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 would you rather own a small piece of something huge or a big piece or everything of something much smaller i feel like i can rule the world i know i could be what i want to sam where are you dude this looks awesome you’re at like a pool or backyard you’re in the hamptons what’s going on i spent the weekend at my in-laws house in the hamptons and i felt pretty sick yesterday so i just stayed the night here i didn’t feel well but i’m feeling fine now but i’m in i’m in the hamptons it looks good right i mean it looks amazing yeah it looks like what i’ve never been to the hamptons not even close never got an invite i don’t even know anyone that lives in the hamptons let me let me tell you away okay my opinion of the hamptons incredibly overrated you want to know another thing that’s incredibly overrated central park central park so overrated central park and the hamptons both overrated the hamptons not it’s not that pretty it’s not that pretty at all so very so what’s the appeal what is good about it if you’re in new york it’s only an hour hour and a half away without traffic so you can go to the beach there so it’s a little bit like sonoma or napa like i think those places are nice they’re not the best they’re kind of boring as far as napa is napa and sonoma are prettier than the hamptons without a doubt in my opinion oh okay interesting and uh do you like do you feel different you walk around every car is like a bentley or better you have to have a range rover to fit in it’s crazy man i it’s not my style at all it’s very it’s not it’s not even remotely my style um did you see the jake fall paul and uh tyrone tyron woodley fight last night did i tell my wife i can’t help with the kids bedtime routine because i’m watching the jake paul fight yeah i did that and i watched that fight and i thoroughly enjoyed myself it was an amazing fight i thought it was um a good fight i thought jake paul i had higher expectations the drama was there like the most time where the technical boxing was great i’m saying the drama was there i didn’t know what was gonna happen beforehand and then every round it still felt like anything could happen which is what you want the drama was so high my my my anxiety level was equal to the best ufc fight like uh like the best grudge ufc fight my like anxiety level was equal to it i thought it was amazing we had jake paul in the podcast he uh was way different on the podcast than he was in uh like for the for this whole uh boxing thing but anyway it was i was gonna tweet it out i was like hey uh congrats to to guest of episode 170 on your victory tonight yeah it was it was a fun fight i’m happy i got to watch it it was more it was more intense than any you have as intense as any ufc fight i’ve ever seen it was pretty badass they’ve done an amazing job well let’s talk about it a little bit uh so they for for those who don’t know or kind of just roll your eyes at uh you’re watching jake paul and jake paul fight this guy is this rigged what’s the point of this isn’t he a youtuber like i got a lot of respect for what they did i’m pretty impressed by this i think that this move they did to go from viner to youtuber and then youtuber to basically one of the best business models you can do as a uh as a single person is basically sell pay-per-views and uh why is that right so like this fight i wouldn’t be surprised if they sold a million pay-per-views and so you sell a million pay-per-views at you know roughly 60 bucks a pay-per-view you know per um you know that’s 60 million dollars and then they partner up with showtime to do that to that whole thing and so you know they can make 10 million bucks in one hour doing this right in basically a single event and you that’s totally different and and it grows their brand like this whole thing makes them more famous because espn is talking about it and twitter is talking about it everybody’s talking about it and uh they’re doing kind of like a hobby that they like which is boxing right they train hard so it’s not easy but man is it lucrative so like pretty impressive jump from one platform to the next and as a business person i think they’re geniuses i think they are whether it’s intentional unintentional they are geniuses uh the way that they approach this the way that they promote these things the way they leverage the brand it’s genius also getting in a ring in front of a million people getting in a ring in front of 50 people it’s incredibly frightening now to do it with someone who’s like even though woodley’s yeah he’s at the end of his career he’s 40. he [ ] kills people like he crushes people like he could he you definitely could die i mean it’s not likely but you could and that’s incredibly bold and very likely you could get humiliated knocked out brutally by this guy you know in front of everybody yeah 100 and so i do think it’s incredibly courageous even though whether i agree or don’t agree with like a lot of the [ ] they do it’s wild i can’t believe they’ve pulled this off it’s wild it’s incredibly wild the crowd on tv i’ve been to like three or four or five i forget how many ufc fights and i’ve been to some of the big ones at madison square garden the crowd on the tv like on the x in cleveland last night yeah it felt the same as when i saw ufc fight like the same energy it was pretty wild they built this they yeah they did it they pulled it off um i also went to uh a live mma fight a local one here in san francisco where uh in the uh the dragon den dragon house yeah amazing you went to one i mean do we go together this weekend i went to one i’ve been to a bunch there it’s badass right it’s way scarier than ufc it was way more intense so we get caged side seats because they’re only 50 bucks right so like the yeah you know it’s not a huge stadium it’s keys our stadium it’s a very small place but uh we went there we get cage site seats for 50 bucks since covid you know started and they said like oh everybody’s got to be vaccinated they didn’t check anything at the door so that was not so great but i walk in and the crowd is just lit i don’t know what they’re all they’re all like super drunk yeah so so i think there’s like four or five factors going in so first of all it’s their friends fighting usually so like there’s a whole in every fight there’s at least like 20 people that are there because they’re friends with this person because these are amateur fights these are people who by day you know they deliver for doordash or they like work in a you know consulting company or whatever and then this is like a nighttime fight club thing for them where they just like decided screw it i’m gonna try this um because i get there early i get there for the amateur fights before i find those way more interesting than the pro fights and um so first of all there’s 20 people that for that that’s their friend that’s their brother that’s their kid i’m seeing moms just yelling like kill him because it’s like their son in the in the ring or whatever second thing is um it’s like people are drunk yeah so people are drinking there’s only like there’s a drop in there if one consecutive it’s only beer well they only sell they only sell beer and costco pizza right yeah exactly it’s like beer and things that make you want beer and then third thing is um i think so i think the third one would be i’m so used to like you’re in the hamptons right now dude i i just hang out online on tech twitter and crypto twitter and like the group of people i normally hang out with are so nerdy and like they’re just concerned about different things the priorities are different i went to this thing and everybody’s like super dressed up like not like fancy but they were dressed up like i might i might meet someone here like this is like a club to them right um i just feel like everybody here it was like more real people than the like kind of bubble that i usually live in and so it was just different it was like shocking there was three fights that broke out in the crowd just after after if i would be done i probably would break out in the crowd and i’m sitting there with my sister and my brother-in-law and we’re just hoping it doesn’t happen near us and the last thing was covet like covet i think has riled people up like when i came in i was telling my brother-in-law i was like dude this crowd is way better than the last time we came to dragon house rico he goes dude people are ready to live he’s like people were just ready to get out and you could see it dude people were just i don’t know