Data-Based Businesses, Executive Briefings, and Spotting Scams with Anand Sanwal

Episode 413: Sam Parr (@TheSamParr) and Shaan Puri (@ShaanVP) talk with Anand Sanwal (@asanwal), CEO and co-founder of CB Insights, about how Anand built his companies, the importance of data, small business niches that are growing, and much more. Want to see more MFM? Subscribe to the MFM YouTube channel here. ----- Links: * RebelGirls * USNews Best Colleges * McCormick Corporation * Anand's Twitter * CB Insights * How To Manage And Sell A Company In An Industry And A Country You Don’t Know * Do you love MFM and want to see Sam and Shaan's smiling faces? Subscribe to our Youtube channel. * Want more insights like MFM? Check out Shaan's newsletter. ------ Show Notes: (01:15) - Anand's Background (05:00) - "Sawdust Data" businesses (9:00) - Tiny but growing niches (13:30) - Daily executive briefing email (18:30) - Pricing data business (24:30) - Broke & Busted College Rankings (31:30) - McCormick Spice Competitor (41:30) - How To Manage And Sell A Company In An Industry And A Country You Don’t Know (48:30) - Adani Group Collapse & spotting scams ----- Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. ----- Additional episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto * #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

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

• 0:00Shaan Puri?

  I love how even though I tried to pick a non nerdy data one, it actually underneath the hood was a nerdy data one. You're like the, you're a data hammer and the whole world is just little nails that you're just trying to hammer with your, you know, like But dude, this is the best business there is. In the data like a vacuum. You're the data Dyson that's just taking in this data from everywhere you can. Yeah.

• 0:29Sam Parr?

  Man, founders are like, a lot of times not good at explaining what they do to idiots. So can I do it? Can I? So, all right, I'm gonna make you look cool. I'm gonna be your wig man.

• 0:39Shaan Puri?

  All right.

• 0:40Sam Parr?

  So you run a, I don't know if you call it software or a data business, but people pay subscriptions and your, your company, CBN sites, you're now getting close to a hundred million a year in revenue, which is like a huge accomplishment, hundreds of employees as well. And basically, and this is the part that's kind of hard to understand for someone like Sean and I, because we haven't run like really, really huge companies. But basically when a company that has a thousand people have to decide what software they have to buy, like, let's say it's just like some customer support software or payroll or something, they need to do tons and tons of research to make sure that the business that they're gonna pick, the vendor they're gonna pick, like, will stay in business or will be around for 10 or 20 years, things like that, as well as a bunch of other information.

• 1:23Sam Parr?

  And you have crawled through what you call dirty data. So all this data out there exists, but you just put it in a bit of bits of software that make it really easy to digest and understand so a person can make a right and smart decision. And they pay you like 30 or 50 or a hundred and 50,000 dollars a year to access all that. Is that right?

• 1:41Shaan Puri?

  Sounds about right. Yeah. And more importantly, fan of the show and prolific idea guy, before this episode, before we did this episode, he sent over a Google sheet that is 77 rows of

• 1:55Shaan Puri?

  Random startup ideas, which just tells me you're you are you're one of us. And so this is great. You made our job really easy. We have a bunch of ideas we can go through. There's a few kind of interesting CB insights stories that you've blogged about in the past. I want to talk about, but let's do those at the end because I think the ideas are going to be a lot more fun. Sam, you favorited yours.

• 2:16Sam Parr?

  Sean, one of the reasons why he's fun, you said that he's one of us because the idea thing, that's true. He's also fun because even though he comes off like this, like polite guy who's like introverted. He's a shithead. Anon is a shithead. His Twitter is hilarious. He always, he writes this famous newsletter to like 500,000 people now, and he signs it with like, I love you. And in his Twitter, the bio says, please buy a CB insights subscription. I owe people money. And like, he always does like, he kind of pokes the bear a bunch in his stuff. So he's got that. He's got a really cool attitude, but hopefully we'll get that out of you.

• 2:51Shaan Puri?

  Yeah, yeah, exactly.

• 2:53Speaker 02

  My kids were, my kids were excited that you called me a shithead. So I appreciate that one.

• 3:01Shaan Puri?

  You're welcome. All right. So here we go. Sam, you put your favorites on the sheet. I put my favorites. What's interesting to me is we have almost no overlap. You only maybe two out of the 10 that you put down there were my favorites. I had completely different ones.

