Sam and Shaan break down the four categories of course businesses — solo creators, consumer platforms like MasterClass, and B2B corporate training — explaining what makes each model tick and where the money actually is. They then pivot to the Irish Pub Company, a “bar in a box” concept that’s done $2 billion in kits over 30 years, and brainstorm adjacent opportunities before riffing on clear ice as a niche hobby, vacant San Francisco real estate, and the rise of flexible month-to-month living.
Speakers: Sam Parr (host), Shaan Puri (host)
Cold Open [00:00:00]
Sam: That alone is kind of like — to your point — where if you’re a creator with an audience, with credibility, if you’ve done something, if you’re actually good at a skill, you can get to a million dollars a year of profit — not just revenue — doing it as an individual course creator. And the path is quite straightforward. The tactics are simple.
Intro and Episode Overview [00:00:15]
Shaan: All right everyone, what’s happening. We have a good episode today. In this episode we’re going to talk about course businesses — something a lot of people are interested in. I think it’s one of the easiest ways to make a million dollars a year. But we’re also going to talk about how companies are making $100 million a year doing it. So give us a listen. We’re going to talk all about the course businesses.
Books: How Sam and Shaan Actually Read [00:01:10]
Shaan: I’m still recovering from your sick burn about my sweatshirt.
Sam: They’ll see on video. It’s not that it’s bad, it’s just that it would have been a lot better if you wore it as like a nine-year-old in 1994. You look like a skateboarder who got his birthday present — a 12-year-old skateboarder who got his birthday present.
Shaan: Abrayu clapped back at Sam and told him he looks like a knight wearing the chain link stuff that goes under your armor. You look like an extra from the Disney movie Brink.
Sam: I have not seen that, but you look like a 90s Disney movie extra, dude.
Shaan: I wish — that would be an upgrade from my reality. Have you been reading books? I can’t tell if this is another burn.
Sam: No, that’s a transition to a real question. Do you read books?
Shaan: Yeah, I read books.
Sam: How many books do you read?
Shaan: I don’t know — I’m reading like a book all the time. There’s more than one going at any given time. Probably three or four a year. When you’re reading, do you feel like you absorb it?
Sam: Yeah. I intentionally read slow, and I reread, and I take notes. That’s what I’m doing now instead of what Ryan Holiday does — he reads like five books a week. That’s popular, people say for their New Year’s resolution, “I’m gonna read 50 books this year.” And I’m like, damn, that’s hard just to do. But do you learn anything?
What I’m trying to do now is only read two or three books a year but master them — quizzing myself. It’s been really hard. So what I do is I get a bunch of books. I’ll buy a book every three days if anything looks interesting. I have an unlimited book budget for myself, I’ve had this for a long time.
Shaan: I do the same thing, by the way. I just instantly buy it on my phone. I use the Kindle app on my phone to read. I have a Kindle, I have physical books sometimes, but the phone is always with me so I like that better — I end up reading more.
What I do is I’ll read like five percent of fifty books in a year. I’ll pick up a book, start skimming through it. I assume that most books are bad, so I’m very okay not completing 95% of the books I start. The book has to actually grab me for me to try to finish it. But once I do read a book I like, I will reread that book multiple times over the years. I use it as a reference book.
Sam: Same. I reread them two times. They become reference books.
Shaan’s Twitter Fight: Jake Paul and Taylor Lorenz [00:05:30]
Shaan: I want to ask you — I went down a rabbit hole and I called someone right before the podcast to get intel. But can we start with something really easy? You got into an argument with someone on Twitter last week. What happened?
Sam: I don’t know what you’re talking about.
Shaan: Okay, I’m gonna try to do this without restarting the fight. I tweeted that Elon Musk sells cars and launches rockets and raises money and does all this stuff, and Tesla never runs a commercial. Jake Paul is going to sell millions of dollars of pay-per-views for a boxing match without a commercial. I said the best marketers don’t spend a dime — just kind of an observation. Obviously a cute sound bite tweet.
Shaan: Yeah, a sound bitey thing.
Sam: Obviously many marketers spend money and are great at it. That’s not really the point. The point was some people are able to hijack people’s attention in the news and have done very well with it.
So I tweet that out — doesn’t even seem controversial to me. I move on with my life. A bunch of people say yeah, true, blah blah. And then a couple people comment like, “yeah but Jake Paul’s an asshole.” Okay, fair enough — doesn’t matter to me. And then one person who’s a writer for the New York Times basically says she can’t believe it.