i don’t know how the kids use the word lit but people were lit at this event this was the whole event was lit it was i love going to those i’ve probably been to three of them were the mongols there i guess they weren’t there because uh they can’t travel no i’ve been there and there’s they have there’s like a large like contingency and mongolians and and they have their family there was one mongolian fighter and he yeah his crowd was like his crew was pretty crazy and then he fought this irish dude and i swear to god it was like conor mcgregor came out as soon as the guy comes out it’s like the whole crowd is chanting olay i’m like where did this huge irish contingent come from he’s got a tattoo silhouette of ireland on the side of his body he gets in the ring and they had a crazy fight and so it was it was a lot of fun first of all so if you have like a i don’t know if people i don’t know if it’s only people who like ufc but if you like ufc which is like maybe one percent of our audience go to a local show i bet it’s more go to a local show i i didn’t think it would be this good it’s like amazing it was like truly amazing but it also made me feel like what is it about people who why would anybody sign up to do this and then i know you are the type who you signed up to get punched in the face quite a bit what’s the appeal and would you ever do this well i signed up for a smoker so what a smoker is is it’s uh amateurs so there’s no judges and typically you can kind of have like in a like you can like say ahead of time like hey i’m new you’re new like you’re you don’t actually at the fight that you went into they’re going in with bad intentions you know they want to hurt you with the thing that i signed up for sometimes like you’d be like hey let’s let’s get after it and you’ll try to knock people out and you might get knocked out but it’s like not nearly as angry and you could like say hey we’re going too hard let’s take it easy so it’s like a sparring session it’s above a sparring session but it’s not quite a real fight or at least it doesn’t have to be and i signed up for it because it makes me feel alive it makes me feel uh like i feel soft when i just sit in front of the computer all day it makes me feel good to survive getting beat up because i know that i’m not going to be stressed out about anything else that i’m going to do throughout the day because like when i stress out about like this podcast or if i get mad that our freaking internet wasn’t working really well i’m like dawg i just got my ass kicked like like this like everything else is fine exactly i went skydiving once and we did it in the morning it was like eight in the morning and so the rest of the day like you know from 8 30 onward because i’d have to only last like five minutes like you’re just you fall for 60 seconds and then you kind of float down gently for five minutes and then it’s over but the rest of that day i was like i couldn’t be bothered by anything i was like dude i jumped out of a plane this morning you think i’m gonna worry about this presentation i have or this person who didn’t call me back or this person who cut me in line like bro i flew i was flying in the air this morning and so it was like if i could bottle that feeling up and have it more often which it sounds like you get by by sparring what not that’s pretty good i also have been re-watching breaking bad so did you watch breaking bad like once yeah so i just i just started re-watching it and uh it’s like enough years have gone by where i kind of forgot it and that’s basically the premise of the show the show is basically this guy lived kind of his whole life you know by the book and was like always like kind of just like worried about you know he didn’t want to offend anybody he didn’t take much risk blah blah blah and then when he finds out that he’s got you know a few months to live he starts doing this stuff initially to help his family like how do i how do i provide for my family if i pass away i don’t want them to have nothing because i’m just a teacher i didn’t save up too much money and then once he starts to do it it starts to feel good he starts to feel alive and so this has become kind of like a theme i’m thinking about and like if we want to tie this to business i’ll force it here which is there’s probably a whole set of products or experiences that just make somebody feel alive and they’re kind of counterintuitive like why would you choose to get punched in the face why would you choose to take this risk and almost get caught by the cops and then how do you bottle that up and package that in a product or service so that because i think a lot of people do want this feeling and once they get it i think it’s very addictive but i would say that that’s what you do with a lot of your investments right like when i think about what you’re doing with an nft or what you’re doing with crypto to me it’s a high adrenaline high risk uh type of thing right uh kind of i think you’d think i take more risk than i actually do but uh but yeah i could see that that’s definitely a piece of it there’s a bit of the roller coaster that you get to go on and the roller coasters for a thrill seeker but i just think in general like you know we were in la i went to disneyland why are there even roller coasters right well because people in 30 seconds you can get that feeling like you might die and then you live and that little package that thrills it taps into this real secret part of people and i just feel like there’s probably more experiences that could be built that are like that i think if you’re building in vr for example instead of trying to build a vr like kind of like fantasy land i would build things in vr that make people feel a little bit afraid a little bit scared a little bit alive i think a lot of video games try this right like it’s why a lot of video games are out shooting people and stuff like that because it’s it’s cool and it’s an escape and something you can’t do in real life so you get to live vicariously through this but i just think there’s a lot more that could be done so instead of talking about fear can i tell you something that i read recently that’s it’s about happiness can i tell you something that totally kind of like i read something recently and the data seems pretty clear and it totally like goes against what we’ve been told previously can i tell you about that so layout layout what we’ve been told and then what you saw so the you know there’s these like things that you see headlines so one of these headlines is like the average american doesn’t have 500 in savings or something like that that’s that’s that’s mostly [ ] by the way that’s a [ ] headline but the other one was that after you make 75 000 your perceived happiness level doesn’t really go up significantly and i read about that a while ago we read about i mean when did that come out you think like in 2012 or something 2013. yeah i feel like i’ve heard this kind of my whole professional life so maybe at least 12 15 years something like that i’ve always thought that that was [ ] i’ve always thought that was [ ] um i didn’t pass the sniff test for you not even a little bit not even a little bit and so i came across this study and so what these guys did was they got 40 000 people to install this app and this app at random times would ask you like they would ask you a bunch of questions but it would be on a scale of like one to five or one to ten i see you’re highlighting the app you can click it and you can see it it’s called track your happiness yeah and it’s pretty cool it’s just a simple app and what they did was they got 35 40 000 people they ranged they had all types of ranges and they asked people how they felt during different periods of the week of the day and they would track your income and what they found is is that while it is true that after you get past a certain point your happiness levels doesn’t necessarily go up in proportion but what this study found is like up until like 500 600 700 000 a year it was definitely still going going up like yeah we can we can show this graph if you’re watching on youtube we’ll put this graph on the screen and it’s basically two lines it’s your life satisfaction and your uh experience well-being and uh they’re both like from fifteen thousand dollars of household income up to five hundred thousand dollars they’re tracking like up into the right just like a straight line so the more income you were getting the more sort of life satisfaction you were having um during at each step of those it didn’t