#87 with Greg Isenberg - The Millions to be Made Unbundling Reddit

Joined our private FB group yet? It's a page where people share each others million dollar ideas or what they're already working on: https://www.facebook.com/groups/ourfirstmillion. Episode summary: (5:15) The unbundling of Reddit (11:50) The formula for finding niches to unbundle (16:24) Examples of a subreddits that could become a business (31:00) The businesses that use giveaways to grow. 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.

• 0:00Shaan Puri?

  All right, all right. Play the intro music. We are back. We have Greg Isenberg on. We're gonna make this a two-part episode because we went a little long, so watch out for this back-to-back with Greg. Greg's been on the podcast before. He's a friend of the house. He's got great ideas. Today, he wanted, he texted me, he said, hey, I gotta come back on. I got a bunch of ideas about building startups off the back of Reddit. And so that's what we talk about amongst other things. So this is part one. Enjoy.

• 0:34Shaan Puri?

  Cool. What up? We're here. Sam and Greg Isenberg back, back as a guest on the podcast. Welcome back, Greg.

• 0:41Greg Isenberg?

  Thanks. What's up?

• 0:42Shaan Puri?

  And Sam said he had a juicy question to ask you, so.

• 0:44Sam Parr?

  Well, we were just talking about stumble upon Greg. I don't know if you can't talk about something, just say you can't talk about it. Who owns stumble upon Greg used to work for or owned or what did you do with?

• 0:54Shaan Puri?

  Startup got bought by stumble upon.

• 0:56Greg Isenberg?

  Yeah, exactly. We started a company which was kind of like stumble upon for video and they bought us. We were their first acquisition and the only acquisition. And then what ended up happening is stumble upon got bought by Garrett Camp and Expa, which is his product studio.

• 1:15Sam Parr?

  And so what's it do now?

• 1:18Greg Isenberg?

  Yeah, so he, he's relaunching stumble upon as a product called mix.com, which is supposed to be like stumble upon, but more modern.

• 1:29Shaan Puri?

  Okay, cool. Well, we should start because there's a bunch of ideas to go. But before we do, Greg, we're trying to rename the podcast and it used to be called, or it is called still My First Million, which was because I was, I started off just interviewing people like, hey, how'd you make a million bucks? How'd you make your first million? And then they would tell their story like, I made it by being a poker player. I made it by selling my company to stumble upon whatever. And now it's changed into this kind of brainstorm idea session kind of weird thing. And so we want to rename it. And so we just put out a little poll. I don't know if you like any of these names. All right. So one is, is kind of what we refer to it now as million dollar brainstorm, kind of close to what we have. Not that exciting as a rebrand. Another one we had was Ideaholics, but nobody voted for

• 2:14Shaan Puri?

  that. So that's losing right now. There's the brainstormers. So a couple of people have voted for that in our, our podcast group. Uh, do you have a genius name for us? And also, do you remember your hilarious, uh, naming, naming advice that you used to have regarding a certain Spanish word?

• 2:32Greg Isenberg?

  Uh, it's scary that I don't remember that.

• 2:35Shaan Puri?

  Okay. So I remember somebody was trying to come up with their domain name and you were like, oh, I got you. What's your business? And he's like, uh, you know, insurance. And you're like, insurance bueno. It was just you were just putting bueno at the end of every name. And you're like, oh, hotel bueno, haircut bueno. Like the domains are all available. It sounds pretty good.

• 2:57Greg Isenberg?

  I do have a list of probably 350 names and, and I do come up with like, like a bunch of words and I'll just add it like space this or ski, you know, street that or avenue this. And I just kind of play around with it.

• 3:12Shaan Puri?

  Idea street.

• 3:14Greg Isenberg?

  Yeah. I, yeah, exactly. I mean, I could pull it up.

• 3:16Sam Parr?

  I know. Let's just do bueno. Let's just add bueno to stuff. I love that idea.

• 3:23Greg Isenberg?

  So first of all, I don't really love any of the names, to be honest.

• 3:26Shaan Puri?

  Thank you for the honesty.

• 3:28Greg Isenberg?

  One of them kind of remind, what's the, what's the first one again? Go through it and I'll tell you why I don't like them.

• 3:34Shaan Puri?

  All right. Million dollar brainstorm.

• 3:36Greg Isenberg?

  It's too much of like, I mean, we're trying to 10x the name here, you know? So it's too much of incremental.

• 3:43Shaan Puri?

  Yeah.

• 3:43Greg Isenberg?

  Yeah.

• 3:44Shaan Puri?

  The next one was the brainstormers.

• 3:47Greg Isenberg?

  You stand out like, you sound like startup myth, Mythbusters and I'm not into it.

• 3:52Shaan Puri?

  Then there's Ideaholics.

• 3:55Greg Isenberg?

  I mean, I think we're more than just Ideaholics and.

• 4:00Greg Isenberg?

  You know, I'd like to give us a little more credit.

• 4:03Shaan Puri?

  Okay, so those are the three, those are the three we have right now.

• 4:06Greg Isenberg?

  Well, come on, Greg, break some of the table then. I mean, I got a, I got a lot here. I just got a lot of, of names I can go with. I mean.

• 4:13Shaan Puri?

  You have like the suffix and prefixes, basically, that you.

• 4:16Greg Isenberg?

  Yeah, exactly.

• 4:17Shaan Puri?

  Remix names with.

• 4:19Greg Isenberg?

  Okay, after-party, broken suit, Prince Preston, so you can like Prince this, King this, anything LTD, days of anything, fresh laundry, anything weekend, um, make-believe, visiting day, saint, anything, cottage industries, dear, anything. What is, what's a cottage industry? Cottage industry, I think, is, you know, let's say you, you know, built an F1 Formula track, you know, Formula One track in your, in your city. Like, what are all the other industries that are going to support?

• 4:57Shaan Puri?

