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 [Music] did you see uh like what michael that guy michael rubin did so we talked about him a little bit to be honest i don’t entirely understand what his business fanatics does but i know that like he’s got three different companies right now one of them was worth like 50 billion another one’s worth like a billion in other words worth like five or 10 billion like it’s just like crazy it’s like there’s fanatics and there’s like three spin-offs of it yeah exactly so um i don’t have like a ton of uh you know kind of like research on him or whatever but basically fanatics itself is worth over 10 billion dollars and what fanatics does is they basically are a merch company but for sports and so what they do is you want to go buy a steph curry jersey whether you buy it in the nba shop the warrior shop or you just google steph curry jersey and you land on fanatics.com it’s fanatics that’s printing and they’re actually like printing the jerseys and then shipping them out to customers i get that i just don’t understand how can just like a rookie like a noob i mean he’s not a noob anymore he’s been doing this since he’s 21. he’s probably 55 now how can just like a guy come in and just like muscle like the people who have had those contracts for 20 decades for 20 years i also had that same exact question now i know he was kind of like successful before this i think he had done a uh it was called a gsi i think commerce and he sold it to ebay for i forget exactly how much but he made like 80 or 90 i think and then it didn’t work out at ebay so he bought back some of the stuff and he grew that to be big and then he also spun out a few things so this company called shoprunner which is quite popular it’s basically like amazon prime for people who aren’t on amazon um he built that business and a few other things and so he started as like a ski shop when he was 18 i think yeah yeah exactly ski is sort of a ski business whatever then became like kind of apparel logistics so that’s gsi commerce that’s sports again sports commerce he sold that to ebay i think i don’t know if you said the price 2.4 billion yeah i think he only walked away with like 80 which is a lot but uh i i don’t think he i think he gave up a ton of equity and he was like in his late 30s at the time and then um and then yeah i don’t know how he got the contracts but he basically just like continued licensing i don’t think he got exclusive so i think he got the licenses to prince print the stuff and then over time demonstrated that like they had the best product with the best delivery with the best quality assurance and all that stuff and so they ended up being like we’ll just power your shop right we’ll be the we’ll be the default one when you go to like the team’s websites well he also bought a recently started a cards company that is making cards and they just and then he was like you know what let’s just buy tops while we’re at it yeah so i don’t understand how he’s totally just kind of brute force his way into this it seems yeah so he uh exactly so he bought tops which is kind of like a pretty interesting move we’ve talked about trading cards we talked about um you know like this whole thing what they’re what it seems like what they’re gonna do is they’re gonna say all right we got the licenses from the from the sports teams we can get we can we know licensing as a business we can get the licenses for cards as well we know printing and manufacturing we can do that with the cards as well but then also with cards there’s like basically it’s the same customer it’s the same fan so if i buy a steph curry jersey odds are i’m going to be like somewhat interested in like a steph curry rookie card and what hit the reason i want to bring him up was not because like i had some like deep insight on his like business plan although i think it’s pretty simple which is like we have the sports fan as a customer what do they buy one of the things that they might buy is collectibles okay let me go buy tops and like we’ll sell them collectibles but i thought his approach was smart and one that people should take which he goes right now there’s like five million people who collect sports cards and um so the whole business is like these five million people and nobody has like taken a like big approach to this it’s been this like hobbyist kind of underground there’s like the charm of it like if you go to like the annual sports card conference it’s like this yeah in cincinnati that’s like you know these hobbyists bring their cardboard boxes and like some special shout out to like you know kentucky fried chicken for sponsoring this year’s conference or whatever right and like eric’s moms for bringing cookies yeah exactly third year running thank you mrs k um so they’re like you know that’s the conference right now so he’s like dude why is that like that but like sneaker con is like this [ ] state-of-the-art thing and ces is like this epic show that’s like you know like cutting it so he’s like i’m gonna do all that in the tr no he’s like nobody has spent a dollar on marketing collectibles like nobody like it’s like this hobbyist passion industry but nobody goes