#160 - Paid Communities Making $20m+ (and How to Build One), Fighting Inertia & An Interview With Dave Selinger of Deep Sentinel

MFM #160 The guys breakdown paid communities Why paid communities are good businesses: You can make them kinda fast (much faster if you have an audience) Fun to run if you like the interest Don’t need a lot of start-up capital and can have a lean team Quite profitable Cons: Churn can be high Likely can’t scale to me huge Won’t get better with size necessarily (if user content-driven, deal-driven, or otherwise, more can be better. If connection related, less is better) Seem challenging to sell if there’s a leader To make a successful community: The amount of money you’ll make is directly proportional to the amount of revenue the members will make being connected to each other multiplied by the amount of people who’d sign up. Enthusiasts of RC cars? Likely don’t make much value from it, so you can’t charge a lot. But if it’s huge (and get better with size) then can work Underdog, us vs them, united interests, info that wants to be private, highly disjointed online, Communities the guys like: Tiger21: A peer group for people above with a net worth of at least $10m. Numbers: It boasts ~850 members. They generate revenue through a $30,000 membership fee and also run ads to its members. Do an estimated $24m at least in sales Sold to private equity recently Why join?: Learn and make connections. Evanta Was known as CXO Acquisition Co. and Sports Leadership Acquisition Co...so maybe started in sports? Evanta derives most of its revenue from event sponsorship. Event sponsors pay a fee to advertise at each event with pricing dependent upon the quality and level of executive attendance. 121 Unique communities worldwide 6,500 Participating organizations 253 C-level programs across 10 countries 83% of Fortune 100 represented 18,000 Participating C-level executives 87% companies with revenue of $1B+ Sold for $275m in 2016 to CEB and then Gartner Had $17m in cash when bought 12x income...so made $23m in profit! SoleSavvy A SoleSavy membership provides you the tools and resources you need to successfully purchase the products you want for retail (starting with sneakers) Raised $2m Started as a Slack group (the waitlist for the group grows by 400 people per day) 5,000 members. They charge $33 a month so $160k MRR Cook groups. AK Chef is a big one. 2000 ish members at $50. NurseLifeRN Instagram meme page with 1.2m followers BALA (a shoe for nurses company) uses this as the main advertising channel. Shaan predicts these niche communities can launch brands and hold equity in companies who need their captive audience to grow. Inertia Shaan explains inertia: Are you doing what you are doing just because or does it make you happy and are you chasing what you actually want --------- Have you joined our private Facebook group yet? Go to https://www.facebook.com/groups/ourfirstmillion and join thousands of other entrepreneurs and founders scheming up ideas. Editing thanks to Jonathan Gallegos (@jjonthan)

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

• 0:00Speaker 00

  Hey, I've got a white male, six foot three. He's got a crowbar and I have, and he's trying to break into this building. Here's the address. I've just given them a description of the suspect, a description of the crime and the existence of weapons. Every single police department in the nation, that's what their dispatch is designed to do.

• 0:17Shaan Puri?

  You just described Sam at his own house, practicing crowbar combat.

• 0:22Speaker 00

  I know, right?

• 0:29Sam Parr?

  Hey, uh, your thing looks pretty good.

• 0:32Shaan Puri?

  Pretty good.

• 0:33Sam Parr?

  No, I think it looks great. I think it looks great.

• 0:36Shaan Puri?

  I look fucking fantastic. You look fantastic. This is the best, this is the best I've ever looked. If I look in a mirror, I've never seen this coming back. So whatever this camera is doing for me. This is, just know if you're watching this, I'm uglier than this looks right now. So I'm uglier than this looks.

• 0:52Sam Parr?

  I think you kind of look celebrity-ish, like you got cool hair, you've got a cool beard. I think you look, I think you look like, I think you look cooler than you've ever looked.

• 1:00Shaan Puri?

  Thank you. That's how I feel. I feel cool. And I think I need a tattoo or something. I'm just like, now I'm trying to triple down on the celebrity status that I see.

• 1:08Sam Parr?

  No, I, I think you look wonderful. Um, two things. First, today, I want to talk about paid communities a lot. But before we get into that, the second thing is what I want to tell you. Last night, my wife Sarah goes, good night, Sean.

• 1:24Sam Parr?

  Because everyone's been saying that, dude, they say it in such a mean way.

• 1:30Shaan Puri?

  Was she trolling or was it an accident?

• 1:32Sam Parr?

  She's trolling because someone tweeted like, well, we think that you are Sean and Sean's you because Indian guys typically have high pitched nerdy voice and white guys like you have like low pitched alpha voice. It turns out Sean's the one with the alpha voice and I'm like, fuck. So she called me.

• 1:53Shaan Puri?

  Oh, that's amazing. I hope you guys were doing some great things while she called you Sean. That was awesome.

• 1:59Sam Parr?

  Yeah, well, she burned me good, but uh, let's get right in. You want to get, you want to talk about paid communities? I did a lot of research because this interests me right now.

• 2:08Shaan Puri?

  Okay, let's do it.

• 2:09Sam Parr?

  Okay, so paid communities interest me because I came across this thing called Tiger 21. And this sounds like lame that I'm bringing this up now after selling my company, but I've been interested in this for for years. Do you know what Tiger 21 is?

• 2:23Shaan Puri?

  I've heard about it. What I know about it is it's kind of like a mastermind peer group thing, but it's for a certain wealth level. I don't know if there's this, I don't know if there's an actual cutoff, but it's supposed to be for wealthier. And I think it's mostly older people and we have a couple of friends who are in it. So I texted one of them today about it. So I got a little bit of info, but tell me what I missed. What do you know about it?

• 2:45Sam Parr?

  Okay, so Tiger 21, Google it. I don't know the URL, maybe dot, maybe it's just that dot com. But basically it's a peer group where you have to have at least $10 million of investable assets in order to join. It's very expensive. It's $30,000 a year. I wouldn't call it a mastermind because mastermind has a certain connotation. But yeah, it kind of is that. I logged on to the site. I'm not a member, but I use a friend's login to check it out. And there's at least 850 members according to the, what I saw and according to their site. So what's that math? $24 million a year in revenue. They have local chapters that meet up, I guess now digitally.

• 3:27Sam Parr?

  And they do things like they share one another's portfolio and you have to defend your portfolio. And so it's basically rooted in rich people talking about rich people's stuff mainly being investing. But I think it turns into a little bit of therapy every once in a while, like a lot of groups do. But what did your buddy say?

• 3:44Shaan Puri?

  All right. So I texted our mutual friend Keith. And he's, he's, he's a real estate guy. He's been on the pod. You can go listen to Keith's episode. And Keith's a good dude and he goes, I go, you're in Tiger 21, right? And he goes, yes. What's up? And I basically asked him, what do you think about it? He's like, it's an interesting group. It's because it's all about investing, preserving wealth. It's mainly for older people and.

• 4:10Shaan Puri?

  He goes, the typical meeting goes four hours. You do, like you said, a portfolio defense where you talk about what you're holding and why, and other people get interested in it. And sometimes there's speakers. Sometimes it's, sometimes it's an external speaker. Sometimes it's somebody from the group who speaks and there's like a moderator. And they also do like events, because if you go to the website, you could see like they hosted a Tiger 21 event at Magic Johnson's house. And so they're definitely trying to build this kind of like who's who network, this sort of like Soho Club, Soho House vibe to the whole thing.

• 4:44Sam Parr?

  And it, uh, yeah, so they do that. They also, you get like deals. So a friend of mine sent me a deal where they, basically when you're wealthy, you get this thing called umbrella insurance, which you pay two grand a year. And it's just like general insurance. And it's basically the, the story to tell you is like, if you get in a car crash and someone Googles you, they're going to see you're rich and they're going to want to sue you for $5 million. And this protects against all types of stuff. And so they give you a discount on umbrella insurance. And so by my calculation, I actually would bet that they do 30 to 40 million in revenue. And they recently sold the private equity. And so it's a relatively big business. And I actually read about, uh, read up on it. And someone said like, there's 90% retention rate, which is pretty amazing.

• 5:24Sam Parr?

  I've also been following Reddit's Fat Fire, which is a subreddit similar to this. And it's like tripled over the last year. So this space has got me incredibly interested, but this is just one example of a paid community. And so what I wanted to do was go through a few other paid communities that are interesting. I want to explain, I'm going to try to explain why I think they work and then where the opportunity is for other paid communities.

• 5:46Shaan Puri?

  Can I start, can I start with one opportunity, which is why isn't this just a business model for our podcast? Like, why aren't we starting Tiger 21 for people that are, you know, that have, let's call it a million dollars of investable assets. So a million dollars of sort of like liquid net worth that you can go invest into something. And why aren't we starting this now? This seems like the perfect thing to do for a podcast like this.

• 6:08Sam Parr?

  I think that probably there should be something like this. I agree. If you go to the Tiger 21 website, you'll see like, you know, the type of models that people use on their website is like their ideal customer. And it's like 65 year old white dudes who own insurance companies that are quite wealthy, but not young or not like our kind of crew. So I agree. I think there's something there.

• 6:35Shaan Puri?

  Okay, fair enough. So let's go into it.

• 6:37Sam Parr?

  All right. So let's talk about, where should we start? I've done a bunch of research. How about we talk about?

• 6:43Shaan Puri?

  By the way, sorry, sorry, interrupt you one more time. The thing I just said, by the way, I think is important. I said, why isn't that the business model for this podcast? I think way too many podcasts try to just do ads. And we've talked in the past about like Supercast, which lets you do like a paid, a paid kind of super premium version of it for your hardcore fans who pay you nine bucks a month or five bucks a month or whatever. And, uh, you know, I started a rolling fund largely off of the audience from this thing that said, hey, I've listened to this guy a bunch. I trust him. He, he has a good track record. And so now that rolling fund is $4 million a year that I get to invest into startups. That's more value than all of the ad revenue that we had before.

• 7:25Shaan Puri?

  And so I think that more people should figure out business models that are different from the content that they're creating. And so I'm surprised more podcasts don't have different business models.

• 7:36Sam Parr?

  I agree with you, but we are

• 7:38Shaan Puri?

  It is more work.

• 7:39Sam Parr?

  We're in one of the most lucrative niches there is. I mean, like if you're a comedian, if you're, um, what's that shit called? The two women who talk about sex all the time.

• 7:49Shaan Puri?

  Call her daddy.

• 7:50Sam Parr?

  Yes. Like, that's a little bit different. So how do you make money off that? That's a little bit different. And that's actually what we're going to talk about with paid community. So let's actually talk about, let's, and I'm going to bring that up. So let's talk about what makes them interesting and what makes them not interesting. So to me, what makes them interesting is that they can grow pretty quickly. So you had a podcast. You do this four million dollar fund. Now, building the audience takes a while, but you turned your fun on and you, it was four million dollars in a matter of months.

• 8:19Shaan Puri?

  Yeah.

• 8:20Sam Parr?

  Very quickly. So they seem relatively fast to grow. They're really fast if you have an audience, but compared to like a software company, which could take 10 years, I think you definitely could build it in a matter of two or three years. Second, they seem pretty fun to run if the interest of your community is the same interest that you have. If you, if, if you, if they don't, then it's definitely not as fun, but it's kind of interesting if you, or it's very interesting if that's what you care about. Third, you don't really need a lot of money to start one. You kind of actually need no money. You really could just start with a paid Facebook group. Um, and you could have a really lean team to do it. And finally, they definitely seem pretty profitable because you can have a lean team, but let's talk about the cons.