Shaan: While you’re pulling that up — the person you’re talking about, her name is Taylor Lorenz, she works for the New York Times. A lot of people in the tech world really dislike her. I actually — let’s be objective here — a lot of people really love her too.
Sam: I don’t have her tweet because she’s now blocked me. So I said: Elon is pumping Dogecoin on Saturday Night Live while the Paul brothers are raking in tens of millions just by stealing Floyd Mayweather’s hat while the camera is on. The greatest marketers don’t spend a dime. By the way, did you see the hat thing?
Shaan: The gotcha hat — so funny.
Sam: So if you haven’t seen it: Jake Paul’s older brother Logan is scheduled to fight Floyd Mayweather. Logan Paul is a YouTuber; Floyd Mayweather is probably the greatest boxer ever. It’s not even close — it’s celebrity death match where one of the celebrities is actually a professional puncher.
Shaan: Two celebrities agree to punch each other, but one of them is actually a professional puncher. It’s like 2001 odds.
Sam: Anyway, they have to sell the fight, so in the press conference they’re talking trash. Jake Paul goes up to Floyd Mayweather and they’re going back and forth, and then Jake Paul goes “gotcha hat!” — just took his hat and ran away like an absolute third grader on the playground.
Shaan: Funny as hell.
Sam: To ham it up, Floyd Mayweather tries to fight him because he took his hat, and there’s like 70 people holding their camera phones up recording it. It just stole the show. So that went viral, got on every blog.
Jake Paul then tripled down — the gotcha hat thing goes viral on social media, while it’s going viral he has his merch guy make gotcha hat hats, puts them up on his store, they sell out. And then he gets a tattoo on his leg that says “gotcha hat” and posts it — and that goes viral again. So he got a double pump of PR out of it.
I was just pointing out that these guys are good at marketing. You really can’t disagree that the Paul brothers are not good self-promoters.
Shaan: Yeah.
Sam: Anyway, a bunch of people say yes, and then a couple say these are pranksters, they shouldn’t be labeled as great marketers, don’t set them up as something to be emulated. What they were really saying was: “Shaan, they’re bad people and you’re saying they’re good.”
Shaan: And you’re like, yeah, I don’t care. That’s not the point. They could be the worst person on earth — I’m just saying they get eyeballs.
Sam: Exactly. It’s like saying a cigarette company could be a great marketer. Who cares if you think cigarettes are good or bad. So this writer for the New York Times basically uses it as an opportunity to promote her own New York Times article about the sexual assault allegations against him. She said something to the effect of — it’s messed up to be saying they’re good when this guy has been accused of sexual assault.
I kind of went back and forth and was just saying what you just said — I’m not saying they’re good humans, I’m not saying they’re great citizens, I didn’t say they should be president. I said they’re good at marketing.
Shaan: R. Kelly could be a great singer and also a horrible human being.
Sam: Right. So they clap back again. I’m getting agitated at this point. The New York Times writer says something that was just trying to virtue signal — and she says it replying to me but talking about me as if I’m not in the room. I thought that was a weird way of putting it. So I just go, “You are the Jake Paul of journalism.”
Shaan: Oh my gosh.
Sam: Got blocked instantly. A bunch of people had a big reaction to that. And here’s why I thought it was the perfect kill shot — because it’s not even an insult to me. I have no problem with Jake Paul. Jake Paul came on the podcast. Her brand of self-promotion is confrontation. She goes and picks fights on Twitter with Kara Swisher, with Mark Andreessen, whoever. She goes to the biggest names, creates controversy, picks fights — and then as soon as they attack back she turns that into a story: “big bad tech is bullying me.”
So I was just pointing out that her form of self-promotion is the same as Jake Paul’s. He went to Floyd Mayweather, agitated him, and used that confrontation to build his own brand. So: A) I correctly identified her own playbook. B) It’s not an insult to me — I have no problem with Jake Paul. I think this guy’s a good marketer.
Shaan: I actually think she does a very good job at promoting herself — covering interesting and controversial topics. She was covering TikTok early on. I know her name; I don’t know any other tech journalist’s name. So I genuinely think she’s effective. I really have no ill will. But that was a pretty good one-liner.
Sam: I unfollowed basically everyone on Twitter. I’ve been spending less time on it because it makes me angry. But I did enjoy that moment.
Shaan: Well, I’m happy I know the story. I love that you do that. I think you should continue.