  All right, I just looked it up also. So I thought it just meant niche, uh, like, kind of like a sub-niche or whatever. But when I Googled it, it said a business or manufacturing activity carried on in a person's home, which I think is like a specific version of that. But Greg's right, it, it is about the things that pop up around, like Airbnb wins, that becomes a cottage industry of like cleaning your Airbnb, helping you decide your price on your Airbnb. That's the cottage industry that.

• 5:21Greg Isenberg?

  Oh, I like that. Yeah, it's a good one.

• 5:24Shaan Puri?

  Cool. All right. Well, we, we could skip the naming for now, but, uh, I might need that list to.

• 5:29Greg Isenberg?

  Yeah, same.

• 5:30Shaan Puri?

  Riff off of. Um, okay, Greg, you, you said you had some ideas. You said, I, you came knocking back on the door of the brainstormers. I don't know, some name. Uh, you came knocking on our door and you said, I got some ideas that I gotta get off my chest. Yeah, I can't sleep at night. I gotta get back on the pod. What are the ideas?

• 5:48Greg Isenberg?

  Well, you know, I don't know if you saw, but I started a Substack and I, I wrote about the unbundling of Reddit.

• 5:55Sam Parr?

  Yeah, I just did a big like course, like a lecture series, and I talked all about that topic. So you want to explain what that is?

• 6:02Greg Isenberg?

  Yeah, totally. So you know, there's this concept called unbundling. There's this concept called bundling. It's a famous thing, I think in the 90s that Jim Barksdale, Marc Andreessen's partner, you know, founder, co-founder of Netscape, basically said, there's only two ways to make money. You can either bundle or unbundle. And this, you know, there's, I think, a post by Andrew Parker from, he was at Spark Capital, 2012, maybe, he wrote this post about the unbundling of Craigslist.

• 6:31Sam Parr?

  Yeah.

• 6:32Greg Isenberg?

  And you know how like, if you look at Craigslist and you can unbundle like reservations for houses and sublets, that's Airbnb, you know, there's, you know, ticket sales, that's stuff up. And the aggregate of the market cap to all these unbundlings is actually way greater than the market cap for Craigslist itself.

• 6:53Sam Parr?

  And you can unbundle Craigslist, eBay, Zillow now, newspapers, anything that's large, cable companies.

• 7:02Greg Isenberg?

  Yep. Yeah, exactly. My belief is that like, there's unicorn status and then there's unbundling status. Anything big enough is gonna get unbundled.

• 7:12Shaan Puri?

  So Reddit obviously has a bunch of vertical communities that are all aggregated together in one platform. So what you're saying is that you think some of these communities could be off on their own. So for example, there's like a writing prompt one, and that could be like a Wattpad or something like that. Is that what you're thinking about?

• 7:30Greg Isenberg?

  Yeah, so obviously Reddit, Reddit and Facebook groups have gotten extremely big as of recently. Facebook groups hit a billion monthly active users. And Reddit is completely surging in traffic right now. My belief is that since, you know, 2016-ish, Discord was the first example of the unbundling of Reddit. Then Discord was built on top of Reddit. It started in the League of Legends subreddit. It was a product for that community. Then they went to CS:GO, then they went to Dota. They just basically looked at what they needed. They spread themselves on top of that network. They recruited mods from that network and kind of went horizontally. Have you guys seen redditlist.com?

• 8:14Sam Parr?

  Yeah, I'm a big fan of that. It tells you which are the fastest growing subreddits.

• 8:18Greg Isenberg?

  Exactly. So I'm gonna pull it up right now.

• 8:22Sam Parr?

  While you're pulling that up, here's a few examples of businesses that have been launched on top of Reddit through unbundling them. So there was Graild. Do you know Graild? I bet you do. You look fashionable.

• 8:32Greg Isenberg?

  Yeah.

• 8:33Sam Parr?

  So Graild is a men's streetwear marketplace that was launched on top of, what was it? Male fashion marketplace, maybe? Imager was launched on Reddit.

• 8:44Greg Isenberg?

  Yeah, I think it's just been like this low key thing that no one's really been talking about. And now, you know, in this COVID land, you know, I think there's so much opportunity to bring people together. And people are looking for support communities, either to earn, learn, or get paid or get laid, whatever you wanna, however you wanna put it. And I don't know why more people aren't just like going on top of Reddit lists. And so that's what I've been doing basically is basically going with my team and scraping Reddit lists. And speaking to literally people on the subreddit. So like just pulling it up like in the last 24 hours, what are the biggest growth subreddits?

• 9:27Greg Isenberg?

  So you have like, you know, Ninja La the game. No idea what that is, but there's probably an opportunity there. Only Friends promos. Huge growth. Bender Boys, you know, Watch Reddit Die, K-pop Thoughts, Avatar Memes. SPACs, right? Special, what does that sound for? Special?

• 9:50Shaan Puri?

  Special Purpose Action Company.

• 9:51Greg Isenberg?

  Position? That's it. Right. So you get this amazing sense as to like what's trending. My thesis on all of this is Reddit, Facebook groups, they're at the size where people are looking for these like bespoke experiences for these subreddits.

• 10:11Sam Parr?

  Are you describing building specialty communities or building products and services for this group?

• 10:18Shaan Puri?

  Right. So for example, Graild is the products and services. Hey, this is men's fashion. We can set, we can create a men's fashion brand. Speak to this audience. Launch on there.

• 10:26Sam Parr?

  They made it easier to do the behavior that Reddit.

• 10:29Shaan Puri?

  So they were trying to do it in the comments and these guys said, hey, let's build a website that makes that.

• 10:33Sam Parr?

  Exactly. And so Greg, are you describing that? Or the second thing that Sean was about to say, which was?

• 10:39Shaan Puri?

  Yeah, just like, you know, creating a, uh, um, oh, this community really likes K-pop art. Cool. I'll create a K-pop art brand as it's more e-commerce selling to that and advertising on that channel. But it's less about taking that behavior you see and productizing it, which I think is really the bigger opportunity.

• 10:56Greg Isenberg?

