Sam and Shaan break down how Logan Paul and KSI’s PRIME energy drink did $250 million in retail sales in year one, then walk through what Logan’s career moves reveal about riding platform waves. They recap their sold-out Vancouver live show, share standout audience stories including Anya who built a solo panic attack app to $2M+ downloads, and cover offshore tax strategies used by Nike and Apple before diving into the wild story of Kim Dotcom and Megaupload.
Speakers: Sam Parr (host), Shaan Puri (host)
PRIME’s $250 Million Year One [00:00:00]
Shaan: Have you been following this PRIME energy drink thing? I don’t know what the hell it is — it’s just a Gatorade alternative, right? Have you followed it?
Sam: Yeah, I followed it because a while back — I don’t know, like a month ago — my business partner Ben told me he met some guy who was involved with it. He’s like, “Dude, the numbers are insane for PRIME.” He was telling me a crazy amount for just one SKU, let alone the main drink. And I was like, there’s no way, that’s a crazy number. Then recently they came out and said some more numbers.
Shaan: There are two takeaways. The first is the numbers. Logan Paul said the beverage brand he launched with KSI — on January 4th, so about a month ago — did $250 million in revenue in the first year, and $44 million in revenue in just January of 2023. And here’s the exact quote. He goes: “Do you want the numbers? All right, in year one we cleared $110 million in retail sales — sorry, $250 million in retail sales — and $110 million gross internally.”
So the takeaways for me: one, that’s a huge number. Two, what the hell does “110 million gross internally” mean? This guy doesn’t even know his own numbers.
Sam: Yeah, he’s off by half. That’s crazy.
Shaan: Also, what is $110 million gross internally? What he’s saying is they sell wholesale. They sell this thing at Walmart. So at Walmart it did $250 million in sales, but they sold it to Walmart at wholesale prices. The markup is what it is — they sold $110 million worth to Walmart. So their company sold $110 million; the total product sold $250 million. I think that’s what that has to mean.
Sam: Crazy that this is that big. I’ve actually seen a few interviews with Logan and he’ll say what the numbers are, and then someone from behind the scenes goes, “No no no, it was this.” And he goes, “Wait, what? Oh, my bad, it was this.” It’s pretty wild that he’s really just focused on the content side and probably doesn’t know much about the business side. I’ve seen him ask Mr. Wonderful about different stocks and things, and he has a pretty rudimentary understanding of certain finance topics I thought for sure he’d be on top of. But I guess not.
Shaan: You can crush it without knowing all that. I think he’s like anything else — the way we’re probably good at business but just enough to be dangerous at content. You know, when we see a YouTuber, both of us have had this reaction: “Oh, we’re horse carriage operators and a Tesla just drove by.” When I see somebody on TikTok I might as well be at Hogwarts watching someone wave a magic wand. I don’t know how to do those things and I will never know, and it’s awesome. But I can’t imagine myself doing those things at the level they can.
So I think he’s good enough to be dangerous on the business side and smart enough to know what categories to go into and who to partner with.
Logan Paul’s Career Arc: Riding Every Wave [00:04:30]
Shaan: If you zoom out and just look at their moves — you can’t hear what he’s saying, you just look at the moves — the transition from Vine to YouTube: great jump. The transition from YouTube cancelled to YouTube rejuvenated: good move. Then from YouTube to celebrity boxing — he boxed Floyd Mayweather and did all right. His brother is one of the highest-earning boxers out there, and he’s not even a real boxer.
Then the next jump for Logan was WWE. He’s now one of the big stars in WWE, but he does it on his own terms. He then transitioned his YouTube content into podcast content because he’s like, “I’m maturing.”
Have you seen him in WWE? He’s good. He’s really good.
Sam: Exactly. If I was 13, I’m pretty sure I would think Logan Paul is the greatest thing ever. Because I’m 34 and I already think Logan Paul is the greatest thing ever. He’s got the acting down, he’s ripped, he’s good. And people love to hate on these guys — sometimes for good reasons, they’ve done some things that are whatever. The stupid video, the NFT trouble. But I don’t know, I think there’s a lot to learn from and admire in these guys. I’m not saying they’re great people, I don’t know them personally. But from a marketing perspective? 15 out of 10. From a brand-building, keep-riding-new-waves, stay-relevant perspective — these guys are phenomenal.
Same way the Kardashians are phenomenal in some way. You could disparage them for a bunch of reasons, or you could look at what they do great and say, “I’m just going to take inspiration from that rather than hate on them about the same stuff everybody else does.”