Setting Up the Course Business Deep Dive [00:14:00]
Sam: Do you want to talk about the course business? I did a ton of research. I know you’re interested in courses. I saw a company that I think disguises itself as something it isn’t — but I actually think it’s interesting for what it really is.
Shaan: I’m fully teased. Go for it.
On Deck: Is It a Course or a Network? [00:14:20]
Sam: So today, for this segment, let’s talk about the course business, the education business. I broke it down into four categories. But there’s this company called On Deck — the URL is beyondeck.com. It’s actually really confusing what they advertise themselves as. I did some research and the way I see it is: it’s a course business. You pay — I think it’s over a thousand dollars, maybe one to three grand — and you sign up for a cohort-based class. There’s a start and an end, and they have like fifteen different tracks.
Shaan: I got to stop you there — these aren’t classes.
Sam: Yes they are! An eight-week program where you’re learning and talking with people — that’s a class.
Shaan: Okay, here’s how I would describe it. Do you know Eric Thornberg? He’s a good guy — he was early on at Product Hunt, left and created a bunch of things, one of which was On Deck.
The way he thinks about On Deck is: it’s a modern-day business school. Why do people go to business school? They want to build a network, maybe learn about business, and they’re looking to pivot their career in a different direction — change industries, change roles, change careers. Business school is this great pivot point.
What On Deck did was make an unbundled, digital version of that — though actually there’s a lot of in-person components. So let’s say you want to become an angel investor but you’re not one today. On Deck is your pivot. You apply, pay the fee, and there is some education — they bring in speakers who are angel investors — but it’s basically an X-week program to go from where you are now to that track. And there’s a version for people who want to start a company, a version for operators who want to join an early-stage company, one for angel investors, one for podcasters.
The network is what you’re paying for — like Harvard, where you’re getting other people of a certain caliber who are going to go on to do certain things.
Sam: That still sounds like a class to me.
Shaan: It’s a lot less about the learning content and a lot more about the network you want to build. In that case I actually think the likelihood of them getting huge is lower. It would be better if they were a true course business. The problem is they’re either going to raise prices to tens or hundreds of thousands of dollars — like a real MBA — or they’re gonna have to decrease the standards of who they let in to keep the price low, which ruins the network.
Sam: So let’s just say — who cares about On Deck specifically. It’s what got me interested in the course business. And the problem with “course businesses” is that people lump everything remotely education-related into the same category. That’s wrong. So I want to talk about the four categories.
The Four Categories of Course Businesses [00:19:00]
Sam: First: one person or a small company making a handful of courses. That’s Jack Butcher, that’s Ramit Sethi. Second: platforms — Udemy, Teachable. That’s not a course business, that’s a tech company. I’m not even going to talk about that. Third: the MasterClass model — businesses that create hundreds of courses and sell them to consumers for $100 to $300 a year. Fourth: B2B companies that sell education to companies — Pluralsight, which sold for $3 billion and does something like $500 million in revenue.
There’s actually a handful of companies I didn’t know about that do $300 to $600 million a year in revenue. Multi-billion dollar businesses.
I went and talked to my friend Ryan Dice — he runs DigitalMarketer.com and has been in the game for 20-plus years — to talk through this.
Category 1: Solo Creator Courses [00:20:30]
Sam: So the first category: single-person creators. I think you’re kind of like that. I’m not at the moment, but I could probably easily become that. I actually think the path to making a million dollars a year this way is incredibly straightforward — and really high likelihood, all relative to starting a business. Very high likelihood of making $200K a year. Very high likelihood of making a million bucks a year.
These are companies like “I Will Teach You to Be Rich” — that’s Ramit Sethi.
Shaan: What you’ve done — your newsletter thing — wasn’t quite a course. But what I announced recently: I tweeted out that I was going to do a course on “power writing” — basically writing for the real world. I said it would cost $400 for the first batch of guinea pigs, and I asked who would want it. I got something like 1,200 replies from people filling out the survey.
Sam: That alone is kind of like to your point. You build an audience where people rally around one type of thing, and then you eventually create something that costs $100 to thousands of dollars and sell it.
My good friend Neville Medhora has done this with copywriting — he probably makes a million dollars a year. Jack Butcher, my wife Sarah is actually launching one, you have one. And it’s the easiest path to make a million bucks a year, I actually think.
The way you scale: it’s hard to get past $10 million a year in revenue. It definitely caps out relatively low. But if you don’t base it on your personality, it’s a pretty good business you could sell to private equity. And after you’ve created the course, you create a consulting or coaching service for $10K-plus a year and potentially have a $10 to $20 million company.