• 3:17Sam Parr?

  I'll tell you why.

• 3:18Shaan Puri?

  I say we take turns where we say, tell us about blah, blah, blah, like the little, the little three set, three word tagline. And he gets to pitch it and let's react and let's try to get through a bunch of these. So we might go on random tangents or drill down, but like, let's in general, try to go, you know, an inch deep on each one of these for now.

• 3:38Sam Parr?

  You want me to go first?

• 3:39Shaan Puri?

  Yeah, you go.

• 3:40Sam Parr?

  So the reason why I highlight, basically everything I highlighted, so CB insights interest me because basically you're not coming up with any data. You're just organizing data that already exists in really easy to understand ways. And then you're selling it at high fees. And I think that's like the greatest business model on earth. And you've listed out a bunch of ideas, including like six or seven that were more of these like data things. So you had one in there called sawdust data and you have examples. You're like, you can look at what the government does, like the government has all this data. You can make that clear and easier to understand for people.

• 4:13Sam Parr?

  Both the sawdust data as well as the government data products. What do you mean by all that?

• 4:19Speaker 02

  Yeah, so sawdust data is people create products and sometimes the residue of that product is actually really interesting data. Right. And so that's the sawdust from the data. And so it's basically taking that exhaust. And so I'll give you a couple of examples. Right. You have, and I don't know if these are businesses already, but you know, OpenTable and Resi have all this reservation data. I wonder if you could take that data exhaust and sell it to real estate firms, right? And they'd be, you know, hey, like reservations are down. This area is not as hot. Maybe this, this retail space is going to be on the market soon because this restaurant looks like a dog, right? That might be one area. You know, I think I met somebody who has dog collars, like a, like a Fitbit for dogs, right?

• 5:04Sam Parr?

  Fie.

• 5:05Speaker 02

  Yeah, Fie, right. And so you could take that and probably sell that to pet insurance underwriters, right? So it's like, it's not your core business. It's this residue that comes off of your business that I think you could do interesting things with. It's another example, like procurement management system. So kind of this like esoteric enterprise-y thing. But if you have all this spend going through this procurement management system at your company, could you go and sell that to hedge funds on like, hey, this company's, you know, average contract value is going down or it's getting a lot more seats sold this year, right? And so can you take, again, not your core business, and I don't think companies are really good at monetizing this on their own. So it's basically building this platform that goes to these companies and builds these data products off of their sawdust. Does that make sense?

• 5:50Sam Parr?

  With the, the business that Sean and I are and were in newsletter business, like people have all these questions, but it's kind of broken down into just a few things, which is just like, figure out what content you can give people that they want to read every single day and then figure out how to acquire users for profit, profitably. And that's basically, that's 80% of the business. What's like the 80/20 thing for these like data businesses? Is there, is there, or, or rather the 80/20 for making messy data, clean data and make it a product that people like?

• 6:23Speaker 02

  The messy data to clean data thing, that's just like, you have to have a pain tolerance. That's all that is, right? And so I think this is why, this is actually, I think, why CBI has done well is like, we've had a bunch of valley companies come in and they want to splash machine learning on it. And like, you just have to get into an Excel spreadsheet and clean the data. Like, that's just it. And if you're not willing to do that nasty work, you're kind of dead. I'd say the businesses that work are, I think, like, my framework is variable SKU, highly opaque, high consideration. And so I'll break that down. So high consideration means, like, somebody's taking risk or putting a lot of money out there, right? It's just like, it's got, there's some skin in the game. Opaque, meaning it's just hard to find, you know?

• 7:04Speaker 02

  And I think if you go into Slack groups and people are like, hey, does anybody know X? That's usually an asset class that's like opaque, right? Does anybody know who a good vendor is for this or a good software provider is for this? And then the last one is variable SKU, which is like, like a car is a high consideration software purchase, but it's not really variable. Like, it's got a set of features, you can compare them on a grid. And so the internet's really good for that. I like businesses where like the variability of the SKU is significant because you can't just put it into a table. You can't, like, an iPhone's an iPhone is an iPhone, but like, we, we launched Yardstick, like, you know, I don't know, radiology software that uses, you know, that AI reads radiology images? Like, those are totally different.

• 7:49Speaker 02

  And so that's like the framework I use. And so when it meets on those three, I think that's an interesting, messy, hard business that's going to be a lot of pain, but like, you could build a moat around that.