  Yeah, that's what I so that's what I'm saying. So I'm saying like the Discord model is this. You look, you, you go to, you go to Reddit, you see what's trending. You go and you have this community of thousands of people who are talking about a subject. They need stuff. They want to buy stuff. There's a lot of energy that you can capitalize on. And there's an opportunity to build software. Um, and that software could either be, you know, an e-commerce site. It could be a media site. It could be whatever. It's not necessarily like you're trying to compete with Reddit. You're not trying to compete with Facebook groups. You might have like a community like layer on top of it, but that's not the point.

• 11:40Greg Isenberg?

  That's not the point of, of the unbundling of Reddit like for, and, and that's the Discord model, right? They looked at it. They looked at like League of Legends. People were using, um, Teamspeak. And a few other products to communicate. It was legacy. They knew that from speaking to people. They knew that from looking on Reddit. And they just, you know, like, if you think about what is the frame, like, we can talk about it, but like, what is the framework for uh, creating a product and service for a community? Like it's a brand. Number one, you have to have a brand that people resonate with Discord. Like look at, I mean, I don't know what you guys think, but it would definitely like speaks. I mean, Sean, obviously you have.

• 12:21Shaan Puri?

  Yeah, Discord has some of the best marketing, uh, in the game.

• 12:24Greg Isenberg?

  It's more like just like nerds, like geeks.

• 12:27Shaan Puri?

  It's for gamers and, um, and gamers tend to like have kind of this like really specific cross-section of interests. Which will span into some movie stuff, some specific type of game or whatever. But if you go like I, we were in the same space as them, so we would watch how they dripped out. When they do an update, they don't just put the patch notes out there. They would make these videos and the videos themselves were so entertaining that it didn't matter if you use the feature or not. You, you know, your love for Discord went up because they knew how to speak to you because it felt like they came from the community. And they felt in touch in a way that mostly other brands felt totally out of touch like Skype. Skype would never speak to gamers in the way that Discord did. And so Discord just over time just sucked in every gamer who was trying to decide between a Skype or a TeamSpeak or Discord.

• 13:10Sam Parr?

  Can I give some small examples of what you're talking about Greg and you tell me what you think? So.

• 13:14Shaan Puri?

  Yeah.

• 13:16Sam Parr?

  I am a massive redditor. I have, I've got like 50,000 karma points. It's like, it's my, it's my life. I love Reddit. I've even attended Reddit meetups, so I'm a big redditor. The subreddits that I noticed that are growing significantly since I've joined is a few things and they're all related. And Sean and I were actually just talking about this, but um, uh, mobility related things. So body weight fitness is huge. I think it has over a million subscribers. And then scoliosis is another one, and that's about posture. And then good posture is another one. And these are all related around this weird group of people who I'm part of that are, don't really care about big muscles.

• 13:58Sam Parr?

  But like getting strong and fit for the sake of just being um, like law, having longevity.

• 14:03Shaan Puri?

  It's like what the human body should be.

• 14:05Sam Parr?

  Yeah, what the human body should be. So like wearing shoes like I'm wearing now that have like no heels on them. So you like have good Achilles flexibility, just like things like that. And there's a company, I, I don't know how you pronounce it, but I, but it's spelled ROM WOD. R O M W O D, like a workout of the day for a certain CrossFit. I don't know what the ROM means. It's an app. I bought it. It's a hundred dollars. And I did research. These guys do close to a million dollars a month in revenue with only eight employees. And it's a hundred dollar app and all it does is it teaches you say like where you're tight, like your hips or your shoulder. And it just has videos and you just do a 20 minute workout with it. Very easy app to build. Big fan of that one. The second one is, and clearly I'm on a fitness

• 14:49Sam Parr?

  kick is when I built my home garage, there's a whole subreddit called, I forget what it's called. Is it called Garage Gym or Gym Garage? And there's this guy named Cooper that goes, "All right, guys, I'll create a website." And he created the Wirecutter for Garage Gyms. And it's crazy how fanatical these people are about this. He probably makes a few million dollars a year just off affiliate fees. And there's one for Philips Hue light bulbs where I see people creating services where they come to your house and they make your Philips Hue light bulbs. Like they have like, they set lightscapes for it. So it's like, you want your living room to be Hawaii, we'll come set it up. So, so it feels that way.

• 15:27Shaan Puri?

  So, the first thing is Reddit is an amazing source of content. So every news person, like Sam, you guys do this at the Hustle, all the viral news sites were doing this, they hunt for viral content on Reddit because it's amazing surfacing content. There's one layer below that, which is like, kind of like the 4chan message boards, IRC. That's really where this stuff originates, but then it gets surfaced to Imager, then it gets surfaced to Reddit, and then it gets taken mainstream. So it's always been a farm for content. And everyone kind of knows that you can export Reddit ideas, and you can just take it off Reddit, and it can go viral on BuzzFeed and other places. What you guys are saying is, that's cool as a, you know, that's cool if you're farming for likes, but let's say you're farming for dollars. You can look at some of these subreddits, and there's not going to be like,

• 16:11Shaan Puri?

  to be clear, there's not going to be a thousand businesses like this probably that are going to start. But there's probably a hundred that are in the vein of what Sam was talking about, which are these kind of like niche kind of e-commerce.

• 16:21Sam Parr?

  Well, I definitely think there'll be a thousand small ones.

• 16:24Shaan Puri?

  Right. But then there'll be a couple, a handful, maybe three or less, that are the Discord sized, you know, huge opportunities that you can see. And so I think it's good to set the expectation that like, that's the case. Now, I'll give you an example of one that's interesting. All right, I'm on Reddit list. I see GIF recipes. This might be a stupid one, but whatever, here's one that popped out. So GIF recipes is a subreddit with 2.2 million members. It's kind of in the top 100 list. And all it is, is like, kind of... A cooking recipe that's delivered in the format of a GIF, so it's really quick to watch. And it's a super efficient way of getting the information onto the screen. And so I could see, for example, a mobile app that's all about, you know, a foodie community

• 17:08Shaan Puri?

  or cooking at home community. And this is the core format that they use instead of long text posts or long videos that you have to watch to try to get the content.