Shaan: I like that. My uncle does this — he’s in real estate, has something like a $200 million real estate portfolio. He created a “how to do multi-family apartment investing” course, I think it’s like $5K. He sells a bunch of those, and then some people pay him $25K for one-on-one coaching. For them it’s not hard to justify, because the economics of even a single apartment building are such that that’s future income.
Sam: What’s your uncle’s course called?
Shaan: I don’t even know. He’s my Uncle Vinny. We should have him on — he’s got a kind of incredible story and his personality is amazing. He’s the most joyful person I’ve ever known, almost to the point where people think he’s like, are you high? But he’s just like that 24/7. High on life.
Sam: Uncle Vinny’s a great example of the model.
Category 2: MasterClass and Mass Consumer Courses [00:26:00]
Sam: The second category — the MasterClass model. There’s a pretty clear path to get to like $100 million a year in sales. You create something in the $200-$300 range for an annual subscription and scale fast by buying a lot of ads. But before that, you have to create a pretty big library of course content, which can take many years.
I know quite a bit about MasterClass. Want me to give you some interesting bits?
Shaan: Go for it.
Sam: MasterClass was started by David Rogier — he went to Harvard Business School. One of the core insights was he wanted to create what he called “the library of Alexandria for today.” They spend upwards of half a million dollars per MasterClass just on production value alone. The first one was over $500K. The production is like a Hollywood shoot. Personally I don’t know if that’s necessary — I think it’s overkill — but that’s their stick.
The bigger part was getting the biggest brand names. If you want to learn business, here’s Howard Schultz, CEO of Starbucks. You want to learn basketball, there’s Steph Curry’s MasterClass. You want to learn comedy, here’s Steve Martin. Writing — here’s Aaron Sorkin.
They took A++ talent, which is a key differentiator. Most online courses are like — I’ll just make fun of myself here — we’re nobodies compared to what MasterClass went and did. MasterClass was like, I can take Gordon Ramsay’s cooking, create a hyped 30-second trailer, blast that on Facebook ads, and Gordon Ramsay has enough brand pull that I can profitably acquire customers.
They do this with a bunch of creators — Serena Williams, whoever else — and they cut a rev share deal with them. An upfront minimum guarantee and then a rev share on every course sold. Then they turned it into an all-access subscription at $15 a month.
I actually talked to the founder/CEO. I was like, do people really want to learn cooking from Gordon Ramsay and then basketball from Steph Curry and then tennis from Serena Williams? Does that all-you-can-eat buffet work? Does anyone come back? Is retention high?
He just showed me the numbers. He was like, look, we’re making X hundreds of millions of dollars a year, growing at this pace, and look at the churn — the churn’s not that bad. I said, how do you keep churn so low for an education product? He said: when people take a MasterClass, they keep their subscription even if they’re not coming back every month. Why? Because it’s aspirational. They have a dream of learning photography. And if they had one experience where they felt like their idol shared a real nugget of wisdom with them — that’s enough to keep them hooked.
Shaan: I thought that was pretty interesting.
The Dirty Secret: Course Completion Rates [00:31:00]
Sam: And this is the thing we should discuss — the downside of every category. Retention isn’t even the right word. The word is completion. Our good friend Nick Hoover launched a course, and he goes, “200 people bought this — do you know how many people finished?” The number was like three. He was legit devastated. He was like, did I make a shitty course?
I was like, no, man — this is the standard completion rate. With Udemy, I think they said at one point six percent of people complete the course. Six percent. Imagine: 100 students come in, and on the last day of the semester six people are left in the class.
Shaan: That’s so weird — you’re going to make all this money and you’re crushing it, but most people don’t even use the thing. And they’re not pissed. Often it’s not that they used it and didn’t like the product. Life happened — they got busy, they didn’t follow through. If they’re upset at anyone, they’re upset at themselves for not taking action.
Sam: Right. And just counter-intuitively: is this even a problem worth solving? I actually think unfortunately the answer is no. People who are gonna not take it — that is just how people are. We should just make money off of it.
Shaan: I’d disagree — I think it’s a fight worth fighting. Because if people aren’t actually taking the course, they didn’t get the real value of the product, which means they’re not going to come back, they’re not going to tell friends, which means your business will suffer. Can you get above 6%? Can you get 30, 40, 50 percent?