just plateau at 75 000 like the the old kind of like that quoted quoted study is and it may like the difference between 2 million and 3 million probably won’t be significant but like according to this study like the difference between 10 million and 1 million is significant and does impact your happiness and that totally like kind of broke my frame even though i always thought it would be true i thought this study was actually really interesting and there’s a few reason why a few reasons why basically the other one was nonsense was the first one was remembered feelings so the 75 000 study basically what they did was they asked people how they felt in the past and that’s kind of [ ] because you always think that you remember uh things better than you actually did or like during during one period you’ll think it’s great and then you’ll say how you remembered it and you’ll think it or sorry you’ll during the time you think it’s horrible then you’ll look back and be like oh that was actually awesome right this actually asked you right then and there how you felt the second thing was before it said were you happier then or were you happier now and that’s kind of nonsense because there’s no variance like the variance is too low and like you know sometimes like it could be well i’m a little bit better and that matters and so that’s binary it’s it’s just yes or no there’s no like there’s no granularity yeah so i don’t know i thought this was interesting i wanted to bring this up because that’s one of the it’s one of those studies that i always thought that people base like you read this headline and you believe this to be true and a lot of people probably make decisions based off of this and i think it’s important to say no that’s i think it’s [ ] and and you shouldn’t base your life on that data or that study right yeah yeah and i i like uh i love this topic by the way i think it’s great it’s sort of like myth-busting of these like common things you hear like another one is like the ten thousand hour rule that got really popular because malcolm gladwell wrote this book called outliers and he’s like oh you know to be great at something you got to spend ten thousand hours and uh and so then a lot of people run with that and it’s like well there’s obviously a bunch of caveats but like the caveats get stripped away as the thing just gets kind of like turned into a fortune cookie tweet right it’s like ten thousand hours that’s the rule and um and sure there’s instances where somebody spends ten thousand hours it gets really great at something but there’s definitely instances where it doesn’t take ten thousand hours to get graded something i’ve had many of them in my life and uh and so you wanna like i guess question a lot of these things that you’re told and try to figure out what what’s the truth and what’s the truth for me what am i going to experience what do i choose to believe and so i’m with you on uh on looking into stuff like this i also think this app is cool this tracker happiness app i’m gonna actually use it at my previous company when i was running the idea lab i was my first time uh like as ceo of like a larger group we had like 20 something employees uh at that time and that was i was 25 years old it was the most people i had ever managed and i was like okay well how do i manage people i was like well there’s a whole bunch of books on this but i created something pretty simple i asked one of the programmers i went to this guy quinn and he’s like this young hacker guy and i was basically like hey quinn i would love to know i would love to just kind of like if i could go have a conversation with each person each day saying hey how are you feeling uh how’s it going i think i could be a better manager but that would take way too much time and it would just also be like a full-on conversation with each person i said can you just set up a thing so that at the end of every like work day so at like 4 30 p.m or whatever it just pings everybody individually in slack and it just says hey sean uh how are you feeling today you know one to ten and uh what’s your happiness right now and it would just i would basically do what this app does and they would put it in and then i had a dashboard as the manager is the ceo that would show me all these different people and what i found was two things the first is some people have a very narrow range of emotions that they feel so like there’s like our cto is this uh british guy paul he’s a he’s very kind of like stoic he’s sort of like you know like british sort of dry humor and so like he never got too too high up too high down like he was always like a you know like a seven or an eight he didn’t he never hit a ten he never hit a five he always stayed in that range so i had to interpret his data differently because i was like for this guy his self-assessment of his own like kind of like happiness or well-being his his range is different so i can’t just say oh eight you’re good eight is actually great for him and a seven is actually quite bad for him whereas for other people who are like you know the hot mess folks it’s like some days it’s a one and some days it’s a ten and i had to interpret them differently so that was the first observation the second was when i would go and uh i could i could ping them afterwards i could just say you know it could basically ping them once they submit their score it would say cool do you want to add a note on why and the reasons that affected people’s happiness were so different than what i would have expected i thought people would be unhappy because you know they feel like underpaid or overworked or you know maybe their colleagues said something to them it was always like the smallest [ ] it’s like like what it’d be like you know it’d be something oh you know uh at lunch today uh you know i whatever you know this table was full so i kind of had to go sit over there or be like you know at uh you know we’re working on this project i really wanted to get more done but i got a phone call i got distracted it’s like they were like some people were like really some people got off on high output and so their happiness was like it’s like oh yeah we had to do that team meeting and so i didn’t get to go work on my pride i didn’t get to write enough code today or it would be like something really really small it’s like yeah i’m really dealing with this kind of like back pain so this chair is really uncomfortable it was always things that i wouldn’t have otherwise seen and so it brought those to the surface and then i could decide is this something i could affect and like improve or do i just like at least i get a better understanding of them so that was like one of the better products that we built we probably should have productized it and made it an actual like work tool for other people to use yeah i used to use this thing called 15.5 you remember that company they’re doing pretty well dude i think they’re they’re pretty successful i bet i would bet they are so they kind of like went quiet for a little while and typically that means it’s failing horribly or it’s actually quite large like it’s usually like one of the other uh and so it was called 15 5 and basically they would send you fi the whole product it was very simple and it’s probably thrived during covid but basically they send you an email every day and it takes is it 15 questions that are five minutes to answer or it’s 15 minutes to answer five questions one of those and that’s all it is is they just send you an email at the end of the day and they say what did you get done today how do you feel yep and that’s all the product is and i would imagine that it’s quite large yeah yeah i think it raised that like 130 million valuation recently or something so you know maybe that’s a little out of date that’s 2019. so i bet it’s doing doing pretty well uh all right let’s do a different topic what do you want to talk about let me tell you about a different uh a different company that i recently discovered so it’s called e-s-r-i have you ever heard of that no sounds like a government agency kinda okay so esri so basically there’s this entire uh sector this entire industry that needs important map information if you scroll all the way down to where it says felt you’ll see where i am yeah but basically the idea here is um there’s this company called esri it was started in the 1960s it’s 100 owned by this one guy and his brother so 100 owned by the same family no debt they’ve never taken any outside funding you can’t find anything about it it does over a