• 17:17Greg Isenberg?

  To that point, you know, one of the ways I look at some of these subreddits is like, what is GIF recipes actually actually telling us? Well, it's kind of telling us that there's this, you know, the way people are searching for recipes right now might not be great. You know, like going on Google and being like, I want to make a meatloaf and like getting this SEO based.

• 17:40Sam Parr?

  I hate those sites. I hate those. They are such a pain in the ass. And I bet you that like Rap Genius was founded on this idea that lyric, song lyric sites make up like

• 17:52Shaan Puri?

  1% of, yeah.

• 17:52Sam Parr?

  Like a significant chunk of the web. I bet you the same would could be said for recipes.

• 17:56Shaan Puri?

  Yeah, the Rap Genius guys used to say, I think, 1% or 2% of all Google searches are for lyrics. And that was like, kind of the core insight why, hey, this is bigger than you think, this opportunity. And yeah, I would guess that recipes are the same way. And I also just have a theory that in general, stories have been shown to be like the superior communication format. Like, there's a reason that Instagram stories, Snapchat stories, these have taken off. And it's because it's a really quick way to get entertainment or information. It's a great way to communicate from one human to another. And I just think that more, more things that are in long form text or long form video, you could just convert to story based formats and do really well. So like Wikipedia today is all about an encyclopedia with long form text.

• 18:39Shaan Puri?

  I wonder if you could create a modern day Wikipedia using stories as your way of explaining what something is, or, you know, just as a silly example, but recipes would be another one.

• 18:48Greg Isenberg?

  And I think with recipes, would you say 2.2 million subscribers?

• 18:51Shaan Puri?

  In that Reddit, yeah.

• 18:53Greg Isenberg?

  I mean, you look at that, it's like, okay, 1% of 2.2 million is 22,000. Can you get 22,000 people to pay you five bucks a month for better recipes?

• 19:07Shaan Puri?

  Right.

• 19:07Greg Isenberg?

  And it's like, the answer is probably. And that's why I actually disagree. I think like. There's, I disagree in terms of the amount of businesses that you can create. I actually think that there's probably a thousand businesses that you could create on top of subreddits. And using subreddits as your like idea source. By the way, idea source, good idea for a podcast name.

• 19:32Sam Parr?

  You're correct. That is a great idea.

• 19:36Greg Isenberg?

  Idea source subreddit and a thousand businesses you can create that could do at least a million dollars a year. Um, and yeah, maybe a few of them could be your discords. But like, I don't know why more people aren't just like doing that and just being like, and that's what, that's what I'm doing. But I don't know why more people aren't.

• 19:56Sam Parr?

  Yeah, I agree with you. I, I actually, it doesn't matter, but I think it'd be way more than a thousand. I mean, there, there's so many things that you don't even know about, like, because it's not in your, you don't care. But like, for example, my wife subscribes to like black hair care and r slash curly hair. And like, these are things that like you would never even worry about right now.

• 20:18Shaan Puri?

  Hey, I, I brought up curly girl hair as an idea 10, 20 episodes ago.

• 20:23Sam Parr?

  I think, yeah, you did, Sean. You're right. I remember we talked about this, but there's like things like that where you don't even realize. Like, I didn't even know, I didn't even know this was a pro, like I, you guys don't have just like nor, like shampoo that, you know what I mean? There's all these things. So I, and, and, and examples of those businesses are billion dollar companies like that thing drunk elephant or some bullshit like that. What was that thing called? You know what I'm talking about?

• 20:45Shaan Puri?

  Drunk elephant?

• 20:47Greg Isenberg?

  Yeah, drunk. I don't know if it's elephant, drunk.

• 20:50Sam Parr?

  Hippo or there was some like, uh, women's, uh, shampoo company that sold.

• 20:57Shaan Puri?

  So, so I think, so, so Greg, what you're saying is first Reddit as an idea source of mining for, okay, what are, what are topics that people care about? What are communities that are super active and super like kind of trading information, trying to communicate, trying to organize themselves to do stuff? So that's one is like you find markets basically. And then what's your process right now for like finding products on top of those markets?

• 21:21Greg Isenberg?

  Okay. So you start with, you start with the market, basically the subreddit.

• 21:27Shaan Puri?

  Right.

• 21:28Greg Isenberg?

  The other really, um, you know, you start with the idea source, number one, then you go to your name source.

• 21:35Greg Isenberg?

  Which is like, you know, I'm just scrolling through, it's like casual conversation saved you a click. There's literally name gold in these subreddits.

• 21:43Shaan Puri?

  Right.

• 21:43Greg Isenberg?

  Like, and you know me, like, you know, one of our projects is you probably need a haircut.com. Like, why did that? The name itself, we're pitching for a reality TV show right now because it's so good. And, you know, a part of that-

• 21:56Sam Parr?

  So you care a lot about names?

• 21:58Greg Isenberg?

  Oh, yeah, I think names is one of the most underrated aspects of building internet products.

• 22:03Sam Parr?

  That's so funny. I so disagree with you.

• 22:05Shaan Puri?

  You should read, James Courier has a great post on this. I don't know if you've ever read it, Greg, but he's the only other person besides you. I've heard be like, hey, everybody in Silicon Valley thinks this is overrated and whatever, change it later, figure it out later. And he's like, no, and a name can be a game changer.

• 22:20Sam Parr?

  Well, I always say a name could make you, but it likely won't break you.

• 22:25Greg Isenberg?

  I think in startups, you're just looking for as much chance of success as possible. And I think that the name, especially when it comes down to like getting free customers, which I love doing, is so important.

• 22:40Shaan Puri?

  Right.

• 22:40Greg Isenberg?

  So for, so for example, like you probably need a haircut.com is on one hand, kind of a dumb name. But on the other hand, like, people remember it and people talk about it. Then you spend days and you read everything. And you go to the next page and the next page and down the threads. And you look at people's usernames and you understand what's trending, like you become one with the subreddit.

