Sam and Shaan analyze how Mr. Beast’s Beast Games — a real-life Squid Game recreation — generated 130+ million views in a week while spending only $3.5M (half sponsored by Brawl Stars), exploring what it means to shoot for epic vs. incremental projects. They also dig into several business ideas: the AdBlock chrome extension empire built by a single engineer, a $130M public company that rolls up emoji and wallpaper sites, QVC-style live shopping for high-ticket products, and Peter Levels’ prolific “open startup” empire including Rebase, a Portugal relocation service.
Speakers: Sam Parr (host, co-founder of The Hustle), Shaan Puri (host, founder of Milk Road)
Cold Open [00:00:00]
Shaan: When you go fish in a part of the pond that nobody else is fishing — because everyone else thinks the water is too deep and it’s too scary over there — the rewards are disproportionate, even to the effort and the work that goes in.
Intro: AppSumo Deep Dive [00:00:15]
Shaan: All right, what’s up?
Sam: What up, dude. How are you doing?
Shaan: Who did you have as a guest on the last episode? When I was doing my own episode you tweeted out you wanted to guess who came on.
Sam: Two different people. The first was our own Ben — Ben and I did an episode where we talked about people in history and whether there are any commonalities between a bunch of them. And then Noah Kagan, my friend Noah from AppSumo. I asked him if he would come on and he said yeah, so I just recorded two that day.
Shaan: Cool. Did they turn out good?
Sam: I mean, we’ll see. Noah was good. Ben and I was good as well. I just hope the topic is gonna be a winner. We’ll see. Noah is amazing.
Shaan: Do you know about AppSumo?
Sam: I know loosely about AppSumo. So here’s what I know — you tell me what I don’t know. What I know is that AppSumo is basically a website where you can go get software deals. They go find cool software, make a deal, say “hey, we’ll get you in front of like 50 million people, but you’ve got to offer a deal to our audience” — kind of Groupon-style or Woot-style. And apparently he’s doing extremely well, been doing it for a long time, 10-plus years. I think it does over $100 million in revenue. That’s what I know about it.
Shaan: Almost. So AppSumo started as basically Noah emailing the founder of Imgur and saying, “Hey, you guys charge $10 a month — if I give you a bunch of new customers at $6 a month, can I get a little cut of the pie?” That’s how it started. He made $10 grand doing that, just by emailing a bunch of friends.
Eventually, it kind of still is this way, but they’re becoming more of a marketplace and website. For the last 10 years, though, it’s basically been an email list. I think there’s only 300,000 people on that list, and they email out a few deals a week where they find companies that say “hey, give us a discount and give us a cut of the revenue.”
It was doing okay for years — some years it didn’t do better than the year before, sometimes it did a lot better. After close to 10 years, his goal this year was $100 million in revenue. They’re going to miss it by a little bit, but he said they’re going to get north of $80 million in revenue.
Now, he didn’t say it on the podcast — if you just Google it, it appears that of that $80 million, they pay out 30% to their partners and they keep around 60 or 70% of the actual revenue. He owns most of the company, has never taken any outside money, and they have like 150 employees at this point.
Sam: Wow. I didn’t realize some of those things. Okay. So 300,000 people on the list.
Shaan: So if they send out an email about some product — have they ever done it for The Hustle? Did you promote The Hustle in there somehow?
Sam: I don’t think we’ve done it in a traditional way. Maybe we’ve done Trends, but we haven’t done it in a major way.
Shaan: Sometimes they’ll only send it to part of the list. But some of their partners will make over a million dollars in one day.
Sam: Well, I guess my question is — how many people actually take them up on their offer? So how many do they need for this business to work? Because it seems like maybe bigger than it is. I wouldn’t be surprised if it’s like a thousand people clicking the thing and a thousand people is enough for this business to work.
Shaan: When a thousand people take the offer — is it a thousand or more like ten thousand?
Sam: I would think it’s in the single-digit thousands, if I had to guess. That’s how many buy. Because the products are like a year-long subscription or something, so you don’t actually need that many people to buy in order to make $500K to a million dollars.
Shaan: And you’re saying they’re sending emails constantly and now have a website that people are using. Here’s where it gets interesting — I asked him how much could you sell this business for right now. He said the huge range is $300 million to a billion. I think that’s what he said.
Sam: Pretty crazy.
Shaan: It’s like — Noah, good job.
Sam: And like a lot of things, The Hustle included, people say “it’s just an email list, it’s really simple.” And yeah, that’s true, it is just an email. But there’s definitely a machine behind it. AppSumo is inherently quite simple — they just holler at companies, say “give us a discount and give us a cut of the pie,” then email it out to people. It’s so simple and it creates so much value.