• 8:01Sam Parr?

  All right, Sean, you want to do it? Oh, sorry.

• 8:02Shaan Puri?

  You had one of your columns. So, so, so I told you you have 77 rows, so those are the different ideas. But then you had some columns. One of them was frameworks are inflections. And that was your, that was one of your, your things, opaque, variable SKU, high consideration. The other one you had was tiny but growing niches, like, or like inflection, like, it might be time for that to grow. What is that? Is that your other one that you look for in ideas? And we can give an example here of like, uh, here, let me grab one. Like, you did this representation media. So you said, extend the Rebel, Rebel Girls book for other communities. And then your framework was tiny but growing niches. So talk about that idea and explain it with that framework.

• 8:42Speaker 02

  Yeah, so Rebel Girls, if you're a parent of a daughter, you might be familiar with it. So we bought this book when my daughter was, you know, three, four. And it's just like one or two page stories of like famous women in history. So like Amelia Earhart, Marie Curie, Maya Angelou. And it's great, like it's a, it's a really kind of inspiring book, really cool artwork. That book is sold, I think, 5.5 million copies at like $20. It's like 110 million dollars and that's probably dated, right? But I think there's like this idea of like what I, what I call representation media, right? I bet you could extend that to, uh, I don't know, like Hispanic entrepreneurs or like autistic scientists, right?

• 9:23Speaker 02

  Like people want to read about and see examples of success in their communities. And so I think you could extend Rebel Girls across a bunch of different things. And so that's the, I think that niche is growing, right? Like people, like you get these micro communities that actually are pretty large, that would love to read about themselves and receive good representations of themselves.

• 9:47Shaan Puri?

  That's a great idea. Uh, I've had the, I've had a similar idea because, uh, we get gifted some books that are like, uh, I don't know, like Hindu religion book or like, it was like the kids version or something like that. It's like the like, and it's like, oh yeah, if I'm gonna read whatever, you know, Clifford the Big Red Dog, you know, like is there, is there something that, you know, adds a little bit of something from our culture or religion? Like makes it easy for me as a parent to like give them, you know, something I want to give them while still being entertaining and accessible. And there's actually just not much that's out there for that. So, so I definitely, uh, think if you added up all those little, all those little different niches, that's, that could be quite big.

• 10:25Speaker 02

  Yeah, I mean, I think if you kind of un-PC, if you found a story where the protagonist was like a little white kid, like make it a little brown kid, make it a little black kid. You know, like modify the story a bit and like, that's a winner, right? Cause like kids love seeing like, oh, that kid looks like me, that's dope, right? And so like you're off to the races there. I don't think it's that, like nothing's hard, it just takes some work, but yeah.

• 10:50Sam Parr?

  Dude, that's why my, that's why my wife loves Kim Kardashian. She like sees them, she's like, oh, hey, look, they got fat asses too.

• 10:59Sam Parr?

  Sat in a good way, by the way. Sat in a good way.

• 11:03Shaan Puri?

  When I met the comedian Hassan Minhaji, he was like doing his live shows and I had told him, I was like, he asked me something like, oh, what would you do with my business if you were me? And I was like, dude, I would stop this like live touring thing that comedians do. Like this is so painful. You're on the road like, I don't know, 40 weeks out of 52 in a year. I wouldn't want to do that. I was like, you gotta create a Broadway show. I was like, create like the next Hamilton. And then that goes on tour, right? Touring is a great business, but you just don't want to be the guy sitting on the stage. I was like, use your creative and comedic genius to do that. That was my kind of big idea for him. He said, all right, what's the show? And I was like, ah dude, I don't know. Now, now I'm out of my depth.

• 11:44Shaan Puri?

  And then the next, like a week later, I just sent him a voice note and I go, Aladdin, but, but Aladdin's black. And then he's like, what? And that was my whole voice note. And then he goes, um, what are you talking about? I go, remember the Broadway show thing? I go, it's Aladdin, but they don't, it's not like Jasmine can't marry Aladdin because he's like a poor guy. No, no, no. Jasmine can't marry him because he's black. Cause like, you know, this, her family doesn't approve. And then he's like, okay, so it's just he's black instead of poor? And I was like, hey, look, when you say it that way, it doesn't sound that good. But like, I'm telling you, there's something to this idea of he overcomes. They fall in love and the love wins. And he's like, all right, yeah, yeah, I'll add that one to the list.

