar odds with the studio it’s not like you get that much better um i would say a couple things super fun to do because who wouldn’t want this it’s like an entrepreneur’s playground you get to go to work dream up ideas you have a t you have a bunch of teams that are building them all in parallel in theory you’re killing the losers and you’re doubling down on the winners and uh you know you’re just being super creative every day so it’s like the dream job then does it do you actually increase your odds of success on one hand yes because you’re getting multiple shots on goal you’re not you don’t have all your eggs in one basket with one idea the second thing is that you’re learning pretty rapidly so you’re learning from all these different reps these different attempts you’re doing and you’re keeping the team together so like when a team even if you fail the team retains those learnings and just applies it to the next project right away whereas in a normal startup if you fail it’s like everybody goes and gets a job for two years because now you’re you know you just did this thing for three years it didn’t work you’re in debt you need to go make some money and so typically the team breaks up and goes and does something else in this case the team sticks together the learnings are retained so that’s that’s what’s good the bad part which i think is what you’re gonna focus on the big butt of this whole model that i think is what makes it not a great idea if you if you’re if you’re optimizing for success i don’t think this is the best way is uh you’re not focused because you have multiple ideas and you know one of the benefits of one of the key things in life is is focus and laser focus on on making something successful and the second thing which is kind of related to that is like shiny object syndrome every project goes through like kind of periods of plateaus like i remember with the hustle you started off you know with the events then you started the blog and then like there was a moment i remember our conversations where you were like the blogs are bringing in a bunch of traffic but i don’t think this is working i need to figure out something else what if i did this daily email newsletter right you were like trying to figure out what do we do is it video is it this newsletter what is it and in a studio when that happens when you plateau or things just stop working or growth stalls it’s super easy to instead of being like [ ] how do we find a way out of this how can we try to make this work uh it’s really easy to be like hey what about that other idea that we’re doing like that one’s still super exciting it’s not in a plateau right now so you just like unconsciously start to spend more energy on the thing that’s not stuck because like who wants to stay in a [ ] stuck on a stuck project but as an entrepreneur you have no choice you told everybody you told your investors you told your team you told your mom i am building this and you have to find a way and that’s like the most valuable thing a startup has is that like the the the do or die situation for a startup and i think studio takes away the do or die mentality because it’s like do this or do that or do that or do the other thing and so you have all these options and those options actually um they actually take away your biggest asset as a startup so i would say if you’re going for fun studios are dope if you’re going for success i think that going like dabbling and picking a startup to go all in on is a better model than trying to run a studio with multiple projects and that’s actually what i remember my what i spoke to you about um years ago when we started hanging out at monkey inferno is uh i don’t remember which one it was blab bebo one of them like it seemed pretty good but like every business there was some problems where you’re like people are coming but we’re getting hacked or i don’t remember what the problem was yeah or it was like kind of good kind of bad um and i was like dude just like just figure it out and i actually thought that you were for part of me was like oh sean’s at this great place where he can do anything he makes money and he has an unlimited budget he can do anything i actually think that that hurt a lot of times and it would have been a little bit better if it was like you’re you’re [ ] you’re broke right yeah exactly i think you you called it for what it was like really early on you were like dude i think having everything right we had like a [ ] private chef we had the dopest office we had all the engineers we needed we had unlimited funding and runway we could just keep going and you were like dude it’s gonna make you soft like don’t you know having all this [ ] is like not good for you i remember you like pointing that out really early on and then also like just pick one of these and stick to it don’t like don’t get distracted by having a lab or a studio where you have all these different things going on and you’re just dividing up your attention 20 here 30 here 10 here and uh like what if you just put into like the one and you just found a way you know i you i remember you saying that stuff but it seems really fun and when it works it’s like oh wow it worked and it’s fun and that’s what i’m seeing when i when i when i i mean i don’t know these guys but from an