Ryan Hoover did a list a while back of big companies that started off as “just an email list.” Product Hunt started off as an email list. Product Hunt got acquired by AngelList, which is like a $3 billion-plus company. AngelList started as just an email list — just a list of angels. Craigslist started off as an email list. Groupon was basically an email list for a long time.
So there was a whole bunch of products that started off as just an email list. Some became more than that, some stayed an email list. Don’t underestimate email.
Shaan: That’s not tattooed on Sam’s back — “do not underestimate email.”
Beast Games: Epic Projects Win Disproportionately [00:07:45]
Sam: Let’s talk about a couple things. I have a business idea I want to highlight — one of these “that’s so simple, are you joking, that’s the business” type deals. But first, before we do that, we gotta talk about this Beast Games thing. Mr. Beast’s Squid Game. Did you watch it when it happened or have you watched it after?
Shaan: I heard about it basically through Casey Neistat, who I follow on Twitter. He was saying Mr. Beast — what he’s doing with the Squid Game thing is one of the most epic things he’s ever seen on YouTube. And Casey Neistat is one of the pioneers of YouTube, so him saying that meant a lot.
Sam: Exactly. That’s like Denzel saying “wow, great acting in this movie.”
Shaan: So for those who didn’t see it — Squid Game was this ultra-popular Korean show, I think the most popular show ever on Netflix. It’s this crazy death-game concept where a bunch of people enter and they’re trying to win the big prize, and if you lose, you die. That’s the short version.
I actually didn’t watch Squid Game, so maybe I got something wrong, but I did watch the Mr. Beast version. What did Mr. Beast do? He basically decided: “I’m going to recreate Squid Game, but obviously people aren’t going to die.” And he did it even better. He invited 456 people to an arena that was built for this. The prize was $456,000 for the winner, $10K for runner-up, and everyone who went got $2,000. In total — production plus prize money — I think he spent about $3.5 million on this 25-minute video.
So first, players showed up wearing the same outfits as in Squid Game — kind of a green windbreaker jumpsuit with a number. Player 1, Player 2, all the way up to Player 456. Inside their shirt they had this pack — an exploding paint pack. So if you’re playing Red Light Green Light and you flinch after “red light,” your little pack would explode and red paint would come out, as if you got shot like in the real Squid Game. Then you’re out.
In the end, some player won $456,000.
Here’s what I think is amazing — some numbers. The video got about 130 million views in seven days, which is crazy. And I believe — Ben, you can fact check me — I believe 130 million views is more than what the actual Squid Game got on Netflix.
Shaan: Now Netflix is a paid service, and people watched like 12 hours of footage across multiple episodes. But still — the fact that it’s comparable, the fact that somebody watched the show and was like “we’ll do a backyard version of that” and got 130 million people to watch, is insane.
Sam: He spent $3.5 million on it. To put that in perspective, that’s basically half the cost of a 30-second Super Bowl commercial.
Shaan: Wow. Really?
Sam: The whole thing was fully paid for by Brawl Stars — the super popular mobile game. If you look in the arena, it’s a giant Brawl Stars arena with their logo in every shot. For Brawl Stars, this was such a smart move. They basically paid half the cost of a Super Bowl ad and got more viewership than a Super Bowl ad — 130 million people watching a 20-plus-minute video versus a 30-second clip. And this is an epic thing that’s going to get shared, and they could take this content and repurpose it for ads or anything else.
For Brawl Stars, $3 million is probably like one day of ad spend on Facebook or something. Brawl Stars is owned by Supercell, one of the biggest gaming companies.
So if I’m Mr. Beast — I think he could have gotten Supercell to pay for the whole thing. Three and a half million dollars. I bet he also got another $500K or so just layered on top of that. And then he probably said “I’m gonna keep YouTube ads on this, and I get all of it.”
Shaan: So if Mr. Beast is getting 130 million views in the first seven days and you do maybe $4 CPM — that’s around half a million dollars in the first week. Plus I believe his deal is going to be a lot better than $4 CPM because he’s like, you know, one of the faces of YouTube. These guys have custom-negotiated deals that I would bet a lot of money are better than the standard four to five dollars.
Sam: What do you think it is?
Shaan: I bet he’s getting closer to $10 CPM. So if it’s $10, that’s $1.3 million.
Sam: And just in a week.
Shaan: Just in a week. Plus, according to our notes, it looks like he got 10 million new subscribers in the first week. A normal week is 400,000 subscribers. So he 20x’d his subscriber growth.
Sam: So what does this do? He continues to be the content leader, gets 10 million new subscribers who are going to get notified for his next video, makes a million dollars on ads, gets the whole thing paid for by a sponsor.