• 23:10Sam Parr?

  What I always tell people is you click top, so you rank by order. And then you should rank it by month, year and all time. And then you go through the first five pages and you click comments and you read the top 30 or so comments for everything.

• 23:24Greg Isenberg?

  That's brilliant.

• 23:25Sam Parr?

  Right? And then you understand, you're like, all right, I understand the demand here.

• 23:29Greg Isenberg?

  Yeah.

• 23:30Sam Parr?

  Or I understand the, I understand the culture of this community.

• 23:33Greg Isenberg?

  Yeah, these are my people. You have to be like, okay, I get these people. And then you have to map out the ecosystem. So you have to look at in the week of a life of a, you know, animal crossing person, user, whatever.

• 23:52Sam Parr?

  What animal crossing?

• 23:54Greg Isenberg?

  I don't know, just animal, you don't know what animal crossing is?

• 23:55Shaan Puri?

  Mega popular game.

• 23:57Sam Parr?

  It's a game?

• 23:58Shaan Puri?

  Yeah.

• 23:59Sam Parr?

  Oh.

• 24:00Greg Isenberg?

  One point, one point three, one point two eight, two million subscribers. Um, super pop- popular social game on Nintendo Switch. Um, really interesting social experiences around it. I think it's blowing people's minds. And what's coming out of it? And it's one of those things like I love social products like that because like, you know, people are looking for ways like right above animal crossing on this Reddit list is TikTok tips. Which is like another business right there. It's like, oh, how do I create? You know, a product that um, allows me to do TikTok better.

• 24:36Sam Parr?

  You could pretty much do that for every subreddit. That's what I'm like a thousand. It's more like one for every subreddit that has north of 20,000 users.

• 24:44Greg Isenberg?

  Yeah, it's, it's, it's, there's a, and that's why, I mean, I, that's why I hit you up, Sean, because I was like, are you not sleeping? Because I'm not. Um, so where were we? So, so we, you know, you're at one with the community, you map out the ecosystem and, and you should do it like visually, like, work with the designer because I think like actually like seeing it visually is going to help you. And then you spend some time doing like speaking to people about like, hey, what do you think? You know, in the case of let's say Discord, when, when Discord was coming out, say, hey, what do you think of the team speak? Do you like team speak? You know, how, how often do you use it? You know, oh, oh, you know, what would you and ask open ended questions? Oh, what would you change?

• 25:29Greg Isenberg?

  And you just write stuff down. You spend two to three weeks just writing stuff down. And at the end of it, if you can come up with an idea based on community, you have a good name, you understand the ecosystem, you probably have a pretty good shot at creating something. And then the one thing I would add is how do you create it with no code?

• 25:49Sam Parr?

  Which is pretty easy right now.

• 25:51Shaan Puri?

  And have you gotten to that step yet, Greg, with your kind of Reddit process you're running?

• 25:56Greg Isenberg?

  Yeah. So what I'm trying to, what I'm building actually, so I started a, a product studio called Late Checkout. And we're kind of like, almost like an expo, like, like a product studio, yeah, with Late Checkout.com.

• 26:09Greg Isenberg?

  And what we're doing is it's kind of like an expo, but we're kind of looking, we're unbundling Reddit in sort of a systematic way and we're trying to like launch a thing a month.

• 26:22Sam Parr?

  Who's funding that, Greg?

• 26:24Greg Isenberg?

  We're self-funded.

• 26:25Sam Parr?

  How many people?

• 26:26Greg Isenberg?

  A dozen people.

• 26:28Sam Parr?

  Full-time?

• 26:29Greg Isenberg?

  Full-time.

• 26:30Sam Parr?

  That's crazy. And so what, so does self-funded mean that you're bankrolling it or people are working without a salary?

• 26:38Greg Isenberg?

  I mean, everyone has, everyone is being paid. I'm self-funding it, but we do have a agency part of the business where we work with a, just a few clients that are helping, helping fund some of that.

• 26:52Sam Parr?

  Is that paying the bills?

• 26:53Greg Isenberg?

  It's paying some of the bills, but it's not paying all the bills.

• 26:56Sam Parr?

  How much are you gonna burn until you get a hit?

• 26:59Shaan Puri?

  How much are you willing to burn?

• 27:01Greg Isenberg?

  I'm willing to burn it all.

• 27:03Shaan Puri?

  Burn it all, dude?

• 27:04Greg Isenberg?

  Honestly, I would burn it all. I took out all my money from the stock market. I think the stock market's overvalued and it's gone up since then.

• 27:14Shaan Puri?

  Right.

• 27:14Greg Isenberg?

  But, you know, I'd burn it all. I put it all into this thesis of, of unbundling Reddit.

• 27:21Sam Parr?

  When do you, this is interesting. Okay, so you're living a lot of people's dreams, I think, where you're just like creating shit and you're putting your money where your mouth is.

• 27:29Sam Parr?

  A 12 people would be like a hundred, a hundred grand, 150 grand a month, right?

• 27:36Greg Isenberg?

  You know, one thing we do have is we, we do some sort of profit sharing stuff. You know, that's another interesting thing is I think that a lot of people, a lot of companies are all about stock. And as you guys know, like common stock could get, you know, who knows when liquidity is. And I think what you have is a huge, a generation of people who are kind of like,

• 27:59Greg Isenberg?

  I've worked for a couple startups. It's kind of not really gone anywhere. Even if it's been a big exit, like we sold for a quarter of a billion dollars. A quarter of a billion dollars was put in by investors, so I saw nothing. So I think there's actually a huge. Interesting opportunity to offer. I know it sounds old school, but like good old fashioned profit sharing.

• 28:18Sam Parr?

  That's what my company is going to do probably.

• 28:21Shaan Puri?