outside perspective and i’m sure it sucks on the inside just like everything else has pros and cons it seems quite fun it seems really exciting to be able to win big and have multiple uh shots on target it seems really interesting um so one thing by the way one thing i think atomic did good uh that they changed the model so he was i told him i was like i told him about these problems and he was like yeah we’re gonna do it differently he’s like we’re gonna only do one project at a time that team is do or die on that project he goes they have nine months to raise their their series a and if they can’t raise their series a in nine months they’re out like you’re out of a job and he’s like in reality we’re gonna keep the good people we’re gonna offer them a job on the next one but like it’s not a given that like oh if this doesn’t work no problem like just work on this other thing that we’re doing and he’s like that’s going to have urgency that’s going to have focus they’re not going to split their time between different projects and he’s like i’m going to be the ceo of of the project you know like that we’re doing and the other big thing was they weren’t going after consumer like we were doing consumer and like social apps which are you know lower odds of of hitting the lottery um whereas he was like yeah consumer’s super hard you know it’s just really hard to you know the consumers are fickle we’re gonna do b2b and so that they started doing only b2b stuff for a long time and um and hims was the one kind of like consumer hit that they’ve had um the other things that they’ve had that have done okay are b2b companies which i think are a smarter model to do e-founders is a great example of one of the that’s working in europe where it’s like they only do sas and they really focus on problems that they know that are in the b2b space because their own companies have this problem so then they build a product for that and they build it make a company out of it they’ve had big hits like front came out of that and different things like that well rocket internet does it as well and they’re they have their tens of billions of dollars with the value that they’ve created but the best example of this my favorite actually and i just realized this as we were talking is kevin ryan kevin ryan is someone who i admire and and i i joke that we kind of look like he’s probably uh 30 years older than me but i tease that we like he kind of looks like i look like him we kind of look alike and he um he was the 20th employee at i forget what it was called but it was double click it was called doubleclick and it was sold to google for multi-billions and eventually became google adwords and adsense and he told me that he made around 20 million dollars when he sold it which was definitely a [ __ ] ton of money and then using that him and this guy named dwight would invest 300 000 and give a company six months to show traction and the outcome of their companies uh there’s a a couple losers and a couple winners probably a lot more losers than winners but the first one is mongodb which is currently publicly traded at a 21 billion valuation the second one is business insider which is probably a bill it was sold for 500 million dollars probably worth a lot more now uh the third one is zola which prior to the pandemic was doing hundreds of millions of dollars in sales and i think that there’s like four or five more that have been hits right and he told me i actually called him and i emailed him like every month for like three years to try and get him to talk to me and eventually he let me fly out there and meet with him and he told me that all he does is him and dwight i mean they’re wealthy right so they can do this but they he they just come up with an idea and they just get a piece of paper and a pencil and they like write out the math and they’re like oh that’s kind of interesting all right let’s try to find someone to do it and we’ll give them 300k to do it now this sounds like a very simple process and it might be simple but it’s still quite hard to pull off but they’ve done it and it’s and it’s called um sil uh silicon alley insider it’s the name of his thing and uh you’ll have to look this guy up it’s really interesting i think that’s jason calacanis thing that’s not that’s not those guys no it’s it’s they have the same name oh okay interesting um it’s it’s called uh wait is it called silicon alley insider uh it’s called the alley corp sorry you’re right it’s called ali corp so so i think there’s a business insider was called silicon alley insider interesting so so i think so so there’s it’s just like accelerators right there’s like a million accelerators in the world every college has one every little city has one and then you have y combinator that just like kicks ass and you know so what combination best sorry to interrupt guilt guilt guilt is the other one that he started right go ahead that’s a bunch of hits so basically you have like it’s not that is this model good or bad it’s like how do you execute it and who are the people involved in it so like y combinator is an accelerator that is probably created you know i don’t know 100 billion dollars worth of value now out of the companies that have come out of it um easily over 100 billion actually airbnb alone is 100 billion