billion dollars a year in subscription revenue and basically what it does and subscription revenue nice yes um it’s software it’s assault i guess i guess you could call it information but probably at this point software because it started in the 60s so at the time it was basically information but what it what it does is very simple so 20 000 plus cities use it so most cities most like reasonably sized cities in america use it most states use it most fortune 500 companies use it and what it does is they have loads of um of information on maps and so if you’re a government and you want to build new gas new new pipes or something like that in your city you’re going to take their data and you can also give them more data and that’s going to give you an interactive map that you can use to figure out where the other pipes are and you’re going to be able to build this this this pretty complex system that you can continually use year over year that’s going to show where your pipes are it’s called geographic information system you never heard you never heard of that gis yeah i’ve heard that yeah i thought for sure you would have heard of that so um it’s almost like uh google maps on steroids so in the same way that apple or sorry the same way it’s like b2b google maps yes in the same way uber uses one of the apple or either uh google maps this is what like the city of like the hamptons would use when they’re building new roads and when they’re building new electricities now there’s a few reasons why this is interesting one it’s one of the most complex and one of the most interesting family-owned businesses i’ve ever seen total monopoly so in the way that they got their monopoly is they go into colleges and so they work with engineering students they’ve worked really hard on making sure all the colleges they give their software to for free so the engineering students start using it at a very young age and they’re used to it then when they graduate they go oh yeah let’s just use esri so they know exactly what they’re doing and it has a total moat also because selling to a government is impossibly hard it’s incredibly difficult why because when you’re a government you want to make sure that the vendor that you’re using takes 100 responsibility if something f’s up and so when you’re like signing up if you’re a government employee if you’re working on a fortune 4 500 employee you want cover your ass insurance you know you want a company that’s like well known and like not new and like they’re going to take responsibility if something bad happens that’s esri crazy fascinating company but i’m curious about which businesses are gonna because whenever you see something old you know from the 1960s as a software company you think well like surely they’re like you know you can’t crush it forever also the founder of this company esri he’s probably worth 10 billion dollars at this point i think he’s like 85 years old so he’s gonna die he’s gonna they’re gonna lose its way like this is just inevitably how it works this guy’s name by the way jack dangermond is that his name right this dangermond i mean come on that’s uh how old is this i can see why people don’t want to compete with this guy he’s pretty old i don’t know he doesn’t look like he’s 80 it looks like he’s you know well he’s rich 60 70 something like that uh yeah personal fortune 4 billion dollars himself yeah and he started with his brother when he was like 27. crazy fascinated business crazy fascinating business and never taken a cent outside of a 5 000 initial loan from dangermon’s mother crazy right crazy fascinating company and and he seems for i mean you know what i read about he seems like a good guy him and his wife he’s so he’s an environmentalist so he started this because he cared about like uh wildfires and things like that he was building software to help create maps that um somehow reduce wildfire which i’m gonna explain in a second but basically there’s a new company there’s a bunch of new companies coming out the first one is called felt so go to felt.com it totally does not went to this it looked it look it looked well this is like an early access site but my i saw and i said oh this is kind of interesting so i started looking into it i read your notes on it this felt thing seems pretty cool are you investing in this it seems like awesome nope i i we just i’ve i’ve never talked to this person so it started by a guy named sam hashimi he’s his first company was called remix it was a city transportation planning startup that he sold for a hundred million dollars and he was doing that he learned all about the uh inadequacies of like basically using maps and creating maps for your service and he said well i’m gonna credit create a better map business uh something that uh um people can uh add stuff to and it’s almost like uh where where esri is like google maps this is like waze so people can contribute to it if you use it uh kind of fascinating and um it seems very very interesting and i always like these old-school companies i mean i like this company this guy jack started i think it’s badass i love seeing the new guys that are going to try and take this and kick their ass i think it’s very fascinating yeah this is cool i like this a lot there was a company called um what’s the name they’re based in they spun out of like this lab hold on i think you actually might have their name here and while you’re looking for that so felt they describe it as the world’s first collaborative mapping tool and it serves a wide range of use cases so i imagine they haven’t said this but i imagine actually anyone can use it a user can use it so if you’re going hiking with your friends if you’re planning a trip you’re allowed to use this i imagine what they’re doing is their grand scheme though their niche their wedge is to help wildfires uh uh go down and so the way that you could do that is you can actually use data and you can figure out where wildfires are where they’re gonna happen and then cities will pay money to use your mapping data in order to reduce wildfires and i imagine what they’re going to do is they’re going to create this really cool because if you go to felt.com it looks very um user-focused whereas it it’s they’re going to make all their money from b to b so it doesn’t look the same it doesn’t look like a b2b product i imagine what they’re going to do is like just like waze they’re going to let the consumers use it and map out really interesting [ ] and then they’re going to go and sell the data and mapping tools to b2b to businesses and that’s how they’re going to win crazy fascinating go ahead yeah i think it’s cool so the company i think is called discard his and uh what this i meant the founder of this at a dinner and he was telling me about it and i was like wow this is kind of amazing and this became one of my one of my misses i was like oh i really should invest in this and at the time i wasn’t really investing super actively and i missed the boat i think this has become like a very big company but at the time i was like pretty convinced that this is going to be a winner and why is that so they spun out of los alamos alamos national labs or whatever which is like in new mexico or albuquerque or something like that it’s like this like it’s kind of like you know nasa or something like that so this is like highly kind of scientific community they spin out they create this commercial company um that’s called discard this labs and what they do is they do satellite imagery so they would basically take i don’t know if it was their own satellites or other people’s satellites but they would take the imagery of like cool there’s this image from a satellite of a field and then they could run all kinds of machine learning and like kind of computer vision and different like tech more modern technologies on top of that and they could give a hedge fund an idea of how much corn yield there is this year or they could give you know so it’s like if you ever watch billions they kind of do something sometimes where it’s like oh look how many trucks are leaving this factory so before the earnings call i can figure out you know how much volume they’re doing because i can see the rate of change from before to after things like that so so they have a whole bunch of different products but basically at the time it was like they were like trying to figure out how to use it i think he told me the story and this is many years ago so i may be getting this wrong but i think what he told me was at the time they didn’t have that many