  I don't think there's great software to do profit sharing to set up easy like here's here's card for profit share. I don't think that there's a great solution for that to granted, haven't looked, but I know several people that kind of like home cook these things and it's a kind of a pain in the ass.

• 28:36Greg Isenberg?

  It's a huge pain in the ass. It's a huge pain in the ass.

• 28:39Shaan Puri?

  So there you go. Product, product one.

• 28:41Greg Isenberg?

  Would you ever consider Sean, would you ever consider profit sharing in a future company?

• 28:46Shaan Puri?

  Uh, yeah, right now it's happening right now. So yeah, now that it's a little bit messy in the sense of, okay, when do we declare profits? So, you know, to what extent do we reinvest into new things versus actually take profits out of the business? I think that's the only murky thing that like, you know, so right now I have a, I have one person who's an operator of a business and excited about profit sharing as the model here. But the question is cool. So when, when do, not when do profits arrive, but when do we decide to take them out of the business versus not? I think that's the only.

• 29:17Sam Parr?

  Typically it's pretty small though. It's like 10%. A lot of people do 10% of profits.

• 29:22Shaan Puri?

  Sure. So you can set up some rules like that. It's going to be 10% of profits. Once we hit this point or at this point in time, but that's the only gray area that I haven't sort of figured out yet with my model. But yes, actively doing it right now to and, and want to figure out a software solution for it.

• 29:36Greg Isenberg?

  Yeah, we're, we've built it on top of Notion and I don't think it's perfect. But I think like, you know, one of the ways we look at it is like, imagine you have like an L1, L2, L3 type person and based on like rankings.

• 29:49Shaan Puri?

  Right.

• 29:50Greg Isenberg?

  You know, based on contributions. Um, but I'd love to see, I'd love to see like, I would pay for software that would do this.

• 29:58Shaan Puri?

  Right.

• 29:59Sam Parr?

  My friend Nathan Berry, um, you guys probably have it, ConvertKit is the name of his company. And he's one of these like radical transparency type of guys. And he, so his, all of his company's revenue is on bare metrics and they do, I think 22 million a year in recurring revenue. It's a really great company. And he revealed his profit sharing methodology. If you Google Nathan Berry.

• 30:22Sam Parr?

  Profit sharing, you'll be able to see any like reveals to spreadsheet and like how he allocates money to different employees. And I think that what he ended up doing was just saying like, uh, we're just gonna, we're just gonna do it strictly on um, tenure. So people who have stayed here for one year get this, people who have stayed here for two years get this, and it doesn't matter how much money you make, like how much salary or what position you have.

• 30:42Shaan Puri?

  Okay, so I have a Reddit, I have a Reddit based idea that um, it's not a new idea, it's an idea I saw that I'm connecting the dots here. So when we were building Blab, this really interesting thing would happen like once a week or once a month, I don't remember the cadence exactly. But all of a sudden, the top watch stream, it would have like, I don't know, like a thousand plus people watching it in that moment. And it was all new users, all new accounts, and they were kind of like, uh, I was like, what the hell's going on? Who are these people? And the screen was just a screen share, it wasn't a person on on screen talking, so they were kind of hacking our system to use it for for what they wanted. And it was, I don't remember the name of it, but there's some kind of like Reddit millionaire game or Reddit lottery game that happens on some some frequency, some, it's either once a week, once a month.

• 31:26Shaan Puri?

  And basically, um, someone in the subreddit wins, and that's kind of it. It's like, um, you don't have to pay, I don't think, to enter, you just, you might win. And um, I think they either crowdsourced the funding or something like that. And um, I saw this product come out recently that's very similar, and it's called Yada Savings, did you guys see this?

• 31:45Sam Parr?

  Ah, yeah, they're running commercials.

• 31:48Shaan Puri?

  Oh, so, so I don't know the backstory of this, but it was a clever idea. Basically, they created a savings account, so they wanted a whole, they wanted, they created like a, you know, a savings account, they wanted a bunch of people to deposit with them. And so what they did was they were like, hey, you could win up to ten million dollars just for saving your money in our FDIC insured account. So you don't have to buy into the lottery, but it's sort of a trade, it's like, put your money in our our savings account, so they can become essentially like a little mini bank. And then if you have a savings account and for every dollar you have in, I think you get entries into a weekly lottery, which will let you win X, Y, you know, X, Y, or Z amounts of money. And you get more tickets, the more you you get more tickets to win, the more you've deposited.

• 32:27Shaan Puri?

  And those are very clever mechanic to try to like, uh, solve the chicken and egg problem of of starting a, you know, a financial services company. And it reminded me of the sort of the, the, the idea on Reddit of, of like, well, what if you just had a chance to win? You don't have to buy a lottery ticket. And then is there, is there a way you could make the economics work? And I think these guys have a method that might work. What do you guys think of this idea?

• 32:48Sam Parr?

  So we gave away a Tesla in June and that incentive absolutely worked. We said, if you get your friends to join the hustle using your unique link, um, you're entered into win this thing. And we've collected hundreds of thousands of new users that way in 30 days.

• 33:04Shaan Puri?

  That's awesome. And when you decided to do that, it's obviously a big risk because you have to declare.

• 33:09Sam Parr?

  It's not that big a risk. It's $25,000.

• 33:12Shaan Puri?

  Okay, you gave away model three. So, um, did you set a benchmark early on? You were like, okay, this is what success is, is 50,000 users or what did you say?

• 33:20Sam Parr?

  Yeah, uh, I don't want to reveal that number, but we looked at like what the lifetime values of a user. And then we gave it a huge discount.

• 33:26Shaan Puri?

  You worked back from that. Okay.

• 33:28Sam Parr?

  Yeah, and, um, now there's a ton of legal implications here.

• 33:31Shaan Puri?

  Right, doing giveaways is fucking hard.

• 33:33Sam Parr?

  Yeah, and, and it's full of scammers. So if you're gonna do it, you have to, A, follow the law. So like, for example, in California, you can't use the word. It's like there's word, like verbiage you have to use, like a giveaway versus a lottery versus.