Shaan: I think him and KSI are kind of minor partners in the business — I think it’s like a third, a third, a third type of thing. The operators get a third.
Sam: Yeah, I saw an interview and it was either a third or like 20%, but minority but meaningful. This could be a billion-dollar brand, dude.
I invited him to Camp MFM, by the way. I was like, “Yo, you should come, it’s going to be awesome.” And he was like, “Dude, I can’t get hurt. I’m doing WWE — if I go play basketball I’m going to sprain an ankle or twist a knee and not be able to go wrestle at WrestleMania in a month.”
Shaan: Wait, he replied to you? How did that happen?
Sam: What had happened was — I jumped into a Twitter Space where he was and just started talking. Then he DM’d me afterwards. He had talked about my Clubhouse or metaverse tweet on his podcast too, and I was like, “Yo, you actually talked about my thing — I’m that guy.” He was like, “Oh, cool.” So Twitter DMs is where we talked.
Shaan: That’s actually kind of a hack. There’s a handful of YouTubers with five, ten, twenty million subscribers who I’ve chatted with on Twitter, and they only have like 10,000 or 100,000 followers there. Their audience — mostly kids — isn’t on Twitter. It’s such a good way to get in front of them. I’ve pulled that move a few times. I’m shocked it works.
Sam: That’s genius.
Vancouver Live Show Recap [00:09:00]
Shaan: It’s just not the same without thousands of roaring fans chanting our names and signing people’s backs. Sweaty backs.
Sam: You want to do a recap? The gist of this is Shaan and I did a somewhat impromptu — it was supposed to be a meetup, turned into like a live performance basically — in Vancouver. I don’t know if it was 1,000 or 1,300 people but we sold out this theater. It went pretty great. Want to talk about a few things that surprised you?
Shaan: Yeah. Surprisingly hard to be on stage, even though we kind of talk for a living at this point. There was a moment about an hour before where we were both like… how do you use your tongue? Do you touch it against your teeth when you’re making sounds? What do you do with that? We just had no idea what to say. You know that moment of panic where it’s like — are these people even coming for us? Who are they? Did they sell the tickets or did people just click maybe? We questioned everything for a moment.
There was really no thought that went into it. An hour before, we went and got sushi and we were like, “So what do you want to talk about?” We talked about that for five minutes and then started talking about family and just fun stuff. We had like a ten-minute powwow to try to figure it out.
Sam: I think it turned out okay. We’re pretty tough critics of ourselves — I think we gave the overall event an eight out of ten. Not a ten because the opening part was a lot of intro, welcome, thank our sponsors. And we weren’t as well-prepared as we could have been. I had the moment of clarity afterwards: “Oh, it’s a live show with an audience, we should be doing things like A, B, and C.” We didn’t fully get that. But we did a shark tank pitch competition, Q&A, some stuff with the crowd. I think that was good.
Shaan: All things considered, I thought it was actually a nine. Given the preparation and the amount of fun people had… another shocking thing was that people came. I think the value in order was: one, to see us; two, to meet one another; and three, to actually hear what we had to say.
Sam: Right, exactly. And I think there’s some benefit in doing it in Vancouver specifically, where there’s probably not a lot of events for entrepreneurs or tech people that are exciting. Versus if we’d done this in San Francisco, we probably would have gotten bigger numbers but they wouldn’t have cared as much. There were a lot of people at this thing who’d traveled from Toronto or Portland or different places because “might as well, it’s a couple hours away, there’s not going to be another thing like this anytime soon.”
Shaan: So it was me, you, and Andrew Wilkinson on stage in this theater — balcony seating, a giant theater where a comedian would normally play. And backstage as we’re walking up, it was truly humbling. I mean humbling in the “most on myself” way. We’re walking to the stage and there are framed pictures of the guys who were in that same green room before us. Jerry Seinfeld. Dave Chappelle. All these legendary comedians. We’re some of the best podcasters in the entrepreneurship category on Apple Podcasts, dude, but still — it was humbling.
Sam: Another thing that was humbling: after it happened, we went and hung out with people, and there was just a huge line. What it made me realize was that it’s basically Shaan and me and producer Ben — Jonathan sometimes — and we sit here recording, talking to each other. We forget on a regular basis that it’s being recorded. When the podcast gets published, we don’t see comments. We could see the numbers but it’s just an analytics screen. I don’t know who’s listening, why they’re listening.