• 12:28Sam Parr?

  Add that to the list. Yeah, that's what he said. He's like, stick to podcasting, Sean.

• 12:35Shaan Puri?

  Well, yeah, representation media.

• 12:37Sam Parr?

  All right. Can I ask you about one? This is actually really fascinating and actually I think can be a bigger business than, than, I don't know if you think, but bigger business than a lot of people think. A daily executive briefing email.

• 12:50Speaker 02

  Yeah, I don't, I'm not sure how big this one could be. I think I, I don't know if I put it in the sheet. I say you have like a dollar column, which is kind of like my indication of how big it is. I think this is like a great side hustle business, right? So I, when I worked at American Express, every morning our CEO would get like a briefing from his chief of staff, right? Like, you know, here's what Capital One did, here's what Citi did yesterday, here's what Visa did, whatever. And it was like basically that person's job to like scour the internet and like look at financials and product launches and all this stuff. And there was a company that Cision bought called Bulletin Intelligence, which I don't think, I don't know how much they're doing with it, but it was basically that idea. It was gonna be like your morning chief of staff email.

• 13:31Speaker 02

  And yeah, I think this is an awesome business that like somebody smart and industrious can, can build. And you, I think if you go niche, meaning like go financial services, because like if you get Amex, like the CEO of Citigroup like cares about, or Citibank cares about mostly the same company. So you can reuse a lot of it and it's not just the CEO, it's all like their division presidents and their like geography, like, you know, heads and all that stuff. So yeah, I think this is like, and you know, I'm sure with generative AI and stuff, you could like make this really like efficient. But yeah, I think this is like a tens of millions of dollars business.

• 14:08Sam Parr?

  No, I think you're way off. So have you heard of, you guys know Politico, right?

• 14:13Speaker 02

  Yeah.

• 14:14Sam Parr?

  It's like a Politico is like a news website for DC, all politics, but it's not from like a CNN, Fox News, news perspective. It's more so like people who work in politics, they read Politico, whatever. That's not interesting. What's interesting is that they sold recently to Axel Springer for over a billion dollars. And where they got roughly nine figures, so a hundred million plus of recurring revenue, where they had this, they have this service called Politico Pro. Have you guys heard of, not, have you heard of Politico Pro?

• 14:43Speaker 02

  No, I mean, I know that's a premium offer. I don't know what's in it.

• 14:46Sam Parr?

  So basically, I think it's like a thousand a month. I forget the pricing. So someone's gonna like get on me. But they have this, they're pricing, but the, basically, it's for if you're a lawyer, or if you work in DC and you have to know what type of laws are happening at like a real rate, like who, you know, like, hey, the Senate is thinking about changing this, like, because we heard this senator say this in the news, yada, yada, yada. Well, anyway, they have these things called pro briefings and they send at least one a day, but sometimes more than one a day. And it's really fast, short emails, and that's your briefing of what's happening that day with, with like a very, very, very niche thing.

• 15:29Sam Parr?

  So for example, they have a segment just for pharmaceutical companies. So if you're pharmaceutical and you want to know right away what's happening with the new laws, or if you want to dive deeper and read about researchers, or if you just want to have a conversation with an analyst, you spend thousands of dollars a year, tens of thousands, tens of thousands a year. And that's basically what you're getting is this briefing as well as a few other things. They scaled this business to north of 100 million in recurring revenue. And it's pretty fascinating. And there's a few others doing that. And so I think if you could actually pick the right thing, whether that's pharma, legal, I don't know what else there would be.

• 16:04Sam Parr?

  All different types of finance. I think you could actually build a really interesting daily briefing business. And you could even have a user say which companies they want to spy on a little bit more than normal. And I think you could charge tens of thousands of dollars a year for a subscription like that.

• 16:19Speaker 02

  Yeah, you can charge a lot for this. Like these folks, as long as you deliver quality in the morning when they need it, like, yeah, there's, they have sort of massive budgets. And I think Bulletin had Bezos as a customer for a while. So like he was reading the Bulletin Intelligence briefing every morning. So.

• 16:35Sam Parr?

  What's that company called? Bulletin?

• 16:36Speaker 02

  Bulletin Intelligence. Cision bought them many years ago.

• 16:40Sam Parr?