customers but their business model was basically just betting on like futures of corn crop yields or something like that because they’re like they’re putting their own they were their own balance sheet they were just betting basically and they were showing that like look we can actually generate returns using this strategy because that’s how valuable our data is and i think since then i think that was early on when they were like just making the technology and playing with it but um either was them or they’ve been a partner doing that and now i think they have a lot more customers who are looking for this whether it’s like you know a agriculture company that has some need because they need to predict you know the way that the world is changing the way that the the the way that um anything any data that you can get from satellite imagery is basically what they do so i really like that business model as well some people are doing that in terms of getting satellites into space and other people are doing it taking the satellite imagery and making more sense of it making more getting more actionable like data and insights from that did you say the name of the company in front of the founder the name of what company oh no no he told me am i saying it wrong is it french have you heard of the philosopher descartes yeah what’s the french philosopher’s name renee descar maybe maybe that’s what it is what did you call it it’s descartes yeah it’s the car it’s like it’s like the i don’t i forget uh renee descartes is he the guy who said i think therefore i am uh anyway it’s that’s well i think therefore uh i know i know that i got that pretty bad pretty badly wrong i i met this guy years ago so i don’t even fully remember the idea i just remember thinking oh that’s interesting all my friends are making like apps to like order pizza and like to-do lists and stuff like that and this guy’s basically taking satellite imagery and looking at it and it my two takeaways were i should probably invest in this guy and the second thing was why am i not doing something more interesting with my life because that sounds way more cool and interesting and like probably valuable than competing in this competing around ideas that everybody has and that everybody could kind of do and so that was a you know a takeaway i had during that process um you want me to keep going or you want one no do one all right let me tell you a quick story about a guy named wayne hazinga i love wayne hezinga i read his book i believe it’s called uh building blockbuster so there’s this guy named wayne huzzingo where all right now i’m gonna sound uncultured is he from i always get it confused holland in the netherlands and dutch are they all the same thing dutch is a way to describe people i think from the netherlands i think holland might be a part of the netherlands i’m not sure dude i don’t know i’m sounding on culture i’m sorry but what what does it say what does wayne huzinga say so he’s of dutch descent dutch descent came to united states from the netherlands all right good all right so he’s born in 1937 all right so listen to the story of this guy born in 1937 parents divorced at a young age went to the army and when he was in his 20s he started this company called waste management basically he had one moving truck or one truck and he started a waste management business where he would just go from door to door throwing away your trash and eventually like after only a short amount of time like two years he starts realizing that these uh this this business is incredibly um there’s a there’s loads of small players who all just own little bits and pieces and he goes well [ ] i’m just gonna buy all of them and so he starts buying a [ ] ton of them something like two or three a week um and is a business eventually because has become waste management today it’s got a 64 billion dollar market cap it’s uh the biggest waste removal company in the country and it’s incredibly big and he left that in 1984 so he built this huge business and you think all right so uh that’s great go and chill next when he was still in his 50s i believe he starts a company called blockbuster and so this is in 1987. he uh bought he found one blockbuster it was one blockbuster store he bought it uh with a little bit of money and he took it public like two years later so this guy’s like a financial arbitrage machine so he’s like is really good at raising money and deploying capital and so he raises this money and so blockbuster after like two years it has seven million dollars in revenue 19 stores and then in just a handful of years he gives it to 4 billion in revenue in 3 000 stores in 11 countries and eventually he sells it to vicom in 1994 this is about uh eight years after starting the company for eight and a half billion dollars and so it’s pretty crazy and if you would have invested 25 000 and so he would let some friends invest and if you would have invested 25 000 in into a blockbuster when it went public in in 1987 it would have been worth about a million dollars when they sold so he’s pretty amazing i mean he’s he’s got a good track record so he also started something else right he’ll started yeah yeah so the guy all right so he’s in waste management he’s in blockbuster at this point he’s in the 60s you think all right now you’re just gonna chill absolutely not he starts autonation which is at this point it’s the largest seller of used cars in america so he went from waste management to blockbuster to cars and then throughout this whole period he’s also doing the same with resort so have you ever heard of uh extended stay america i believe now it’s owned by marriott you never heard of extended save america so basically they’ve got they’ve got something like five six seven hundred uh motels that are nice enough that you could stay for like a handful or like a month or like two four weeks at a time he started that he also started a bunch of different golf clubs and then in the 90s he eventually buys the miami dolphins and i think he bought another florida uh what’s the florida football team well so that’s the dolphins and then he buy the the florida marlins also the baseball team the marlins uh pretty amazing is this and and and so i always was amazed at this guy and um the reason i was amazed at him is he had an incredibly positive attitude when he was doing this whole thing and so here’s a few things here’s a few quotes that i have from his biography that he talked about were his philosophy the first we made small acquisitions in different states around the united states it was just easier faster and cheaper to go in and buy a guy who was already established in a market even if it was very small then i’d hire a bunch of sales people to go out and do the internal growth the plan was always to have internal growth but in order to get internal growth growing quickly would sometimes either go out at a certain market and just buy uh buy a guy who had three or four trucks and say okay let’s do this on our own and that’s what he did over and over and over and over again and he did it in all those businesses except for blockbuster but even then he did it with blockbuster because he started the brand but and they grew on their own but eventually they started buying like loads of different mom-and-pop mom-and-pop movie stores and this was his whole strategy there’s another guy who did this his name is bradley jacobs he’s uh is worth like five or ten billion dollars he did this over and over and over again and i think that there’s still a ton of room to do this so what what other industries could you do this in i’ve been thinking about this a lot and i’m not entirely educated on the topic but i think i think you could do it for all types of moving businesses because moving businesses there’s not actually one leader that you trust who’s like the best right it’s like a lot of mom and pop stores um what other industries could you do this like consolidation stuff in i mean these roll-ups happen kind of in every industry i feel like people have done it with dentists right now dentist is like the hottest thing going there’s also like pet you know uh vets you know veterinary hospitals or veterinary clinics there’s pet cemeteries that somebody has told us about that that’s like a pet cremation basically is like another one that you could do again fragmented market there’s there’s a lot of these there’s rural wireless internet service providers there’s there’s a huge number of these where in a local market there’s somebody who has maybe not a local monopoly