So you forget that this stuff actually kind of matters to some people. It’s really fun to go meet people who consume your thing and realize: wow, this actually matters to them. There would be a father and son — the kid is 14 but wants to be an entrepreneur — and after every episode they brainstorm together. It’s like, oh, that’s really cool. This is embedded in their family a little bit.
Shaan: Also I should say — you were good at that. You were really good on stage, Sam. I don’t know what happened, but I think the nicotine pouch kicked in and Sam went to another level.
Sam: I’m going to start doing nicotine.
Shaan: Afterwards in the meet-and-greet you were good at being kind of the celebrity. I didn’t know what to do with my hands. People would come up and say, “Can I take a picture?” and my response was like, “Why? Oh yeah, sure I guess.” Then they’d stand next to me and I would do this point thing — every picture with me, I’m just pointing at whoever the fan was. Like, “nah, it’s about this guy right here.”
And you were doing the billionaire hug. Do you want to explain that?
Sam: I have a theory that once you hit a billion dollars, you get invited to a seminar where they teach you the billionaire hug. Basically: when you hug someone, your hips and ass are going one direction, but your shoulders and arms lean hard toward them. So you’re touching shoulder to shoulder but ass to ass you’re never touching — crotch is nowhere near their vicinity. It’s safe. It’s PC. All good.
I do the billionaire hug, and I also bring my wife along to all these things because it just keeps everything comfortable for everyone.
Shaan: Is it a sexual thing? Are you keeping your wallet away from them? Why do the hips need to be away?
Sam: It’s just a time-honored tradition. I don’t know, I’m not there yet — but I copy my heroes.
Also, sometimes people hear us talk and they think we’re so approachable, and sometimes they come up to me and go, “Dude, let’s do this!” and I’m like, whoa, you’re coming on too hard. I know I say this stuff but you’re coming on way too hard. So you need to set some boundaries. That’s my mini boundary. The crotch boundary.
Andrew Wilkinson’s Big Dog Energy [00:18:00]
Shaan: We had our buddy Andrew on stage. Andrew’s been on the pod a bunch of times, but I’d never met him in person. I’ve talked on the phone, done Zoom calls, he’s come on the pod. But in person, I’ve got to say — he’s got a lot more juice than I expected.
Tell the story about lunch.
Sam: So before the show we’re like, “Dude, we’ve got to hang out.” Ben’s kind of from that area — I thought Vancouver BC was all the same thing, but you’ve got to take a sea plane. Or a helicopter. So he took a chopper to come meet us, which is honestly one of the more big dog moves anyone’s ever done to me.
We knew it was a big dog move because he was five or ten minutes late, and instead of saying “my flight was delayed,” he said, “I was late for my flight.” I was like, wait, what?
Shaan: Yeah, I didn’t pick that up. I just heard the chopper going on the phone and I was like, “Hey, wait — is there a fan on near you? What is that?”
Sam: So he lands and before he lands he goes, “I’m going to be five to ten minutes late — I was late for my flight. Just order for me: eight oysters, two salmon nigiri, wagyu steak, miso soup. I have a nut and shellfish allergy, I’ll die if someone does that. Thanks.” But he just signed it off “THX.”
I was in the shower at this point running late as usual. I started laughing. Shaan replied — what did you say?
Shaan: I was like, “Did you just say ‘THX’ to me? Yes sir.” It was ridiculous. He tried to blame autocorrect. We’re like, “No bro, you’re just used to talking to people who let you get away with that. That might fly in Canada, but you don’t bring that weak THX energy to the United States of America. We reject that.”
Sam: So we go to lunch and we’re having a good time. Andrew’s got the juice. He’s got the juice in the way my best friends who I look up to the most have it. You have that too — when you hang out in person with Shaan, he’s got a little bounce in his step. He’s eager, excited, has a plan. Wherever you go, something a little extra is going to happen — a little more laughter, a little more learning.
Andrew had that, which was awesome to see because he’s got this calm brand. But in person his energy was a lot more kinetic.
Shaan: Kinetic energy. He was physical, he was moving — that’s a great way to put it. I have that too. People always yell at me because I’ve got big thighs and I shake them and when I do, the table moves.
Sam: So we’re probably an hour and a half into this wonderful lunch, not quite done eating, and then all of a sudden he goes, “Oh shoot.” We’re like, what? Panic. He goes, “Dude, my Uber’s been outside waiting for me for ten minutes. I’ve got to go. Bye.” And he just stood up — he was even better than that, he just stood up like he was stretching for a second, picked up his jacket, and said, “I’ll see you guys at the place.”