  Dude, the reason why I like. I like talking to you is like you and I are some of the few people that nerd out on there's like all these data businesses out there. So you and I for years have talked about there's like Informa, which is like a $10 billion market cap, basically data and trade show business. Then there's Euromoney, which we've talked about, another publicly traded company. There's Cision, which like is just kind of an older company that no, it just, they, these companies are just huge and they're just not sexy. So they're not talked about with our circle, but they're crazy fascinating to like learn about these companies because their margins can be huge.

• 17:13Speaker 02

  Yeah, it's a, I mean, it's a build once, sell multiple times kind of business, right? So like, once you build that data asset or that info asset, like you can keep selling it. So yeah, they're great businesses. They're unsexy, which is always good because like then you don't get all the smart people kind of trying to come in and, you know, eat your, take your lunch money. So yeah, I like these businesses a lot.

• 17:33Shaan Puri?

  You had one on here also that was the pricing data. So it was like, go extract the pricing data from every SaaS tool and, you know, go to their, go to their website, find the prices, organize all that information for things where it requires a demo quote, like, I don't know, send a, you know, $5 an hour employee through that process, collect the pricing data. Now you have it. Now you can make that visible where they are hiding it on their website. And you basically have a giant, what, like a search engine or a database of, of, okay, if I want to use some email, you know, send software, here's the, here's how the prices compare across them. Is that what the idea would be for that?

• 18:11Speaker 02

  Yeah, I think the idea there is, I think you start with public SaaS pages and you figure out how to crawl them or just, you know, M Turk them or something. And then, yeah, email service provider, what's the pricing? What are the features? I think the real killer there, which is, you know, maybe borderline is like you actually, because a lot of enterprise companies don't put their pricing on their page. So you hire somebody who goes and pretends that they're a customer and gets the pricing. And then that's really, really valuable, right? Because like now if I'm, because pricing is like a dark art in B2B. You're like, Yeah, it sounds good, right? And like, everybody's got opinions and nobody has data. So I think you could actually do something really interesting there, like long term, if you actually called companies and got that pricing.

• 18:54Speaker 02

  Or talk to their customers and you get their pricing, but.

• 18:57Sam Parr?

  That's actually the tagline. It was the tagline on your website, which is, uh, without data, you're just another idiot with an opinion or something like that. I think.

• 19:06Shaan Puri?

  Dude, that's great.

• 19:07Sam Parr?

  It was great, right? I don't know. Do you guys use that anymore?

• 19:10Speaker 02

  We don't use that anymore. I think we, we still use like, in God, we trust all others gotta bring data. Like, so we'll use that in some.

• 19:19Shaan Puri?

  Who, uh, who, who comes up with this stuff? This is you? This is someone on your team who's like the witty copywriter?

• 19:25Speaker 02

  These are just stolen from other people who are.

• 19:27Sam Parr?

  It's like a quote. The idiot one's a quote, I think, right?

• 19:30Speaker 02

  I think both of these are like, you know, somebody like some luminary and, you know, we, we footnote them in small print and give them credit.

• 19:37Sam Parr?

  Do, do, do you think that you guys being kind of silly is a leg up or do people criticize you?

• 19:46Speaker 02

  Yeah, I mean, we get some criticism, but honestly, like B to B is so mind numbingly boring that, like, it's, it's great as a way to stand out. But, you know, I, I tell the team, like, you know, love us or hate us, you should have an opinion on us. And so that's the general theme, right? Cause most of it's like, pretty vanilla and, you know, just kind of like jargony. And so, yeah, it's been, it's been, I'd say a net positive for us, but we've lost some customers over stuff we've said offended them and what.

• 20:14Sam Parr?

  Like what?

• 20:15Speaker 02

  You know, we did a ranking, one of, of VCs once, and we said a specific firm was losing in the ranking and it was just an objective thing. And they were like, we're canceling our subscription immediately. Right? And, uh,

• 20:27Shaan Puri?

  What a loser move of them. It just proved my point. Oh, you don't, you don't want access to data now? You got, you got your feelings hurt and you canceled your own, your own data pipeline?

• 20:38Sam Parr?

  You're like, you're down another peg.