This is a great example of something we’ve talked about before — we talked about it with Elon when he does epic stuff like “I’m going to go to Mars.” We talked about it with that guy building the epic train system in America. I ranted about Disneyland last week. When you shoot for epic projects — things that get people inspired and excited — it seems like it’s harder to pull off but in many ways it’s easier. Because:
You’ll get talent to pour in because they want to be part of something bold. You’ll get sponsors to pour in because they want to bet on this epic thing. And you get your own motivation to get out of bed every day because you’re working on something so grand.
Ben just looked it up — 142 million people watched Squid Game on Netflix, 132 million watched Beast Games on YouTube. About the same. One to one.
Shaan: You get disproportionate prizes when you go fish in a part of the pond that nobody else is fishing, because everyone else thinks the water is too deep and it’s too scary over there. The rewards are disproportionate even to the effort and the work that goes in.
I had a friend — it could have been Noah actually — who spoke to Mark Zuckerberg, and he said to Mark, “Why don’t you just sell the company for a billion? Why are you raising all this money, things are growing?” And Zuckerberg said, “Look — I only have 24 hours in a day and I’m only going to work the same amount of time whether it’s big or small. So I might as well make it as big as I possibly can, because that’s what interests me. It’s equally hard to go big as it is to get to mild success.”
That’s a perfect example of what Mr. Beast has done — equal work, same amount of time in the day, but when you build something so epic it’s exciting. So many people who don’t give a damn about Mr. Beast — of which I am one — cared about this. Small ambition and large ambition take the same amount of effort if you want them to work.
Sam: I think this was brilliant. This is another example of Mr. Beast being one step ahead of the curve. You’re going to see a lot more people try to clone this. The next thing that comes out, you’re going to see four YouTubers who are the wannabe Mr. Beast try to recreate this.
This wasn’t the first thing he did like this — he did like a “I’m gonna recreate Fortnite,” went to an island, 100 people playing paintball as a game of Fortnite, made a video. I think it did well but it wasn’t this level. But those reps you put in give you the confidence and the shots on goal until you get something to work like this.
I was also watching a clip of Mr. Beast yesterday — somebody said, “You’ve talked about wanting to be a billionaire, the first billionaire creator. Are you there already?” He goes, “No, no. Cash-wise I’m probably the poorest person in this room.” They’re like, “No way.” He goes, “Yeah, because whatever I have is paper. It’s not liquid. Any cash I get I just reinvest into the next video.” He said, “If we make three million dollars this month, I’ll put three million dollars into the next video. We have razor-thin margins.” He said he’s spending something like two or three million dollars a month on content.
I would have guessed around $30 million in revenue off his operation, and so that makes total sense. He has around 30 to 40 full-time people working for him. I read about what it’s like to work with him — a lot of people complained, saying working with him is horrible. And I was like, “Okay, what’s going on, why?” They said he’s a perfectionist. He would analyze every single frame and ask “Why isn’t this good enough, why is this so bad?” Frankly, that made me love him even more.
Shaan: There’s something interesting about this though — I actually think being him is exhausting, because you have to go up every single time.
The YouTube Treadmill [00:21:00]
Shaan: Let me give you an example of two YouTubers that are incredibly interesting to me: Graham Stephan and Meet Kevin. Do you know who those guys are?
Sam: I know Graham Stephan. I don’t know Meet Kevin.
Shaan: Meet Kevin, I think, is even more famous. He has 2.5 or 3 million subscribers. He recently did a video called “Here’s My Entire $50 Million Dollar Portfolio at Age 29.” I noticed he had done one of these about a year ago and his net worth then was only $25 million. I was like, “What is going on, this guy is nuts.”
So Meet Kevin — I don’t know his full name — makes like three to four videos a day and talks about which stocks he’s buying, which houses he’s buying as investment properties, and he shows his entire portfolio. At the end he goes, “Now here’s proof,” and he logs into all of his accounts and you can see everything. Screen share.
Sam: Which is amazing.
Shaan: For many reasons. One, he’s only 29 and he’s a YouTuber with $50 million — how? He started at age 19 as just a real estate agent. A normal guy. Made like $100K a year, took that $100K and bought some properties. Then started a YouTube channel in 2010 or 2011 documenting his real estate investing. Slowly that started making additional income. Using that income he bought even more properties. Eventually he had a course and things like that where he was making like $1 to $2 million a year. Then he took that money and started investing it and started talking about what he was investing in. You can see this entire growth over the last five years of his portfolio.
Of course, it helps that A) he’s got a significant income stream now — maybe $4 million a year — and B) we’re having the best bull market of all time. So it kind of works.