We’re like, what?
Shaan: “Yeah guys, I gotta go, my Uber’s been outside for ten minutes.” When did you call an Uber? And he just floated away like a balloon. Like a grandfather floating up, the house just went away.
Sam: Then me and Shaan were like, “Okay… was that weird that he just floated away like a balloon?”
Shaan: Well, we’ll work on conversation skills later, Andrew. Have a nice day. I had to blow him a kiss, he was already running away.
Why the Live Event Felt Like a Movement [00:23:00]
Shaan: I’m not going to put you on the spot, but I’d love for us to do a five-city, three-day kind of thing. Like a B and C cities tour — not New York, not San Francisco. Something like Denver, Toronto, Kansas City. Places where there’s “small pond syndrome.” I want to be a big fish in a small pond.
Sam: Do you want to do it?
Shaan: You’ve got a little something on your shirt there. I think you got a dribble of that Fame that just stained the shirt. You liked the taste of fame, didn’t you?
Sam: Well here’s why I liked it — we know why you like fame.
Shaan: Yeah, because being famous is awesome.
Sam: It is awesome. But it is exhausting. Now I understand why touring bands who last a long time just show up, do the concert, go home, go to bed. I was wired, couldn’t sleep — we hung out with everyone, had a breakfast the next day.
But I liked it because it was a challenge. And I also think in our little tech world, we assume we’re this niche internet thing, but it’s actually cool to flex and see the people. Honestly it felt like a movement. There were times where I thought Shaan and I were great at what we do, but in reality we were just an excuse — a steward of a particular type of movement. These people are all on a journey. Some are further ahead, some aren’t there yet, some don’t want to go far, but they’re all going somewhere. And we were just an excuse to gather those people. It felt beyond and bigger than us. I know that sounds woo-woo, but that’s truly how it felt.
Shaan: I agree 100%. At first I felt so excited — “Man, I can’t believe we sold out this theater, there’s 2,000 people on the wait list, they came to see us.” But there’s a small part that said: that’s the stated excuse. The reality is that the value was that this podcast puts people through a bunch of filters. Like “no small boy stuff” — people who want to think big for themselves, but they define what big means. People who don’t take themselves too seriously. If you want the smartest podcast, go listen to Invest Like the Best or All-In — those guys burn a little hotter intellectually.
We will celebrate a plumber who’s hacking the Yellow Pages to get more leads as much as a guy building a new country from scratch. There’s this set of people who appreciate the same things we appreciate, and when you put them together… it’s not easy for them in their day-to-day life to be around a bunch of other people who are like them. The schemer-dreamer archetype. So that’s what I saw as the best part.
People were saying, “Sorry you guys had to wait so long — ” and they’re like, “No, it was awesome. I was in line and I met this guy who’s doing this thing, and this other guy who’s doing that…” The real value wasn’t coming to get a selfie with me as I do my awkward point. It was getting to be in a community with other people who have the same freak energy.
Sam: I met a couple of billionaires in the crowd — or at least people with large stakes in multi-billion dollar companies. I met one of them, and he was a typical dorky guy. Then I met this other guy who had a sheetrock business, blue collar, and his hands were so meaty and fat. I shook his hand and told him, “Dude, I can’t even wrap my hand around yours, and I’m not small.” That’s sick. We got the neck beards and the calloused hands guys.
And then one of the guys, I go, “Yeah, just DM me on Twitter.” He goes, “Okay cool, my handle is Fin Manly.” And I was like, all right, that’s badass. He said, “My wife has a big Instagram following for women’s stuff so I decided to create Fin Manly to counteract it.” I thought that was awesome.
Anya and the Rooted App [00:30:00]
Sam: I want to tell you about one woman who had a really interesting story. There was a dinner the night before that the Tiny guys hosted. One woman came up and goes, “Hey, my name’s Anya, big fan,” gave me a little high five, and goes, “I just made my first million.”
I was like, nice. What do you do?
She goes, “I created this app for people with panic attacks. It’s called Rooted.”
I was like, “Panic attacks? That’s like an app for panic attacks?” I never would have even thought about that niche.