• 8:59Sam Parr?

  One, and this is what I've learned with our paid stuff and from friends. I think churn could be pretty high. Did you notice that churn was high in any paid communities you've been part of?

• 9:09Shaan Puri?

  Honestly, the churn was not high in the paid community that I ran. Um,

• 9:13Sam Parr?

  But you did it for a year.

• 9:16Shaan Puri?

  Yeah, yeah, for sure. But I was, it was a monthly, it was a monthly fee. So you could churn out monthly, right? For trends, I think you charge annually. So you don't know your churn until, you know, sort of later, unless somebody actively cancels.

• 9:27Sam Parr?

  So it's not like, uh, like enterprise software churn, where it's like a net, like a 100.

• 9:33Shaan Puri?

  Negative.

• 9:35Sam Parr?

  Yeah. So that, that, I don't think that exists in most communities.

• 9:38Shaan Puri?

  By the way, my, my paid community, just for real numbers, mine was 7% a month was churning, which is like, if you just, if you're not adding any new members, you know, that doesn't take long for it to go to zero, but I was.

• 9:49Sam Parr?

  I think 7% is one year.

• 9:51Shaan Puri?

  No, I'm talking about monthly. I was monthly, I was churning 7%. And so, uh, so, oh, you're saying one year for it to go to zero. Yes.

• 9:59Sam Parr?

  I think if you have a, I think if you have a 4% churn, that's 18 months.

• 10:03Shaan Puri?

  And, and so when with, including my growth, I think my net churn was like 1%. So I think I was adding 6% and I was losing 7% basically every month. And, um, can you share anything about trends? What was the retention like?

• 10:17Sam Parr?

  Yeah, so we had some payment issues when we first launched. So basically, we had some issues where if someone signs up on day one and on day 366, they get a renewal. The credit card statements, a lot of the banks will be like, whoa, whoa, whoa, what's this? That's fraud. So we actually had a big fraud, a problem with banks blocking it, but 80% of people were opted in to renew in the year one, or renew in the year two in our first cohort.

• 10:46Shaan Puri?

  Yeah.

• 10:46Sam Parr?

  Ballpark, ballpark, about 80%, which is pretty good, but not, but like it's hard to get new customers on a consistent basis.

• 10:54Shaan Puri?

  Yep.

• 10:55Sam Parr?

  Okay, so the second thing is, a lot of times, they don't scale that well. And the reason they don't scale that well is if your community is kind of like trends, where you value close knit connections or Tiger 21, more people makes it actually worse. Now, if your community is content based, which we're going to talk about in a second, it can actually make it way better. But a lot of communities, like a YPO, like, or like if there's 150 people at your meeting versus five people at your meeting, one is worse than the other.

• 11:28Shaan Puri?

  Right, because the scale gets worse for two reasons. One is exclusivity. So if the reason to be in this group was that it's exclusive, the more people in, the less exclusive it is. Or if the value is that, oh, I really like this conversation. This conversation was really, really nice. But now you get a noisy room of 1,000 people. Well, now it's just too noisy. I can't keep up with this. I don't know who these people are. Some of these people are saying stupid things. I'm out of here. Right? So that's the two reasons that the scale scalability hurts.

• 11:56Sam Parr?

  Yes, and it can work though, because if you're Reddit, which is a community, not a paid community, but it's a good community. You want more. You need more. You need way, way more people. If you are Quora, you need way more people. If you're some of the other examples that you need, you need way more, more people is good, and that's great. But it's not always good to add more people. So what I want to talk about is a few communities that I found that I think are interesting. And then I want to talk about opportunities in the space. And then finally, we can talk about what I think you need to build a successful community. So the first one that I discovered, and I've actually brought up here a ton, is called Aventa. Have you seen Aventa?

• 12:37Shaan Puri?

  No.

• 12:38Sam Parr?

  Okay, so Aventa, I know the first example is gonna, it's like, doesn't even entirely apply. Because I think Aventa is actually a free community, but you need to apply and eat or get invited. So it's somewhat similar, but Aventa is a community, is a professional group. I believe it has eighteen thousand participating members and it's for executives particularly. Are you on the website right now?

• 13:01Shaan Puri?

  No, I'm on our, our notes.

• 13:03Sam Parr?

  Okay, basically, it's for Fortune 500 or Fortune 100 people. It's people like the, I don't even like, because I've never worked at a company. I don't even under, understand all these roles, but like a CIO, was that a chief information officer? So I said C S O, I'm looking at their website. C I S O, I don't even, I don't know what C I S O means. Was that Chief Information Security Officer?

• 13:28Shaan Puri?

  Yeah, CISO, yeah.

• 13:30Sam Parr?

  So these are like, things that I don't even, oh, I guess they have CFO. I know that is Chief Financial Officer. So it's basically executives.

• 13:39Shaan Puri?

  This just turned into a glossary section for Sam to figure out.

• 13:44Sam Parr?

  You know what a C H R O is?

• 13:46Shaan Puri?

  Yeah, that's basically your HR, Chief, Chief HR Officer, basically.

• 13:50Sam Parr?

  Okay, I guess that one was easy. How about a C D O?

• 13:54Shaan Puri?

  I don't know that one.

• 13:57Sam Parr?

  Chief Data Management Officer, because come on, a lot of people aren't gonna know what this is. But it's a big thing. They have eighteen thousand members and check this out. They sold in 2016 for close to three hundred million dollars. It was three hundred seventy-five million dollars they sold for, and it was for twelve times profit, which means their profit was twenty-three million dollars a year. And almost all of that profit came from sponsorships. And so the way it works is, is that they would get groups of ten or twenty people. They would host a talk, like, I think it was mostly an online talk that says like, how Walmart is gonna handle. How Walmart is going to handle

• 14:36Shaan Puri?

  Remote work.

• 14:37Sam Parr?

  Remote work. And 10 people, like, I'm just gonna guess, what's a Fortune 500? So like, the CMO of Northern, I'm looking at now, the Chief Information Officer of Northern Trust. I don't know what that is, but it sounds like a huge company. The CIO of Delta, of Chevron, of Nestle is gonna go. Which is like, it's only 10 people at that talk, but it's 10 people who each control 20,000 people. And sponsors will pay stupid amounts of money, hundreds of thousands of dollars to reach these people. Enough that it makes $25 million a year in profit. Very interesting, an interesting community. Again, like Tiger 21, if you go to the website, it just kinda looks like pretty old school.

• 15:22Sam Parr?

  Mostly older white people. So who knows if it's hip or at least like in the know of everything. But where's that, where's this land with you? Interesting?

• 15:31Shaan Puri?

  It's interesting, but I think, you know, if I'm most people, I'm like, okay, the hard part of this is going and getting the CIO of Nestle or the CMO of Delta to join some group. How do you do that? And I remember, what's the name of the mastermind group that's the more popular company? Not Tiger 21, but like the other one we've both studied. I can't remember the name.

• 15:49Sam Parr?

  YTO, Young Presidential Organization?

• 15:51Shaan Puri?

  No, no, the one that does like $100 million a year.

• 15:55Sam Parr?

  It's a competitive YTO?

• 15:58Shaan Puri?

  Yeah.

• 15:58Sam Parr?

  Oh, yeah, yeah, yeah, yeah, yeah. What's that? I don't remember what that's called. It's under the C, I think.

• 16:04Shaan Puri?

  It slips my name as well. It slips my brain as well. Anyways.

• 16:07Sam Parr?

  Vistage.

• 16:07Shaan Puri?

  Yeah, yeah, Vistage, sorry. Not, not, not sorry, the, yeah, Vistage. So Vistage does the same thing as this. And I remember getting phone calls saying, from some, you know, pick up some random number and it was, Hey Sean, you know, this is Wendy from Vistage. Okay, have we, have we met? Yeah, actually, I've heard a lot about you. You're the CEO of Monkey Inferno, right? Yeah, that's right. Again, like, where do we meet? No, no, see, I'm actually the chapter president for San Francisco for Vistage. And I actually want to invite you to join our CEO network. We have CEOs from this company, this company, this company. And we just really think you'd be a great fit for our CEO group. We meet up about once a month in San Francisco.

• 16:52Shaan Puri?

  It's a great time, blah, blah, blah. Okay, CEO group, you sound like you know me, you're talking about my city. This sounds pretty legit. Okay, so what are you asking me for? Yeah, so the membership is $20,000 a year. And I was like, oh, okay, this is a sales call, shit. Like, good job, you got 45 seconds into the sales call. And so this is how them, and I don't know if it was them exactly, but it was a company just like them, was recruiting people was just they were just cold calling C level people with a script that made you feel like they were calling for you, based on your city and your company name and your role, your job title there. And so I think this is what you would have to do is you'd have to be a pretty badass cold caller. And you'd have to figure out how to get this thing going with just enough

• 17:37Shaan Puri?

  brand names where this sounds legitimate.

• 17:40Sam Parr?

  I look, I host an event called HustleCon. I've over the years, I've probably had 150 speakers, tens of thousands of attendees. When I started it, I didn't know any of these people, I cold emailed them. And there's a way to play it off that it's cool to be part of. There's a way to get customers, I think that's a little bit better than cold calling. And now I think cold calling, cold emailing like that should exist, and you should do that. I think there's a few different ways, like having a podcast. And there's a few interesting ways to do it. But nonetheless, I think it's an interesting community. The second one that I want to bring up, and I got hold of their deck, a year ago, and I could have invested into it. And I skipped it, I passed, and I think that might have been a mistake. But it's

• 18:25Sam Parr?

  called Soul Savvy. Have you heard of Soul Savvy?

• 18:27Shaan Puri?

  It's like a shoe thing?

• 18:29Sam Parr?

  Yeah, it's pretty interesting.

• 18:30Shaan Puri?

  Sneakerhead lover community, something like that?

• 18:32Sam Parr?

  Yeah, it costs $33 a month. And you basically, when I was got their deck, it was basically just a Slack group. That's all it was. And I don't know if that's what it is anymore. But there's a lot of kids, probably grown people as well, who are

• 18:49Sam Parr?

  Want to get insider tips on when a certain drop of a shoe is and they somehow game this to some like it's what it's called cook groups. So there's these like groups where they team up and somehow I don't know anything about the space, but they somehow get insider information on when a drop is going to happen and they and they collaborate and scheme together on how they can get access to these certain shoes. Now, what Soul Savvy is doing is they started with shoes. It was just a Slack group, which I think is stupid, by the way. I think if you're building one of these on Slack group, that's not the right move. But they get they get because they have a group of, I think they have 5,000 members now, so it's 160,000 in MRR. Because they have this contingency of 5,000, like really big shoe fanatics, they can probably give them special access to X, Y, and Z. They can do interviews with special people.

• 19:34Sam Parr?

  It's kind of interesting. They raised $2 million recently. They say that they're adding 400 people to their waitlist a day. I don't know if that's true, but

• 19:45Sam Parr?

  it's an interesting, it's an interesting space nonetheless. What do you think of that?