Interestingly, when Gavin Newsom was being recalled, Kevin ran for office. There was a Republican named Larry Elder who got second behind Gavin Newsom. Kevin was third with hundreds of thousands of votes. This kid is amazing.
Sam: That’s surprising. I feel like a YouTuber with a big following should crush any politician.
Shaan: He doesn’t have that big a following — 2.5 or 3 million — and it has to be California voters over 18, so it’s not huge. But my point: Graham Stephan did the same kind of content and his prediction was — a Mr. Beast-type person will run for president and will surprise people with the type of following they get.
Sam: Oh, absolutely. Whether you want to actually be president or not, you could just throw your hat in the ring. The original Trump playbook was: “I’m gonna throw my hat in, get tons of attention and press, build my brand off the massive amount of attention that goes into elections.” You’ll see Kanye did it, you’re gonna see the wild west of people putting their name in the hat. They’re going to get a little momentum, that’s going to create a press cycle, that’s going to create more momentum.
I don’t think they’ll actually win. I don’t think they even want to win. But it would be a smart move for the dog-eat-dog world of YouTube trying to get views.
Shaan: But here’s back to the original point — what an exhausting life, that you have to go up like that. I’m thankful that Mr. Beast does what he does. I’m thankful that Kevin and Graham are crazy enough to log in and show everyone their portfolio.
Sam: I had this exact thought the other day. I forgot who I was talking to, but I’ve had like five ideas about YouTube videos that would get clicks. One was: I was gonna show how you can make $10,000 being a Santa Claus for Christmas. Buy the suit, show the economics, go do the thing — funny thumbnail, semi-viral story. Another one was buying fancy stuff and like actually — Justin Kan did a video where he toured a $50 million home and it was amazing. Just interesting content. Junk food that people in our niche like to consume.
And every time I think of one of these, I think to myself: I do not want to get on that treadmill. I know this would work, but I’m also wise enough to know that is not a path I want to double down on.
I don’t feel that way about this podcast. This podcast feels ongoing. It’s a breeze — we show up, I shoot the shit with my friend for an hour, people seem to like it. It’s like two hours of my week on camera. And because it’s a podcast, I’m not worried about how I look and the angle and this and that. Podcasting has that effort-reward ratio that works for me. The YouTube treadmill has a much bigger prize but I don’t want to win that way.
Shaan: It’s exhausting. There’s a reason you don’t see Casey Neistat anymore. I watched a couple recent interviews with him and he said, “Now I don’t do anything.” He goes: “For those three years I was recording daily vlogs, everything in my life had to be content. If someone invited me to dinner, I had to message them and say I can’t come unless someone interesting is there or you want to go somewhere intriguing — because it has to be content.” He said, “I lost a lot of friends, my wife almost divorced me, and it was exhausting.” Now he’s 37, financially successful, and he goes, “I’m not doing it anymore. I need to take a break.”
Sam: So I think it’s cool to dabble, but I am wary of the treadmill.
Sam’s Real Estate Project [00:30:00]
Shaan: Now, you did a video on the other side of the coin. You’ve been putting out your fitness content, which I think is probably just fun and motivating for you. And then you did a video I loved — you put it on your personal YouTube channel about this real estate project you’re doing. I wanted to ask you about it.
For those who didn’t watch it — you bought a piece of land right next to your house. Like literally the neighbor lot adjacent to your house. And it’s got this really run-down shack on it — a large piece of grass with a really shitty shack that somebody was living in. It looks brutal, like conditions you wouldn’t wish on an enemy. And you broke down the economics.
How much did you buy it for, exactly?
Sam: $650,000.
Shaan: You bought the whole thing. Did you leverage it or buy it cash?
Sam: Cash.
Shaan: Why didn’t you borrow?
Sam: Because I wanted to purchase before they put it on the market. The background: it was a 90-year-old couple who owned it and they rented it to a guy. The day I moved into my house, I did a little research, found out who they were, and I said, “Hey, just so you know, my name’s Sam. I live next door. If anything ever happens and you want to sell this, please contact me.” The man died on a Monday. The wife called me on a Wednesday and said, “Would you like to buy it?” I bought it on a Thursday.
Shaan: Amazing. I love that.
Sam: And in this area there’s a price per square foot that you can get, and you know on the low end it costs this much to build, on the high end — considering it might be more expensive than we think — I might have to put a million dollars in to build the actual structure. I might be in for $1.6 million total. But based on the price per square foot in this area, I should be able to sell it for $2 to $2.5 million when I’m done.
Shaan: The margin of safety was really strong. You made your money on the buy, as they say in real estate.
Sam: Yes. And it’s not taking nearly as much time as you’d think. Here’s why.
