#60 - YC Demo Day Startups #2, Importing Foreign Innovations & Collaborative Copywriting

Sam (@thesamparr) and Shaan (@shaanvp) today go over more YC batch companies! Sign up to the new Trends report that Sam mentioned at https://trends.co. Today's topics: Sam might have corona virus (5:46), is YC better this year going digital? (10:15), Smile Direct Club for Latin America (14:56), Education in India (17:56), EzeWholesale - Marketplace for Used Phones (23:28), Offerup and LetGo Merger (28:13), Build a Plane - Project Management for Construction (30:03), Strippers leaving their jobs to become delivery drivers (34:24), Ditto - Collaborative copywriting tool (38:12), Shaan's marketing intern challenge (46:14), Ugly food delivery services (48:49), Automating collections using Upflow (52:52), Teiv - Adblock for in-store TV's (58:31) See acast.com/privacy for privacy and opt-out information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Sam Parr?

  All right, everyone, we have Jordan Harbinger on, and I'm gonna tell you why. So, we get a lot of, a lot of people asking us questions on how to do different things that we talk about in the podcast, and that's great. And we do the same thing, Sean and I. And one of the folks we turn to on a regular basis, I'm texting him all the time, is Jordan Harbinger. So, Jordan, he's had podcasts for 13 years now. He's been in the top 100 for almost that entire time. And he's got a great pod called The Jordan Harbinger Show, where he talks about social engineering. In particular, he teaches Navy SEALs how to do social engineering. He teaches intelligence agencies, special operations. It's incredibly fascinating. He dives deep with his guests to learn how they think, why they think, and it's really, really, really fascinating. And it's something that I've been listening to for years.

• 0:41Sam Parr?

  But he has one episode that's incredibly fascinating to me, and that's about the guy from Catch Me If You Can, Frank Abagnale. Is that his name, Jordan?

• 0:49Speaker 01

  Yeah, Frank Abagnale, he's a fascinating character. He came on the show, and we spent a long time talking about the psychology behind how he was able to trick so many people. So, to refresh people's memory, he posed as an airline pilot, which is kinda terrifying, a doctor, and an attorney. All of these are pretty specialized. You know, look, if you were just pretending to know how to stock shelves at a grocery store, like, that is something where somebody who does that for a living could probably catch you, but the, a normal person might not have any idea. Now, when you're pretending to be a doctor, the stakes are pretty high, man. You know, law kind of trickier to pass the bar exam, that kinda thing. So, the airline pilot, of course, is the, really takes the cake.

• 1:31Speaker 01

  He did this all in his twenties, and we spent a ton of time on The Jordan Harbinger Show discussing and dissecting the concepts behind why people believed him. These same concepts work even now. He's told us that it's actually easier now for fraud, scams, con men to operate than it was back then. Cause you'd think, "Oh, now we have computers, we can verify everything." Back then, they didn't have that, the communication took longer. Now, though, people trust the machines too much, so you can trick people, and you can trick machines. Things just got even more complicated, and he, that's what he does now, is teaches law enforcement, FBI, and citizens like you and I, how to avoid common scams. And fraud, all of course, while dissecting the psychology behind it. So I loved this episode. It was one of my favorites.

• 2:15Sam Parr?

  I remember watching this movie years ago and then I immediately read the book and I was fascinated. I'm a schemer and I like building businesses and just like what I call scheming. I like doing things. And whenever you see someone doing something like this, I mean, they romanticized it and made it and made it sound like, like it was kind of cool to go and become a pilot. And so he got to use it a little bit for evil. But what are some techniques and tactics and strategies that he used to persuade people that you think people now should capitalize on?

• 2:44Speaker 01

  So something that he used that I actually, to a certain degree, also used in my twenties is the element of fear. And now, look, I don't mean you're scaring people and pulling guns on them and making them freak out. But for example, I used to talk my way into concerts before I could afford to go to them. And the way that I did that was I would show up and say, hey, I am from this magazine, from this German website or whatever. And people would say like, well, I don't have anything on that. I have no reservation for you. And I would say, oh, well, that's okay. I, what's your name? Juliana? Okay. I, I just want to make sure because I'm going to go home, go back to my hotel and get some rest, but I don't want to get in trouble from my editor.

• 3:24Speaker 01

  So I'm just going to be like, yeah, Juliana didn't have my reservation on her sheet. And she'd go, uh, hold on a second because nobody wants their name pinned to a failure in a business. So she'd go get her manager. I'd give him the same spiel and then the guy would go, you know, he's doing the calculation in his head, right? He's going, either I don't let this person in and possibly the owner gets mad at me because this media guy came from Germany and was supposed to be doing this thing and it didn't happen. Or I just let him in and it's no skin off my nose. So they can do the calculation in their head. Now, an amateur person will try to explain and force you to do that calculation by explaining it to you and being explicit. If you can get people to think it's their idea and that's how they solve the problem,

• 4:09Speaker 01

  then that's the security hole, right? And it's kind of like sales, except for you're trying to unsell them on a certain idea and then you get them to push the issue forward. Now that's a simplification. But that's essentially what he did in many ways in order to pose as a doctor, a lawyer, and an airline pilot. He learned jargon so that he sounded more believable, and we can find we can do the same thing. If you know how to talk in the language of the target, you are going to have a huge advantage in terms of being believed. A lot of military people find this. You'll say that, you'll see that military people can find who's posing as an intelligence agent or special operator by the words that they use.

• 4:50Speaker 01

  So if you can master that vernacular, you go automatically behind the circle of trust, right? They start believing you because you talk, walk, act, speak like them. That's dangerous mental fallacy to fall into.

• 5:03Sam Parr?

  God, that's so fascinating. I'm just, I'm sitting here just licking my chops at how I want to apply this. I really appreciate you coming on. So there's no money being exchanged here. We're promoting this because Jordan is an amazing guy and has helped us grow this podcast. But also, I've been listening to him for years, and so this isn't, don't take this lightly. We love this guy. Jordan, how can people find you?

• 5:25Speaker 01

  Yeah, you can find me anywhere you get your podcasts. Just search for The Jordan Harbinger Show, or you can Google The Jordan Harbinger Show, or go to jordanharbinger.com.

• 5:33Sam Parr?

  I appreciate it, man. This is awesome.

• 5:35Speaker 01

  Thank you.

• 5:46Shaan Puri?

  Sam, do you have the coronavirus?

• 5:49Sam Parr?

  Um, I was not able to get tested, but it appears so based off of just symptoms.

• 5:57Shaan Puri?

  Oh, no.

• 5:58Sam Parr?

  According to my doctor, so who the fuck knows?

• 5:59Shaan Puri?

  But you were saying so far, kind of mild?

• 6:03Sam Parr?

  Um, today's a little worse. Today, for sure, the way, okay, so you know how everyone says it's like, not that bad or bad? That's hard to quantify. So the way that I've been quantifying it is, would I stay home from work today if this was last June?

• 6:17Shaan Puri?

  Right.

• 6:18Sam Parr?

  And yesterday was the first day that I would have stayed home. Uh, and just barely, today, for sure, I would stay home from work.

• 6:26Shaan Puri?

  I see.

• 6:27Sam Parr?

  Uh, so, no, it's not that bad, but dude, shortness of breath is scary because, um...

• 6:34Sam Parr?

  Like i- it's not bad, right? Like, I can breathe perfectly fine, but it definitely is like, oh my god, what happens if this gets any worse?

• 6:42Shaan Puri?

  Right.

• 6:43Sam Parr?

  That's scary.

• 6:44Shaan Puri?

  I've been following a bunch of people who are like, pretty fit. Like, there's one guy who's an Olympic athlete, and there's, um, he's a, I think he's a swimmer or runner, Australian swimmer or runner. He has it, and he's like, yeah. So, yeah, mate, this is tough. And he's like, you know, shortness of breath, and, uh, just, you know, it's impossible to train like this. And you know, he's talking about it, and then somebody like, retweeted it, and they were like, this guy's an Olympic athlete, by the way. Like, uh, he was basically like, yeah, this gets tough. And then, there's the guy, uh, another guy I follow, who's a healthy guy, um, he was the bachelor, his name's Colton, and he got it. And, uh, he's like, you know, pretty jacked guy, like, he was an NFL player for a bit. And he's like, and he does this little Instagram post to like, update his fans about how he's doing.

• 7:29Sam Parr?

  Saying it's bad?

• 7:30Shaan Puri?

  Yeah, he's just like, you look at him, he looks raggedy as hell. Like, he is not, he is getting knocked out by this thing. And it's been like, a week plus, and he's doing just at-home treatment, and he's like, quarantined in a room. His, you know, girlfriend and their family, they just deliver meals to the door. He kind of opens the door, drags it in.

• 7:49Sam Parr?

  I haven't left the home in about a week. Like, on Saturday, I went for a walk, but besides that, or since Saturday, I haven't gone on a walk. I haven't left the house at all.