She was like, “Yeah, I struggled with it like crazy, so I created this app.” She pulls it out — Rooted, as in feeling grounded instead of having a panic attack. There’s a red panic button you can hit in the moment, but there’s also sleep stuff, lessons where you can learn what panic attacks are and why they happen to you, breathing exercises, all of that.
She said she has had two-something million downloads of this app. I thought, okay, that’s pretty great. That’s not even the crazy part. I was like, “Are you just really good at Facebook ads or what?” She goes, “No, I don’t do any paid marketing.”
I was like, so how do you get two-plus million downloads? She goes, “I think it solved a real problem. And I dominate the App Store search for this because everybody else went really broad — sleep, anxiety, breathing. I went for ‘panic attack’ because everybody else thought that was too narrow. I did a good job owning that in the App Store.” ASO instead of SEO. App Store optimization. She started getting good reviews and it snowballed and now she’s the number one result for that.
Shaan: Did she tell you how big the team was?
Sam: I was like, “How big’s your team?” She goes, “It’s just me.”
Shaan: What?
Sam: “It’s just me. I have a couple contractors that help me with things, but no employees. I don’t want any employees.”
I was like, I want to be you. She’s building something that has an impact, she dominated it her way. If she’d gone and asked smart guys like us, or asked some mentor what to do, they’d either say it’s too small of a market, or “what’s your growth strategy?” Or “you need to scale up.” But she’s like, “I don’t know, I just want to build a useful product and figure it out as I go.”
Third thing — she’s now closing deals with healthcare companies where they’ll provide the app for all the members of their gold plan. They’ll pay for it for 50,000 members. You’d think you need a BD rep and a sales team. She’s like, “No, I just go take the meeting myself.” She said she finds them on LinkedIn — “I just messaged him on LinkedIn.”
Shaan: Fantastic.
Sam: Shout out to Anya. She’s got the… not Billy of the Week, not blue collar side hustle. She’s something else. The “riches in niches” award of the week goes to her. Amazing story.
Shaan: It was amazing. This is her first business. And if you told me the idea — “I’ve never done anything tech-related, I can’t code, I’m going to hire contractors overseas, I don’t know anything about marketing” — I’d say everything you’re saying tells me this won’t work. And she completely pulled it off.
Go look up her app. It’s like a 4.9 rating, thousands of reviews, and it’s only about two years old. She just went full-time recently. Most of the app is free — she said, “I want most of it to be free because I’m trying to help as many people as I can. I’m trying to find the balance where it’s a sustainable business but most of the app stays free.”
Sam: She had this intensity about her that you could almost tell — on paper she had no attributes. We all know the rule: you’ve got to have some attributes if you want to win. She didn’t have the experience, didn’t have the skills. But she had a certain level of intensity, and you could see it just in the way she was talking. She came across like a person to be taken seriously.
Vessi Shoes: Bootstrapped to Allbirds Scale [00:37:00]
Sam: Did you meet the Vessi guys?
Shaan: V-E-S-S-I. Yeah, we went out for lunch. I don’t know if I can say the numbers, but basically — Tony was the founder. They make awesome shoes. I haven’t tried them but apparently they’re huge in Vancouver. The lady at my hotel saw me wearing them and said, “Oh, you’re wearing Vessis, those are cool.”
Basically they look just like tennis shoes but they’re waterproof, which is a big deal in Vancouver because it rains a lot. The guy bootstrapped the whole company. He told me the top-line revenue — we’ll bleep it — but we’re talking in the same ballpark as Allbirds. Like a publicly traded company’s revenue level. Completely bootstrapped.
I started talking to him and he said, “Hey, I want to get popular on Twitter.” He started talking to me about it and I started giving feedback. Then he told me about the company, told me the size. I was like, “Wait, wait, wait. Why do you want to be on Twitter? You realize this is totally not worth your time? You are way better than any of the thread boys, including me. Don’t go on Twitter, dude. Just keep crushing it.”
The company started as a Kickstarter. Profitable since day one.
Sam: Why are they so good?
Shaan: Negative cash cycle. They sell the stuff before they have to pay for the goods. Good terms with the manufacturer, and the Kickstarter model means you collect money before you even produce. Profitable since day one.
And this breaks all kinds of patterns I thought were possible. Starting in Vancouver — not a big city. The metropolitan area is 2 million, the city itself is only 800,000. It’s not like an epicenter. I went for a run and I ran across the whole city, and I don’t run much.