Before I even bought the piece of property, I found comparable homes in the area that sold for my ideal price per square foot. Went on Zillow and Redfin, found the architect, called the builder, and asked, “Hey, how much would it cost to build this exact same home right now?” They told me. I bought the lot. Then I called them again: “You know that house that just sold for $1,000 a square foot? Do that again over here for me, please.”
You’re not trying to innovate. No sandpaper touches of like a 3,000 square foot gym in a 1,000 square foot house. It’s a normal house build-out. I said, “Make it a two-car garage because if I decide to live there I’ll build a gym there.” That’s basically it. I took a house that was crushing it and I hired the same people and said “do it again.”
Shaan: By the way, just the fact that it’s next door is going to be a huge savings in time and headache involved. Because my family did this — we had a house in San Francisco and then bought a house two doors down. Just the fact that it was two doors down had all these extra benefits: super easy to go see it, super easy to manage any construction. They share a fridge in the garage. My sister runs a business out of one of them and she can manage it without getting in her car. Just being within eyesight — a two-minute walk — is so important.
If anyone’s going to do a project like this, do not underestimate that. I’ve seen it a couple times now. This is my rule with friends and family too — you want to live so close to your best friends or family that you could go unplanned to their house. You don’t need to pack a bag. Because the difference between 15 minutes away and four minutes away will fundamentally change how often you see that person.
Sam: Why did you bring up that YouTube video, by the way?
Shaan: Because I thought it was awesome! And I just wanted to hear more about the actual real estate side.
Sam: The numbers are going to work out — not a lot of people believe me, but I think it’s going to happen this way. I’m going to make half a million dollars in profit or more from it. There’s a world where I make closer to a million than half a million. I can sell it, rent it out, or live in it and sell my home — I have a few options.
But the way all this math is going to work: between this house and that house, I’ll have made around a million dollars in profit in like 18 months. I’ll make more from this real estate project than I made from my entire Hustle salary combined.
Shaan: But you had to invest, right? That’s the kicker. You couldn’t have done this back then because you didn’t have a spare $1.6 million to go invest. Or if you did, it was like all of your money.
Sam: Exactly. You’d have to go completely all in.
The $25M Chrome Extension [00:38:30]
Sam: Can I tell you about a company that interests me? I was talking to someone recently — I can’t say who — but they had a Google Chrome extension that made something like $25 million in revenue with only two guys.
Shaan: Two people? What did the extension do?
Sam: Roughly helping people on Amazon sell stuff. Kind of like Jungle Scout, something in that world. So I got curious and started looking at extensions.
There are two extensions that caught my attention. They have almost exactly the same name. The first is called AdBlock. The second is called AdBlock Plus. So that’s why it’s a little confusing.
AdBlock was created by one guy in Georgia — Duluth, Georgia — named Michael Gundlach. He just kind of built this thing in 2009 and he’s been the only employee the whole time. I went to his personal website to learn about him. He has 55 followers on Twitter. His website is called sorryrobot.com. He has Python projects, a Unity game he built called Asteroids, and even has an MP3 of him singing a Christmas song at church. His LinkedIn job description just says “just a guy.” And it says: “I am not available for work. Please do not contact me about job opportunities. I created AdBlock, the most popular Chrome extension, with around 20 million users. It’s neat. Before that I did some other neat things.”
Shaan: He is in Duluth, Georgia, and the only employee.
Sam: Then I looked at his competitor, AdBlock Plus. They have a few more employees — I think 20 or 30 people. Because they’re based in Europe, when a European company makes over a certain amount of revenue they have to file a report that reveals revenue and profit.
I went and looked at this company called Eyeo — they own AdBlock Plus. In 2017, they did $44 million in revenue and $26 million in profit. Astounding. And they had at least 100 million users.
If you look at the Chrome plugin store, AdBlock Plus has around 150,000 reviews and says over 10 million users. AdBlock — the one-guy operation — has around 300,000 reviews and also says 10 million users. So there’s a potential that this one guy had a business making tens of millions of dollars a year just off a chrome extension.
Shaan: This is amazing. I’m still on Michael Gundlach’s website — sorryrobot.com — reading his resume. He was an engineer at Google working on Google Ads and Google AdSense. Did you already say that?
Sam: No.
Shaan: So he worked on keeping the global Google Ads and AdSense networks alive. And in his spare time — Google has that “20% time” thing — he built AdBlock. He goes from working at Google AdWords to creating AdBlock. Makes 20 million users love this thing. What year did he work at Google?
Sam: 2005, I believe. Right after the IPO basically.
Shaan: So he probably made $30 million at Google collectively, if he held the stock. Then reportedly — and everything about this guy is very quiet, very hard to find — I think in 2015 an anonymous buyer bought AdBlock.
Sam: Interesting.