• 7:59Shaan Puri?

  Wow.

• 8:00Sam Parr?

  It's, uh, you know what's crazy? So, do you know how like, you hear, like, um, T.I. and Martha Stewart and Dr. Dre all served house arrests? And their, their house arrests are definitely different because their homes are massive.

• 8:14Shaan Puri?

  Right.

• 8:16Sam Parr?

  But a house arrest would suck still, now that I realize. I'm like, it wouldn't be that cool.

• 8:22Shaan Puri?

  Right.

• 8:22Sam Parr?

  It is still a little bit of an arrest.

• 8:25Shaan Puri?

  Yeah, it's, uh, it's crazy. Okay, well, I hope your symptoms are mild. I hope it's just actually the cold, because...

• 8:31Sam Parr?

  I, I think it's fine. Um, we'll see. I mean, whatever, it's all the same, right?

• 8:36Shaan Puri?

  Right. All right. Well, the show must go on. So, uh, what do we want to talk about today? So first, you guys released this like, book thing. What is that? I saw that yesterday.

• 8:44Sam Parr?

  It's just to get more sales to trends. It's to get people in the door, and it's incredibly effective. What we did was, we put together all of our, um... The best talks from HustleCon and we transcribed them. And when I first started the company, do you remember this book called Founders at Work by Jessica Livingston?

• 9:02Shaan Puri?

  Yeah, I love that.

• 9:02Sam Parr?

  That book like changed my freaking life and it's not even a, I mean, it's a book technically, but it's like she didn't do any like work other than what you and I do every week.

• 9:11Shaan Puri?

  Right.

• 9:11Sam Parr?

  And she just transcribed her interviews and so I was like, let's do that. And so we did. And so it's pretty cool.

• 9:18Shaan Puri?

  Yeah, I downloaded it and I started to skim through it. I was reading the Pandora guys one and so that's good. Okay, where do people get it if they're listening to this, they want that?

• 9:27Sam Parr?

  Good question. I want to see, we just posted it.

• 9:31Sam Parr?

  We just posted it Tuesday, so let me see if it even ranks on Google.

• 9:35Shaan Puri?

  Okay, we'll put a link to it in the description if you want to read this thing. It's, is it free or you have to, you have to become a?

• 9:41Sam Parr?

  It's a dollar.

• 9:41Shaan Puri?

  It's a dollar.

• 9:42Sam Parr?

  It's a dollar and everyone's like, what's the catch? I'm like, well, it's a dollar and then you're going to be automatically subscribed to trends, but you have two weeks to cancel. So get value or sign up and try it and if you don't like it, then just cancel and you're only out a dollar.

• 9:56Shaan Puri?

  Right.

• 9:57Sam Parr?

  The, so if you go to trends.co, you'll, you should, you'll see it at the top, like a, like a, like a link.

• 10:03Shaan Puri?

  Okay.

• 10:03Sam Parr?

  But it's not even ranking for Google yet and hopefully we can link to it in here.

• 10:07Shaan Puri?

  Okay, cool. We'll do that. That's fun. That's exciting. I'm glad you guys did that.

• 10:11Sam Parr?

  Yeah, it's great. The cold email lecture one was even better. I mean, that, people love that shit.

• 10:16Shaan Puri?

  Yeah. Okay, cool. So we wanted to, we did a bunch of the YC companies last week or not last week, a couple of days ago. And reaction was good. People wanted more. We only did five or six of them that time. The way I'm thinking about this is like, I listened to a couple of sports podcasts, like the Bill Simmons podcast. And every year around like the NFL draft, it's like, there's these special sort of annual events that you do, like these deep dives for. And to me, that's kind of what the YC demo day is. It's like, I could see us doing this as a recurring thing in the podcast where it's like, oh, that's our version of the NFL draft. You see all these hot prospects and you're scouting them and you're checking them out and you're, you're using them to sort of see what are the?

• 10:58Shaan Puri?

  You know, what are the smartest people working on? Where do they see the opportunities? And then what do we think about those?

• 11:04Sam Parr?

  What did your friends say? I, I, cause I talked to Jack and a couple of other guys about this and they go, I think the, uh, some of them are like, I think the batch was pretty weak and I totally disagree. I think there's a bunch of amazing things.

• 11:15Shaan Puri?

  So people who have been going to Y C Demo Day for years, they, this is like their favorite thing to say. It's like, oh yeah, Y C batch this year is weak. And like, um, you know, I don't know to what extent that's true versus just a cool thing to say. You sound cool by saying it. Um, I was skeptical of those. Jack's not the type to do that though. So, um,

• 11:33Sam Parr?

  He wasn't, he, he was not like totally negative, but he was basically like, oh, it's okay.

• 11:39Shaan Puri?

  So what I heard from, what I heard, the sentiment I got from people who've been going to Demo Day for a while is, uh, you know, in the past, it was like the glory days and there was less competition on the investor side and the companies were better and higher quality. And there was fewer of them. So you could go deeper with them. One of the problems now is like, for example, Demo Day has become something where they get up on stage, they talk for, I think one minute, they do a one minute presentation. And then it's like, if you're interested, you know, come talk to me. And then there's a like line of investors already wanting to talk to that person from the one minute pitch. And, um, and it's so competitive, the deals are already, half the deals are done before Demo Day, just cause people swoop in beforehand.

• 12:17Shaan Puri?

  And then the other half get done, you know, very shortly afterwards. So a lot of smart people are like, dude, this is a, a frenzy that is not smart. Now this year, they don't even do the one minute pitch. It's just a slide, one slide and two, two paragraphs. And then you decide to, to talk to them more or not.

• 12:33Sam Parr?

  And I think that's great. To be honest, if I was an operator, which I am, um, like I see these and I'm like, oh my God.

• 12:39Shaan Puri?

  For the founders, it's fantastic.

• 12:41Sam Parr?

  Well, I'm like, I should do that.

• 12:43Shaan Puri?

  And even for the investors, I actually think this one's better because it's digital. So it's like you say, it's like Tinder. You basically, when you see the listing, you say, yes, I'm interested. No, I'm not. And if you, if you say yes, then they get a request that says this person wants to talk to you and then they can say yes, and then it matches. And, um, so I think that's actually better this year because, because it's digital. I think people are going to take time to have conversations. Whereas when it's sort of a live event, you, um,

• 13:09Shaan Puri?

  It's again, it's just like a meat market. You're just sort of, it's like, you know, the old Wall Street trading floor, people are just standing up and yelling shit. It's a little bit faster paced and people don't feel like they're able to make thorough decisions.

• 13:21Sam Parr?

  And what's in, well, I think what we, I don't know if we told this to people, I don't know, we might have to blink this out. We won't name names, but people can't see what you and I see. So we're reading off like a private list. And I don't think we're breaking any of the rules. I mean, it's not like, it's not like fucking illegal.

• 13:37Shaan Puri?

  Yeah, I don't think so. TechCrunch has reported on all these companies now. And also, there's some companies that say off the record, or we just won't talk about this. No problem.

• 13:45Sam Parr?

  You want, can I, wait, yesterday, I was pretty hopped up on Dayquil the other day. Did we talk about, uh, did we talk about this? So here's a theme that I noticed. We talked about last time about how there's like X of India. So right now I see bill.com of India.

• 14:01Shaan Puri?

  Right.

• 14:01Sam Parr?

  Uh, this thing for, this thing's for Latin America.

• 14:05Shaan Puri?

  Flexport for Africa. Yeah.

• 14:07Sam Parr?

  Okay. So we saw that a lot. We saw that a lot. And I like.

• 14:11Shaan Puri?

  You said the India thing last time. I went back and looked, there's like 28 companies in the batch that are Indian startups. Like the India, we took over the spelling bee and now we're taking over YC. That's what's going on.

• 14:21Sam Parr?

  So at first I was like, I don't know if I like that. Not the country thing, but like, we're just gonna, we're this, we're this business, but of that region.

• 14:30Shaan Puri?

  Right.

• 14:30Sam Parr?

  And I think I've changed my opinion. I think it's cool because Y Combinator is supposed to be all about innovation and shit. And it's not exactly innovative to say you're going to be the Smile Direct Club of Latin America, but I still think it's cool. And that's one I want to bring up. Did you, did we, did we talk about that?

• 14:44Shaan Puri?

  We didn't talk about that one. No.

• 14:45Sam Parr?

  Did you read that?

• 14:46Shaan Puri?

  I didn't look into it, but yeah, we can talk about it.

• 14:49Sam Parr?

  Okay. So, uh, what was it called? They don't, how do I do a search on here? Um, but anyway, Moons. Okay. And they just say Smile Direct Club for Latin America. And here's why I like this. In one of their decks, they go, Smile Direct Club became a billion dollar company in five years. We're going to do it in four.

• 15:12Sam Parr?