but a large local footprint and uh and going in you can’t it’s very it would be it would be too expensive to go in and try to rebuild that it would take too long and be too hard to do that in a small place so you buy it at a fair price but you buy a whole lot of these and you make the the sort of the sum greater than than than than the parts and so i think this roll-up strategy is one of the more like i would say intriguing ways to build a monstrous empire like otherwise you kind of got to build a you know build a facebook build a youtube it it’s very hard to build a multi-billion dollar individual company from scratch i think it is far easier to execute one of these roll-ups and create you know 100 million dollars create even a billion dollars of value in you know five to ten years it doesn’t interest me personally but if i wanted to become a billionaire i think that this would be one of the lower risk ways to get it done um one redux did this with local newspapers also so rupert murdoch this is kind of what he did local newspapers and then local radio stations local television stations whatever he basically bought local media companies and then aggregated them and rolled them all up and created like giant basically news corp which is his his like mothership brand um so yeah by the way this guy wayne hazinga if you’re watching on youtube put this guy’s face on here from his wikipedia looks like an evil steve ballmer so that that’s what this guy looks like bradley jacobs the other guy you mentioned who’s done this with xpeo logistics and a couple other companies literally looks like couldn’t be a sweeter you know someone sweet sweetheart dad who uh you know coaches the local soccer team uh i i love looking at these because i think to do this you got to be pretty i don’t want to say ruthless but extremely aggressive ambitious a great deal maker and um and and you’re moving like at a freight train’s pace and so i love to meet these people now you can’t meet them sometimes i love to just even look at their photos and just just read their bios who’s this person where did they come from because it takes a very specific attitude to be able to go do this with self storage or local you know landscapers pool construction companies rolling them all up i’ve read a lot about uh both of those guys and i’ve seen them talk on youtube and my opinion of them is that they seem highly ethical they seem incredibly high energy super high energy and they seem very entrepreneurial even though they both look like wall street suits that don’t like create these guys definitely are creators even though they buy stuff and you think well that’s not like you’re not inventing anything and maybe they’re not inventing anything from scratch but they’re definitely creators um and i because i remember i saw that guy bradley jacobs and i saw what he looked like and i’m like dude this [ ] suit like he’s just like he’s just some arbitrage square and he’s not he totally uh he’s a he’s a creator and it’s really interesting he’s maybe not like mark zuckerberg where he’s like coding [ ] but he’s a different type of creator and i really like these types of folks doesn’t this seem a little low this guy’s net worth was 2.8 billion when he died i feel like how is this guy’s net worth so low compared to doing autonation waste management system doing uh doing a blockbuster like how is that how does that add up i think that the number that we have there could be wrong but i think it’s wrong what i read about in his biography was that with uh with waste management because they raised so much money and because they bought so many companies they simply didn’t own that much of it i mean they owned a smaller piece of a massive pie and they were okay doing that and so when he started waste management and when he left uh he was the largest individual shareholder i believe but he probably owned like single digit percentage right yeah even just owning the dolphins i feel like the dolphins themselves are going to be you know 500 million to a billion dollar franchise so that seems a little a little low but yeah this guy’s definitely the billy of the week uh extremely impressive career uh you know shout out to uh to this guy he looks like he passed away yeah a couple of years ago at age 80. um so you know respect okay what else we want to talk about i have a i have another kind of fast growing company i think it’s worth talking about this thing called picasso have you seen this no i’m gonna google it is that how it’s spelled picasso yeah p-a-c-a-s-o so two execs at zillow spun out and created this thing i think a year ago and it’s already worth one or two billion dollars kind of in startup valuation world so i think they created all that value in basically a year and a year and a half and um and what does it do it’s basically a [ ] time share so what they do is they buy homes they convert them to a llc and then they sell fractions of that home um to investors so they bought like you know let’s say a house in napa valley they go buy a million dollar house they convert it into uh slices of one-eighth so you can own an eighth of this house for whatever 125 thousand dollars you can buy a piece of this home so you’re a fractional homeowner and it’s meant to be for second homes so you don’t do this for your home you do this for your like second your vacation home and uh when you buy that one-eighth of the house that gets you 44 nights of a stay in that home for the year and you can either use them yourself you can gift them to others i think you can rent them out or get let them rent it out for you and this company takes this insane rake so they take 12 of the purchase price uh up front just straight off the bat and then they charge you a monthly management fee because they have the app that you and the other owners use to coordinate who’s booking what what’s the what’s the rental share what are you how are you sharing expenses all that good stuff and if you know if the house goes down you you know you’re on the hook for it they took their money up front so i thought this was kind of a incredible riff on a time share that uh i’m surprised frankly i’m surprised is growing this fast i didn’t like it doesn’t it’s not something i look at and i say that’s awesome i wish i had done that or thought of that idea i actually think this is kind of dumb what do you think so time shares i mean timeshare is a huge business i i like the idea of a time share is not bad i would i would be into owning one it’s just that i don’t want to go like through the sleaziness of of of you know what i mean like you want to sit through the webinar yeah i don’t want to i don’t want to go to the seminar so it’s weird so i think it could be cool why is it worth so much so fast uh yeah i don’t know i don’t know i mean they’ve grown you know so it’s picasso evaluation i saw it because there was a big protest going on so picasso raises 75 million goes from launch to unicorn in five months so i think part of it is what was the protest what’s that you said there’s a protest oh the protest was basically like in napa the home that they bought the neighborhood was like yo what is this uh like we don’t want uh we don’t want this we don’t want this like timeshare rental we don’t want all these different people coming through why why are they doing this and so um so they basically you know they were they’re trying to like they were trying to say hey time shares are not allowed and what this company says is it’s not a time share in a time sure you own a block of time in this you actually are a part owner of the home so it’s different than a time share and then people were like dude you can’t just call it cooperative ownership make up a new term and like it’s a time share and so they’re kind of going back and forth uh about that so the guy who started his name is spencel spencer raskoff is that how to say his name so he started and austin allison so she’s actually the ceo they were both execs at solo so yeah so one of the co-founders name is spencer have you seen what this guy’s done before no the name sounds familiar wasn’t he one of the original like founders of zillow like yeah so check this out in 99 at the age of 24 he founded hotwire.com a leading travel internet company i mean obviously that’s hotels right they sold it for 700 million dollars then he started zillow and he took it public he was a ceo through its ipo and bought loads of different companies uh he’s resigned in 2020 so i guess he’s out entirely uh then he started la which is a media company for