• 20:40Speaker 02

  So we've had, you know, that and some people don't like, you know, I think when Trump hysteria was going, we'd like sometimes put an infographic with him in it and like, we didn't have an opinion, but it was just like, you just, him and Elon Musk, like if you mention them, it's just like lunatics come out, right? And so like, and so it's good for engagement, but it is definitely like a little bit, it can be odd, like you say something and people just like, they've, you know, it's, it's a cult and people go kind of crazy.

• 21:09Sam Parr?

  Like I, you, you, you're a really good writer and, or whoever's writing is really good. And you guys always use things like, um, your headlines are really good, but then there's like just phrases all over, like it's built into your culture. Like in your annual review, we're like, hey, we did pretty good for a company that isn't lighting money on fire like the rest of the VC world or like, just like little phrases like that. It just makes it stand out. And I think that that makes you have a voice and you guys are actually pretty good at that.

• 21:34Speaker 02

  Yeah. And I appreciate that. I mean, I think it's, you know, it's partly for the external market. It's partly for the team, right? Like you're selling B to B software. And so sometimes that can be like, you know, if you're 22 out of school, it's like, hey, that's not super inspiring. And I don't know exactly what that looks like. And then once we can show them, we can have personality. We're in the tech economy, which is interesting. So yeah, it works. You know, we, we screw up a bunch of things, but that's been good for us.

• 21:58Sam Parr?

  If I was going to go out there and do what you said of getting all the data and like hiring people to call and actually get quotes, who would I sell that to?

• 22:07Speaker 02

  On the software pricing?

• 22:09Sam Parr?

  Yeah.

• 22:10Speaker 02

  I think you go to product teams at software companies and say like, you know, or your CR, chief revenue officers and say like, hey, like, you know, do you know how you came up with your pricing? Like, you know, and here's what your peers are pricing at and give them like a snippet and give them a taste and be like, hey, and we have all this other detail behind, right?

• 22:28Sam Parr?

  How much would you charge?

• 22:31Speaker 02

  I mean, I don't think you start anything with like CROs at big companies and like you start at, you know, 20 to $50,000, right? Like it's easier to go low than to start low and go high.

• 22:45Sam Parr?

  We just, um, you just handed someone listening a pretty solid idea, right?

• 22:53Sam Parr?

  I think that-

• 22:53Speaker 02

  I think the thing people do is they underprice. We did this in the beginning. Our first CBN sites, when it started was 395 a month. And what you actually got was a bunch of people who didn't know how to use data who were a pain in the ass, right? And so it was like your worst nightmare. It was people who churned quickly, who paid you little and who were blowing you up on chat all the time for support. And then I remember meeting a management consulting firm and they were like, hey, can you add a couple zeros to the price? Because like one, your price will look like a joke internally. And two, I don't want to wait behind the guy paying 395 a month for service. So like, price is a indicator of quality, is an indicator of other things beyond just like the core value of the product. So that was like eye

• 23:38Speaker 02

  opening to me. Like I was always like, oh, you know, price low and, you know, do all that. And like, you know, now we're, we're orders of magnitude higher than we used when we started.

• 23:47Sam Parr?

  That's awesome. Sean, what do you got?

• 23:49Shaan Puri?

  Uh, let's do some non-data nerd ideas. So, um, I'm gonna pick a different one.

• 23:54Sam Parr?

  Do the college rankings one.

• 23:56Shaan Puri?

  Yeah, yeah. Let's do the college rankings one. What'd you call it? Broke and busted? Broke and busted college rankings. Okay. So what's, uh, what's the, what's the insight here?

• 24:06Speaker 02

  So I think US News and World Report is sort of like the preeminent college rankings. There's been plenty of coverage about how that's a basic con, right? And like universities do all this sort of finagling to try to get higher in that, you know, I look-

• 24:20Sam Parr?

  How's that work?

• 24:21Shaan Puri?

  Yeah, they pay or what is, what's the con?

• 24:23Speaker 02

  I don't think it's that they paid. I think it's that like, you know, you've got these like subjective criteria, like, uh, you know, student to teacher ratio, right? And so like-

• 24:34Speaker 02

  Universities will like massage that data so it looks good, right? And so like, you know, that it's like a limited set of factors. And it's unclear how causal those factors are to actually getting a good education. Right? And so I think you turn that on its head. Well, I think US News and World Report, you know, I think in like 2013, it was doing like 40 million in revenue. And now it has like, again, LinkedIn, 500 some odd employees. So I gotta believe it's doing 100 million plus in revenue. And I'm assuming college rankings is the number one thing. So I think the thing you do here is you actually go to graduates of the school and just ask them for their W2s. And you're like, how much are you making? Right? You just took on a bunch of debt.