  And and I looked up the people behind it and the people behind it previously worked at Rocket Internet. Which is notorious for cloning companies and scaling them in different in different industries. Or cloning like Amazon but for Thailand or something. And I love, I mean, there's pros and cons to that, but it definitely creates some value. And the fact that they said that at Y Combinator, I think is like, I just think they're ballsy and I love these guys.

• 15:40Shaan Puri?

  Yeah, so there's a bunch of these Gusto for Africa, Acorns for India, Cameo for India, Flexport for Africa, Smile Direct Club for LatAm, right? Like, this is a, um, you know, it's not like a groundbreaking idea, but it's, it's, you, it really does stand out when you look at the list.

• 15:55Sam Parr?

  I want to do the opposite. I want someone to tell me what's cool in India that's not in America.

• 15:59Shaan Puri?

  So I'm doing that. So I'm basically putting together a report of the coolest companies in India that don't have analogs here. Um, like, for example, there's this company called Bijju. Have you ever heard of Bijju? B Y J U and

• 16:12Sam Parr?

  B Y J U?

• 16:13Shaan Puri?

  Yeah, this guy basically started off as a teacher and he would teach like essentially test prep because

• 16:17Sam Parr?

  Oh, you freaking love this.

• 16:18Shaan Puri?

  I think I've told you about this before, but basically

• 16:20Sam Parr?

  Well, yeah, you, you, you, like, you say that's your dream.

• 16:24Shaan Puri?

  Yeah, this, this guy, he started off as a small teacher in a town, basically, and was doing test prep and then sort of got bigger and bigger and bigger. People wanted to learn from him to the point where he was selling out stadiums of people coming to watch him teach math. And that was, when I saw the picture of the stadium, I thought this is remarkable. Then he turned it into an online learning platform, a basically a video-based teaching platform, sort of like Khan Academy, but for profit. And it's an eight billion dollar company now. And, um, this guy Bijju is sort of one of the youngest billionaires in India. He's a teacher turned billionaire, which is very rare. And, uh, you know, cool product, cool company. And there's actually a company in this Y C batch that's trying, that's the former first instructor of Bijju. He's like, I was the face of Bijju because he was in all the videos.

• 17:09Shaan Puri?

  And he left to start his own thing. He's like, you know, here's the dirty secret about Bijju's thing. It has very low retention, great at making money, great at getting people to sign up. But less than 15% of people stick with the, the course as it goes along. We're doing this other way and we're going to win. And they're in this batch as well.

• 17:25Sam Parr?

  So that's interesting. So I would love to ask you questions about that. First, I want to tell you that I'm looking at their Wikipedia. It says they do, they're worth eight billion dollars. They do eighty million in US dollars in sales. And then it says they only have five employees.

• 17:42Shaan Puri?

  Yeah, that's wrong. And also, they do more, they do more revenue recently. They were over a hundred million, I think, the last, like, I read something where they were, where they were doing over a hundred million, but.

• 17:52Sam Parr?

  So why is this big? That'd be amazing. Why is this big in India but not America? Is it because Indians love math and science?

• 17:58Shaan Puri?

  Yeah, so education is like, you know, God in India. Like, you, you can be dirt poor in a village, but you'll do anything to educate your kids. And, you know, even the sort of Indian people in America, you probably have noticed, are like, you know, their parents are pretty strict about education. You got to get good grades, all that stuff. And so Indians are willing to pay anything for education, and they don't really pay anything for anything else. So, you know, entertainment is, is usually lower on the list, although Bollywood does well, but like, on a per capita basis, where are you going to spend your money? Education is sort of number one for, for Indians. So that's the first part. Second part is they have such a huge population. So you can take a really small amount of money from such a huge number of people and build a very big company. So that's the second part.

• 18:41Sam Parr?

  How, how much bigger is India than America in population? Three times?

• 18:45Shaan Puri?

  Yes, uh, four times, I think. It's like one, I think it's, I think it's over one billion and US at three hundred million, I believe. So it'd be like about four times. And, and of course, not all those people have smartphones, not all those people have money, but like, you know, it's, it's, India has like sort of the largest growing middle class. So that's some of the reason why this works, is because people are willing to pay for education. And there's so many people that if you take a few bucks from each, and everybody's willing to pay for this because it's education, that adds up. But, you know, eight billion is sort of out, it, it, it is outpacing their revenue growth, right? So I think the part of it is the story of what this becomes, and their sort of defensibility, that's probably why they're valued so much higher than their, than their revenue would suggest.

• 19:28Sam Parr?

  Do you think that that, that can be popular in America?

• 19:32Shaan Puri?

  Oh, I think so. Like, I think Khan Academy is fairly popular and it's mostly in America.

• 19:37Sam Parr?

  No money, though.

• 19:38Shaan Puri?

  It's just, yeah, it's a nonprofit and they don't pour money into growth like these guys do. I'm sure these guys are aggressively trying to grow and using their payback to to sort of fund more growth. But yeah, I do think like something like this can work here. But, you know, we'll see. There might be other reasons why it doesn't. There's a whole bunch of other companies. I basically found these five guys on Twitter who are like in the Indian startup scene that are actually really smart. And once I started following them, I started seeing awesome companies all the time. And I'm trying to put together essentially the Mary Meeker Internet Trends Report that she does every year for like global internet trends. I'm doing that just of India, State of the Union, Indian startup scene. Here's what you need to know because a lot of people in America want to know, but are not going to do the research to figure out

• 20:21Shaan Puri?

  what's going on in the Indian tech scene. And I think I can distill it down.

• 20:25Sam Parr?

  I am writing that down and probably going to steal that. That is a great idea.

• 20:30Shaan Puri?

  Okay, great.

• 20:32Sam Parr?

  What is your call? That was cool. Like a trends report of Mary Meeker for different countries?

• 20:38Shaan Puri?

  Yeah, Mary Meeker for India, basically.

• 20:40Sam Parr?

  Can I tell you why I think that's a great idea is because have I told you about Kevin Ryan?

• 20:46Shaan Puri?

  Hmm, no. Maybe he's in charge of that media company, right?

• 20:51Sam Parr?

  So Kevin Ryan was the 20th employee at DoubleClick and DoubleClick ended up becoming AdSense or AdWords. And Google bought it for three or four billion dollars, very successful. And then, so he was the CEO. He was the 20th employee and then CEO. So he was successful in that regard. Then with his earnings, he told me that he made 20 million dollars personally. With his earnings, he went and started this thing called Silicon Alley Group. And Silicon Alley Group created MongoDB, which is now a publicly traded company in the billions of dollars. They created Business Insider. They created Zola, which is big, and they created about four other things.

• 21:31Sam Parr?

  And one of the things that they did was they created Gilt, Gilt Group, which is like flash deals for women's clothing. And the reason he started it was he said, Uh, cause I called email them and asked them all these questions. I became friends with them. And he told me that uh, he was walking down the street in Paris and saw a long line outside of a women's store and he asked a woman like, what is this thing? And they go, well, they do, they do these deals every day only for an hour at noon. And so they're starting to do them online, but they still do them in person. And he goes, oh, cool. I'm gonna do that in America.

• 22:03Sam Parr?

  And that's how guilt started.

• 22:04Shaan Puri?

  Nice. Uh, yeah. So you're basically saying import the sort of the behaviors and innovations you see in foreign markets back into the US, not just right now, US is an exporter of innovation and it's a, you're saying we can also become an importer of innovation.

• 22:19Sam Parr?

  Yeah. I mean, like you did it and you kind of, or you tried to do it with sushi trains.

• 22:24Shaan Puri?

  Yeah, yeah. When we did their sushi thing, yeah, like in Australia, that was a common and in the US, you never saw it.

• 22:31Sam Parr?

  And I don't think it still has caught on, but you, you did the same thing.

• 22:35Shaan Puri?

  Well, we tried.

• 22:36Sam Parr?

  You, you definitely tried and it was a good swing. I think it was a great swing. Uh, in, in case you're curious, I just looked it up while we were talking, Khan Academy, because it's a nonprofit, they uh, all their financials are available and uh, they do like 80 million dollars in sales.

• 22:53Shaan Puri?

  Yeah. So actually on par with Biju. Um, and does it say real quick where you're at, how many students they have that active, like the active learners or anything?

• 23:01Sam Parr?

  It does. So if you go to Khan, Khan, uh, Khan Academy Annual Report.org, you can see all the information.

• 23:09Shaan Puri?

  Okay. I'm going to check that out afterwards and I'm going to do a report on them because I'm a, a education nerd. And so I'm going to like, I'm going to bring them to the table for the next podcast. All right. So let's, let's go back into the, to the Y C companies. Uh, let's just trade off. You do one that you find interesting. I'll do one that I find interesting. Go for it.

• 23:23Sam Parr?

  I did Smile Direct Club for Latin America. Your turn.

• 23:26Shaan Puri?