Sam: I’ve asked people who charge $5,000 per course — they said under 30% is still what they get as a completion rate. It’s insane. Such a big financial commitment, and people still don’t finish.
Shaan: When we had live cohort classes, it was like 75% completion. That’s exactly what I was about to say. Lambda School switched to live, cohort-based with a high bar for entry. Lambda School doesn’t get paid until you get a job, so their incentive was: we only want a student if they’re actually going to finish. Because of the filter on the front end plus the format being live and in a peer group — way higher completion.
I invested in this company Maven for the same reason. They’re saying: we’re going to make it easy for you to teach a cohort-based course. That was appealing to me because so far cohort-based is the only thing I’ve seen where people actually finish.
Sam: When we’re going through this discussion, we have to acknowledge that most people don’t finish your stuff.
Category 3: MasterClass Variants and Mass Consumer Variants [00:36:30]
Sam: To wrap up the MasterClass category — I have to call it like “mass consumerism courses.” Lynda.com would be in this category when it started. MasterClass, there’s a bunch of MasterClass clones.
There’s one called Monthly — Monthly.com — which is like MasterClass but their stars are social media stars and famous YouTubers. There’s another one that’s MasterClass for athletes — just the vertical of sports. The person I talked to is a trainer for Kyrie Irving, for Carmelo Anthony, for a bunch of NBA stars. He was able to say: hey Mello, create your course. Hey Kyrie, create your course. He can access top-flight basketball stars because he himself is a basketball trainer.
Shaan: That’s actually a pretty interesting model — just that group, just for that audience.
Sam: His name was Adam — I’ll find the exact name. But in order to make that style of business work, you have to create mostly evergreen course content, and the name of the game is volume. Get as many as possible that meet some quality bar. How do you scale? The Great Courses does something like $150 million a year in revenue. MasterClass I bet is $200 to $300 million-ish.
Category 4: B2B Corporate Training [00:39:00]
Sam: And then the fourth one — most interesting in terms of scale — is B2B education, corporate training. Easily the biggest one, hands down. The example is Pluralsight. Have you heard of it?
Shaan: I’ve heard the name.
Sam: Geared specifically towards engineers — it teaches the latest and greatest tech stuff that you give to your engineers. Pluralsight is one of them, but there are many that do $300, $400, $500 million a year in revenue. But this is where it gets a little lame — these businesses are based on one thing: salesmanship. You just hire a fat sales team and go out to companies and sell.
I asked the people at HubSpot: why do you guys buy this stuff? And they said: basically we’re ranked really high on Glassdoor, we recruit a ton of people, and one perk we offer is $5,000 a year for education. We want to be the best place to work. Another example: Cisco and Microsoft have certifications they want you to pass for promotions or just for your resume. Pluralsight teaches you how to succeed at those certifications. They charge something like $600 a year per head.
You give each salesperson a $300K to $500K quota and you say: here’s the yellow pages, start dialing. That’s why Pluralsight is based in Utah — because Mormons are some amazing salespeople. They spent two years selling a religion, so they’re really good at it.
This business is probably the biggest, but it’s oddly not really about education. It’s about salesmanship. You go down a narrow niche, hire subject matter experts, pay them a flat fee, go very role-specific, and sell into the HR and L&D budgets at large companies. Those budgets are typically slashed first, but they exist and they have to get spent.
Shaan: Pretty much a game about getting inside with these people and selling to them. Kind of lame, but there’s money to be made.
I wonder if somebody could do it the “bottoms up” way. Bottoms up SaaS became its own category — you make your software useful even if the whole company doesn’t adopt it. You let individual employees start using it, it spreads, and then you go to the CIO and say: a bunch of your employees are already using this thing, buy the enterprise version so you have security oversight.
I wonder if you could do bottoms up corporate education. Because if you go bottoms up, you’re actually going off of making stuff that individual employees want to learn from. That’s a healthier thing in the end, although harder.
Sam: The hard part here is just like there’s a 6% completion rate for hobbyists. At Twitch, I asked my team if they were using any of the free courses available to them. They were like, “yeah that’s a good idea, but I just don’t have the time.” The amount of time an employee is going to carve out for optional education is so low. Most of the stuff that lives in the LMS — Learning Management System — inside companies is untouched. Twinkies sitting on a shelf.
Shaan: Not only is it about salesmanship, but the truth is: it’s not actually about teaching your workers something good. It’s about being able to say you offer it. If they use it, fine. The fact that you offer it makes you look better and helps you hire.