um so so y combinator is like the best and then you have tech stars and then you have like all these other accelerators that like have never had a hit and um so our accelerator model is good or bad like if you said it was bad you’d be wrong because y combinator is a hit but if you said it’s just great and you can repeatably make success using this model no that’s not true i think the same is true for studios and everyone is different because you have to make a bunch of choices it’s like for example are you going to do multiple ideas at once or you’re going to do one at a time are you going to have shared staff working across projects you’re going to have staff dedicated to their one and they live and die with the one are you going to fund it indefinitely or you’re going to give it a six month or nine month time period to to get to some traction and raise money from external investors or are you just going to let it run forever do you come up with the ideas or do you invite in founders and they spend some time coming up with the idea like an eir all right there’s all these different differences that like there’s all these like little choices that will lead to a totally different outcome it sounds like in that case they come up with the ideas and then they find an operator in jack’s case he came up with ideas and he was the initial operator and then he hires a ceo um you know in xbus case they bring in an operator and they the operator comes up with the idea and so there’s all these different versions of it and um you know a lot of it just depends on both luck as well as who’s involved like truly great entrepreneurs and investors can have success where somebody else copying the same model that they have won’t they won’t be able to pull it off because they don’t have the right judgment and that’s why i think i failed and i think i didn’t have the same judgment these guys who have had success like with them with their model i think they were better at playing that game than i it also helps to be wealthy i think and be able to write uh 10 to 20 300 000 checks and have the time to do it and so i don’t want to dismiss that but a lot of them raise money like jack he raised money he raised uh i don’t know like 100 million dollars or something from andrews and horowitz and others to fund his lab even though he himself was like you know you know doing super well he had sold the company to ebay he was like crushing it at paypal or whatever like or ebay when he was there um you know he sold his company for 75 million dollars when he was 24. well i’m not just i’m not dismissing any of their skill i’m just saying this is definitely like a after you get your hit it’s a lot easier i’m not dismissing that at all it’s like it’s a lot easier to become a good golfer if you have some money to afford a fancy uh uh fancy clubs and a membership and there’s a bunch of people trying to do that don’t have that right there’s a group uh this guy bobby he listens to the podcast he’s doing this for creators he’s like all right we’re gonna make a studio we’re gonna just build products for the creator economy and i don’t think they have a big track record or anything like that but that’s their focus they’re trying to do a studio for that i’m not saying it’s impossible i know another group of guys this year another group of guys that i’m bet i would bet on that um the main guy is this guy kumar and uh if you should follow him on twitter he’s amazing uh he’s super interesting on twitter and facebook uh his handle is data raid i know who he is and he’s just like really into all these alternatives he’s a weird guy yeah he’s a weird dude but he’s really sharp and he’s really out there different type of thinker and so he’s like he’s like really into like you know the the energy industry and so he’ll build like little products for the energy industry that you didn’t even know like there was a need for so i think this guy’s going to do well because he knows where to sniff he knows where to sniff out some money because he’s looking at problems that the average kind of engineer in silicon valley or new york or la they don’t even know these problems exist they don’t even know these companies exist and so um you know he’s he was doing one for example like his friend is a lawyer and uh you know there’s like all these like little rule changes in like your local regulation or your local law and he just made an alert system where it’ll alert you about whenever this rule changes and uh he can go get a bunch of lawyers to sign up for these email alerts and it’s a sas business that you know can do well or you know energy prices when they when they rise and fall um how you know how are you gonna track that how do you get how do you build a database of that that information so he’s got all these like really random ideas that i think the average entrepreneur doesn’t really even know about those markets enough to like to know those problems and therefore he finds kind of untapped opportunities well i think we should dive deep on this sometime like even more and i want to get jack on here and i would love to get kevin ryan on here um because i this sounds cool it definitely sounds like a rich guy’s playground and frankly i want to do it what i want to i put my all in it like the days of the road