  Okay. My turn. All right. So, uh, I'm going to do this one. I don't know exactly how you say it. Ease wholesale, easy wholesale.

• 23:32Sam Parr?

  I love that you bring that up. Yeah.

• 23:34Shaan Puri?

  Really interesting company. So basically the premise is it's a marketplace for buying and selling used smartphones. And uh, you know, I'll, I'll tell you some of their stats. I haven't sort of verified how real these are, but they say that used smartphone sales are $46 billion a year annual market. They say that 230 million uh, smartphones are sold per year. You can do math, see if that checks out. Um, they have, uh, so what they did is they made a marketplace where you could, if you have phones and you're a wholesaler, uh, you can basically say, hey, I'm uh, either I'm looking to buy or looking to sell. And they made it like a stock market. You, you basically put a A bid up, you say, I'd like to buy this iPhone. And if somebody has it, they can fill your order and they could basically like do, they can close your transaction out there, your ticket out. Or you could say, I'm selling a hundred of these specific Android phones.

• 24:19Shaan Puri?

  And somebody could say, I'll buy 10 of those. And so they made it easy. They said that most of this used to happen through Facebook groups, WhatsApp, sort of the underground, you know, just using social tools.

• 24:29Sam Parr?

  Yeah.

• 24:30Shaan Puri?

  But there wasn't a marketplace and that was focused on this. And so they, they have 400,000 in GMV so far. Now, GMV, you know, you can assume maybe they're making, you know, in the tens of thousands of dollars themselves.

• 24:43Sam Parr?

  So GMV gross merchandise.

• 24:46Shaan Puri?

  Volume.

• 24:46Sam Parr?

  Volume, okay.

• 24:47Shaan Puri?

  So basically, how much is total sold through their market? So if a cellphone sells for a thousand dollars, that's a thousand dollars of GMV. Their cut might be 5%, 10% of that. But this is because the smartphone, if the smartphone, if the used smartphone marketplace is this big and they have some stats about how fast it's growing. They say that used smartphone sales is growing faster than new smartphone sales per year. Because, you know, Apple is trying to like make the old model irrelevant so quickly. And sure, some people do upgrade, but there's all these other phones still out there that are still very good phones.

• 25:17Sam Parr?

  I, like, I, I can afford new phones. I, up until my most recent phone, all of them have been used.

• 25:24Shaan Puri?

  And the, the best part about these guys is, so I believe that they were bootstrapped. I'm not 100% sure, but they, so they've gotten to this point. They, they themselves were former buyers and traders of cellphones and they had sold prior to this, just as brokers, eight million dollars worth of cellphones and then decided to create a sort of technology marketplace out of this. So if you think about it, market, love it. Style of business, marketplace, love it. So I love that, love that they're going for used market, used smartphones. I love that they're doing a marketplace. I love that they came from a background where they actually did this manually before and were sort of prolific brokers. A++ love this, love this company here on, on, on the YC list.

• 26:05Sam Parr?

  Okay, I like it. Let me play devil's advocate here, which is, okay, so I looked up a few. Okay, so first of all, I think that this is a lot harder than people think. The reason why I think it's a lot harder is I think it's incredibly competitive with a lot of people who are already very established. Um, so I think getting distribution and getting eyeballs on their product is going to be prohibitively expensive, maybe.

• 26:28Shaan Puri?

  Right.

• 26:29Sam Parr?

  Um, I also think that, so there's a company called SwapA. Do you know SwapA?

• 26:35Shaan Puri?

  Uh, no, but I see your note here.

• 26:36Sam Parr?

  Okay, here's why this is interesting. I've actually used it before, but I didn't, but what's interesting is I posted, or I have, I have a thread that I found of the guy who's, so SwapA is the same thing, but slightly different. I don't know how it's slightly different, but it's the same, it's a, you buy used cell phones. Um, what's interesting is that in 2011, the guy who started SwapA posted on Hacker News and he said, hey, I'm launching this thing on the side. Here's what it does. And so you can actually go and like see how he started it. And it's, I, I, I don't know how big it is right now, but it's, uh, it comes up number one when you Google buy used cell phones. So I would imagine it does.

• 27:15Sam Parr?

  I, I bet you it does fifty million dollars in sales at least. Um, because I'm comparing it to the person that's number two, which is Gazelle, which is a big company. But anyway, SwapA bootstrapped. And so I, if I was a greedy, if I was these ease guys, how do you say it? Easy? If I, if, if I was these ease guys, um, and I, easy or whatever, what did you say?

• 27:40Shaan Puri?

  Let's go with easy.

• 27:40Sam Parr?

  If I was easy, I would be greedy and wanna raise very little money, like less than a million dollars. And just see how, how I can just make this really profitable, but, um.

• 27:53Shaan Puri?

  Yeah, they say, launched three months ago, four hundred K GMV monthly, eight percent margin, profitable and growing at twenty percent month over month. Of course, easy to be profitable when you have two people and you're not taking salaries, but, um, nonetheless, I think this could be a profitable business because of the, um, you know, the, the, the sort of take rate.

• 28:11Sam Parr?

  And here's why I, but here's why I don't know if I would raise money if I was these guys is, cause have you, did you see what happened two days ago? Do you know this, uh, offer up and let go?

• 28:21Shaan Puri?

  I know about them. Well, something bad happened?

• 28:23Sam Parr?

  OfferUp and Letgo, um, combined.

• 28:28Shaan Puri?

  Oh, interesting.

• 28:28Sam Parr?

  They merged.

• 28:30Shaan Puri?

  And who was the sort of bigger parent? Was it OfferUp?

• 28:33Sam Parr?

  Yep. OfferUp was the bigger parent and they raised an additional $120 million to make this all work.

• 28:40Sam Parr?

  And so, that's not a good sign.

• 28:44Shaan Puri?

  And so, they have a pretty cool story. I don't know if you guys told it or where I read this, but OfferUp has a pretty cool story where it sort of started, I believe, I might butcher this, I might be thinking of something else, but I believe it was, they're in Canada, and people have these buy-sell-trade groups on Facebook, and they saw this behavior of Facebook, you know, sort of local used goods selling happening, and then they started, they built off the back of that, of these Facebook groups for buying used stuff, and they built OfferUp off that, um, off that, that community of people.

• 29:17Sam Parr?

  So, I, I, okay, I, I dig that. They also raised like $500 million. And, and they haven't hit terminal velocity. I mean, they're not like, they're not a player yet compared to eBay and Craigslist. Um, so I would say if I was these guys, if I was Eas, EZ or Eas, I would, um, I would be very happy to start and own that. If I was an investor, which I am, and I just came across these guys, I think I would invest a small amount of money because I think I can make money off of it. But, um, I don't know if I would raise venture capital, like significant amount. Yeah, I think they still need to prove a lot.

• 29:56Shaan Puri?

  Yeah, uh, for sure. But I think it's a good investment. I like him. All right, let's go to the next one.

• 30:00Sam Parr?

  Okay, let's do, um, uh, Build a Plane. Love this. If these, uh, this is a, uh, this could potentially could be a $10 billion company, I think.

• 30:09Shaan Puri?

  Okay, tell me why.

• 30:11Sam Parr?

  Okay, so Build a Plane, what, so what they do is they look at, uh, it, it's boring. Let me see, I'll try to read the exact description, but what they do is they, it, it's project management for construction.

• 30:23Sam Parr?

  So let's find it, build a plane. But here's why I think it's cool. First of all, remember how I

• 30:29Shaan Puri?

  I was just gonna read their description so people have more context. So we're a powerful dashboard for construction companies. We give them visibility and control of project finances, change management, documents, compliance and communication, blah, blah, blah. They built a different company that got acquired for 80 million prior to this. And they say Bill Plan is solving the core issues of being the centerpiece of projects, empowering full automation, blah, blah, blah. Okay, whatever. Basically, they're saying that total, they're saying that construction costs, controlling construction costs and making them more efficient represents a sort of a $10 billion opportunity globally. Here's some of our features. Here's our product. Check it out.

• 31:07Sam Parr?

  So when you're building a 300 unit apartment building and you want to see how much everything costs, you want to see RFPs for your vendors, and you want to know what your cash flow, what your cash output is. Simple, right?

• 31:24Shaan Puri?

  Yeah, I think there's, this is one of those where if you win, you're in such a big space that your prize is humongous. Hard for two reasons. Hard to get any sort of blue collar project industry to adopt software is always a challenge. When you do it, it looks like, oh, yeah, obviously, they used to be using paper and pen, or they used to just use clipboards and, you know, whatever. And now, it looks obvious in retrospect, but then there's also that so many cases where it's like, yeah, we just, our thing is better. It would have saved them time and money. They just didn't put it in their workflow. So that's one piece. On the other side, I think there's a lot of competition. I know there's like several companies that are, you know, every year, there's

• 32:06Shaan Puri?

  like 15 companies that try to do project management software for construction. And the question is, what do these guys know that they, that the others don't? Or what is their unique angle? That didn't come through for me in this pitch.