Sam: Canada in general — it’s a smaller place than people realize. Same population as California. Same population as the New York metro area. Bigger than the US in land mass, but just… a lot of space per person. It’s not a sophisticated place in the startup sense. I remember at the airport they checked my passport in the oddest location — as I was going to the security scanner, not ahead of time. I’m like, you know it would be way faster if you did this earlier, right?
Shaan: But this guy’s company absolutely kills it. Huge in Vancouver. Everyone was talking about them. Incredibly quiet, understated company. They opened a physical store in Vancouver — did you see the video of that? There’s a line around the block.
Sam: I was like, “Is this a marketing stunt, did you pay people to stand in that line?” He’s like, “No, these are actual customers. It’s a Monday.”
Shaan: He mentioned their retail location revenue — we’ll bleep that too — but the number was absurd. Crazy. This guy was really cool. Happy I got to meet him.
How Offshore Tax Strategies Actually Work [00:45:30]
Sam: Good weekend. We’ll do it again. So — going international, going abroad, some might say offshore. Which got me thinking about offshore companies. Offshoring money. I’ve always heard about this but could you ever actually explain how it works? Like, do you actually know how companies offshore?
Shaan: I have no idea what the words even mean, but I like using them, you know what I’m saying?
Sam: I went down a random rabbit hole last night. Pretty interesting stuff.
Shaan: Here’s the headline, the takeaway: companies like Nike and Apple — the most blue-chip of blue-chip companies — use this. This is not just shady crypto guys opening up a company in the Bahamas. At one point Apple had $300 billion overseas that they weren’t bringing back into America. Why? Here’s the first principles explanation.
Every country has a tax rate. In the United States, the corporate tax rate is let’s say 21%. If you make money here, you pay 21% on all your profits. But if you’re able to shift those profits so they’re taken in another country, you use that country’s tax rate. And there are several countries with a tax rate of pretty much zero.
Here’s the Nike example. Nike created a shell company in Bermuda, and the shell company in Bermuda owned the swoosh — the trademark to the Nike check. Now the US company is selling shoes and maybe racks up $10 billion in gross profit. Normally they just pay tax on that $10 billion. But what they would do: the Bermuda swoosh company would charge them $9 billion in royalty payments. “You’re using the swoosh, you’ve got to pay us for that.” All of a sudden the taxable income in the US goes from $10 billion down to $1 billion. They pay 21% on $1 billion. The $9 billion that the Bermuda company got? Taxed at zero.
Sam: Right.
Shaan: So their effective tax rate goes way, way down. They had this setup in the Netherlands too — Nike International over there. In the Netherlands, there was a rule where you don’t pay taxes on royalty income. So all the revenue this company makes is royalty income from the IP, the swoosh trademark they’re renting out to their other companies, and they were paying zero taxes on it.
Then after ten years, people start complaining. They close that loophole. Politicians high-five — “We did it! These big corporations are going to pay their fair share!” And Nike goes, “Oh, hold on.” They get the lawyer on the phone. “One hole closed, open up another please.” The lawyers get to work and find something new.
Here’s what they did: they created two Dutch companies. One had a director in the United States. In the US, the law says if a company is incorporated somewhere else, it gets taxed there. In the Netherlands, if it has US directors, it gets taxed in the US. So it’s like those movies where two guys are pointing at each other: “He’s got it.” “No, he’s got it.” Nobody’s taxing this thing. They called it a stateless company — Nike Innovate CV — taxed nowhere. Zero taxes.
Companies like Nike, Apple, Facebook have all done versions of this.
Sam: Have you ever seen why all these tech companies have offices in Ireland? In Dublin? Everyone has a Dublin office. I was like, okay, must be the fantastic world-renowned engineering talent of Dublin. But the reason is something called the Double Irish strategy. If you have one Irish company that owns the IP, another that’s a subsidiary with US directors — same thing, zero taxation. For five years I think Apple made $3 billion through their Irish companies and paid zero taxes on it.
Then Tim Cook goes and stands in front of Congress, and there’s this amazing clip where he goes, “Apple pays every dollar that they owe in taxes. We don’t depend on tax gimmicks, we don’t stash money in some Caribbean island.” And it’s like… yeah, you stash it in Ireland instead.
Shaan: And then Apple goes… this is all from what you probably remember as the Panama Papers. Do you know what actually happened there?
Sam: Panama was a country where this happened. I think an accounting firm that did a lot of the work got hacked?