• 19:49Shaan Puri?

  Uh, I think you did good by passing on it. I think it's a cool business for the person who owns it. It's definitely not a, as constructor right now, that I don't see how that becomes a super large business worth investing in, worth, why they need $2 million and how they're going to turn that into, you know, a $200 million plus company. I don't really see that because like we said, communities themselves, you know, these chat groups don't scale. And, um, you know, you're looking for diehards who are going to pay. If you're paying $33 a month, right? Like, you know, that's more than, it's like you're providing more value than Amazon Prime. You know what I mean? Like that's double, that's triple the price of Amazon Prime. And so, you know, you really have, you're, yeah, the hard cores are going to go for it.

• 20:33Shaan Puri?

  But also the more people you let in, then the more people who all have access to the same information, the same tips, the same drops that they're trying to go buy, the harder it gets for you to actually go buy anything that's valuable. So I don't really see how this becomes a big, big venture scale business. But I think it's a great idea for somebody who's a big shoe fanatic to create a community like this. I think that's an awesome lifestyle business to own. And, uh, like if that's your thing, that's great. I love it.

• 21:01Sam Parr?

  I agree with you. So let's talk about three ideas.

• 21:03Shaan Puri?

  Can I give you, can I give you two characteristics I think make it work? One is high passion and then the second one is the ability to make money on the other side. So this happens a lot with stock trading groups. So there are a bunch of stock tip groups out there where people are looking for additional information and they want to be in a group where the crowd is moving a certain direction. You have this for sneaker heads, you have this for NFTs right now, collectibles. So, so the key characteristic is it's not just like, I'm a big fan of the, you know, the Golden State Warriors, so I'm going to join this paid community for them. Typically that doesn't work as well as if I join this group, I'm going to get tools that are going to help me make more money.

• 21:46Shaan Puri?

  So it's a very simple money in, money out calculation for people. And I think that's why it works for sneaker heads and it works for trading cards and it works for crypto, but it doesn't work as well for like, you know, people who just love gossip girl.

• 21:59Sam Parr?

  Yes. So there's a few ways I think that if you're going to build this, you, you've got to think about the first is the amount of money that your company is going to make is exactly what you said, which is it's directly in proportion to the amount of revenue that the attendee member can make back. So for example, if you are an enthusiast of RC cars,

• 22:20Sam Parr?

  well, the equation here is how much revenue the attendee or member is going to make times how many there are. So members of people who like RC cars, I have no idea. I just made that up, but there's probably not that many of them. And because it's like a hobby that you don't really make any money from, you probably cannot charge a lot for it. So that like probably won't be massive. But not, I mean, maybe you should still do it, but that doesn't mean it's going to be actually that big. So that's the math that you have to do, which is how much revenue is the member going to make? And how many of those potential members are there?

• 22:51Shaan Puri?

  Right. Or, or the one, like you said with Tiger 21, so Tiger 21 is actually like that, right? When you, when you go and you hear somebody's portfolio, you're going to get investment ideas. And even a single investment idea, a single like improvement to your portfolio, if you have over $10 million in investable assets, one good idea is going to more than pay for the $30,000 a year membership, excluding the friends you'll make and the deals you'll do together and that real estate thing you'll buy together and all that good stuff. So excluding all that. Now, on the other hand, if you're looking at something like the Aventha or whatever, where it's like, What is the CMO of Nestle gonna do when she meets the CMO of Delta? Like, they're not gonna directly get revenue out of it. I don't think that's why. I think it's like,

• 23:36Shaan Puri?

  how hard were, how hard is it to accumulate this group of people in a room? So if it's really hard to reach these people, these are all high-value people, then it's, the membership is worth the value of the people in the group. So if it's just a bunch of sneakerhead buyers, each individual member is bringing zero like clout to the table. But if it's CMOs of different companies and it's about how much clout do they each bring to the table? That's the value, not so much how much revenue they're gonna make.

• 24:01Sam Parr?

  Yes. And so let's talk about three groups that I have that I think this could work for. So if you're gonna start a paid community, I'm gonna start with the bottom, or I actually think it's the best one, but it's bottom on our list. Nurses. We've talked about nurses a ton. It's an interesting demographic. I think nurses are kinda cool for this space for two reasons, or three reasons. The first, work could pay for it, maybe. I think work would maybe pay for it. Second, nurses are typically, I've spent time around nurses, so they're typically women, and they typically are people who feel like downtrodden, like they feel like they're forgotten because they're not doctors.

• 24:36Shaan Puri?

  Overworked, underpaid, underappreciated.

• 24:39Sam Parr?

  Yeah, and that is, so groups that are the, whatever you just said, I guess, I don't know how to explain it, but groups that are like the us versus them, like, we don't have someone speaking for us. Typically, that's like, there's a lot of, like, I've looked when I was researching communities, there's so many successful women, like, women discussing X, Y, and Z communities. This is just like that. So I think that they have that us versus them mentality. And the third reason is there's a shit ton of nurses.

• 25:06Shaan Puri?

  Yeah. Have you seen this Instagram account, Nurse Life RN?

• 25:10Sam Parr?

  No, how many is it?

• 25:12Shaan Puri?

  It's 1.2 million members on Instagram. It's run by this guy, I think his name is EB or EBBY, I'm not sure exactly how you say his name. And it's this guy, this is black nurse, and there's a whole bunch of nurses.

• 25:24Sam Parr?

  Private.

• 25:25Shaan Puri?

  They just went private. They used to be public. And I think you have to like, you have to request so that they can make sure that you're a nurse before they let you in. Which again, is part one thing that communities do well. The, you know, what's that quote? It's like, I don't want to be a part of any group that would accept me. You know, the, the better your gate at the front, the more people will value being in the group. And so this is a group and they, they just post mostly like nurse memes. So it's like, you know, if you, it's like being underappreciated or whatever. They'll make a joke out of it or like, you know, coming home and realizing you still have whatever, you know, on your shoe. And it's just, you know, relatable memes from the eyes of a nurse. So that's how they like, keep their members engaged. It's just meme content. That's a good like,

• 26:10Shaan Puri?

  inside joke for the community, but he partnered with the makers of Bala Shoes, which is the nurse shoe brand that's coming out. That's trying to be Nike for nurses, basically. It's Nike for, for medical footwear. And so he got equity in that company and gets paid every month because he is the promotional vehicle for the, for Bala Shoes who wants to like penetrate this community. Right? So not a paid community as such, but it is a private community. And on top of that, they do this. Now, what would Incredible Health, you know, the startup that's raised, I don't know how much money, $25 million from Andreessen Horowitz and all that. What would they pay to access 1.2 million nurses that are like engaged and trust this brand and trust this leader of the community?

• 26:52Shaan Puri?

  They would pay a lot, right? Nurse job boards, like, so, so if this guy's ambitious, he could create a job board. He could create the next Incredible Health. He could take equity in, in Bala Shoes and be a part owner of, of the shoe brand. Like, I think that's where this goes for, for nurses. I think this is a great example of one.

• 27:08Sam Parr?

  I think this could crush. I think that guy is gonna, that guy's sitting on a gold mine. That like, if you, if you bash forward 10 years and tell me that he turned this 1.2 million person Instagram page into a hundred million dollar company, I won't be surprised.

• 27:20Shaan Puri?

  Right. If you go and start Truck Life RN right now, I think that's what's gonna happen after this pod.

• 27:28Sam Parr?

  I might need to. The second one, this is shocking to me, okay? Google Sheets. There's this guy who tweeted at me and he started this thing called SheetsCon. And he had 6,700 people sign up. Is that, I mean, I guess that's shocking. Because like, I know that probably 100 million people plus use Google Sheets. But, and I guess it doesn't, and I guess it also doesn't shock me because I am a Google Sheets nerd and like I've dorked out about why.

• 27:54Shaan Puri?

  And some of the most profitable online courses in the world are become an Excel master, how to use Excel, become better at Excel. Those are like, if you go look at the charts of most profitable online courses, highest revenue online courses, Excel is always in the sort of top five.

• 28:11Sam Parr?

  Yeah, Encore, the founder of Teachable, one time told me that there was some guy making a million bucks a year and he was like the biggest earner on Teachable on Excel.

• 28:22Shaan Puri?

  Exactly.

• 28:23Sam Parr?

  So, Google Sheets, I 100% think you could do a paid community. It would have to be cheap though, because it's the same, it's the math of like, how much money do you make for Google Sheets? I think that there's absolutely something there. And then the last thing is, this someone tweeted at me, a community of vetted senior engineers who talk about advanced engineering concepts, like how to scale a tech stack from 100K to 10 million users. Totally buy into that. Something like that, that is incredibly niche and incredibly high end, where if, there's this other component that we didn't talk about with the community is you have to make it.

• 28:58Sam Parr?

  So, that information that you gather in that group, you cannot find online. Like, for Tiger 21, not that many people are gonna talk about how, like, because it's embarrassing. How do I gift my child $15 million without the government getting their hands on it? Like, that's not something you're gonna tweet, because that's embarrassing. Same thing with 100,000 to 10 million users. There's just simply not that many people who have done it. So, you're not gonna find a lot of reputable information on that. So, that's another trait of these paid communities and why I think this one in particular is interesting.

• 29:31Shaan Puri?

  I think any job in any, any job can do this. So nurses is a good one because you have a, some are going to be better than others because you have, you know, the more people, the more potential and the more kind of like insider knowledge is needed, the more downtrodden that group feels. Downtrodden is a kind of a negative word, but I, kind of what you're saying, like, sort of like, they feel that they need to take action in order to like level up in some way, the better. And so like, you know, this could work for nurses, but it could also work for designers. I could see somebody just making a community of, you know, professional designers at all these different companies. It's like, yep, we have designers from Figma and from HubSpot

• 30:12Shaan Puri?

  and from Okta and from GitHub. And you should, if you're a designer at one of these companies, you're making $150,000 a year, $200,000 a year. Why would you not want to be a part of the, like, the best network of other designers like you, where you can share tools, tactics, salary information, if you're looking for new jobs, opportunities, if you're looking for new jobs, like, every job I think needs this. And the more new and fringe your job, the more they, the more the community is needed. So like, I know that our friend David Spinks did this with community because community was like this, there's not really, like, there's no chief community officer at these big companies, but all big companies say it's all about community. Facebook's like, it's all about community. Twitch is like, it's all about community.

• 30:53Shaan Puri?

  And what does that mean? And who in your company? Show me your, who's in charge of community at your company? Right? And there's typically not a C-level who's in charge of community. So David Spinks said, well, look, there's all these like, kind of mid-level people who are community, they run community for these big ass companies. And there's no playbook on how to do their job. They're underpaid, they're underappreciated, and they're overworked trying to run all these events. I'm going to make the best community for community professionals. And so he made the community for community people. It grew pretty large. He ended up selling the thing. I don't know how big of a business it was in terms of a business outcome. He might have been a little early. But I think that's a great example of somebody doing this, just taking a job and making it happen.

• 31:35Sam Parr?

  So there's my idea. I just wanted to talk about communities. I think they're actually kind of cool businesses. I think a lot of people think that they want to start one. But I also think that there's a lot of mistakes made of like charging too little. And I wanted to show a few examples of companies that make like a quarter of a billion dollars of value off communities. But I think they're kind of cool. So that's all I got to say about communities.