Shaan: There’s a world where it could have been sold for $200 to $300 million. But here’s the thing about chrome extensions — these are a giant security hole for people. Chrome extensions can read and write all the data as you browse the web. Every email you’re writing, the text can be picked up by these extensions. And even if they start off safe — because some random engineer from Duluth, Georgia, built it with the right intentions — somebody who buys it with the wrong intentions can do some dirty stuff with the data. Modifying it, things like that. You got to be careful. I try to install the minimum number of Chrome extensions as possible.
Sam: They are pretty scary. But it’s a wild business.
Here’s what I love about extension-style businesses — there are a few platforms that I think are quite interesting. Google Chrome still makes a ton of sense. Shopify still makes a ton of sense. Our friend Andrew has a business where all he does is buy Shopify plugins. It’s a publicly traded company, market cap around $600 million, on the Canadian stock exchange.
But the third thing — which you probably have not thought of — and the fourth thing you definitely haven’t thought of: Salesforce plug-ins and Zoho plug-ins. Incredibly interesting.
We used to hire an engineer at The Hustle in another country and we’d pay him $20 an hour to just build little apps for us for our sales team. I think Zoho — which is like a Salesforce competitor but a little jankier — has an equal amount of users as Salesforce. I think you could build a really great business just doing Salesforce plug-ins.
Platform Roll-Ups: Gaming, Shopify, and More [00:44:00]
Shaan: And we’re rolling them up. I don’t know if I’m allowed to talk about this, but I’ll say it in a vague way. I heard about a guy who was rolling up games inside a big gaming platform. So there’s a very popular game and there are little games or modules people create inside it. People monetize them. This person was rolling them up.
Sam: Does that mean these are created by — I don’t play games — okay, so for example there are big gaming platforms like Fortnite, Minecraft, Roblox. Inside the game you can create little experiences and you can monetize them. Kind of like people who create different-colored guns for Call of Duty, or mods for different games — maps, different things like that. Some of these games are so big that they actually formalize their little creator economy inside the game.
Shaan: And the person I knew was rolling them up and said, “These are selling for nothing because it’s just a kid who made this. It sells for less than 1x revenue — it’s crazy compared to going and buying that same cash-flowing asset on FBA or Shopify.”
Now, everything has a different risk profile. Maybe this game is a fad, maybe people will stop using it, maybe the game will change the rules and you’re screwed. So yeah, there’s some risk. But I love these game plans of “go to these niche platforms.” We’ve talked about Etsy, we’ve talked about Poshmark, FBA, and now Zoho, Salesforce, Slack — all these different platforms have little apps making $50,000 a month, $100,000 a month. You can go buy these, roll them up, and have a company doing $10 to $20 million in revenue profitably. You can buy your way there without even having to invent anything. Just go get cheap debt, buy the thing, and profit.
Sam: But there’s one major thing: if Call of Duty or Fortnite goes in a different direction —
Shaan: Exactly. That’s the same thing with FBA and all these roll-ups. You’re dependent on a single platform that’s known to compete hostilely. They could change the algorithm and your thing that was at the top is now at the bottom. So you have to look at: what’s my payback period? If it’s nine months, I feel pretty good. If it’s three years, I don’t feel so good.
Emoji Sites and Zedge [00:47:30]
Sam: Can I tell you about a really random small one? Our buddy Ramon tweeted this out. He goes: “Here’s an example of a silly stupid business — this emoji website gets five million visitors a month.”
All it does is let you look up an emoji, copy it, and paste it wherever you’re writing. Like emojipedia. Have you seen emojipedia? It’s like Wikipedia but for emoji. It’s the top-ranking site when you search for this stuff, and it’s just plastered with ads everywhere. Depending on the ad revenue, this site could be making between $50,000 and $150,000 a month in all profit.
Do not underestimate these small simple sites. We’ve talked about this with crosswords, Sudoku games, Scrabble word solvers, crossword cheats — those little websites can be really good.
So I was like, who owns this thing? Turns out some company bought it. They own it and it’s called Zedge — Z-E-D-G-E. And this is one of those companies where you’re like “really?”
Shaan: Zedge is a public company. Market cap is around $130 million — a very small-cap public company on the New York Stock Exchange. They’re a publisher or roll-up. They bought a bunch of little apps and websites that get traffic because people want self-expression. Wallpapers, ringtones, stickers, alarm clock sounds, emoji PDFs — they brought it all under one roof and they’re a public company.
They do about 50% operating profit on their product. About $20 million a year in revenue, $10 million operating profit. They have around 350 million total app downloads and 40 million monthly active users.
Sam: These companies just hidden in plain sight. It just shows you how much money is in really simple things that a lot of people use.