a california startup so i guess that’s kind of like a passion project and then now he’s started picasso dude this guy’s prolific and he’s on the board of pallets here this guy this is why it’s worth a billion dollars because it’s like oh the ex-ceo of zillow is doing this new real estate thing cool we’re we’re in and we’re sort of price insensitive on the valuation so i think it has more to do with the team than it does probably the traction in terms of that valuation yeah this guy’s a badass i mean he’s he’s a hardcore badass would you would you want when i think of these types of things these companies that raise all this money we talked about zillow or we talked about this company picasso and the this guy looks like spencer that’s his history also a podcaster he’s got office hours podcast there you go oh we should have him on here spencer if you’re listening come on do you think that do you like this strategy of raising would you rather own a small piece of something huge or a big piece or everything of something much smaller um i don’t think about it that like that wouldn’t be the deciding criteria if it was just between those two i would rather own the whole thing of a smaller of a smaller thing i find it to be more fulfilling and i think economically you end up doing better you have more options because when you own a small piece of a bigger thing if it happens to go a little sideways and doesn’t have big unicorn exit doesn’t go public doesn’t get sold for three billion dollars it’s very easy to kind of walk away with very little because you raised all this money so now you have the first 100 million dollars go back to investors and maybe you only sold it for for 70 or something like that whereas you owned like a huge amount of the hustle i think that path is better because you could sell for 12 million dollars and walk away with 10 million dollars you know like out of it and so and so i think it’s a it gives you more options on how to build your wealth now that being said there’s something fun about building something massive and going for something that’s like truly game changing with three extra zeros on the back of it so like you know i respect both pat’s if i was picking between those two i would own i would want to own more of a smaller thing because it gives me more options what do you think is easier oh for sure owning uh owning a small thing now easier in one sense which is it is easier i think on a day-to-day basis because you don’t have to worry about fundraising shareholders other shareholder management and you can again you can exit for smaller amounts the harder part when you go rate like these guys just raise 75 million dollars they’re not gonna feel like they’re like roughing it every day whereas when it’s your company and like i don’t know you probably ran payroll for you know in the first year of the hustle and um and you probably had to worry like let’s say you know advertisers pull out you know you probably were feeling that pinch because you were more or less bootstrapped you raised a little bit of money but like right i don’t think you ever felt like you know you have this huge cash cushion that you can just fall back on well yeah i did not but my opinion i i normally would have agreed with you but we had mark laurie on the podcast and i talked oh i had a lot of his co-workers reach out to me after the podcast and basically mark laurie is our judge.com and what he’s done is he uh he what was his vision he had his like he had this like phrase and i forget the phrase but it was like a vision capital people is that what it was yeah that’s his uh his his fun name now so we could look it up uh but yeah it’s it’s vision capital people yeah you gotta write vcp vision and so he like that was his whole premise he’s like everything i come up with the vision i get the capital we get the people that’s what we do and when he says that i’m like that like what does that mean like that’s a pretty like a vague fluffy thing but i started talking to people who worked with them and they’re like he did that so well where he would raise all this money and he really like he did a lot of work but it wasn’t like he he wasn’t like doing like like like like you know the [ ] that you do when you’re just starting out when you don’t have any money you know uh uh like i i ran my own payroll i did all the banking i did you know i would go out and get all the vendors he was like he just like hired amazing people and they did most of the work and he just took care of the hard part of like selling people to uh join the company and selling people to give them money and i thought about that i’m like dude that does sound so easy yeah it’s not crazy it’s not that it’s easy it’s awesome i thought i’d put it nothing’s easy anything anything valuable is typically you don’t go to it because it’s easy necessarily but um i i’m totally with you i what’s what’s more fun a small vision or a big vision a big vision right what’s uh what feels better having a lot of ammo you know in terms of capital or being strapped for cash and always work not only having to worry about how to get customers and grow but can we pay the bills every single month yeah definitely on the other side if sean wants to [ ] off for a little while you can do that yeah you know you could you could you can bail for a little i optimize for freedom i optimize for freedom above above most things and so like if you ask me would i rather my my dad taught me this a long time ago he told me once because or my first startup was a sushi restaurant chain and i was like i was talking about you know why it’s fun blah blah blah he goes he was trying to convince me to come work in the energy industry he’s like he he worked at bp so he worked in the oil and gas industry and he’s like he’s like you know the minimum it’s like you like to play poker right now when you go to a poker table you can either sit down with a hundred dollars or you can sit down with ten thousand dollars or a hundred thousand dollars you’re still playing the same game you’re still gonna sit there for six hours he’s like it’s why not play the bigger game and he’s like in the energy industry the minimum stakes are in the millions nothing happens in the hundreds of thousands of dollars like you’re saying a restaurant one location if it works can produce a hundred thousand dollars a year of net income or 125 thousand dollars in net income he’s like why not just he’s like a small project and a big project if you make it your your obsession which is what you’re going to do when you go start a startup they both take the same amount of time they’re both going to be all consuming all right so might as well do the one that has the bigger payoff so when he said it like that i was pretty sure like that’s why my next start i stopped the food thing and i went and did a biotech company because he was right and biotech our we made one deal it was worth five million dollars and i was like wow that would have taken us like five years and 25 locations to do in the restaurant industry and this was like one one great meeting one great presentation and like you know a year of technology development and boom five million dollars came through the door so i kind of got to taste both sides of it and so if i was gonna a big project and a small project both take the same time a big project’s more fun but what i don’t like is big companies because in big companies i feel like i lose my freedom of my time my energy of how i want to spend my day and so that’s why i’m trying to find this mix of my perfect situation is i work for myself and pretty much by myself but i’m working on things that i feel are big and can pay off big and with the world of the internet that’s now possible one of the most expensive mistakes ever made so trends now makes millions of dollars in subscription revenue it’s a really good business had we made relatively minor changes like not that different like it wouldn’t have cost us more money we maybe would have had a few more people and we right now we charge 300 a year there’s a world where wouldn’t have had to been that much different and it definitely would have been a similar amount of work we could have charged 30 000 a year right i didn’t understand that for a long time now i completely do where it’s like well actually we were talking about that with hustle con when you were doing hustle con the hustle con ticket was what like 200 300 or something like that yeah on average and you had told me because i was like dude why are you doing this like events business