• 31:57Shaan Puri?

  I'll leave it with this, which is a lot of people, I think the majority of people who listen to us, they would love a non nine to five waiter make $10,000 a month.

• 32:07Sam Parr?

  And Well, I read that in your

• 32:12Shaan Puri?

  Survey results. Yeah.

• 32:15Shaan Puri?

  Yeah, wish we could talk about that. But but in general, that's, that's the number one thing I think people listen to this would would just grab right away. They don't all want to be founders of billion dollar companies or 200 million dollar companies or whatever. But if I said, hey, this is something outside your nine to five. It's a side hustle. It doesn't take up all your time and it's going to bring in $10,000 a month. I would say that this to me right now is the number one way to do it. I think there are some other ways, right? You could try e-commerce or drop shipping or something like that. You could try to do a newsletter or paid newsletter. I would do a community if I was going to, that would be my fastest path to that right now. And I'll tell you, you know, the reasons why are all the things you said, which is like, it's not that much work to run. The members provide the value to each other. It's

• 32:57Shaan Puri?

  not all about you creating content all the time. It's not that hard to spin up. You just have to be smart about which group you're choosing and what, where you kind of have an edge. What's your group? And then the last thing, the downsides of it are that it can't scale super large, but that's not your goal anyways. You're just trying to get to $10,000 a month of free, free cash flow from your side hustle. And so that is super achievable. You know, $20 a month for, for 500 members and you're there, you know? So I think that is where I think this business fits in.

• 33:26Sam Parr?

  And I, and I, and I said before, I actually do think they can scale, but not all of them can. Some of them, some, some of them can. But I, I'm someone, I've built a paid community that makes many, many millions of dollars a year in recurring revenue. And it is, I would say that it's really hard actually to start because I had to create a lot of the content early on and I had to create the, the culture of the community. But now I barely post and it has its own culture. So yeah, once it's Once it's taken off, yes, you you create that flywheel and it works.

• 34:00Shaan Puri?

  By the way, I just did this. I just did this in e-commerce and it probably I've probably put in a grand total of maybe eight hours into this thing and I'll tell you what it is. So I wanted to create a community for people who have ecommerce stores. So I created a gate at the front that said, your ecommerce store must be doing a hundred thousand dollars a month.

• 34:21Sam Parr?

  What's revenue out?

• 34:23Shaan Puri?

  It doesn't even have a website. There's no website. It's it's called Club LTV. LTV is like an inside term in the econ world, lifetime value. It's like what every econ store owner wants is their their LTV to go up. So I called it Club LTV. It's people are trying to increase their LTV. And so I said, you have to have a hundred thousand dollars a month of of of revenue. I told, so I tweeted it out. So I definitely had a head start because I have an audience. So that brought in about the first thirty five members. You said, yep. And they would just send me a screenshot of their dashboard. Yep, here's me.

• 34:52Sam Parr?

  What did you say, Cos?

• 34:54Shaan Puri?

  Okay, so so what I did was I made it free to join for the the store owners, but you had to have this much value like this much. You had to be this kind of far ahead in the game. But what I did then was I went to sponsors and I basically said, hey, I have a group of seventy five store owners ranging from one million to fifty million dollars a year in revenue. And all of them, trust me, like me, and I meet up with them once a month. And would you like to sponsor this? So I have one sponsor on board. They paid me five thousand dollars a month. All I do is at the event, I say, boom, I do my intro, my high energy intro, and then I say, hey, let me pass it to the guy that makes this possible, that makes this group possible. And he says his thing for two minutes.

• 35:35Shaan Puri?

  He's had, I can't say the names, but I don't know if I, I guess I just give him a free plug. So Mercury Bank is the sponsor of it because that's who I would use for ecommerce projects and they're they have a big push in ecommerce. And so they've had at least from our group, five different, five out of the seventy five ecommerce stores switched to Mercury just from the sponsorship. So they've gotten their money's worth out of it, including one company that's a two billion dollar company has switched over to them. And so, you know, they definitely got their value out of the sponsorship.

• 36:05Sam Parr?

  But is and is this still going?

• 36:07Shaan Puri?

  Yeah, this goes every month. And so all that we do, we have, we have about one hour a month of prep, and then 90 minutes a month of the actual event. And the month, the one hour of prep is that Ben goes and gets a cameo made from a different rapper every month. And the rapper is just shouting out Club LTV. He's like, so we had like, you know, um, we had Sean Paul do the cameo one month and he's like, "Hey, it's your boy Sean Paul. Just wanted to like, big, big ups to Club LTV. You guys are all doing so great with your ecommerce store." And he's like, you know, just, it doesn't even make any sense, but it's just like a video that plays and people like it because it's like, I don't know, it's kind of goofy. So we do one, we get one cameo ordered and he sends the calendar invite. So just make sure everybody gets it. Sends one reminder email.

• 36:51Shaan Puri?

  And then the last thing is that after the event, he just says, "Hey, if you learn something really useful that you're going to implement in your business, um, email me the one line of the most useful thing that happened for you in the hour." Um, because the structure of it is we break everybody up into groups of six. So you're in a group with six other store owners who do between one and 50 million a year in revenue. And then the, the format is you say, "One thing you did in the last month that's really working, it's driving revenue up. And one thing that you're struggling with that you might want help from, from the group." And so afterwards, they all email him the most useful things. He just, he just takes, he just takes that sheet and he just sends it to everybody. So, hey, "Here was the top insights from the group." So that whole thing takes him one hour. What's that?

• 37:30Sam Parr?

  Why wouldn't you charge for that?

• 37:31Shaan Puri?

  Because, because I can actually make much more off the sponsorships. For example, I've been approached by, you know, the companies that want you to build their e-comm store on their platform. There's the people who want you to use them for email marketing. There's the people who want for influencer marketing. Who are you using? For Facebook advertising, who are you using? What's the agency that manages your, your, um, your data tracking, like your pixel stuff? So all these companies each are willing to pay multiple thousands of dollars. I just have to onboard them now. Um, because now I have the group and the group is where the value is. That's the honeypot. It's the same thing you were talking about where, uh, Aventa, they have a free group and they might, they have, they are making $25 million a year on the sponsors who want to talk to these people.

• 38:12Shaan Puri?

  Oh, sorry. That's the profit. They're making 200 million, but that's the same model that I'm using here. Don't charge the members. Just make sure all the members have successful businesses.

• 38:21Sam Parr?

  And how much is this gonna get, or do you care?

• 38:24Shaan Puri?

  I mean, I put zero effort into it since then, but like, we have 75 people who show up every month to the thing. And which is like 80, 85% of the members show up every single month to the event. So they're getting value out of it. And so I bet if I told Ben, hey, go on Twitter and just reach out to these 250, cold email these 250 or these 500 ecommerce stores. Because it's very easy to get lists of ecommerce stores that are successful.

• 38:48Shaan Puri?

  I bet we could triple the size of the group if we, if we put some effort into it, but don't really care about it. It's more for fun. But it's cool because it's, it's just free money every month and it's a good group to be in. I want to learn from these people. I want to learn what they're doing, what's working, what's not, and make these connections.

• 39:03Sam Parr?

  That's badass. Well, you, you know, I, it's funny. I've, I've built the community as well, but it's like every time I learn something like you, the way you're doing it is a lot different than the way that we've done it. And it's really neat to hear a different point of view and perspective on how to get it done.

• 39:21Shaan Puri?

  Right. I optimize mine for how do I spend the least time, but get just enough value. Whereas I think for you, it was like a part of your business. You were like, I'm gonna, this is gonna be a multimillion dollar thing and we're gonna make it fucking awesome, which is awesome.

• 39:33Sam Parr?

  By the way, if I had to start over, I would have done it differently. I would have charged way more money.

• 39:38Shaan Puri?

  Right.

• 39:40Sam Parr?

  Because I've learned the mistakes that you have to add a ton of people to build a big business and a ton of people for certain groups isn't necessarily good.

• 39:48Shaan Puri?

  Right. Fair play. You want to do one more quick one before we go?

• 39:54Sam Parr?

  Only if it's you, because that's all I prepare.

• 39:56Shaan Puri?

  Okay. Okay. I kind of have like a, like a advice thing. This is my PSA. This is my public service announcement. Um, do you know what the word inertia means?

• 40:07Sam Parr?

  Yeah, it's like, uh, when something starts moving, it's hard to quit moving.

• 40:13Shaan Puri?

  Yeah. So I've noticed this, and you tell me if you've, if this has happened in your life, but I've noticed for myself and many people that kind of asked me for advice. Inertia explains like 90% of why people are doing what they're doing, right? They're doing what they're doing because they're already doing it. And sometimes that's good because like, hey, the train's in motion. So I kept going even when things weren't, you know, going gangbusters, but I just kept going because it was, it was already in progress. And I'm glad I did because I had this good outcome. But more often than not, whether it's your business, your relationship with somebody, maybe it's something you've invested in. And why are you invested in it? Well, I already own it. I don't want to sell it. Okay. But if I gave you that money today, would you buy it? No.

• 40:56Shaan Puri?

  So it's like, you know, there's all these weird things. If, if, if I didn't, if you weren't already doing this business, if, if I gave you a clean slate, tomorrow, would you go start this business again? No. Then why the hell are you doing it? Right? And so in my life, I've had this kind of like weird moment many times where I realized, shit, inertia is a bitch. And inertia is the reason I'm doing all these things I'm doing, not because I actually want to be doing them or think that that's the right thing to do right now. And so I just wanted to say this for, to A, see if this has ever applied to you. But B, for anybody out there who's listening to this and like something is not going the way they want in their life. Coach, like just check yourself. Like, is this, am I doing these things because I really think they're the right thing to do and I want to do them?

• 41:40Shaan Puri?

  Or am I doing them because this is just the way that things were already going? And I, I don't have the courage to change it. Uh, I remember with my company, when we sold our company, it's because I had a conversation with my buddy Sully and I, you know, while we were talking, we were trying to figure out, okay, how do we make this bigger? How do we make this grow? And we were both looked at and we were like, I don't think there's a, like, we don't have great ideas left. We've tried so many things. We've whiteboarded all these different ideas. It's like, do we even believe that this is a big opportunity? Like, knowing everything we know now, would I be still doing this opportunity if I wasn't already doing it? And the answer was hell no. And it was like, so this was my test. It's if this project ended tomorrow, for whatever reason, the company had to fold.

• 42:24Shaan Puri?

  Would I wake up tomorrow and start working on the same project? And the second question was, if the company had to dissolve, the investor, you know, the company went bankrupt. And I needed to go start again, would I call these same people? Like, hey, you want to work together on the next thing? Because if I, if, if no, then I have the wrong people today. If yes, then I have the right people today, if I would call them again. And so for me, it was always the people were right, but the project was wrong. And that's when I decided, look, maybe I should sell this instead of keep going on this for another five years. And, um, you know, just sort of keep going with the inertia. So has this been a thing for you in your life?

• 42:59Sam Parr?