Shaan: Not quite — someone leaked it. A whistleblower. The fourth biggest law firm in the world, called Mossack Fonseca, known for creating shell companies. Somebody leaked 11 million documents. A team of journalists looked at them for a year before finally publishing the Panama Papers. That’s where a lot of the Epstein and Putin stuff came out.
Then there were the Paradise Papers, which came after, leaked from an accounting firm called Appleby.
Sam: Interesting name.
Shaan: And that’s when the Apple company stuff came out. You could see Apple going to their law firm and the leaked emails saying, “The Irish thing is coming to an end, we’d like to find another country with this favorable advantage — maybe in the Caribbean.” Pretty much the exact opposite of what Tim Cook said in front of Congress.
Sam: You did something I think is funny. When people discuss these topics, they use words that by themselves are not bad words and don’t mean bad things, but in this context people automatically think “villain.” And sometimes I find myself using those words but almost bragging about them. “Loophole” — why don’t we just call it a rule? We’re just following the rule. “Manipulate” — why don’t we just say persuade or influence? “Exploit” — I love that word. People say Amazon exploits their workers, and I’m like, isn’t that… we give you money and then we exploit you? Like that’s the point. We use this in a very particular, efficient way.
You used the word loophole as if it’s a scam when it’s the opposite of a scam. This is within the rules.
Shaan: Well, I think they mean something, which is: within the rules but not within the spirit of the law. That’s the difference.
Sam: Don’t get all pro bono lawyer on me, bro.
Shaan: You’re doing bro legal jargon now. By the way, Tim Cook even said that in the same clip — “We not only comply with the letter of the law but the spirit of the law too.” Which was, you know, a lie.
But you’re right — there are rules of the game. If you play by those rules, don’t blame the player, blame the rulemaker. Hate the game. That’s where a lot of people go wrong. When I’m explaining these things, I’m not saying Apple and Nike are evil. I never actually knew what any of this meant or how it actually worked.
Sam: You’re a capital-J journalist. Just stating the facts.
Shaan: I’m a capital-M man. We established that.
Sam: So what’s the game theory? One thing Trump did which is actually pretty smart — another loaded word you can’t say — he pointed out that these companies have hundreds of billions overseas. Once they get taxed in the low-tax place they can’t just move the money back into their Chase account in America without getting taxed on it when it arrives. So it just stays overseas. Money that never reaches here.
What Trump did was make a one-time exception for repatriation — “bring the cash back, I’ll lower the tax rate.” Kind of like a gun buyback. No questions asked. “Here’s a discount rate — if you want the cash back in America, if you want to invest it here, here’s your half-price offer.” I think it was 15%. And that brought back 60 or 90 billion, but not the four trillion he thought would come back in.
Kim Dotcom and Megaupload [01:00:00]
Shaan: Speaking of crazy people and huge numbers and loopholes — I’ve got a cool story for you, and I have a feeling you know about this person. Have you heard of Kim Dotcom?
Sam: Yeah. He’s prolific, as you like to say.
Shaan: This guy is a prolific freak. He’s a total freak. Kim Dotcom — 6’7”, 350 pounds. Massive. He lives in New Zealand. He married a Filipino beauty queen, and when they divorced, everyone thought she was going to talk trash about him. She’s like, “No no no, I have nothing bad to say about him. The marriage just didn’t work out, he was a nice guy.”
So I started reading about him. His real name is Kim Schmitz, but then he went by Kim Tim Jim Vestor, then Kimble. Eventually he legally changed his last name to Dotcom. And his ex-wife kept the married name. Her name is like Sarah Dotcom. The article refers to her as “Miss Dotcom.”
Sam: This guy is like Mr. Worldwide — “I’m going to become Shaan Worldwide.”
Shaan: Miss Dotcom. So check this out. In the 90s he starts in Germany as a hacker. He claims — unverified — that he hacked into some famous bank, took $40 million, and donated it to Greenpeace. Greenpeace says that’s not true. TBD.
He starts building programs and software, mildly successful. He’s trying to send a file to a friend and the email says, “You’ve exceeded the limit.” So he creates something called Megaupload, which eventually gets huge.
Sam: Have you heard of Megaupload? If you’ve ever downloaded anything not entirely legally, you’ve probably come across it.
Shaan: Never used it for textbooks, but definitely have used Megaupload in my life.
Sam: It’s like Napster, but you don’t need a client — it’s just a website. Like Pirate Bay. You trade files. It went viral because people would share files and he’d put the Megaupload logo in the image, so that’s how it grew.