out and markets this thing he’s like but people have done that for sneakers and other things so i think what he’s gonna do one one smart thing i like this part of the plan it was he’s basically going to athletes that like to collect in general he’s gonna like make it known that these celebrities oh did you know like the whatever you know like the guy from billions like the hedge fund manager has like he’s gonna build stuff he’s gonna build like a media company on top of this a little bit like a media company or it’s a it’s going to be a slick media play and they happen to sell the cards it’s going to be he’s going to make it cool to collect right which is a smart thing and the reason why again like okay that’s just part of a plan the one part i really liked is he goes there’s 5 million people who collect today and what anybody else in the space has tried to do is try to get as much take as much as they can from those 5 million my question when we bought tops was how do we get 50 million or 500 million people to collect and like that’s the only game i want to play is expanding the total size of this market from five million people who do this thing to 50 million people who do this thing and i just thought like that’s that’s a really powerful mental model for how you how you build businesses and i’ve talked about this before that’s the same it’s the same framework as the the one that the guy from slack did when he created slack he’s like yeah there’s work chat tools and some people use them but he’s like the reality is eight out of the ten customers that we talk to companies that we talk to they don’t use a live chat tool they use email so he goes his memo was called we don’t sell saddles here right because he’s like if we just go to the existing people who like horseback riding they probably already have a saddle we try to convince them to switch because we got a better saddle they’re kind of familiar with their ways we’re always going to be in this like tiny niche but if we sell the dream of horseback riding and show people how fun it is to go horseback riding we increase the size of the overall market and then when they say oh wow i love this thing but my butt hurts we’ll say great we have a saddle for you and so that’s like just like a general approach to business that i think more people should take is increasing the um the size of the number of people who even want your category before saying pick me that i think more people should take is have you i i agree that’s a really good insight and an example of that is have you seen uh so kevin rose this tech guy for years kevin rose for some reason after i forget where he was he was either i think he was at google leading like their adventure arm he left and he became the see i think he became a part owner and the ceo of this blog called hodenki yeah i think that’s hodenki and i remember hearing about that and i was like what he goes yeah it’s a blog for watches and i was like well yeah there was a middle step so he created a studio a lab to incubate ideas and that’s why he was even more crazy he’s like yeah we’re creating this like publication or this thing for watch collectors and then that got acquired i think by either hooding or that was called a dinky and it got it fired i’m not sure which one yeah they sometime this guy other he already had this blog kevin was tinkering with it and they became one and he started working on that and i was like what the heck man you’re like [ ] about buildings yeah aren’t you like yeah like a blog like what are you thinking and then i started watching some of their youtube videos and it was either kevin or the other guy who started the the site and he was sitting with john mayer and they were talking about their watches and i sat for like 20 minutes watching this like where john mayer was like yeah this watch is actually special for this reason and i was like that’s that’s amazing and they had this show on youtube where they were doing that and i’m not a watch guy because i don’t want to spend i don’t get joy i get more stressed out of spending 30 thousand dollars for something on my wrist i kind of get annoyed with it but i was watching his stuff and i was like i want to i want to own this you’ve turned me into a a connoisseur or i want to be connoisseur i want to be part of this exactly i want to want this i don’t know how yet yes it’s like sushi and wine there’s a whole bunch of these things from like oh i kind of like the idea of getting into this hobby golf right like i want to want it yes and that’s how i felt with him and i could see myself wanting to do this with cards i am when i was a kid did you ever collect magic cards not magic pokemon for me but yeah i did i did magic and i don’t even remember how to play it and i remember like i was like just let me look on ebay see how much some of those are and i was like i’m just gonna buy some this is this is fun it’ll remind me of my childhood and i would totally do that with sports cards even though i don’t pay attention to sports now just remind me of my childhood i would buy like a a mark mcguire card or something like that um but yeah this is cool i think that’s a really good framework actually you