As a small company owner, I would never have bought this stuff. I’d say, look, if you want to take something, I’ll buy you any book you want. But big companies want to put it on their perks and benefits page.
Sam: That is my very high-level summary of the course business. The creator one — that’s a no-brainer once you have an audience. If you don’t have an audience, you’re more in one of the other buckets. It’s a no-brainer business model for people with audiences, but it also has a cap, and it takes up time. You gotta choose accordingly.
The Irish Pub Company: Bar in a Box [00:48:00]
Sam: All right, let’s talk about some other ideas. I have one that I saw today that I think is pretty interesting. It’s called the Irish Pub Company. Did you see this tweet?
Shaan: No.
Sam: We got tagged in this — by the way, that’s the best signal that we’re doing something right. People just tag us in stuff they know is exactly what we want to talk about. When you hear about a cool niche business that’s just so simple you would have never heard of otherwise — this is perfect for My First Million.
Our friend Chris J. Bach tagged us. He tweeted: “The Irish Pub Company is one of my favorite companies. They charge one to four million dollars for an Irish bar in a box.” Irish bar as a service.
Here’s how it works: they give you six styles to choose from, they give you the Guinness signs, the right bar tap handles, all the decor — seats, all of it — ship it to you, install it, and bang, now you have an Irish pub.
They’ve done over 2,000 kits over 30 years. At $1 to $4 million per kit — that’s over $2 billion over 30 years that this company has generated. And their pitch is: Irish pubs produce X more than a traditional bar, X more foot traffic. Hey, if you throw this kit onto a generic bar, your bar is more successful. It’ll pay itself back.
Shaan: So the owner’s name is Mel McNally — which is the perfect name. He’s the founder of the Irish Pub Company and the creator of the Guinness Irish pub concept. He launched this in partnership with Guinness brewery.
Sounds to me like Guinness was like: “Hey, we need more Irish pubs to exist in the world so we can sell more Irish beer. Can someone come help us figure this out?” And that’s how this started.
Sam: This is so cool. I love this. I think they’re doing $50 million-plus a year just on the consulting, the brand identity, the shipping, the installation, and the service after. They do it inside airports, different cities, hotels, all sorts of places.
How did your buddy find this?
Shaan: He just tweeted it out. I think it’s just such a cool concept. And you can start thinking: okay, how many more concepts are there like this?
Brainstorming “In a Box” Business Models [00:52:00]
Shaan: Well, there’s one you brought up about a year ago that I think is probably killing it — bathroom in a box. You select one of five different bathrooms and they come and do it.
Sam: Yes! And you could obviously do this for every single room in the home. Then we talked about the guys who came and set up our video conferencing setup — the lighting, the audio, the DSLR camera, the whole tech setup, the wires taped to my table so I don’t have a wire mess. I told those guys: “You need to turn this into home video conferencing studio in a box.” You could do this in every city in America right now — especially with remote work, with podcasters and Twitch streamers and YouTubers. A lot of people want a cool video setup. If you just have four to choose from on your menu, you have simple operations and you can scale as you buy parts in bulk.
Shaan: In the bar concept specifically, I think there are a few more angles. Any brand with licensed IP — like, could you do a Disney Diner? You take IP that people love and create a bar or restaurant out of it. Rainforest Cafe style. And sell that as an in-a-box concept.
Like the Simpsons — wouldn’t it be great if you could have Moe’s Tavern in every city? You partner with the Simpsons, you say: every one of these you get 10%, you do nothing more than let us use the name. You go to bars and say: you’re a generic bar, you have no differentiation for why tourists should come here. You could upgrade.
Or Always Sunny — Paddy’s Pub in a box. Every city should have a Paddy’s Pub.
Sam: Yeah, or the gaming concept. I lived in Denver and there were bars like this — retro arcade machines, the drinks and menus themed like old Nintendo stuff, life-size Jenga, skee-ball, whatever. They got way more foot traffic than a normal bar. This one you’d post on Instagram. You’d post that you’re drinking the Mario drink while playing Duck Hunt.
Gaming is one niche like the Irish pub where you could show: if you kit your bar out with this, you’re gonna get more foot traffic.
Shaan: I had a friend that did Book in a Box — they would write a book for you. I think it was making eight figures in revenue. But it sounded like a real pain in the ass because it was far too customizable to be “in a box.” Whereas the pub thing is way easier. It’s like one interior decoration theme that you just slap on.