  Yeah, and I'll tell you how I combat it. And I think I'm actually really good at combating this. I think I'm, I'm not great at a lot of stuff, but I'm good at combating this. And Warren Buffett says it's like, uh, uh, bailing out water over leaky shit. He's like, it's sometimes it's better just to get a new boat. And the way that I get out of this is I do two things. The first is I burn bridges. So a lot of people say, don't burn bridges. I say, no, I actually do burn bridges. So quit your job or move to another city or do something drastic. Because for me, I've said I cannot focus on more than one thing at a time. I can only focus on, I can only focus on one thing at a time. And so in order to like, get to create, to break inertia and create new type of momentum. I like to create some, something that I, my back's against the wall. And I think more people should do that.

• 43:44Sam Parr?

  I think that's the way to go. They say that like, once you have a kid, you, you're, that changes. So that's one, that's an example. Once you get fired, a lot of things change. So I like to create those moments where I have, where, yes, I love those forcing factors. And the second thing that I tell, that I do, and I actually tell people, is I say, just do something really small. So for example, if you're starting a business, don't think about a million dollars. What can you do tomorrow that's just one dollar? And creating the little tiny things actually helps a lot. Because breaking. The pattern is quite challenging and I love burning bridges. I think that's the way to go.

• 44:21Shaan Puri?

  Well, you gave advice on two things there. You said, basically, you you cut things off and you burn bridges. That's how you stop current momentum.

• 44:29Sam Parr?

  Nice start.

• 44:29Shaan Puri?

  And when you start, you start with ultra small baby steps or and and I've heard this now from many people. So when I went to this Tony Robbins event, he used to say, he's like, how many of you have like, if you think in your life, has there ever been a decision that is like altered the direction of your life? Like, obviously, yes, for all of us, our life is full of choices. And if we had made different choices, we'd be in a different spot right now. And so clearly, like, choice and decisions are like one of the superpowers that we have. And he goes, but how can there's times where, you know, maybe it's like, weight loss, you you keep saying you want to lose weight, you keep deciding to lose the weight, you make that New Year's resolution and then you don't do it. Right? Or this and that, you know, you you say you want to quit your job, you want to start your business. Then there you are nine months later, still in your job, still without business.

• 45:13Shaan Puri?

  And so he says, like, the word decision, we've kind of, we just use it too freely. He goes, the word decision, the root word of it, like, decision is like kind of incision, which is a cut. And he's like, the word decision means to cut off the other possibility. When you decide X, you remove the possibility for Y, you cut it off completely. And he always says, like, I forgot that famous like story or whatever, but it's like, you know, these people going, the the generals going, they're trying to surge, take over this island. So they arrive on boat and they're trying to trying to make it to land or trying to take over the land. And he says, you know, if you want to, if you want to, if you want to win the war, you got to burn the boats.

• 45:55Shaan Puri?

  Like, see, like, if the soldiers know there's no boats, there's no place to retreat, there's no boat to get back on and go back home where you came from. They'll win this island. And so he's, you know, the the story, I guess, I don't know if there's real or not, but the story is the general burns all the boats. And then the soldiers go and they win in the same idea. So that's kind of what you're talking about, which is, you're better than most in that when you make the decision. You literally cut off the other option by physically moving, by sending that email by like

• 46:22Sam Parr?

  Or I make the old option really embarrassing or hard to continue doing. So a good example is this is as we speak, I have, I'm actually gonna talk not loud, doesn't hear me. I have a chef in my kitchen cooking for me and it's very expensive. It's a very expensive fee and I'm doing it because I'm trying to, I got actually really fit this summertime and then I got a little chubby and now I'm gonna get fit again and it cost me a lot of money to have this guy here doing this and I don't. And the reason I'm doing it is because I'm gonna lose weight quickly if eat only their food because I wanna stop doing this. And so that works really well. Another example is if you wanna lose weight, you sign up for a competition like an Ironman or

• 47:06Shaan Puri?

  Something you can't get out of.

• 47:07Sam Parr?

  Something you cannot get out of. And those types of forcing functions are the, I have found for me personally, who's pretty lazy and stubborn, it's the only thing that works.

• 47:15Shaan Puri?

  Right. I'm, I'm the same way. I wanna use psychology against myself. I wanna use my own psychology against myself. So if I say something publicly, like we've said on this pod, we're gonna grow this pod, we're gonna make this a top 10 podcast. This podcast can be doing 100,000 listens per episode. We've said that. Now, egg on our face in front of all these people that we think are cool and we wanna seem cool against if we don't make it happen. If we don't, if they don't see us taking the steps and taking this seriously to make it happen. So when they see us putting thousands of dollars into our studio, adding video, adding YouTube, uh, doing more research. So we're coming on to this podcast more prepared. They see that we are taking massive action towards it and we can't be embarrassed on it. Tim Ferriss used to do this thing where he say, I don't know, I don't know how

• 47:58Shaan Puri?

  real this was, or this was just a thing he used to sell his books, but he used to say, if I wanted to lose weight, I would give my friend a $5,000 check and say donate this to the KKK. If I'm not this weight by this date, it's already in the envelope. You just have to put it in the mailbox. And that, he doesn't wanna lose the money. He doesn't want it to go to the KKK. He thought of the worst possible outcome for himself that would give, give, use his own psychology in his favor to serve him in this case.

• 48:22Sam Parr?

  Yeah, there's a business around that. It's called STICK, S-T-I-C-K-K. Or it's spelled like with two K's or something. It's like a cute spelling. And you have a referee of a challenge that you wanna do. You fund the account with a certain amount of money. You pick something you hate and the referee deems if you hit it or not, and then that money goes to your anti-charity.

• 48:42Shaan Puri?

  Right. Yeah, I think that's a cool idea. I think there's even more people can do to like, use, use our own psychology to get us to do the thing we really want to do in our life. And of course, you know, like, these things are kind of external motivators. They're not great. You know, like, what you would rather do is, you know, build great habits and you would rather be internally motivated and make a decision for yourself that this is, this is like a must for you. You're gonna do it. It's not a should. But, but you know, some of these, these tools can help you get leverage. And I was actually leaving with that.

• 49:11Sam Parr?

  Well, what, what change? What are you talking about? Can you say or no?

• 49:15Shaan Puri?

  Uh, for what? What do you mean?

• 49:17Sam Parr?

  You.

• 49:17Shaan Puri?

  Why did I bring this up?

• 49:18Sam Parr?

  Yeah.

• 49:19Shaan Puri?

  I was talking to a friend and I just realized like, I can help this friend. The friend just needs to make a change. And then the real realization was that the friend didn't even want to be doing what they were doing anyways. They were just doing it because of inertia. And I looked at my own life and I saw all these different examples of where inertia had, inertia was, inertia had the drivers, you know, had the, had the wheel. And inertia should not even be in the passenger seat. Inertia should be in the trunk. And it's just something you carry with you at the, at the, at the most. And so I just felt like, I need to say this in case there's somebody out there listening for whom this happens. Cause my, when my friend was in that situation, I explained it. And they were like, dude, thank you. Like, I needed to hear that because it made it more clear. And now I'm kind of embarrassed that I'll just keep doing

• 50:02Shaan Puri?

  this just because of inertia. Like, no, that's not a good enough reason for me. I'm gonna actually choose the things I do. And then for better, whatever they turn out, at least I chose that path, rather than like autopilot, sleepwalking.

• 50:13Sam Parr?

  And I think there's a lot of people listening that might say like, and I think you agree with me on like taking drastic changes. I think there's a lot of people listening who are like, that's pretty reckless. And my answer to that is, yeah. If you want like a drastic outcome, you'd have to take a drastic change. So, yeah.

• 50:30Shaan Puri?

  Or like, be honest. What is the real risk? The real risk in almost all of life is mediocrity. You know, like, my, my trainer tells me this all the time. He goes, most people are so afraid of so many things. It's like there's a lion sitting in the room. He's like, and I'll be the first to tell you, look, if there's a lion in the room, don't meditate. Don't, uh, don't take deep breaths. Run. If there's a lion, run. Sure. He goes, but most of the time, there's no lion in the room. And basically what he's saying is like, The things that we, the things that we want to do, we should have the courage to do. The reason we don't do them is fear. And, um, and one of the, you know, like, we should not be fearful all the time because most of the time there's no lion in the room. Most of the time, the risk is much lower than you think for the things you're hesitating on.

• 51:15Shaan Puri?

  And the, the real risk over the long term is mediocrity, is having a mediocre life, a life that's not on your terms, that isn't the way you want. And so, um, you know, I think that's true. And I think you can apply this to anybody like Abra you. If you, if, if I, if I say this to you now, or as you've been listening to this, Abra you, is there a part of your life that you, you think is like, that's inertia? That's inertia driving, not, not me choosing. It could be doing this podcast. I don't know how long you've been.

• 51:41Sam Parr?

  I hope you won't say that.

• 51:43Shaan Puri?

  It could be though, like, cause Abra has big dreams. Abra wants to start a company, he wants to do all the stuff. And he, you know, this, this podcast was a passion for him and it turned into a job for him. And I don't know, like, is this what he wants to be doing with his time? Or does he have a bigger dream and he's just doing this because he was doing this? I don't know.

• 52:02Sam Parr?

  What do you think, Abra? What do we, how, what, what, this is a weird episode.

• 52:05Speaker 03

  This was the weirdest episode. It kind of became about me. But like that, the community part felt less like a podcast and like we could charge for that. There was so much value in there for the right person. I think for a lot of people listening, I think that's, it was not as entertaining as the stuff that we normally put out, I think, but it was more valuable, if that makes sense.

• 52:26Sam Parr?

  Yeah. Uh, I don't know which one was best, but I guess we'll find out.

• 52:31Shaan Puri?

  Tweet at us so we know. And just tweet at us, like, I, I don't know if Abra, I don't know if Abra speaks for the average listener. We think he does, so that's why we ask him. But if you're like, if you're like, yeah, I generally agree with Abra's grades, then tell us. And if you don't agree usually, and you're like, don't listen to that guy, also tell us, go, just go on Twitter or email us or something.

• 52:49Speaker 03

  Now I'm blindly excited, disagree with myself, so.

• 52:51Shaan Puri?

  Oh, also, I put this out there. Uh, Abra, you put the link to the hotline in the description of this. I want to start doing Q and As where we take, um, ideally like somebody asking a question, like you talking, somebody asks this question, we play it and we respond to it, or we take call-ins or something like that. But me and Sam want to do some bonus episodes. I opted him into this, I didn't even ask him if he wants to, but we want to do some bonus episodes.

• 53:17Sam Parr?

  I committed to a third episode.

• 53:21Sam Parr?

  So, and if it's a Q and A, that's like the, that's, that's part of zero work for me. So.

• 53:25Shaan Puri?

  Yeah, I think it'll be fun. So we're gonna put a thing in. It's basically a hotline where you can just ask your question to the MFM hotline. And we will get those, we'll sort through them, we'll put the good ones into the episode and we'll answer them. So do that.

• 53:38Sam Parr?

  All right, I'm out.

• 53:39Speaker 03

  Hey, everyone. We did an interview with Dave Selinger, AKA Selly. He's the founder of Deep Sentinel, really interesting home security company. Dave is also really interesting himself. He's a multiple time founder, really cool guy. Not only do the guys discuss Deep Sentinel, they also talk about some of the opportunities Dave sees in the moment. So we'll leave this interview here at the end as a little bonus, as a little nugget. Hope you guys enjoy and as always, leave us some feedback.