• 33:48Shaan Puri?

  Versus raffle versus.

• 33:50Sam Parr?

  Raffle, yeah, it's all, it's very, you have to use a certain terminology, but.

• 33:54Shaan Puri?

  Did you restrict who could enter to like certain geographies?

• 33:57Sam Parr?

  Yeah, we say, I, I forget, but yes, I think like, I don't think Puerto Rico can enter. I don't think international can enter, um.

• 34:04Shaan Puri?

  The two smart things, I saw you guys doing that. I was like, this is fucking great. This will work. And then the other one was sponsoring Dave Portnoy's stream. I was like, this is also great. This will work. And then taking the Dave Portnoy's stream and turning that video clip into an ad. I was like, yes, this is why Sam's my boy.

• 34:18Sam Parr?

  Yeah.

• 34:18Shaan Puri?

  Great shit like this.

• 34:20Sam Parr?

  It worked. That was very expensive. Uh, that was six figures. That was expensive. But, uh, anyway, the giveaway worked. And also, you know, Publishers Clearinghouse?

• 34:30Shaan Puri?

  I've heard the word. I don't actually know what the hell that means.

• 34:32Sam Parr?

  Greg, are you Canadian or American?

• 34:34Greg Isenberg?

  Canadian.

• 34:35Sam Parr?

  Okay, publishing clearinghouse was a business that was, it might have been around forever, but it was particularly popular in the eighties and nineties. And do you remember like how they would show up at people's homes with a big fat check?

• 34:48Shaan Puri?

  Right.

• 34:48Greg Isenberg?

  Yes.

• 34:49Sam Parr?

  I forget the history of it, but basically it started literally like magazine publishers would do like a giveaway. And then now it's its own thing and it's a multi-billion dollar company and it's just a big lotto, like a raffle. And they still do it and it still makes billions of dollars in revenue. It's his own company. I think it makes, it's quite large. But anyway, Sean, my point is these giveaways definitely work.

• 35:10Shaan Puri?

  Yeah, that's amazing. How do you do that digitally? That's kind of my question.

• 35:14Sam Parr?

  Well, have you seen the million dollar San Francisco house raffles?

• 35:17Shaan Puri?

  No, what's that?

• 35:19Sam Parr?

  There's billboards on bus stops for it. It's called San Francisco, I'll bring you, see if you can find it, like San Francisco raffle house or something like that, where it's $25 a ticket and you get entered to win a

• 35:31Shaan Puri?

  Million dollar home.

• 35:33Sam Parr?

  A million dollar home.

• 35:33Shaan Puri?

  Who's running this?

• 35:35Sam Parr?

  I don't know, but I always see billboards for it. You've never seen these? They're all over.

• 35:40Shaan Puri?

  Dude, I haven't left my house in like four months. So no.

• 35:42Sam Parr?

  They bit, it's called SF raffle.

• 35:46Shaan Puri?

  Dude, how are you with the Google skills? Okay, go ahead.

• 35:49Greg Isenberg?

  The idea is this. Okay, actually, before we get to the idea, here's what I'm, here's what I'm learning. Number one is that people's lives are probably pretty boring and they want to make things interesting.

• 36:01Shaan Puri?

  Yes.

• 36:02Greg Isenberg?

  Number two, number two is that people love slot machines essentially, which is you do something, person does something and something with chance might happen. So it's like, how do you, and I know this is a bit gambling-y, but like, how do you apply slot machines to everything?

• 36:28Shaan Puri?

  Chatroulette.

• 36:29Greg Isenberg?

  No, in the sense of like, okay, I'm buying a, you know, I just bought this white t-shirt at James Purse, but for an extra X amount of dollars, I could put into something to get a, you know, FaceTime from James Purse or something like that.

• 36:46Shaan Puri?

  So I think, I think you could do this as a Shopify add-on to a post-purchase. So I think you could say, cool, I got to the point, you bought a thing, your credit card's in, and hey, here's a chance to get X, and you could possibly apply something sort of at that point when they're, they're already so far down the funnel that you're just trying to basically increase the average order of value by introducing a little game of chance where some people get like a ton of value, and then a lot of people lose a little bit of value as one mechanic for it. I did this with, I think I've talked about this podcast, there used to be this penny, this sports betting site that was genius where they basically said, okay, to get around the illegality of this, you come on the site, everybody gets 10 cents for free to bet.

• 37:29Shaan Puri?

  And you can, so everyone gets 10 cents free, you can only cash out when you get to 10 bucks. And of course, it's really hard to climb to 10 bucks, but you start betting, and then when you would stop, sorry, when you would place a bet, it would say, cool, do you want a 2X multiplier? So you put down 10 cents, this could be worth 30 cents if you watch this ad. And then you would watch the ad and the thing would like variably spin and tell you what your multiplier is. And like sometimes you'd get like, you know, just a 1.5X multiplier. So it's like, try again, watch another ad. And these guys were just arbitraging the shit out of this, where people would just watch a bunch of ads in order to get their multiplier higher. And eventually, they would just make a bad sports bet and lose it all back to the bank anyways. And so they never were actually giving out, like very few people ever, ever cashed out. And I just remember in college being like, this guy, whoever this is behind this is my hero.

• 38:16Sam Parr?

  Okay, you guys, listen to this. Publishers Clearinghouse, did you guys look it up? Publishers Clearinghouse reportedly did a billion dollars in sales in 2018. And the way that it works is, they own eight different websites, one of them being Publishing Clearinghouse, like their main website. And you can see giveaways that they're doing, like right now, there's one, win a $3 million dream home. And you enter your email, and in order to get more entries, you have to buy a magazine subscription or a piece of merchandise, and they take a massive amount of affiliate revenue.

• 38:52Sam Parr?

  That's all, that's all it does.

• 38:54Shaan Puri?

  So these

• 38:54Greg Isenberg?

  So that's insane. By the way, this is insane. So what? I mean, for my mind, I don't, my mind is literally exploding right now.