• 32:17Sam Parr?

  It did not come through to me either. But just because the market is so big, if I was these guys, this is one of the few companies where I'd be like, get as much cash as you can right out the gate and just throw it at the wall and go big or go bankrupt.

• 32:31Shaan Puri?

  Okay, I'm not sure why. Why, why, why do you advocate for that?

• 32:35Sam Parr?

  Because it just the

• 32:36Shaan Puri?

  What do you think the cash does for them? Why, why do they need so much cash?

• 32:39Sam Parr?

  I would hire just a, a math, because, okay, so, uh, there's a few ways that you can grow. You can grow through content marketing. You can grow through word of mouth, which happens way less than people think. You can grow through like network effects like Facebook. You can grow, grow through, uh, paid advertising, which is really easy if your product is cheap.

• 32:55Shaan Puri?

  Right, or sales.

• 32:56Sam Parr?

  Or you can go grow through hiring a sales team. I love products that are priced in such a way where you can afford to hire a sales team. You cannot afford to hire a sales team if your product is probably less than 10 grand a year. Um, and so what I would do is I would create a fat office in Dallas, a huge office in like Charlotte. And then maybe an office in, or like, like Na- Nashville and Dallas, and then like maybe New York. And I would just re- recruit all the salespeople from, uh, com- older competitors and wrap my office in like this startupy bullshit and go for it. That's what I would do.

• 33:36Shaan Puri?

  And I, I think what, what you, what I, the other part I heard that you didn't say explicitly is just, even though this pitch didn't have everything, it had enough where you're like, I need to know more. Uh, I, I, I, I want to know more. Uh, so sometimes, you know, there's better pitches on this, on this site right now, but there's not better markets. Um, and so like, for example, there's this one that's about like a rewards program for gamers. I hate this, I hate this idea. I hate the market that they're in. Super hard to make it work. And even if they have a great pitch, even if they have traction right now, um, it's a stay away for me. And so whereas construction tech, it's a, it's a come closer. Let, let's learn a little bit more.

• 34:14Sam Parr?

  Right.

• 34:14Shaan Puri?

  Let's, let's get some coffee.

• 34:15Sam Parr?

  It's like building like freaking driverless cars right now. It's like, uh, you'll probably fail, but if you make it work, it's like the greatest thing ever. Um, and another example is Homebound. Do you know Homebound?

• 34:28Shaan Puri?

  Not well.

• 34:29Sam Parr?

  Okay. It's launched by Atomic, uh, Atomic Labs, or I don't know what they call themselves Atomic. It's like a startup. I don't know. They just launch companies. They've launched Hims and they've launched a few others. Hims is the most.

• 34:40Shaan Puri?

  They're like Monkey Inferno, which I used to run, like a studio that, that, uh, creates companies.

• 34:44Sam Parr?

  Yeah. They launched one called Homebound and they're doing this, but only for people who are building single family homes. And it's, it's got some traction. So there's

• 34:55Shaan Puri?

  Alright, I got another company for you. Ready?

• 34:57Sam Parr?

  Please tell me it's the strippers on demand.

• 35:00Shaan Puri?

  Uh, no, but that one's good. Oh, we should actually talk about that. Uh, so there's this cool story. This is not a YC startup, although it maybe should have been. Cool story. We're basically in Portland, you know, right now with coronavirus, everybody's getting deliveries, right? And so Uh, I have a friend who runs a company called Farmstead and they do grocery delivery. They've been doing this for, you know, two years now and they All the, all Farmstead does is they deliver, you know, your staple foods, milk, eggs, bread, stuff you need repeatedly. And you don't need, you know, going to the grocery store every time you run out of milk kinda sucks. So they just deliver it to your door. And so they're like a, a, a version of Instacart that's just focused on the staples.

• 35:36Sam Parr?

  Okay.

• 35:36Shaan Puri?

  Now, uh, and also, you know, sort of key difference. Instacart goes to the grocery store and buys stuff and marks it up. These guys are the grocery store. So they just have, they buy wholesale and they sell retail. So they don't mark it up. They actually get good prices.

• 35:49Sam Parr?

  Okay.

• 35:50Shaan Puri?

  Good startup. They are exploding. 20x, 30x oversubscribed on, uh, demand right now because everybody Is ordering food in because of coronavirus, right? So everyone's getting, uh, to try this like delivery thing. They're sort of forced to do delivery for the first time.

• 36:05Sam Parr?

  And what's it called again?

• 36:07Shaan Puri?

  Those guys are called Farmstead.

• 36:08Sam Parr?

  Oh, not Farm Theory. Okay. Farmstead. Okay.

• 36:10Shaan Puri?

  Farmstead. Yeah, this is my buddy's company. Uh, he listens to the podcast sometimes. So shout out if he's listening. So, um,

• 36:16Sam Parr?

  Cool name. Love the name.

• 36:17Shaan Puri?

  Yeah. Great name. Great brand. Uh, it looks good and the product is good. So I actually, I'd like it a lot. Now, one problem that they're having and that every delivery company is having right now is that, uh, they're short on drivers. They're short on delivery people. They have too much demand and not enough ability to fulfill. So this company in Portland started hiring out of work people from the coronavirus. Now, what, what industry has been affected by this? Strip clubs. Nobody's going to strip clubs right now during coronavirus. So they hired the strippers to do delivery. And so they got a bunch of PR from this.

• 36:48Sam Parr?

  What's it called?

• 36:49Shaan Puri?

  Uh, I gotta, I gotta find out which company it was. I don't know if it was DoorDash or whatever. I don't even know if the company really did this or the strippers just started signing up for this. It's like, oh, we gotta make money. So what are we gonna do? I guess we should become, you know, delivery people right now for, for the interim.

• 37:02Sam Parr?

  I see it. I see it.

• 37:04Shaan Puri?

  Which, what, do you know which company it is that they're delivering for? Does it say?

• 37:08Sam Parr?

  He jokingly calls it Boober Eats. Uh, so it all started as a joke with Lucky Devil Lounge, one of his clubs. And no one was coming in and they go, we need to do like Uber for weed delivery or Luber for sex lube delivery. And I was like, let's do Boober, which is topless girl picks you up and takes you to a strip club. And so anyway, that's the joke is that it's, uh, I don't think it's real, but it did get PR.

• 37:39Shaan Puri?

  Yeah, it did get PR. I think, I think I did read that they were, uh, like the gig workers are basically shifting from one to another, right? If you can't, if, if, if the demand has gone down in this area, it's gone up in delivery and then more people are becoming delivery drivers. And, uh, so anyways, I thought that was interesting.

• 37:53Sam Parr?

  There's another one. It's called Meals for Four Inch Heels.

• 37:58Sam Parr?

  Or Meals and Six Inch Heels.

• 38:01Shaan Puri?

  Well, I don't know if it's smart to create your own delivery company, but I think, uh, if you're a stripper and you're out of work right now, you know, girl's gotta eat, gotta do something.

• 38:10Sam Parr?

  Well, I'd bring up another YC one. Let's, let's see what else you got.

• 38:12Shaan Puri?

  Okay. So Ditto, um, I think you'll like this one.

• 38:16Sam Parr?

  Yeah.

• 38:16Shaan Puri?

  So Ditto's tagline is it's a tool for teams to manage copy from design to production. So copy is something we've talked about. Um, I also, I always define copy because I remember when I first moved to San Francisco and got a job in tech and then somebody asked me, can you give me some copy? And I didn't know what the hell they're talking about. I thought maybe they said coffee, maybe I had to go make a copy of something. I didn't know what copywriting meant. So copywriting is just like the words on a website, the words on your, on your, your product.

• 38:41Sam Parr?

  It's, it's a very vague word.

• 38:44Shaan Puri?

  Yeah. So, so anyways, what these guys did was they said, all right, we have all these tools like Figma, um, you know, Photoshop, whatever. We have Google Docs, spreadsheets. So we have all these collaborative, well-made SaaS tools that help us collaborate on design or on engineering or on, uh, modeling and, and Excel. And so, um, why isn't there a tool that helps teams collaborate on their copy? And so they basically built a tool. That says, you know, their, their pitch, which I think is, you would agree with is, copy is the most under leveraged aspect of product building. It has a higher ROI and is easier to change than almost any other part of your product and can drive sales faster with better copy, which I agree with. And what they're saying is that teams don't have a great way right now to collaborate on your copy.

• 39:27Shaan Puri?

  And so they built a tool that lets you sort of point and click and make suggestions of what the copy could be or should be, or look at what it was before, that sort of thing on their product. Their, the product's not super clear exactly what it is, but I like the premise.

• 39:41Sam Parr?

  I, I think it's interesting. Okay, but let's talk about this. The, the people, okay, the people who started it, um, one of the women, oh, they're young. But, okay, they, they said they came from venture capital. They were like interns at VCs. So I was gonna say, wow, they're really young. Their first jobs before this were interns. Um, good for them.