Sam: Right — you had a pub, now you’ve got an Irish pub. So I just wonder: could you compete with them, or are there other themes that work? Is it German? Asian style? A Russian drinking bar? A Mexican tequila bar? An Italian wine bar?
Shaan: You’re asking a non-drinker. I’m out of my loop on this one.
Clear Ice: Spotting Niche Hobbies Early [00:57:30]
Sam: I do have a different idea that’s kind of interesting. Clear ice. Have you ever heard of it?
Shaan: What is it?
Sam: Go to clearice.life. This is not something I would do, but I’ve learned these things where I shake my head and then three years later it’s like a huge hobby. Let me give you context. You know SodaStream, right?
Shaan: Dude, I have a TikTok video — one of the only videos I ever posted — that got like 200,000 views because I attached a scuba tank-sized CO2 thing I rigged to my SodaStream so it could last like three years versus constantly replacing the cartridges.
Sam: So the first time I heard about SodaStream I was like, you make your own sparkling water at home? What’s the point? SodaStream is like a $5 billion-a-year company. And my point is — when I first heard it I was like, who would want this? But it was huge. Same with craft beer. Like a decade ago these guys were home brewing their own beers and I was like, why? There are so many beers already. Then it became this massive category.
Shaan: And pour-over coffee, all these extreme coffee habits. There’s a whole bunch of these little niche hobbies.
Sam: Clear ice is the latest one I saw. Basically: you don’t just get the bad ice that comes out of your freezer tray or you buy in a bag. This is high-quality, super-clear ice — no impurities in it, so it doesn’t affect the flavor of your whiskey. It’s also one big cube, so less surface area, so it dilutes your drink less.
Shaan: They actually sell it. Like, cubes or balls. It’s all about surface area and melting rates.
Sam: This is like a hobby. My spidey sense is tingling that this is one of those little niche hobbies where you could sell products, information, courses — whatever — and there’s a lot of people who want to make their own homemade clear ice. I can barely understand why, but it’s a thing, and I bet you there’s a wave to surf if you want to build a business around it.
Shaan: I don’t know, I’m not on board. Is this even that big?
Sam: I saw it as part of a growing trend. I don’t know if it was a subreddit or where, but I saw it in a way that was like, oh, this is one of those that’s popular and I don’t understand why. Like ASMR.
Shaan: ASMR is awesome, so be careful.
Sam: That’s how I was at the beginning when I was like, “this is weird, people do this?” And then yeah, a lot of people want this and do this. I get it — to me this sounds like a pretty tiny thing, but tiny enough that you could make a pretty good living doing it.
Shaan: You want to catch these early. You want to catch it when it’s somewhat tiny but very passionate. The bet you’re making is that the passion will stay and the tiny will grow.
Sam: Exactly. There was a home brewery company I learned about — for a long time I didn’t know that beer nerds track all the beers they’ve ever tried. I interviewed a guy to work at The Hustle and he worked at one of these companies — it was a tens-of-millions, maybe close to hundreds-of-millions-of-dollars revenue business. All it was was an app where you could track all the beers you drink. Put that in the category of: things I have no idea exist and also kind of don’t excite me.
San Francisco Real Estate: The Pandemic Opportunity [01:01:00]
Shaan: All right, let’s do one more. Okay, here’s one I’m just curious about — I don’t have ideas around it yet, but let’s do an off-the-cuff brainstorm.
There’s this article about the amount of space now available in San Francisco because of work from home. Some absurd amount of vacant space. Companies are taking $10 million or even $100 million write-offs on their real estate just to get out.
Some numbers: there’s $200 million of real estate impairments in the past year since COVID. Almost a billion if you add in the lease-related write-downs from large companies — Salesforce, Dropbox, Uber, PayPal, Zendesk — just getting rid of their real estate. Dropbox itself has $400 million of impaired real estate right now.
The amount of vacant and subleasable space was 10 million square feet in San Francisco in 2021. In 2019 that was 3 million — it’s tripled. And companies are basically saying: this costs us $90 a square foot, we’ll take $20 for it.
Sam: That’s a good idea. What comes to mind?
Shaan: For the sake of discussion, let’s just assume San Francisco’s wacky laws and rent control stuff aren’t an issue. What could you do with this arbitrage?
The obvious answer is WeWork can make a killing right now if they believe in their model. But what else?