• 39:02Sam Parr?

  This has existed since the 50s. I mean,

• 39:04Shaan Puri?

  Dude, you want it, you want it to explode more? Go to P C H dot com, their website. Well, look at this fucking awful website. It's just all black with one old guy holding a check and it says you on the check and then it says win $7 million a week or $7,000 a week for life. That's the whole website. And what's going on?

• 39:23Greg Isenberg?

  These guys, these guys do a billion, this is a billion dollar company.

• 39:27Sam Parr?

  Yeah, man. You're a Canadian and Sean, you've lived all over the world, but if you grow up, like if you go to your grand, like when I was a kid, I go to my grandmother's house and watch TV. Like this is what the grandmas would watch and they had a TV show where they would take that big fat check and bring it to you. Like it was like a famous thing and like the commercials were famous. This is

• 39:45Shaan Puri?

  Also, the big check is just a genius move by whoever was like, you know what? You know what? You know what we're gonna do? There's a lot of money. That's a little check. We're gonna go with a jumbo jumbo check. And the jumbo check is like embedded in my brain from like, you know, my childhood, like that's the what, you know what winning feels like at the highest level? Like I wish when we sold our company, Amazon handed me a big check. I would have taken less money if they were like, but we'll throw in the big check.

• 40:09Sam Parr?

  I bring you, I bring you up. Were you raised in America?

• 40:12Speaker 03

  I was, yeah. And I remember the commercials. It'd be like

• 40:15Sam Parr?

  Thank you.

• 40:15Speaker 03

  When, when like one grand, two grand per week per for life. I remember those. Yeah.

• 40:21Sam Parr?

  Yeah, this is like a huge thing. It's still big. I mean, this company has probably made like 20 or 30 billion dollars in profits since its inception.

• 40:30Shaan Puri?

  We just spawned like, you know, 2,000 more schemers out there who are going to create little crummy knockoffs of this.

• 40:37Sam Parr?

  Old women love this shit. Me and my grandmom used to watch this shit all the time. It was great. I mean, it's, it was like fun for us.

• 40:43Shaan Puri?

  So there's, there's a product we meant to talk about a couple of weeks ago called Hybe. Greg, you heard of Hybe? I feel like this might be kind of on your radar if you've heard of this. H Y B E dot com.

• 40:53Greg Isenberg?

  Uh, yeah, the box.

• 40:55Shaan Puri?

  Mystery box, mystery drop company. So if you go to hybe.com, you see a whole bunch of boxes. I like the design of the site and it's like Louis Vuitton box, Nike box, you know, an off-white box, like these exclusive boxes. And so you buy these boxes and there's some, some item inside and it's going to either be, you know, worth the same amount that you paid for the box because like the Louis Vuitton box, for example, one of them is for 25 bucks and then the other one's for 250 bucks to buy the box. And you might get something worth way more. You might get something worth that same amount or less. It's a game of chance. And when you first join, they're like, here's your first box, open it up. I want an AirPod case or something like that.

• 41:36Shaan Puri?

  And it's like, awesome. Do you want to just recycle? Like, do you not want this product? You can just recycle it into Hybe Credits? Or pay for shipping and you can get this product. And I was like, man, this, this is like the same flow that wish.com or the wish app uses. And I was like, this is, this is a great product. And I tried to find who are the founders of this. I couldn't get, I could not find who's behind this thing, but uh, respect, because I think this is very interesting.

• 41:59Greg Isenberg?

  I'd invest. I'd invest.

• 42:00Shaan Puri?

  Yeah, exactly. That's why I was trying to find the founders. I was like, how do I, how do I invest in this?

• 42:04Sam Parr?

  So these guys have been around for a minute. Like there's, there was a mystery, it was called mysterybox.com, I believe. And they would advertise like crazy with the Logan Brothers, Logan Paul, right? Those two kids, they would advertise with them like crazy. All right. Here's another take on this, guys. This is actually a legit, this is a scam. This one lady had this candle company and it was doing okay. And what she decided to do was put a diamond in one of the candles. And every other, one candle had a $20,000 diamond. The rest had like a, like a cheap stone. And it's huge. It's a, I forget what it's called, but we covered it, I believe. And that's another take on this. People would buy these candles just to see if they got the winning one.

• 42:46Shaan Puri?

  Right. The Willy Wonka method.

• 42:48Sam Parr?

  And it was pretty cool. Like it's kind of like, it makes it fun. Like it's a fun gift.

• 42:53Shaan Puri?

  Yeah, so many ideas, dude. Okay, dude, this is great. I'm glad you came back on. We should wrap it up. But if you have ideas for subreddit ideas, I want you to actually tweet it at Greg. So your Twitter handle, I think it's just your name, right? It's at Greg Isenberg?

• 43:08Greg Isenberg?

  Yep.

• 43:08Shaan Puri?

  At Greg Isenberg. We'll put it in the comments of this. Let us know what you think. If you guys love Greg, let us know that we can have Greg on more. If you hate Greg, let us know that we'll never let Greg on again. We have a deal. But at least we got our new name, Podcast Bueno. So Greg, good times, man.

• 43:26Greg Isenberg?

  Bueno Idea Zone. Idea Source.

• 43:29Shaan Puri?

  Idea Source, yeah.

• 43:31Greg Isenberg?

  All right. Thanks, man. I appreciate it. Take care.

• 43:33Shaan Puri?

  See ya. All right, that's gonna be it for part one of the episode with Greg Isenberg. Part two is coming on Friday, so it's a back-to-back brainstorm. We went long, and so we decided, hey, let's keep it all in. Let's cut it up into a two-parter. So I hope you enjoyed this one. More is coming on Friday. And if you're not already in the Facebook group, well, what are you doing? Get in the Facebook group. I don't know why you wouldn't be in the Facebook group if you listen to the podcast. The group has a ton of cool people. People share what projects they're working on. They get ideas. They find partners. They get investment. They get advice. A bunch of good things happening there. So join the group, and I will see you on Friday.