Shaan: Why the hell would a company like that go public?
Sam: Yeah, don’t go public. I mean, I think there are a bunch of reasons why they might, but I just thought it was interesting.
QVC for Mobile: Live Concierge Shopping [00:52:15]
Shaan: What’s this “QVC for mobile” thing?
Sam: So I just got a sauna. I got a Clearlight Sanctuary — the infrared sauna. I like the size, the look, the shape, all that. But it doesn’t make me sweat enough.
Shaan: That’s the problem with infrared. That’s the point of the sauna.
Sam: So I realized: I didn’t have one of the panels plugged in. That was part of it — it got better. But also, the best way to use infrared is you break a little sweat before you go in. Just do a quick 5- or 10-minute cardio first. Because what infrared is doing is it’s not warming up the air, it’s warming up your body. Like microwaving you. Which seems pretty awful, but I guess it’s good for you — heat shock proteins, blah blah blah.
So I thought to myself: I did the research, I talked to people, I read reviews. But the thing that I feel is missing — I wish there was some kind of live QVC-type thing where I could go on and say “I’d like to talk to somebody about saunas.” A person live on video who is an impartial, third-party source who can show me things live and help me figure out what I actually need.
Shaan: Dude, this is exactly what Marc Lore said. Marc Lore — the guy who started Jet.com, sold it for two or three billion to Walmart. He said one thing they were working on at Jet that could have been a massive business was concierge shopping. You simply log on and you tell them, “I’m looking for a toaster.” A clerk online says, “Okay, for your needs, I think this is best — would you like this one?” He said that would be a big business.
Sam: Even with this sauna — if you go to the website to buy it, there’s no buy button. You have to call someone. So I called the sales rep. It’s 8 PM. She picks up. She’s American. I was like, “Whoa, what the heck, you work at this hour?” She was really good at her job, built trust quickly, and got me over the line to buy the $6,000 sauna over the phone.
She said, “Yeah, it’s a network. The way we work, we only sell the sauna company’s products.” And then she goes, “I get a commission if you buy. That’s how we make our money. On a good day I could sell four of these in a day. On a bad day I’ll sell one or zero.”
Shaan: Listen — the reason why you and I are pretty good at coming up with ideas is because of that question you just asked. People are amazed that you could do that. When you’re just going to a food truck you’d be like, “Hey, how many customers do you get a day?” And they just tell you.
Sam: And you can triangulate. The secret is you don’t ask a rude question like “how much money do you make?” I said, “What’s a good day? How many of these do you sell on a good day?” That softens the blow because you’re just asking about a good day, which doesn’t seem like top-secret information.
Then I said, “I really liked this. Was this a great experience for you?” I was like, “Are you one of the better sales reps, or are you more middle of the pack?” She goes, “No, I’m actually one of the top performers.” She’s like, “I picked up the phone at 8 PM — a lot of people just don’t pick up the phone.”
Then I go, “How many reps are there?” I’m just sounding amazed because I was amazed. And what you say to that reply is, “Wow, are you guys all in America? Yeah? Were there like ten thousand of you? Of course it’s gonna be close — hundreds? Like a hundred?” And she goes, “More like 800.”
So I was able to suss out how the whole system works. I was able to figure out: what’s the commission structure, how many reps, what’s a good day, are you a top performer? I’m just doing it because I’m curious. I have no agenda. I’m not starting a sauna company. I don’t care.
But I took a piece of that to my own team for e-commerce. I was like, “Hey, should we have a phone number on the site? Should we be helping people like that?”
And then I met this guy Ezra Firestone — he’s super well-known in the e-commerce space. He’s got this famous brand called Boom by Cindy Joseph, which is kind of like makeup and anti-aging face cream for women 50 to 70 or so. That brand does great. I think he’s pretty open about it — they do like $80 or $100 million a year in revenue.
He was interviewing me at an Ecom World talk, and he goes, “How do you do your sales?” I go, “What do you mean?” He goes, “Do you do live chat?” I go, “Yeah, we have chat but it’s just customer service.” He goes, “Okay. Do you do phone?” I go, “No.” He says, “Does anybody do phone? Does that shit work?”
Shaan: Same type of question — that will get somebody to defend the thing they do.
Sam: He was like, “Dude, 30% of our sales close over the phone.” And I was like — data point. Interesting. Should I be doing that?
The next thing you ask is, “Yeah, but there’s no way that’s profitable.” And they’ll say, “Of course it’s profitable — we only pay them $18 an hour.” Exactly. And you can break down the whole economics: how many calls close, how much commission, what’s the average order value.
Shaan: That’s badass.
Peter Levels and the Open Startup Philosophy [00:58:30]
Sam: All right, you want to do one more? What’s this thing about Peter Levels?