• 25:19Speaker 02

  Like, does this place actually get you a job that gets you paid? Or are you like, you know, a server in a restaurant and you got like your $200,000 in debt? And so I think you reach out to alumni, go get their W2s and basically put a ranking together of, here's how much I paid and here's how much I make when I get out. And if I'm a parent, I'll care about that. I'll be like, I don't really want to send my kid to a school where their prospects for employment are garbage. And so I think it's like, takes all of the, it's a very singular characteristic. So it doesn't take into consideration social life and all that other stuff. But it's like, I think it's pretty important, right? Especially you got all these people like leaving school with, you know, tons of debt.

• 26:04Speaker 02

  So that's the way I would do it. And you'd have to probably pay those students or ex-students a little bit, but I think it's pretty cheap. And you'd probably go like, do like New York colleges to start, like start niche. Like, don't try to be everywhere right out of the gate, like, you know, and then build out from like concentric circles from there.

• 26:23Sam Parr?

  Do you under, like, I don't know about you, Sean, but like, what is, we're talking about some nerdy stuff here, but I, I find it like crazy fascinating because it's very clear to see the opportunity here. But what's shocking.

• 26:37Shaan Puri?

  It's like when you say, oh, I'm gonna go get the data. Someone like me, I would be like, um, well, I gotta go like Google it and like find a database. And you're like, no, I'll just like hire like, I'll use Mechanical Turk you said earlier, or I'll just hire someone, or I'll just like make a ton of phone calls. And just doing that stuff, I can get interesting insights. Is that really how a lot of this works?

• 26:58Speaker 02

  And, and the beauty of that business is 99 people out of 100 won't do that work. So like, once you built the data asset, like, most people will think it's cool and they just won't do it. Like, the other one that I like, which is, I don't know if I put on the page, is, you know, I was trying to get a pool bill at my mom's house. And like, pool pricing is just like, it's opaque, highly variable, and high consideration. And like, I have no idea what to pay for a pool. Like, some kid should just go door to door at every person's house that has a pool, and just be like, how much did you pay for your pool? And like, get the specs, and then go find out, and then find out what do they pay per month for cleaning, and whatever, I don't know what a pool requires. And like, literally build the database of like...

• 27:44Shaan Puri?

  That's a great idea.

• 27:45Speaker 02

  Pools in North Jersey, here's what it costs.

• 27:47Shaan Puri?

  Yeah, cuz that's what people Google too, right? Like, uh, you know, pool, pool cost, and then my city, right? That's a, that's a, a term that people will look for. Or even if they're just looking at pool cost, but you have their, their city in the headline, they're gonna click that one over the next one.

• 28:04Speaker 02

  And then you go back to the pool people, and you're like, hey, listen, I got this pricing. Next time you wanna bid, you probably need to know what your competitors are bidding. So like, you can sell the data to both sides, right? Like, but it's definitely like, it's a perfect side hustle. Like, you know, it'd be like a thing that, you know, I hope my kids will like, just go do this, like, door to door, and go get data.

• 28:23Shaan Puri?

  I love how even though I tried to pick a non-nerdy data one, it actually underneath the hood was a nerdy data one. You're like the, you're a data hammer, and the whole world is just little nails that you're just trying to hammer with your, you know, like...

• 28:35Speaker 02

  But dude, this is the best business there is.

• 28:37Shaan Puri?

  Hoovering in the data like a vacuum. You're the data Dyson that's just taking in this data from everywhere you can.

• 28:43Speaker 02

  Yeah, I mean, I love that business. And I actually think, like, not to get off on a digression, but I think this whole chat GPT thing is actually gonna make private data like that much more valuable. Because like, you know, before it was like, oh, I'll give you my data, and you'll just link to me, and I'll get Google, but like... Like that's all going away, I think. And so like having access to private data is going to be really valuable. So I'm, yeah, I'm, I'm extra bullish.

• 29:07Shaan Puri?