• 40:02Shaan Puri?

  So I believe their claim, we think copy will be the new visual design. I think that's, I think that's true. I think design got super important over the last 10 years. Um, and now every company just sort of knows that, hey, design is super important. Usability, UI, UX is super important. And nobody talks about copy.

• 40:19Sam Parr?

  It's not the fucking new version of that. It always has been. It just, people just are silly.

• 40:24Shaan Puri?

  It's not in vogue in tech companies.

• 40:26Sam Parr?

  Yeah.

• 40:26Shaan Puri?

  Like, I'm at a tech company of 2,000 people. I don't think I've heard the word copy once. I don't think anybody has a strategy to make our emails better or the text on our website better.

• 40:35Sam Parr?

  But this isn't gonna, I don't, this won't do that though. This is like saying Figma is gonna make your website look better.

• 40:42Shaan Puri?

  Yeah, that's true. You know, the tool, I think if you make it easier to do, people do do it more. But right now, the problem is people aren't, um, aware or sort of considering this as something they need to be focused on. So, yeah, they, they need to educate the markets of, of the market of the importance of copy first and then of having an easy tool.

• 41:00Sam Parr?

  So I think it's cool. I think it looks great. There's one red flag that I have, which is their, like, the pricing, it's $12 a person a month.

• 41:10Shaan Puri?

  Right.

• 41:12Sam Parr?

  I, it's gonna be, it's hard to build something big when it's so cheap. You really need a lot, a lot, a lot of people.

• 41:18Shaan Puri?

  Right.

• 41:19Sam Parr?

  Um, I mean, they'll need a, you know, a million users at that rate. Or not a million, but you know, a lot, maybe. Well, yeah, a million users to be like really large. Um, so I think their pricing is silly, but they might be able to figure it out. Um, great idea. I like the idea, but it's not there yet. But I think that if you wanted to bet on them, it's an interesting bet.

• 41:42Shaan Puri?

  So here's something interesting. Have you ever read this blog post by Stuart Butterfield called, "We Don't Sell Saddles Here"?

• 41:48Sam Parr?

  Yeah, yeah. And that's old.

• 41:52Shaan Puri?

  It's old. It's so Stuart Butterfield is the founder of Slack. And, um, before they launched Slack, he wrote this memo to the team and he released it later. And what he said was, uh, he wrote this blog, goes, "It's great. If you're a founder, you should go read this. I'll summarize it very shortly." So, "We don't sell saddles here." What does that mean? So he talks about, "Let's assume you are a saddle company. You make saddles and you sell them. And so you could make saddles, sell them to existing horseback riders, and basically try to tell them why their, their old saddle that they use is not great and how they should be using your saddle. And that's tough because A, you've got to get people to switch, and B, um, there's just not that many people who, who are horseback riders today."

• 42:34Shaan Puri?

  And, um, he goes, "You know, the better approach," and the reason he says, "We don't sell saddles here, even though we're a saddle company, is that what we need to do is sell the joy of horseback riding." If we can make people want a horseback ride, we can tell them how about, how awesome it is to ride horses, how it's fun, how it's great exercise, how it feels great to have the wind blowing in your hair, then they'll want to do it. And when they do it, they'll be like, "Oh shit, I need a saddle." And it's like, "Don't worry, we got you." Um, and he basically says, "This is the Lululemon approach." So Lululemon doesn't go, didn't go to a very small, at the time, yoga industry and say, "Hey, you should be buying hundred dollar, you know, yoga pants." What they did was they helped spread the joy of the, of the sort of the lifestyle of a yoga lifestyle. Uh, they got more people to want to do it. That's why they offer yoga classes in their store. Like, who does that?

• 43:21Shaan Puri?

  They want people to be in that lifestyle and then once you're in the lifestyle, it's like, do you want the best? Cause we, we do have the best materials. And so this is just a general strategy. If you're, if you're operating in a niche, sometimes you have to actually sell the lifestyle of being in that niche, more than your product to the existing people in the niche.

• 43:39Sam Parr?

  I love that. And did, and a lot of times, not a lot of times, every once in a while, those like marketing things, like in those selling lifestyle actually becomes bigger than the original thing. So for example, this is an example where one has become bigger, but it's become its own, its own thing. You know, Michelin star restaurants?

• 43:58Shaan Puri?

  Okay, yeah.

• 43:59Sam Parr?

  You heard of Michelin star restaurants? It's like, it's like the standard of what is good and what isn't.

• 44:04Shaan Puri?

  Fine dining, yeah.

• 44:05Sam Parr?

  Well, you know, Michelin tires created that. And they, they did it because they created a guide on which restaurant, like this thing, Michelin has been around since this car started. It was around even before that. They made rubber for all types of things. And then cars got popular and it was, you guys need to get out and travel the world and you need to see all these amazing things. And look at all these restaurants. This one, we rate this one one star. You should go see it. But this one's four star. You have to go see it. And if you do happen to go see it, make sure that you use our tires.

• 44:38Shaan Puri?

  Right. How are you gonna get there? You better drive. If you're gonna drive, you better have tires.

• 44:41Sam Parr?

  Right. And, and, and that was, that's how Michelin star, uh, Michelin stars got started. And there's a whole bunch of examples like that where uh, these marketing schemes have become their own, their own thing. So anyway, um, what's it called again? Ditto?

• 44:56Shaan Puri?

  So ditto. I think they're gonna have to do that. I think they're gonna have to not sell saddles. I think they're gonna have to sell horseback, right?

• 45:01Sam Parr?

  And, okay, so the, it, it, these people who are starting it are pretty young. Let's see if they're like aggressive enough to do this and I, maybe they, they might be able to. But selling copy is really easy.

• 45:15Sam Parr?

  Like if I if I like, I could just go to you, I could say, look, you give me a blank piece of paper and because I have this skill set, I'm an ATM. Like, do you know what I mean? You're like, like if just or like, there's like this, there's this very famous copywriting story of this very of this copywriter who sees a guy who is a homeless guy who's holding a sign and he says, I'm blind, please help me. Um, and he goes and the copywriter goes up to the guy, he goes, hey, let me help you out here. And he just writes, it's beautiful outside, comma, and then it fills in, and I'm blind, please help. And the whole point is like, dude, if you just add two or three words, it changes everything.

• 46:00Shaan Puri?

  Right.

• 46:00Sam Parr?

  And so these people, ditto, their ad campaigns could be really good. So yeah, I'm a good point, I'm on board.

• 46:08Shaan Puri?

  Can I tell a quick story about, uh, and we're totally off the Y C train for a second.

• 46:11Sam Parr?

  That's right.

• 46:12Shaan Puri?

  This is a fun thing I just remember when you told that story. So my very first company, um, we had no money. We were funding the whole thing off prize money. So I would be going out like a, like a busker pitching at startup competitions, trying to win them. And every, every time we won, we got more money to keep going. And, um, I don't know why we didn't just pitch investors, but like it was working. So we just kept doing it. So we didn't have a lot of money to hire anybody, but we realized, hey, we were right next to the University of Boulder and we could get a bunch of interns. But then the question was, how do we pick which interns? How do we know who's good? So I was like, all right, we're going to design a test, a case. And so the case we gave them was, and so we wanted a marketing intern. And I said, hey, you know, near the university, there's a, there's sort of a homeless population.

• 46:54Shaan Puri?

  Um, and they, you know, let's say today they all earn on average, uh, 50 bucks a day. Let's say that's what they're making today. So your challenge to show me your marketing skills, your savvy, your instincts. I want you to come back and I want you to basically pitch me a plan. And the idea was for them to actually go do it, but we never, we never ended up having them actually go do it. But we said, come up with a plan of how, of how you would earn the most money in a given week. So what would you, where would you stand? So this was about like understanding locations, foot traffic, which is like essential for restaurants. So where would you pick that you were going to go? What would you write on your sign? How would your image look? What would you, what would be your sort of your, your, your look? And, uh, why do you believe that that would be the most effective way to get money?

• 47:39Shaan Puri?

  And this was our, our sort of test. It was a little bit like not, not politically correct, but. Um, there was one girl who had a, who had a, she had a good solution where she was like, uh, I don't remember all the details, but it was like, oh, I'm going to go to this area because this type of person is, uh, she was like, first I wanted to figure out who is the type that donates. And so she was like, first I would observe which type of person, I'd spend the first day just observing which type of person donates. And I was like, that's smart. Um, understand the customer first before you implement your plan. And then she was like, okay. And then after that I'm going to, um, you know, I would target where that person's commute is, I would be there. And then I would have a positive message because I believe that the positive messages will sell better than the

• 48:21Shaan Puri?

  sort of the, the negative, uh, messages. And I would try to tug at people's heartstrings. So I'd go for emotion and not logic on, on why it can help. But that, you know, I'm struggling and I'm a mother or whatever it is. And like, that's why people donate. So.