• 54:07Sam Parr?

  So we're gonna do a relatively quick segment, segment. Dave, do you go by David or Dave? Uh, go by Dave, go by Sally. Most of my, my friends and coworkers call me Sally. Sally, all right. That's a good one. Uh, Sally, S E. Sally. Uh, I dig it. Um, okay. So I invited you to come on because I have this thing called Sentinel, Deep Sentinel. I say it right? Sentinel? Deep Sentinel, yep. Sentinel. Um, my friend Noah.

• 54:35Shaan Puri?

  You mispronounced his name. You mispronounced his company. Is your friend's name really Noah?

• 54:41Sam Parr?

  Yeah, I, I, people make fun of me because I mispronounce a lot of stuff, but um, I have been using this. It's quite interesting. And I want to give a summary of episodes. My friend gave it to me. Basically, I had Ring, these Ring cameras and Ring is pretty good. I mean, it's fine. It's cameras. But my friend Noah was like, oh, that's cool. You can watch people steal your shit. Um, and I was like, what do you mean? He's like, well, I mean, what's the point? Like, you gotta monitor all them. And I was like, yeah, that's actually a great point. He goes, here, try this thing called Deep Sentinel. So I tried it. And basically what it is, is it's a, it's a, it's a bunch of security cameras around my house and there are security guards watching it all the time.

• 55:18Sam Parr?

  And if something is triggered and uh, they see someone at my door that looks suspicious, or even just someone at my door, they say, hey, who are you? Uh, do you know the person who lives here? What are you, what are you doing here? Whatever, yada, yada, yada. And I tested it online on my Twitter handle and I like did the secret sign. You could like put your hands above your head and do a sign. And someone checks in and goes, hey, is everything okay? And it's just like pretty badass. And so I invited you on because I wanted to learn a little bit about this. Did I describe the company accurately?

• 55:46Speaker 00

  You nailed it, right? Like our motto really is, and one of our, one of our marketing gimmicks is that we make a T-shirt that says, oh, you have ring, congratulations. You know, now you can watch people steal your shit. And that's, and that's literally kind of where, where I know I got that is that I personally have, I have a ton of cameras. I've been a camera fanatic for a long time. And my neighbor had a home invasion. And so, you know, the, the neighborhood, it's a pretty big neighborhood. We all freak out and we're like, you know, what, what can we do? We have the police come. And I introduced myself, I'm kind of the head of the, the neighborhood watch and blah, blah, blah. So I, I asked the cop, I say, you know, look, my neighbor, she

• 56:26Speaker 00

  has all these cameras. She has an alarm system. You know, why did she still get a home invasion? And the cop, who I'm now friends with, by the way, says like the rudest possible thing, which is, which is straight on point. He says, well, you're the tech guy. What did you think the fricking cameras were gonna do? And it was like this moment of just utter eye opening WTF was, I think, and you're right, like, they're just cameras. And they don't actually stop anything. And so I spent the next five years building a product that turns cameras into something that can stop crimes.

• 56:58Sam Parr?

  How many subscribers do you guys have?

• 57:01Speaker 00

  We have about 2,500 customers across the country. About half of them are businesses and half of them are residential.

• 57:08Sam Parr?

  And how many security guards do you have? And where are these security guards?

• 57:12Speaker 00

  So we're bordering on like, kind of the, the secret sauce here, but I'll tell you, we have a ratio of about one guard for every about 100 properties right now. And that's how we make it so that it's affordable because It's a hundred dollars a month, kind of our starting price point. And if you think about like having a security guard at your house, if you happen to, you know, have a bunch of friends who are billionaires, for example, they're spending thirty to a hundred thousand dollars a month for a security guard. And our, our entire point was like, that's just not attainable to most people, but security is really, really important. How do we make it affordable? And so we use AI and like a bunch of technology in the middle to make it so that we can have one guard protecting lots of properties at once.

• 57:55Sam Parr?

  Okay, so you don't have to answer exactly, but if I had to guess, and I mean, you just said it, around twenty-five ish, security guards, a couple dozen, a few dozen, some, some number in that ballpark.

• 58:07Speaker 00

  Yep.

• 58:07Sam Parr?

  Um, and how can this, how, what the question that I had when I was thinking about this business is two things. The first is this whole idea of like someone, real life, actually doing manual work is like on the other side of a, of a tech, a tech product is kind of interesting to me. I remember, you guys remember when you were younger, there was that service called Cha Cha? And you could like text them a question and they would answer it?

• 58:32Speaker 00

  Totally.

• 58:33Sam Parr?

  Like, I think there was a real person on the, of the other end who would just Google the question you had, because Google wasn't on your phone at the time.

• 58:40Speaker 00

  Yep, that's exactly what it was.

• 58:42Sam Parr?

  And that's kind of like what you're doing. And so my question is this, how do you scale that? And do you just have to give a ton of guards? And also, what other services can I apply this to?

• 58:52Speaker 00

  So that's exactly the way that we think about it, that kind of inside of our four virtual walls of the company. So, so number one, the, the number one thing that we do to scale is that if you think about the, the old business of security, right? Like a guy or a gal sitting at a chair, watching the entrance to, you know, a corporate building. That is inherently not scalable, right? You have no levers because you have a physical chair. And what's neat about Deep Sentinel and the big kind of aha moment for me is that there's all this internet stuff that can sit between the cameras and the guards. And when there's internet stuff, that means you can instrument it. That means you can, you can start measuring things. And then like what I did at Amazon and my last couple of companies,

• 59:37Speaker 00

  you, once you have data, you can start optimizing it. You can start looking at what are the real problems? What are the things that aren't problems? How do I, how do I make the guards into super guards? Right? Like, in fact, at our office, we have an Iron Man at the entrance. Cause that's, that's the way that we think about this is that our technology turns these, you know, regular awesome guards into super guards that can, instead of having four guards protecting one property, you have one guard protecting 100, one guard protecting 200 properties. Because all of the, the, the AI filters out events. It also sends them clips that it thinks are interesting that they should look at like, hey, here's a clip from 30 seconds ago. Maybe these things are tied together. And so as you do more and more of that, it's not like we're getting rid of the people,

• 1:00:22Speaker 00

  but we're making each individual person more powerful, right? And more engaged in their work. Um, the last thing I'll toss out about this too, is that, one of the other things that a lot of people don't know about guards is let's take, let's take like the most badass special forces guy in the world, right? Like I'm ripped, I've been trained for, for years and I'm going to put you on night watch. So you get to stay up between 10 a.m. and 6 a.m. And you're in an area that's like, that's dangerous. It doesn't matter how badass you are, right? Like the tendency to fall asleep when there's nothing happening for eight hours in a row is incredibly high. One of the other neat things about what we do is because we spread this across all of our customers, there's always something happening.

• 1:01:06Speaker 00

  We don't have like a lull time where, where our guards are just not doing anything. They're always engaged. And so we're, we're able to keep them awake, engaged, like, you know, stimulated in, in a way that allows us to provide like what you just said. You show the, the symbol on your cameras and bam, within 10 seconds, there's a guard responding. You can do that 24 seven.

• 1:01:29Sam Parr?

  Okay, and so where are the other opportunities? Like, what do you call this, this model? I don't know what you call it, where you have like real, real people doing stuff.

• 1:01:38Speaker 00

  Yeah, so, so the, the kind of like way to still be called a tech company is you make the human the second part, so you call it human in the loop, that it's a technology loop, and there just happens to be a human for a tiny piece of the work, versus a traditional services business where the human's doing everything. And so, human in the loop, it's being applied right now, already, in some other industries, like cybersecurity uses it, so if they detect like what looks like an intrusion, or like in the case of Rakata, where they don't detect it until after it's done, and the hackers release it, you know, that was a, that was a jab at them. But like, you know, the idea being that the computers can detect things that are kind of anomalous, but that the human really applies his or her intelligence to figure out the last little bit.

• 1:02:22Speaker 00

  So it's also being applied like in, in medical telehealth, right? So you have these experts, and you use technology around them to make sure that you, you take an expert who could only generally be regional, historically, but now a cancer expert because of video conferencing and, and, you know, remote records and, and things like that can actually have a lot, lot more impact. For us, what we think about are, how do we take this in a security context? Because we want to stay in security, and how do we expand that to a, a virtual greeter at a multi-tenant apartment building, a Skyrise in, in New York, for example? How do we apply that to watching elderly folks at home who may need just a check-in every 15 minutes?

• 1:03:05Speaker 00

  How do we apply it to hotels where you don't need to have a guard there 24/7, but you need to check the lobby every 15 minutes? And how do we do that at a cost that's 10 or 100 times less than having a physical guard on location?

• 1:03:19Sam Parr?

  That's interesting. How big is that market of just checking in on, like, how many doormen are there in New York, you know?

• 1:03:26Speaker 00

  You know, it's a great question. Actually, one of the most interesting things about this market is that it's pretty big, right? So the alarm side's about $20 billion and then the guard side's like 20 to 30 billion dollars. But what Deep Sentinel hits is like this really kind of weird seam where there hasn't been a solution at all ever. And that price point's between about 100 bucks a month and $10,000 a month. There is nothing. And there's nothing there, not because there's no demand, it's supply side constraint. There's never been anybody that's been able to create a product that has a price point in that price band. And so what we're finding is that there's just this huge vein of untapped demand, right?

• 1:04:10Speaker 00

  Like a hotel, let's use that example for the, my friend happens to own a few hotels. And he was telling me, it costs him $3,000 a month to have this guard who's kind of schlocky, to be completely honest. I don't know if that's an appropriate term on your podcast, but

• 1:04:25Shaan Puri?

  I've never, never heard that word.

• 1:04:27Speaker 00

  Am I the only Jewish person on here? Okay, so I don't know another word for it, but he's schlocky. So he's kind of sloppy. He's not really going to scare anybody away.

• 1:04:39Shaan Puri?

  Like a schlep, to use another Jewish word.

• 1:04:42Speaker 00

  He schleps up to the place. That's right. That's right. So he shows up three times a night. This is for $3,000 a month. He shows up three times a night and just walks around the parking lot for about five minutes. He gets a total of 15 minutes of security over the course of 10 hours, and it's 3,000 bucks. Whereas with us, we'd be able to provide that service for maybe $1,000 a month, and there'd be someone watching 24/7 in case something happened. It's just, it's so massive, what the disruption is when you create something where there's literally just been kind of a vacuous hole. And so, you know, that's kind of a way of me avoiding the question, answering the question, but like, it's tens of billions of dollars that's just untapped. There's buildings that would love to have

• 1:05:27Speaker 00

  somebody greeting them in New York that don't have someone, because their cost would be 20,000 bucks a month. But if it costs 1,000 bucks a month, bam, they'd do it in a heartbeat.

• 1:05:36Shaan Puri?

  So what does your security person do when they see somebody that is a potential intruder? Are they calling the cops? Are they like yelling through the camera, "Hey buddy, back away, you know, I'm a tough guy inside"? You know, what are they doing to actually eliminate the threat?