Shaan: He launches it in 2005, and by 2010 he’s paying himself $42 million personally. After about eight years, he gets sued. Hollywood, the government. They say he made close to $200 million in personal profit.
All during this, he’s doing other crazy stuff. Out of 50 million Modern Warfare players, he was ranked number one in the world. In 2012 he was the number one Call of Duty player on the planet.
Sam: He also finished first in the Gumball 3000 — that car race across Europe.
Shaan: Then he releases an album of original music, collaborating with various artists. Called Good Times. And it’s not that bad, honestly. Then he creates the Internet Party, a new political party in New Zealand, which gained some traction.
He’s doing all of this while running Megaupload. Then it gets shut down. He goes to jail for the second time — he’d already been in jail briefly for his earlier hacking stuff. This time they swarm his compound SWAT-style. In the house they find 40 cars — Mercedes AMGs, Bugattis — artwork, and $175 million in cash. In a room in his house.
Sam: He’s kind of a proper gangster.
Shaan: Megaupload had 50 million visits a day. It was the seventh most popular website in the world at one point. It accounted for 4% of all internet traffic in America. 180 million users. People were transferring 800 files per second. And he ran it almost like a proper company — 155 employees. Engineers, customer service, admin, all of it.
Sam: And this is a wild story I just came across because I was reading about Miss Dotcom.
Shaan: This guy is super prolific. He even tried to launch a car company — the Mega Car — internet-connected, didn’t work out wonderfully, but he built a handful of the cars.
I think he runs in your world a little bit?
Sam: I’m going to send you a DM after this. We’ve DM’d before and I just have to show you what’s in it. We can’t say it on the pod. But this guy is prolific.
Shaan: He’s kind of like the rogue Mark Andreessen. Mark Andreessen is also surprisingly massive, prolific internet guy who had all these ideals and took at it. Mark just took the straight path and this guy went rogue. That’s how I think about it.
I’m blown away by the Call of Duty thing. Like, this isn’t a he-said-she-said thing. This is rankings, leaderboards. He was number one.
Sam: But does he just have a basement of 15-year-old Korean boys playing for him? Do I really believe this guy was the number one worldwide Call of Duty player? That is insane.
Shaan: It’s like the Travis Kalanick story — I think he was ranked number two in the world at Wii Tennis?
Sam: So the story goes: Travis is at Chris Sacca’s vacation home. Chris Sacca — Mr. Sacca, kind and polite — and Travis are playing Wii Tennis. Travis absolutely crushes him. At the end of the game, Travis goes, “Mr. Sacca, I’ve got a confession.” Kind of a Princess Diaries moment. He throws the controller to his right hand and goes, “I’ve been playing left-handed the whole time.” And then absolutely demolishes him even more. Then he says, “I have another confession” — and goes to the rankings, shows that he’s number two or three in the world in Wii Tennis.
7 out of 10. We’ll give it to him.
Shaan: This Kim Dotcom guy is crazy, man. I would love to have him on the pod. Super interesting. And I feel like the odds of him not launching his own crypto token in the last five years — that had to be like one in a million.
Sam: He was indicted by the US. He was in legit trouble, in prison. So he probably can’t.
Shaan: But what’s crazy is: number one in Call of Duty, and $175 million in cash in a room in his house. Like, how much physical space does that take up?
Sam: Isn’t it always disappointing? On The Sopranos — I was watching last night — they gave a guy $75,000 and it was in an envelope. Not even a big envelope. The kind you have at home. I can’t tell you how disappointed I’d be. If I ever win some sort of prize or I’m involved with any kind of ransom, I need the giant check. If you’re going to give me cash, get it in the smallest bills possible. I want duffel bags. I want a Costco trolley bringing me the cash. If it fits in my jacket pocket, I’m out.
Shaan: If it fits in the side pocket of a suit jacket where you reach in — you know those are small — just keep it.
Sam: I bought a lottery ticket in Canada, by the way. I didn’t win.
Shaan: You buy lottery tickets?
Sam: I have this moment whenever I get up to the counter where my brain just goes into an instant fantasy: “And then this was the day, and I’m telling people I almost didn’t buy it but I just said screw it, and I won.” That’s the stupidest thing ever. I do that at least one out of three times I’m at a counter. In the US they require cash so that saves me from actually buying one. But in Canada you can put it on your card. It’s great.
Shaan: We’re going to wrap there.
Sam: All right. That’s the pod. Don’t forget to subscribe to us on YouTube.