I think you want to think: where is demand growing for space where being central in a city would make a big difference? Cloud kitchens. Cloud grocery and convenience — like cloud corner stores, Fridge No More style. Go-Puff, because you have a whole bunch of people in the city and when they push the button they get their thing in under 10 minutes because it was sitting in the second floor of the Salesforce Tower.
Maybe it is co-working spaces. Or something in education — you create a distributed campus across a bunch of different cities.
You take Harvard Business School Online, which they have, and you basically say: great, you can attend Harvard Business School online in San Francisco downtown, in LA downtown, in all these places — because that’s where that clientele wants to be. And you get a once-in-a-lifetime opportunity to lock up that real estate at a fourth of the traditional cost.
Sam: That is actually a good idea. Like the equivalent of a study abroad, but you’re just going to do it in San Francisco — which was prohibitively expensive for the longest time.
Do you know what the price per square foot is right now?
Shaan: They were saying $20 a square foot — annual number. It was $90 a square foot annually; now $20 is what’s quoted in this CNBC article. I think San Francisco was four or five times more expensive than a B-level city without the pandemic.
Sam: I’ve been living in Austin for just a handful of months. I miss San Francisco dearly. I do think if you’re starting a company now and have a good-sized workforce, it would be interesting to sign a lease now that you can lock out for five or ten years. It’s gonna roar back eventually.
Shaan: Here’s another one. Let’s say you’re a late-stage venture fund — what if you took the real estate and any of your portfolio companies can just use it and pay you market rent or slightly below? So all your portfolio companies now have their real estate problem solved.
Sam: Dude, people were clapping on WeWork — myself included — but I think now it makes a lot of sense in a lot of these cities. And WeWork is just going to come back like crazy because every employee says the exact same thing: “I would love to work from home a few days a week.” Well, you can’t pay rent a few days a week if you have your own lease. So the WeWorks of the world, the Foundry of the worlds — a bunch of companies that didn’t do so hot for the last two years — I think they can absolutely be started right now, and it sounds crazy but I don’t think it is even a little bit.
Airbnb Stock, the 28-Day Stay Trend, and Flexible Living [01:06:00]
Sam: Bro, I loaded up on Airbnb stock today.
Shaan: Oh my gosh. I’m devastated for you. I’m seeing it go down. What is it at now?
Sam: It’s going down because the lockup period ended — people can start selling, which puts downward pressure. Plus the market in general.
Shaan: Why on earth would you ever dump Airbnb stock right now?
Sam: Well, I bought it because — hey, I’m stupid, I just buy stocks when I feel like it. But also because I saw data showing that a huge percentage of Airbnb bookings — I think 28 to 30 percent — are actually stays longer than 30 days now. Which means it’s not just vacation rentals. It’s actually millennials saying, “I want to stay here for a while.” That’s a pretty big trend: I don’t want to buy, I don’t even want a one-year lease, I want to hop from place to place.
Similar to what you did last year.
Shaan: Dude, so many 28-day-plus stays. I think that is an interesting trend to take advantage of.
We actually have a guy coming on the podcast named Bill Smith. He started Shipped, which sold for like $600 million out of Alabama. He’s got this new company called Landing — basically they lease out apartments in different places, take the whole lease, then sublease it to people who want to stay for a month.
The thing about Airbnb is that for two-week stays, the fee is like 10 percent. But if I’m staying in New York for three or four months and my rent is $10K a month, I’m paying a thousand dollars a month just in Airbnb fees. Landing can reduce that fee to something that makes sense for longer-term stays.
Sam: In the future, people like us — and maybe a little younger — I think it’s going to be incredibly normal to live somewhere for nine months and somewhere else for three months.
Shaan: Where are you going to go?
Sam: I got a little baby right now so it’s a bit tricky. But that’s the lifestyle I want to live — one place and then another place for two to three months out of the year.
Shaan: Without sounding like a total douche — is this a rich guy thing, or do you think a lot of people are going to do it?
Sam: You could do it economically. I know a lot of people who did this and made money doing it. They live in San Francisco predominantly, then Airbnb their San Francisco place for a month and go live in Mexico or South America. And they actually make money traveling because the San Francisco Airbnb charges more than they pay in South America.
My mortgage, insurance, and everything at my house costs about $4,500 a month, and I think we’re going to get about $10K a month when we rent it out. We’ve already booked a place — we’re living in Brooklyn from July to September. And I plan on doing that indefinitely. I think a lot of people are going to be doing that.
Shaan: Cool. I gotta run. Good episode.
Sam: We’re out.