• 1:05:49Speaker 00

  Yeah, so there's

• 1:05:52Speaker 00

  there's a bunch of different things that that we do. And you know, you mentioned two things on on kind of the ends of the spectrum, right? And it's a it's kind of like an escalation spectrum. And so on one end, right, like, hey, I see a kid, right? That's the really most innocent thing. And the kid's kind of like poking at the door. And so we have a juvenile protocol. Each of these things are in their own little protocol that we train the guards on. And that's part of what the technology does. The technology helps them know the potentially relevant protocols to engage here. And the and with a kid, you'd say, hey, hey, kiddo, I see you're there. Do you belong here? Right. And that's kind of the softest just touch, right? Then there's an adult that that may be looking a little creepy. And then we say, hello, this is Deep Sentinel Security. Can I help you?

• 1:06:37Speaker 00

  And that way, if it does happen to be a friend or family, we're not insulting them, right? So Sam's best friend from college that we've never seen before shows up. And he decides that the right thing to do is go right up to the door and start looking through the windows without knocking. You know, that's the greeting he's going to get. He's going to know somebody's there. But he's he's not going to necessarily feel insulted right off the bat. If if somebody shows up and they've got a crowbar, it's sirens on, hey, stop what you're doing. And and the we automatically escalate. So either that guard or another guard is contacting police. All of that's happening within about 10 seconds. And that's where the neat, the other neat thing starts is that

• 1:07:16Speaker 00

  because we have somebody watching, our calls to police are very different than what they get from like if you have ADT or like some some I'll use the word again, some other schlocky kind of home security system. ADT calls and they say, hi, this is this is Becky from ADT. I have a motion alarm in the living room. And the police say, well, is it the homeowner? Is it a cat? Is it the wind? Is it the dog? And she says, no, no, no, this is Becky from ADT. I have no idea. I'm just calling you because I thought I'd waste your time. Hangs up. When we call, I say, hey, I've got a white male, six foot three. He's got a crowbar and I have and he's trying to break into this building. Here's the address. I've just given them a description of the suspect, a description of the crime and the existence of weapons.

• 1:08:00Speaker 00

  Every single police department in the nation, that's what their dispatch is designed to do. And they

• 1:08:05Shaan Puri?

  You just described Sam at his own house, practicing crowbar combat.

• 1:08:09Speaker 00

  I know, right?

• 1:08:12Speaker 00

  And that's why two way, but that's a, that's a good joke, but like, that's why two way audio is really important. Cause by the way, homeowners do do crazy stuff. And so sometimes we see.

• 1:08:20Sam Parr?

  Well, I have like a sledgehammer that I use to like exercise. You've just described me working out.

• 1:08:24Speaker 00

  And then we'll say, hey, like, are you there? And you say, no, no, it's me, Sam. Here's my special code word. And then we don't call the police. So when we call police, it's a hundred percent verified. Our calls are a hundred percent verified. And most people don't know this, when alarm companies call the police and ask for dispatch, it's 99% false alarms. In fact, Freakonomics wrote a little piece about this. And they're just like, it's horrendous. It's a waste of police time. And so most police jurisdictions have actually passed laws where they don't have to respond at all to alarm calls.

• 1:08:56Shaan Puri?

  Yeah, that's what I was gonna say in San Francisco, I feel like I can call the police and say, hey, this guy's got a gun to my head. And they'd be like, well, you know, let's see if you could, if you can resolve that with your HOA before we send somebody out there.

• 1:09:06Speaker 00

  If you could get his name and call us on Monday, that'd be great.

• 1:09:10Shaan Puri?

  And so how many crimes have you guys stopped?

• 1:09:13Speaker 00

  We stop about 15 to 20 crimes a day.

• 1:09:18Shaan Puri?

  Wow.

• 1:09:18Speaker 00

  I mean, it's.

• 1:09:19Shaan Puri?

  And that's crimes means like stealing packages. It means everything, right?

• 1:09:22Speaker 00

  Drum beats, right? Like, it's just, it's stealing packages. It's attempted break-ins. It's assault.

• 1:09:28Shaan Puri?

  Why don't you have a TikTok channel? That publishes every crime that's stopped, just the footage of the crime.

• 1:09:34Speaker 00

  We do. It's the stopped video channel. Send everyone to it.

• 1:09:39Shaan Puri?

  Okay, I gotta get, what is it called?

• 1:09:41Speaker 00

  It's stopped, it's on YouTube. We're just starting TikTok. We just found TikTok, right? Like, I'm old, sorry. So like, I didn't, I didn't really get TikTok. My kids were on it and they were like, look at me dance. And we did like the dances, but I didn't really think about it as like, hey, let's post these things on there. People are loving it on TikTok.

• 1:09:57Shaan Puri?

  So on YouTube, what is it stopped? What?

• 1:10:00Speaker 00

  It's the, it's the stopped, Deep Sentinel stopped video series. And every single week we produce the best 5, 10, 15, 20.

• 1:10:09Shaan Puri?

  It's amazing. These have thousands of views. Great. Good for you.

• 1:10:13Sam Parr?

  Someone have close to a million, I think.

• 1:10:15Speaker 00

  Yeah, we have. We have a couple that have a million and it's it's cool. Like it's it. What's neat about it is it kind of taps into. You know, if you've ever been the victim of one of these crimes, like you, you want nothing more than to get back, whether you're getting back at that individual person or just like getting back at the world because it makes you feel powerless. And one of the neatest things that, you know, we actually don't really publicize that we do as a company. Is we we actually reach out to to people that have been the victims of of like really heinous crimes. And, you know, a lot of times I I reach out personally and say like, hey, I I I'm not asking you to promote us. I'm not asking you to do anything. I just want you to know that we've created a product that actually can make you feel safe in your own skin, safe in your own home again.

• 1:11:00Speaker 00

  And I'd love to just give it to you for the next six months. And and it's the neatest thing like I actually this morning I happened to drive by. There was a. There was a home invasion in my hometown last year, and I gave the system to these people that that live in Pleasanton. And and I happen to be by their house this morning, so I stopped in this morning and the husband answered the door. And, you know, this is like a he's a like a big, tough dude, right? And he he's not the type of person that you would you would expect to say like, I'm really scared in my home. But we all have like our our kids or our family or the moments where we're not home or or like we're asleep. And it was really neat to hear him just, you know, eye to eye say like this is

• 1:11:41Speaker 00

  this has really changed the way that we live and and after something that horrible. You know, it's it's really life changing.

• 1:11:48Sam Parr?

  So we only have a few minutes left in the segment, but what I want to ask you is where's the opportunities based on what you've discovered? Because I think like I've actually read, I like reading about companies that got big 20, 30, 40 years ago, and there's a lot like the beginning of ADP. ADP, what's the what's the security company?

• 1:12:07Speaker 00

  ADT.

• 1:12:08Sam Parr?

  ADP payroll and a bunch of other like interesting security.

• 1:12:11Speaker 00

  Basically, the same company, but but yeah, yeah, go ahead.

• 1:12:14Sam Parr?

  A bunch of companies that are just like like the guy who started, you know, wonderful brands.

• 1:12:21Speaker 00

  No.

• 1:12:21Sam Parr?

  It'd be the palm, the palm water or the palm drink and they make

• 1:12:25Speaker 00

  Okay.

• 1:12:26Sam Parr?

  Like he got a lot of his wealth, I believe, from a security guard company, like security guard companies are just kind of interesting to me for some reasons. It's kind of weird. In this space with this like human in the loop service in the security space, where's interesting opportunities that I wouldn't know about because I'm not involved?

• 1:12:45Speaker 00

  Um, one of, one of the ones that we see a lot of is construction recently. And the, what's, what's interesting about construction yards is you have like these massive amounts of assets with no security, like literally no walls most of the time, right? Like sometimes you have chain link fences and, and that's going to generally insecurity, like speaking outside of like deep sentinel in terms of human in the loop. One of the other interesting things that, that we're seeing is like just the movement of stuff seems pretty unsolved, right? Like there are still companies that make a hundred million dollars a year and they have a line of business called cash.

• 1:13:26Speaker 00

  Or like in the age of Venmo and in the age of PayPal and in the age of Apple money and Facebook money and, and every type of virtual currency in the world. There's still people getting paid money to like, put their lives in danger to go move pieces of paper around. I mean, it seems like so absurd, but I'm reading a Haymaker's Guide to the Galaxy right now. In the first chapter, it says like, humans are generally miserable because they spend all their time moving green paper around and green paper doesn't make them happy. And, and it made me think of like the, this, this business that like, oh my God, every, every year people are like scared and die.

• 1:14:02Speaker 00

  Cause they have to move the paper around. How dumb is that, right? Like there has to be something for, I mean, just, I don't know vapor, take a picture of it and vaporize it and then digitize it. I don't know. But that one seems like there's, there's just a, a, a asinine amount of risk and opportunity there.

• 1:14:19Sam Parr?

  So construction, is there one more?

• 1:14:21Speaker 00

  Um. What's another, I mean, like, most of them are pretty obvious, right? Like, car lots, oh my god. Actually, car lots are interesting, too, because one of the things that people don't realize is that everyone thinks, like, oh, my god, car lots, everyone's gonna come and steal a car, but that's kind of a big crime. Actually, the number one thing that we see is people going and breaking into cars at car lots, because there's just lots of catalytic converters, there's lots of stereos, and there's lots of leather. And so, you know, every once in a while, there's somebody, like, stealing cars off the car lots, but what we see a lot of is just these people going and grabbing the doors. Actually, wait, I'll go with one more. Meth. So, meth, meth is a horrible thing, right?

• 1:15:03Speaker 00

  But what meth has led to is like this really weird pattern of mail theft, and I call it agricultural mail theft. And so, one of the things that you'll see this a little bit on Nextdoor, like, hey, I saw this guy, like, going and checking my door handles or checking my mailbox, and then it goes on Nextdoor, and everyone in the neighborhood for like 15 miles says, oh, I saw that same gal or guy, too. And meth has created this entire lifestyle where these people actually go and farm neighborhoods, and they'll go in a cyclical schedule, go from this neighborhood tonight to this neighborhood next week, and this neighborhood, and they literally check every single door, every single mailbox, as, again, kind of tending it like they would be tending their plants in agriculture.

• 1:15:48Speaker 00

  And it's just really, it's a weird phenomenon.

• 1:15:52Shaan Puri?

  What are they stealing? They're just stealing mail, or they're stealing something related to me?

• 1:15:56Speaker 00

  They're stealing wallets and mail that's typically checked. They're actually pretty careful, and when I say agriculture, like, they're actually careful. So, when they put your mail back, it's very infrequent that you see them just throwing it on the ground, because that ruins their agricultural area. So, it's actually really interesting, when you see the video, they're like, they open your door, and then they're very careful when they put your mail back, because the last thing they want is for somebody to find out. And frequently, again, if you look at Nextdoor, what you'll find, and this is why Deep Sentinel is needed everywhere, is they'll go be like, oh, my god, I went back for the last three months, and this guy's been coming every four days, and I only happened to notice this one time, because he took something too valuable to me.

• 1:16:35Speaker 00

  And it's just this really consistent theme across America, that your doors are getting checked, your mailbox is getting checked way more than you're aware of.

• 1:16:48Sam Parr?