• 48:34Sam Parr?

  Yeah. Uh, and it just proves how important copy is. And copy is not words. Copy is understanding how people think and communicating it effectively. And it just so happens it often is used with words.

• 48:46Shaan Puri?

  Right.

• 48:47Sam Parr?

  And speaking of copy, farm theory, that is an example of copy. So you have farm theory on here, which is selling ugly produce to restaurants in India.

• 48:58Shaan Puri?

  Yeah.

• 48:58Sam Parr?

  Is that a Y C thing?

• 49:00Shaan Puri?

  It's a Y C company. Yes.

• 49:01Sam Parr?

  Okay.

• 49:01Shaan Puri?

  It's in India.

• 49:02Sam Parr?

  And that's a company in America. And what's it called?

• 49:05Shaan Puri?

  It's, it's in India. So it's.

• 49:07Sam Parr?

  No, we do that.

• 49:08Shaan Puri?

  Oh, there is also one here. Yeah, yeah, yeah. Uh, there's a, there's like a farm to table box. I think that's the ugly produce thing in America. I forgot what it's called.

• 49:16Sam Parr?

  Me too. I just Googled it. Imperfect.

• 49:18Shaan Puri?

  So you, yeah, imperfect food. So I'll, I'll give you the stats on these guys. So, um, so they're doing 22,000 a month, uh, of MRR. They, um, say 40% profit margins. They say they're growing 65% week on week, which doesn't mean anything because it's Y C. But they're on track to get to a million dollars ARR in the coming months. What they're doing is interesting, but they're taking, um,

• 49:41Shaan Puri?

  Farming is huge in India. So they're saying, okay, there's tons of farming, there's tons of produce produced. There's tons that's not going to get sold because it looks ugly. It's not good for consumer retail. But we could buy that stuff for cheap because it's just waste. Otherwise, we can sell it to restaurants who don't care about the aesthetic look of the, you know, they're not picking like a consumer does in the grocery store where they pick a, you know, the best looking one out of a barrel. The restaurants don't care. They're chopping it up, processing it, turning it into food. If they can get lower food costs, fantastic. And so they're looking at, um, you know, right now it's $720 a month just for the restaurants in Bangalore, which is a part of India. And they're, they believe it's a big market. They, they claim a $500 million market just in Bangalore.

• 50:22Shaan Puri?

  Just through the restaurants that are there. Sounds a little high to me, but um, the, the value prop makes sense. The restaurant saves about 30% by buying ugly produce. The farm gets some revenue out of something that would otherwise be no revenue. And they take their cut in the middle. I like it. What do you think?

• 50:38Sam Parr?

  I, I like it now, but let me, I'm always being like the negative guy. I like it, but let me tell you, okay, I'm a subscriber to imperfect produce.

• 50:50Sam Parr?

  First of all, it's not imperfect.

• 50:53Sam Parr?

  Like the, this is a shtick of the, of uh, farm theory of them selling like things that are ugly.

• 51:00Shaan Puri?

  So what are you saying? They, they look normal, you're saying?

• 51:02Sam Parr?

  Yeah, it looks normal. I mean, it doesn't look like, it's a, it's a wonderful marketing scheme, but it's, it's so like, it's just normal shit, right?

• 51:13Shaan Puri?

  And because I'm guessing you would not sign up for something that just says, here's vegetable delivery.

• 51:18Sam Parr?

  Correct. Yes. It's like saying, there's a famous copywriter named Joe Sugarman. He wrote this great ad for a new cast, is it called Casio? A Casio watch. And he's like, we use space age aluminum with quartz movement. And fucking every watch has that same aluminum and quartz movement is used in nearly every single watch. He just, he just explained it in a great way. And so this is, this is the same thing with these guys. I, and it's a shtick that works. It's a real, it's like, it's like Guinness, Guinness putting a ping pong ball in their beer.

• 51:50Shaan Puri?

  I don't know about that. What is that?

• 51:51Sam Parr?

  Guinness beer, if you buy it in the can, it, there's a ping pong ball in it because apparently that ping pong ball has a little bit of, uh, night, is it nitric oxide? Some type of like, uh, gas in there that keeps it super fizzy.

• 52:05Shaan Puri?

  I see, okay.

• 52:06Sam Parr?

  And when they released that ball, it like went up big time.

• 52:11Shaan Puri?

  I love it.

• 52:12Sam Parr?

  Yeah, so this is great marketing. I'm into it. I don't know anything about India, so it's hard for me to say that. But I do know that, I just Googled it, Imperfect Produce, they have 200,000 subscribers.

• 52:24Shaan Puri?

  What do you pay per month roughly?

• 52:25Sam Parr?

  It's a weekly bill. I think I was paying $200 a month.

• 52:30Shaan Puri?

  Wow.

• 52:31Sam Parr?

  So.

• 52:32Shaan Puri?

  That's kind of incredible.

• 52:34Sam Parr?

  Yeah, it's a big market, so yeah, I think it would depend on how talented these entrepreneurs are, but you definitely can build something significantly, significant here.

• 52:46Shaan Puri?

  Right. Okay, give me one that you like, and then I'll be the bad guy saying, "Wedge, Ben."

• 52:52Sam Parr?

  Did we talk about Upflow? Let's talk about Upflow. Okay, I didn't know this until, well, until I started my business. Collections for collecting your cash flow is actually really hard. My father-in-law has a moving business, and he's like, "Yeah, it's a pain in the butt to collect, to collect the money." With my business, you know, we make, let's say, eight figures a year, and collecting the money, I used to have a team of two full-time people whose job it was to collect the money. Now, I, but then I found an outsourced service to help me with it. And a lot of companies, even if you're small, let's say you only do a million dollars a month in sales, you need someone full-time just to collect that money. And that person could be a $70,000 a year salary person. It's expensive.

• 53:36Sam Parr?

  And so there's a lot of services that I've recently found, but there's not that many that help you collect money. And Upflow is, Upflow built software where they like, you can track who owes you money based off your QuickBooks, and you can like constantly send email reminders to those people. Now, the service that I use, it's literally a person who does it. And it's incredibly effective, and I pay $500 a month for it, I think. And it's like, easy, like I would totally, I would totally, like that's the last business expense I'm gonna cut, because it's so effective. So I like Upflow for that reason.

• 54:17Shaan Puri?

  So, let me ask you a question. When you saw this, did you send this to your finance team and be like, "Let's use this"?

• 54:23Sam Parr?

  Yeah, I signed up for an account.

• 54:25Shaan Puri?

  And what was the reaction, you know, what is the, let's call it the friction in adopting something like this? Cause you definitely have a workflow already.

• 54:32Sam Parr?

  Yeah. So that was the friction. I said, Edie, this new, Sean just showed me this new company. It's at Y C. I signed up. It looks neat. If you have any problems with our current vendor, give these guys a look. Yeah. And so the friction is that we, she said, she goes, yeah, our, our people work really, really well. So I don't want to disrupt it. I said, yeah, don't worry about it. But if I was starting again from scratch, I would maybe use these guys. Now the problem, the, the, you could be, you can play devil's advocate.

• 55:00Shaan Puri?

  No, no, no. Go for it.

• 55:01Sam Parr?

  The problem is, is that the company that I use is like an old school company and they have like, uh, men and women in their forties and fifties who are like in Missouri, who are like pinging these people. And that works. It's low tech and it's super effective. The problem that I would see with these guys is that if they try to get too techie into Silicon Valley, it could not work. Like what they could do is just hire like 200 people in Missouri to just do this manually. And that could be super effective. So if they try to get cute with the tech, then it could not work.

• 55:32Shaan Puri?

  And what do you, when you use the human solution, what do they take? Uh, what's their?

• 55:36Sam Parr?

  I pay them $500 a month.

• 55:38Shaan Puri?

  Okay. So they, they don't take anything on the actual collective thing?

• 55:41Sam Parr?

  No, but I bet you if, there might be a scale.

• 55:46Shaan Puri?

  Right.

• 55:46Sam Parr?

  Um, I can tell you what I use. I think it's called Axim. A X I M.

• 55:51Shaan Puri?

  Okay. Let's check them.

• 55:51Sam Parr?

  Oh, wait, no, that's not it. Is it Axim? Um, let's see.

• 55:55Shaan Puri?

  I think. Biotechnologies.

• 55:57Sam Parr?

  No. Let's see. They could, maybe, uh, I think it's called.

• 56:03Shaan Puri?

  While you look that up, I'm going to tell you.

• 56:06Sam Parr?

  Go ahead.

• 56:07Shaan Puri?

  I'm going to tell you what I don't like about this. Um, because I'm just trying to put my hater hat on. In general, I like this idea, but I'll say, uh, I hate the way they're describing it. We're building Venmo for B to B.

• 56:17Sam Parr?