dude events businesses can be big look at this one look at that one and i went and looked at him because you were right they did actually like make tens of millions of dollars but i was like dude the ticket price of this is three grand minimum and it looks like they have a 15 000 ticket package for like some people yours is like 10 times cheaper than that and you were like yeah we should we could but you didn’t feel comfortable going that route or whatever i don’t know what your reason was because you know yeah i knew i was being there’s a few things one i was a [ ] so i was just i was being fearful and number two when i started my company i was like 24 what i don’t and i never had a job before what i don’t understand is how these young guys uh like people who are 21 22 23 like when the folks who started box.com which is an enterprise cloud company they were like 20 or 19 like in college still what i don’t understand is when you’re a 1920 or in my case i was 24 when i thought about the company i was like well like i don’t have any money i would never buy something that was two thousand dollars now that i’m older and i have more experience i realize well two thousand dollars is not a lot of money and so what i don’t understand is how these young guys who are in their early twenties who don’t have a lot of experience how they even fathom that someone’s willing to spend all this money on their product they’re either just courageous or they have more faith i don’t know what it is but i but kudos to them because when i was 24 and starting my thing even though i could have charged way more money and i tell everyone to do it now i did not have the courage or the knowledge to do it back then right and you see now because you’re inside hubspot you see how much companies spend on just stuff like what amount of money it’s like it’s like going to a really wealthy person’s house and then you see them tip you know you they tip some guy 100 bucks or they you know they buy this this fancy espresso machine for eight thousand dollars it’s oh these are normal expenses for them so then when you’re on the outside you’re like i should be charging a lot more but when you’ve never been inside one of these big companies it feels like a three thousand dollar ask dude i better be giving them like my left arm and it’s like actually they feel more comfortable with larger price tags and that’s like that in fact a 300 product is a little bit off-putting to them and sort of strange to them yeah it’s it’s like disrespectful it’s like dude this this thing isn’t good charge more so like knowing what i know now and i think uh mark andreessen like i forget like this it was a very like headliney quote but it was something like if marc andreessen had one advice for his his startups it would be simple charge more he goes two words charge more because most startups do what i did you charge way little uh way less than you should because you i don’t know you’re trying to be cute i don’t know what it is it’s just it’s cuter to be cheaper uh but it’s like insecurity right because at the beginning you’re like oh i just want some customers it’s not that big of a deal then you kind of then that becomes the anchor point that you mentally anchor to and the market anchors you to and then you’re afraid if you raise prices and everybody’s gonna run out the door um you know what happens if i raise these prices i’m gonna get complaints people are gonna quit you know blah blah and so it’s it’s really like a form of insecurity and it’s like a corporate insecurity and uh and so if you’re out there uh i tweeted this the other day i was like if you’re working at a company go ask for a raise today but do you think anyone did that there’s cycle i just got a promotion go ask for a raise today but i’m i’m i don’t know i haven’t really proven myself go ask for a raise today everybody should go ask for a raise inside of a big company why because there’s almost always wiggle room like when i was hiring they would they had what they called a compensation band what does that mean it means for the same role we can pay this much on the low end or this much on the high end and guess what you start people low or in the middle of the scale and then you flex up when you need to when do you need to when they ask for more money and so like so there’s already in your exact role without getting a promotion there is more money that can be had the second thing is what’s the worst that happens they say no and when they say no you might learn something they might say no because like they might give you essentially a soft hell no well it’s a soft hell no hell no is sort of like they say no and they they’re like look if you want more you can go elsewhere and get it that’s kind of you’re not so valued here like go for it or there’s a no that’s like look we love you we value you i would love to give you more i just can’t right now because of xyz or can you demonstrate can you hit these goals because that will help us build this case and hey you’re one step closer to making more money than you were before you asked and so or they say yes and boom you get more money like there’s no there’s no loss i was uh except if you work for me don’t come ask me for more money that doesn’t count because i gave this advice so don’t ask me but you know other people this is for other people i was notorious at the hustle because when people would ask me for a raise i’d always say yes it was i was horrible at confrontation i just said yes to everything i’m like oh my god i don’t feel like dealing with this that is not true dude you told me a hilarious story we can bleep this out if you want to tell it i don’t know if you remember me you and our friend sully we were at uh de la rosa or we were at some some restaurant and you told the story of okay bleep this do you remember this i don’t remember fully but you were just um no and you can leave if you think that and it was just like it wasn’t just nose like you don’t understand yeah yeah yeah yeah yeah so the story was like well yeah so i remember this so i should rephrase this when people do good i’m i say yes to everything when people do bad they’re like well i want to raise i’m all right so you’re like you are a machine to me that sounds horrible but look like our business is a machine and like humans are like part of the input humans effort are part of the input right and you’re asking me for a raise right now i think that the money that you were paid like breaks even it’s like we put money into this into this machine we put input out and we get the same amount out if i’m gonna give you more amount of money i’m putting more input how much bigger is the output gonna be because right now i don’t think it’s i don’t think that it’s worth it and so i don’t think it’s worth it it’s and and so if you don’t think that that’s fair then you should go to some other machine and figure out where that input can have a bigger output because right now it ain’t working right yeah exactly so i loved that i loved that because it was honest uh b it was a little bit brutal and uh you know it wasn’t like i would say you have many many super strengths like a plus skills like i would pick you over anybody uh softly wording things is not not one of them so i found it to be super funny but but really again even if you find that information out and it hurts in the moment that this person says look it’s not like it’s not on the table with the way things are currently at if you find that out you know that’s a good that’s a good piece of information it hurts in the moment but it’s a good piece of information to know because you might say [ __ ] i need to create more value here what would it mean and you could have a conversation you could say well what would i be needing to do for you to feel great about paying me double what i’m making today that’s a question you can ask they might not know the answer on top of that but they’ll come up with it they’ll help work with you on it and then you’ll realize oh that’s where the value is created in my business and so maybe in this machine that’s where the machine needs the oil i should go oil that part of it and create all this new output and then of course they’ll give me some more because i’ve created all i’ve created disproportionately more value out of it and so it’s a good conversation to go have if you haven’t had it you know with with the people you work with all right good well i’ll let people say we’re going to do that um all right good pod yeah let’s get out of here [Music] looking back