Shaan: I was going to do one on luck of timing, but you said do a non-fluffy one.
Sam: Do a non-fluffy one. Because I feel like we’ve been on a kick of sort of fluffy stuff. And we did a lot of like gossip about billionaires and their affairs. I want to do one more cool business idea.
Shaan: Okay. Rebase. Have you seen this before?
Sam: Before you put it on this sheet? No. I’m looking it up now.
Shaan: So you know the guy behind this — Pieter Levels? His handle is levels.io. I love this guy. He was kind of ahead of the curve on remote work. Maybe six years ago, he created Nomad List. He created a remote-work Slack — like, “If you’re a remote worker, pay $10 and get into this Slack” — and it hit 6,000 members. I was like, “Whoa, you made a lot of money off this little Slack invite.”
He reveals all of his revenue. If you go to his Twitter — his handle is @levelsio — and you can see a link to all of his websites. If you look at his location, where most people write “San Francisco” or “New York,” he’s used emoji to create like 10 squares as a meter. At the end of the meter it says “$5 million a year,” and the meter is about 60% of the way there. Which shows he’s probably at $2.5 to $3 million a year.
Sam: That’s subtle. Very nicely done. Very interesting. I like it.
Shaan: And if you go to any of his sites, you’re going to see a phrase called “open startup.” I just sent you a link. You can see all of his metrics — how much revenue, his GitHub commits, daily revenue, daily signups, meetups organized, new paid memberships, live streaming events, last month’s signups, total customers, page views, where the traffic is coming from, uptime of the websites. This guy’s amazing.
Nomad List is doing $531,000 a year. It’s halfway to his goal of a million dollars a year from that one business. And this guy has like little easter eggs throughout all of his websites.
Sam: This man’s an artist. He’s an artist who so happens to make money.
Shaan: He’s like a music producer. He’s a producer of websites. He’s making little hit songs. Not like he’s trying to be Justin Bieber — the one mega-hit franchise that goes on tour. He’s just a producer who makes dope beats. Except instead of beats, dope websites. And it’s like: pay for a dope lifestyle.
Sam: Subscription revenue. Look — inflationchart.com, that’s one of his.
Shaan: That website tracks real inflation, which is happening but which governments don’t tell you about in their official numbers. Super easy — just a neat widget.
And even on his Rebase site, the very first benefit listed is: “McDonald’s has the Royale Deluxe in Portugal.” He could have just gone into “tax benefit, tax benefit, tax benefit.” But he leads with that — just a fun little nugget that shows you who this site’s built by. It’s built by somebody with a personality. It’s built by an indie software maker, not some stiff company or bureaucracy. Those little touches matter. That’s why he’s an artist.
Sam: So what is Rebase?
Shaan: He tries to sniff out a trend and quickly spin up a semi-viral, slightly profitable version of a website.
Rebase: people are trying to relocate. With the pandemic, with tax changes, with cryptocurrency, people are more location-fluid than ever. He basically said: Portugal, in 2021, had the largest population decrease in the last 50 years. So they decided, “All right, we need foreigners to come live here, spend here, work here.”
The Portuguese government said they want to attract high-tech remote workers and they created the NHR program. Some of the things it includes: zero percent tax on foreign income, zero percent tax on crypto (it’s considered a currency unlike in the U.S. where it’s considered a property), zero percent tax on dividends, zero percent tax on wealth, 10% tax on pensions, 20% tax on freelancing. No minimum stay. Fast-track for EU passport. High vaccination rate. All these benefits for relocating.
So he created a website that just has the sales pitch for all the benefits of relocating to or getting a passport in Portugal. And then what Pieter did was create an on-ramp: for $150, you get an onboarding call with a tax expert and lawyer who will analyze your situation. For $650, they set you up with Portuguese residency and a Portuguese tax ID. For $150 a year, they do your taxes. Click here, start now.
And already it’s booked out. The lawyer could do 50 calls per month, and immediately they were at 300 calls per month. He’s trying to hire another lawyer to scale it up.
Sam: If you had to ask who I admire — I’d put it a little differently: who am I jealous of? This guy Peter. I’m looking at his websites and I am jealous of so many things. The creativity just oozes. And he can do it. Everything I see on his website I’m like, “This is perfect.” He’s incredibly prolific. He’s like a music producer — making dope beats, except the beats are websites.
Shaan: He’s got his own stick. He’s no Rick Rubin — he’s his own thing.
Sam: Not even the Kanye of internet website builders. He’s just got his own lane. He’s amazing.
Shaan: Okay, good. Anything else?
Sam: No, I want to hear about some of the things you have on your list, but we can save them.
Shaan: Sounds good. We’re out.