  Yeah. Stupid.

• 56:18Shaan Puri?

  I, I don't think that's what this is, and I think that's confusing. Um, I think what they need to say is we help businesses collect X percent more revenue, um, by automating the, you know, collection service. Today, this is what happened. So, so I think they got cute with this Venmo for B to B. And I don't see that at all unless I'm totally misunderstanding the product.

• 56:38Sam Parr?

  No, I, I, I totally agree with you.

• 56:41Shaan Puri?

  It is kind of impressive. They have 160 paying customers and 50 K MRR. That's pretty damn good for where they're at. To be at 50 K MRR this early is actually quite impressive. So they're definitely doing something right. I don't want to hate on it just for hating on its sake. I think they have a good thing going here. I don't know about the competitive landscape. And I hate the way that they're describing it.

• 57:02Sam Parr?

  I completely agree with you. I think that they're describing it very stupidly. I just sent you the link to the service that I use, aximinc.com, A-X-I-M, inc.com. The tagline is improve cash flow, reduce risk, save money. We manage your accounts receivable, like very simple.

• 57:22Shaan Puri?

  We outsource it so you don't have to worry about it.

• 57:24Sam Parr?

  And if you click meet the team, the founder, his name is Axum, or no, sorry, James Mixa. So it's Axum, the name of the company is his last name backwards. So, and it looks like his son or his husband, some relative is also working there.

• 57:45Sam Parr?

  And so, and it's a very like low key, unsophisticated way to go about doing it. And it works really well.

• 57:53Shaan Puri?

  30 million a year.

• 57:54Sam Parr?

  Yeah. And like you could see who's collecting the money, like they have the names of the people working there. So anyway, I like this business. I just think that if this company, Uppflow, is run by a bunch of young Silicon Valley guys, they have to be careful to not overthink it and get cute. Because I think, I think that like, they could just do old school ways, but just package it in an interesting way for Brex or for Sean's new startup or for whoever.

• 58:26Shaan Puri?

  Right, right, right. Okay, we'll do one more. We're almost out of time. So I'll do this company, I don't know how you say it, Tayve, it's T-A-I-V, Tayve.

• 58:36Shaan Puri?

  Weird name. Don't know why they chose that name, but whatever. So what these guys are doing is they, you know how every bar or restaurant has TVs and they're playing sports usually or whatever it is? So what they're saying is, hey, the commercial break, that's a lost opportunity, right? So what they do is they hijack the commercial break on that TV and they just upsell stuff from your menu. So you know, you're watching the game, when the commercial happens, it'll show the wings that they have on the menu and it'll be like nine dollars for these wings right now. You want it? It's a commercial just locally for your bar or restaurant. I love this idea because I think there's a lot of restaurants out there who, who are in this scenario. They have, you know, lots of bars, lots of restaurants that have TVs. I think there's a decent market for it.

• 59:22Shaan Puri?

  I like the idea of helping them make money. It's a very simple solution, but the thing is most of these restaurants and bars haven't done anything yet. So like this is a, there's a lot of low hanging fruit still available. This is one that I like.

• 59:34Sam Parr?

  Thank you.

• 59:34Shaan Puri?

  Sort of an ad block for those TVs. What I think might be challenging for them is selling into bars and restaurants. I think that's going to be a slow and painful process for them.

• 59:45Sam Parr?

  All right, I, I have a little background info, information on this. You know Chive TV?

• 59:50Shaan Puri?

  No, what's that?

• 59:51Sam Parr?

  Okay, you know the chive.com?

• 59:53Shaan Puri?

  Yep.

• 59:54Sam Parr?

  Okay, the chive.com, the founders, Leo, it's, and I, I know Leo and John. Leo's one of my investors and someone I look up to. He started the Chive and he, now they have Chive TV. And the way it started was they would get like a lot of funny videos, like America's Funniest Home Videos. Looks like dads getting hit in the nuts by their kids swinging a piñata, baseball bat, like just silly stuff. And in all of Texas, what they did was they would give these bar owners, these little dongles, like these like fire sticks, like an Amazon fire stick. And they uploaded all this programming and they just like constantly filling the pipes. And so if you go to the bar, you see just like America's Funniest Home Videos in the background. And Chive would put their ads in the, in, in the mix.

• 1:00:38Sam Parr?

  And they made millions of dollars doing it. And so much so that they eventually spun it off into a different company and they call it Atmosphere TV. And they've just raised $10 million to launch it. And Leo was like, this is going to be a multi-billion dollar business and.

• 1:00:52Shaan Puri?

  Interesting.

• 1:00:53Sam Parr?

  So I have now the verdict's still out if that's gonna happen. But Chive TV was huge for the Chive atmosphere. He says it's gonna be the greatest thing ever. And he said that what they need to do is just go out and hire the same thing that I described earlier. Hire a ton of.

• 1:01:06Shaan Puri?

  Salespeople.

• 1:01:07Sam Parr?

  How he goes, yeah, we're just gonna hire a ton of salespeople and we're gonna do this. And then another bit of background is you and I talked to the folks at Firefly. Um, I won't put words in your mouth, but I have no problem in saying I thought that was a horribly dumb, stupid idea. And this idea is a little bit similar, but I think way better.

• 1:01:25Shaan Puri?

  Right. Yeah, more more defensible for sure. Um, Firefly is the company that puts a little ad, little billboard thing on top of Uber. Um, so Uber driver can make a little bit more money. That's cool. But um, this is, this is a little bit different. This is more what I'll call, um. It's not dependent on the ad market, which I like. You're internally advertising stuff in the restaurant or the bar to get people to have a little higher check size.

• 1:01:50Sam Parr?

  Yeah, but that's not what they're saying. They in in their deck, they say at first they're doing what you're describing. Uh, and they go, they said all of our one year contracts are insanely profitable. But our next phase is to sell ad time at $25 per CPM.

• 1:02:08Shaan Puri?

  Interesting. Okay. All right. So maybe, maybe the in in in restaurant upsell is not as good as I thought. And that's why they're like already planning to go out of that.

• 1:02:15Sam Parr?

  And I think that's a good market, but in their numbers, what they're assuming, they're saying they're gonna have a $25 CPM. That's gonna make us way more money and create this new $32 billion market. And be in the math is that we have X amount of impressions and we're gonna put $25 CPM ads on there. Now here's the problem, which is their fill rate is not gonna be 100%.

• 1:02:35Shaan Puri?

  Right.

• 1:02:36Sam Parr?

  And it's not even gonna be close to 100%.

• 1:02:39Shaan Puri?

  Um, so that sounds a little ridiculous. Here's the other thing I don't like. Uh, so they charge $4,200 per location per year. That's really expensive for a restaurant or bar. Um, they also charge a one time $1,500 hardware installation. And so I just think that they've added a lot of friction um, to the adoption of this. I think already it was gonna be hard to get people to adopt. That's a high price point and um, a high one time installation fee that they're asking people to do. So I think that's. That seems tough for me.

• 1:03:08Sam Parr?

  That said, I think that this could be a business that makes 10, 20, 30, 40, 50 million dollars a year in sales. This is a great company to own, not a great company to invest, um, not a great company if they raise all this money. That's my opinion.

• 1:03:23Shaan Puri?

  Right. Yeah, that makes sense.

• 1:03:25Sam Parr?

  I like this. They just had, someone smart once told me, he said, "The only thing that you can't screw up in business is your cap table." And so when I look at, when I look at a lot of these companies, I think that could be good, so, so long as they don't screw up their cap table.

• 1:03:40Shaan Puri?

  Right. Uh, yeah, that is one way to die for the wrong reasons.

• 1:03:46Sam Parr?

  That's a great way to put it.

• 1:03:48Shaan Puri?

  Um, okay, cool. Um, so, okay, we're gonna come back and we're gonna do more of this. I also think we have Brett Bishore scheduled tomorrow, um, to come in and talk about buying companies, rollups, that sort of thing. And so, um, so we'll see how, we'll see how that goes. I need to confirm with him that he's still, uh, but his name's Brett Bishore, Brett Bishore. Um, he owns something called Permanent Equity. Yeah, he's, he's smart.

• 1:04:20Shaan Puri?

  Dude, I love Dave. Yes.

• 1:04:24Shaan Puri?

  I definitely want him on. Uh, I've told the story before, but I, when I bumped into him at the HustleCon after-party, we did a mini brainstorm right there and he had, you know, five bangers, uh, you know, five amazing ideas just come off the top of his head. So he's the type that I look for, which is like people who've got more ideas than time.

• 1:04:45Shaan Puri?

  Yeah, let's do it today.

• 1:04:48Shaan Puri?

  Cool.

• 1:04:51Shaan Puri?

  Okay, thanks for listening, everybody. Stay safe, share the podcast, uh, tell your friends, post on Twitter, give us a little love. Um, we're trying to keep growing this thing. It's growing and we want it to keep growing. So, share it.