  I've caught a bunch of people, my camera's being weird. I get an email where it says a guard intervened. I've caught a few people. I hate it.

• 1:16:57Speaker 00

  Yeah.

• 1:16:58Sam Parr?

  It's almost made me freak out more now that I know.

• 1:17:01Speaker 00

  Well, I mean, the good news is that, you know, you do have a layer of protection. The bad news is you now know, like, for real. Like, if you had a ring, you're getting 100 alerts a day. And so you just didn't know, because who's going to comb through all 100 of those alerts every single day? It's just not, it's not worth it.

• 1:17:18Sam Parr?

  Well, I appreciate you coming on. This is super interesting. I've been a fan of your product, so it's nice to talk to the creator of it, one of the creators of it. This is pretty badass.

• 1:17:28Speaker 00

  Well, thank you, guys. Yeah, I mean, as you can tell, like, I'm super proud of it. I'm happy to talk about it any day. If you put me on for five hours, I'd keep going, right? Like, I love it. It's the neatest company I've ever had a chance to touch, and I'm so proud to be able to touch people's lives.

• 1:17:41Sam Parr?

  Did you help build Ring, or did you work at Amazon?

• 1:17:44Speaker 00

  I worked at Amazon. Yeah, so I was there way before Ring times.

• 1:17:47Sam Parr?

  What year did you start there?

• 1:17:49Speaker 00

  2002.

• 1:17:50Sam Parr?

  Holy moly, I bet we should have you on another time to tell stories about that, too.

• 1:17:55Speaker 00

  I have lots of stories. There's lots of people that have great stories about Amazon. Amazon is such a neat company to have watched go from, you know, when I joined, every single, every single quarter, the Wall Street Journal would run a story. When does Amazon shut down? Because it just isn't sustainable.

• 1:18:11Sam Parr?

  What number of employee were you?

• 1:18:13Speaker 00

  Oh, gosh.

• 1:18:15Sam Parr?

  You guys were in the thousands at that point.

• 1:18:16Speaker 00

  Probably like 3,000, something like that.

• 1:18:18Sam Parr?

  Hopefully you haven't sold too many shares. Congratulations. Oh, my God.

• 1:18:24Speaker 00

  But good, good, but good news, though. I sold them in order to start Redfin. So, and I held on to some Redfin stock, so.

• 1:18:30Sam Parr?

  I did not know that, dude. You've been doing, wait, Redfin, the real estate thing?

• 1:18:34Speaker 00

  Redfin, the real estate thing.

• 1:18:35Sam Parr?

  I didn't know you started that. So you've done all types of shit, man.

• 1:18:39Speaker 00

  I tried to. Yeah, it's been it's been really neat. I've had I've been I've had a very blessed career. But again, like what's neat about this one is, you know, Redfin's really, really cool. We invented interactive mapping. But this business, the number of times I get an email every single week that says, you changed my life. That's

• 1:18:57Shaan Puri?

  Yeah, you know, like tech companies get criticized for like, oh, you're just building toys and frivolous stuff. You're like, it's like, you're literally saving lives. So you've got to do both. You've got to do fun, you know, tech with with all kinds of crazy shit involved. And at the same time, you're saving lives. So I like that. I'm jealous of my friend James, who invested in you guys early on. I should have invested. I remember seeing him post about it on Facebook. And I was like, this is a pretty good idea. And what I didn't put, I didn't think about at the time, because I was like, how are they going to scale this up? I thought, oh, they're going to do labor arbitrage. They're going to get people in the Philippines to watch your stuff. And, you know, it'll just be a lower hourly rate, you know, and the price point will be, you know, sort of high, unachievable for most. But what you're saying is smart, which is, one guard is going

• 1:19:39Shaan Puri?

  to have 100 houses under monitor. Most of them, most of the time, nothing is happening. So you don't need eyeballs on the screen. And the AI is going to basically say, something's going on on house 42. 42 pops up, human eyes decide, is this good or bad? Next, swipe to the next. And so it's really, it's actually more than human in the loop. It's, in my opinion, like, these should be called something else. This should be called like, you know, super services or something like that, because it's taking a service-based business. And it's scaling it like a superhero, where it's like, oh, what if that security guard could not just watch one house, but actually could watch 100 houses? Now you have a super service that can scale in the way that services typically can't. And so I think that's even more, I know for pitch decks, you use Hoopin' in the Loop, and I've seen that a bunch. But I think this is actually

• 1:20:22Speaker 00

  Super services. I freaking love that, dude. I'm gonna steal that from you, if that's okay.

• 1:20:26Shaan Puri?

  Yeah, that's great. I think this is awesome. And now, now I'm kicking myself because I'm like, oh, shit, that this actually, if I'd asked one question earlier, this would have made sense to me. And now it does. So thanks for coming on and explaining it to us.

• 1:20:39Speaker 00

  Hey, thank you. And if you're still interested, we're raising another round this year. So hey, you know, let me know.

• 1:20:44Shaan Puri?

  See, the only problem is, I'm a cheap Indian dude who's like, oh, the price back then, the price then would have been, I don't know what you for raise your first round at, maybe 10 million or something like that, 20 million. I have no idea what it was. But now, I bet, like, have you, you've raised an A, right?

• 1:20:58Speaker 00

  We're in the process of raising the A right now. So

• 1:21:01Shaan Puri?

  Okay, actually, I'm gonna email you. I'm gonna invest in this company anyways. I will.

• 1:21:04Sam Parr?

  No, no, no, no, no. You gotta send it to me, too. Look, you guys are

• 1:21:08Shaan Puri?

  I'm not taking your spot. We can both get in, baby.

• 1:21:12Sam Parr?

  Can we? I mean, you raised $24 million, right? Or 23?

• 1:21:16Speaker 00

  We've raised, we've raised a bit. We have a, we have a really unique investment vehicle that's open right now. So, you know, if you're serious, there, there is an opportunity.

• 1:21:25Shaan Puri?

  Because, you know, ADT and these guys, what are the other security companies, the big ones? I've looked into this before, but they're all multi-billion dollar sort of sleeping giant incumbent types that for them to do something like this, they either have to buy you or they have to like change their DNA inside their bodies, which is not going to happen. So.

• 1:21:42Sam Parr?

  ADT has a $6 billion market cap. And wait, I'm so confused. ADT has $5 billion in revenue and a $6 billion market cap? Is that right?

• 1:21:51Speaker 00

  If you look at their enterprise value, that's the secret. They have a $6 billion market cap because they have $10 billion in debt. So they actually have an enterprise value of $15 billion, $16 billion.

• 1:22:01Sam Parr?

  Okay, so there's some.

• 1:22:03Speaker 00

  By the way, the other way we could do this is if you happen to have $10 billion I could borrow, I could do that, too.

• 1:22:09Shaan Puri?

  Yeah.

• 1:22:13Shaan Puri?

  This podcast doesn't pay that well.

• 1:22:18Sam Parr?

  Yeah, we, we missed that one. But dude, send me the information. I'm definitely interested if you wanted to talk about it or you're willing to have either of us.

• 1:22:28Speaker 00

  That sounds awesome. Happy to do it.

• 1:22:30Shaan Puri?

  It's funny how such a small thing makes difference. I saw the video Sam posted and the operator, the security guard who spoke back was like clearly not like, you know, my relative in India. And I was like, oh, wait, this is actually gonna feel totally different to have a human who's got your back, who feels like a trusted American voice.

• 1:22:50Speaker 00

  Right there with you.

• 1:22:51Shaan Puri?

  Right there with you. And then like right now, my neighborhood, our front gate, we have like a door guy just sitting there all day, couldn't stop anybody if you wanted to. But, you know, just sort of useless. You know, there's, there's all these little points of failure, whether it's mail, it's the doorman, it's your personal house, it's my, for example, for e-commerce, our warehouse. They spend a lot of money, you know, just guarding because they have millions of dollars of goods in their warehouse and. And it's just so inefficient, so capital inefficient, the way they try to secure, you know, have security for those things nowadays because you have alarms, which are just going to be like, kind of just a sound, you know, you're playing an MP3 to protect you. Or, or you have a human, you got, you know, a club.

• 1:23:32Speaker 00

  I think it's Spotify now, by the way, MP3s are the old ones.

• 1:23:35Shaan Puri?

  That's right, that's right. We're gonna stream, we're gonna stream the security to you. Or you have a guard who's 99.9% of the time gonna do nothing. And, um, and so it just doesn't make sense, right? Like, so finally, you know, a solution that that makes more sense. And no, I'm not paid to say this, it just makes sense to me.

• 1:23:50Speaker 00

  Well, I, if I can, I'll tell you one more story. One of the things that got me off my butt to do this was, uh, there was a story of this elephant that escaped a zoo. And the video was, uh, the elephant, again, not, not a small animal, right? Like an, an elephant.

• 1:24:06Shaan Puri?

  Right.

• 1:24:07Speaker 00

  And the elephant did not escape the zoo by going around the guard. The guard was sitting at the, at the gate. And, and like, you know, the chairs tilted back the way that you expect the chair to be tilted. Guard is totally asleep and a freaking elephant walks right by him and leaves the zoo. And you're just like, there has to be something better than this. This is ridiculous.

• 1:24:27Shaan Puri?

  Has there ever been a conversation like in San Francisco, there's all these car break-ins? Like, can a city adopt this? Do you ever, do you think a city realistically is gonna ever adopt this where, you know, the cameras are on the street post or, you know, on, on the lights? And basically, you can guard the whole street of cars that way or no?

• 1:24:43Speaker 00

  You know, we've, we've talked to a couple of cities about it. The thing that I don't like is I don't like the idea of big brother being part of the government. Like, one of the things I really like from kind of an ethical, this is, I'm a pretty principled guy, I like to think, is that by making this surveillance private and focused on private property and protecting that property in service to that individual, you don't have that like Panopticon risk of turning into, you know, the evil eye. And, and, uh, you know, we never question who our customer, our customer is the person that, that pays us and owns this property. And that's a, it's a tried and true, like, deep principle of, you know, American liberty.

• 1:25:23Shaan Puri?

  That's fair enough. I like that. Yeah. The person who buys it is the one who's opting in to their own protection, basically.

• 1:25:28Speaker 00

  Yeah, that's right.

• 1:25:29Sam Parr?

  Did my, um, someone just rang my doorbell? And I know that because my, I just got a notification on my phone that Deep Sembel is talking to him.

• 1:25:38Speaker 00

  Isn't that awesome by the way dude?

• 1:25:40Shaan Puri?

  People are gonna be like, you didn't know they rang your doorbell because they rang your doorbell?

• 1:25:45Sam Parr?

  I can't, I can't hear it, but I know that I can see on my phone. I just got the notification. I love it.

• 1:25:53Speaker 00

  It makes me feel so much safer for my, I've got two little girls and I absolutely love it.

• 1:26:00Sam Parr?

  It's great. I'm digging this. I'm, I can see my wife in our courtyard. This is awesome. I'm a fan.

• 1:26:05Speaker 00

  Well, thank you guys. I love, I love getting the opportunity to be here. Thank you so much for bringing me on and, you know, and for being a good customer.

• 1:26:13Sam Parr?

  Thank you.

• 1:26:13Shaan Puri?

  Good talking to you, man.