  And do you look at like, for example, the, um, the pool one is a good one because it's probably not, the pricing's not probably changing all the time. Whereas maybe the college one, you got to redo the, the data collection every year in order for it to be accurate. Like, for example, in the content game or the media game, which me and Sam think a lot more about is like, if anybody could do really well with evergreen content, that's so much better than somebody's doing what we were doing daily, daily emails where it's disposable and you got to recreate the product the next morning. Otherwise there is no product. And so do you think about that when it comes to data? Like either the ease of collection or the longevity of the collection, like really makes the idea more valuable versus less?

• 29:47Speaker 02

  Yeah. I mean, I think you probably want data, maybe counterintuitively, that requires a lot of refresh, right? Because like, that's what keeps people subscribing, right? If I can get the data once and it's good for three years, it's like, all right, I'll get it, I'll churn, I'll come back to you in three years when it changes. When it's actually a little bit more, when there's a little more volatility to it, it's like, hey, I need to know what's going on because like my business might suffer or what have you. In the case of the pool one, the pool owner's only going to buy it once, right? But you know that, but that's okay, right? Because like you could sell those leads to pool people, you could sell that to pool cleaners, like you could do all sorts of interesting things with it, right? And so like, it doesn't have to be you're selling the data, you could build advertising and lead gen and other businesses

• 30:32Speaker 02

  off of it for sure.

• 30:34Shaan Puri?

  Okay, I got one that there's no way this can be a data one. A McCormick's spice competitor.

• 30:40Speaker 02

  Yeah, I don't, this one I don't have a lot. This is, you know, I think I have a column called Zone of Excellence and this one's out of my Zone of Excellence. McCormick's is like this multi-billion dollar spice company.

• 30:52Shaan Puri?

  Oh, okay.

• 30:53Speaker 02

  If you open up your spice, whatever cabinet, like there's probably like these spices, like a red top, right? Like that's all McCormick's, right?

• 31:03Shaan Puri?

  Twenty-four billion dollar company. Wow.

• 31:06Sam Parr?

  And sales?

• 31:06Speaker 02

  And sales? Market cat.

• 31:09Shaan Puri?

  Wow. Public company.

• 31:10Speaker 02

  Yeah. So it's just like, like, you know, why isn't there like the? I don't know, the apple of black pepper. Like, I don't really know how to do this shit, right? But like, like, what's the, what's like?

• 31:21Shaan Puri?

  Well, I think for this one, you're, you're right. You can go either higher end or, you know, just the more fun looking, but just branding, packaging, design and influencer, most importantly. So like, who is the, you know, the whatever, the Martha Stewart of YouTube that you can partner with, that can be the face of a brand like this, right? Like, who, who has that kind of brand and gravitas that can get into a Target or, or the store shelves at supermarkets to compete with something like this? And I think that's, that's the way I would go if I was gonna do this.

• 31:52Speaker 02

  Yeah, a hundred percent. I think the thing that's interesting about this, and I don't know anything about McCormick's, is like the bundling, like, you know, if you buy salt, you need pepper. If you need pepper, you might be needing oregano and you might need whatever flakes that they sell out there, right? And so, yeah, you could just keep stamping this out across like every spice category. But yeah, this is not one, this is outside of my zone of excellence. So I do in this one, but I like it.

• 32:16Sam Parr?

  They own everything. I didn't realize this. Have you guys ever, have you ever seen this protein bar at gas stations called Tiger's Milk?

• 32:26Shaan Puri?

  No.

• 32:27Sam Parr?

  Yes, they own this bar. It's the worst looking, like, it's basically a label. It looks like it was like drawn by Kenny Powers or like, it looks like if Power Rangers ate a protein bar, this is what they would eat. And it's just like, it's called Tiger Milk and it has a, it has a face of a tiger. And it's like their protein bar. They own that. They own a bunch of different stuff. This is awesome. I, yeah, I, I totally should have, um, they own Frank's Red Hot. That's my favorite. So yeah, what a, what a company. I didn't, I didn't realize that these guys were what they are. That's wild, man. They were created in the 1800s.

• 32:58Speaker 02

  Yeah. I mean, yeah, they're just, you know, brand recognition and everybody knows. I mean, if you go to the spice aisle, it's all that. Like, they just own the whole thing, right? So you gotta come up with a distribution hack here, but that's, you know, Sean, that's probably more your world than, than mine. But yeah, for sure.

• 33:14Sam Parr?

  Can I ask you a quick question, different from my ideas, but about money? So, I'm not gonna, you can say it if you want. I'm gonna assume that you own a, a chunk that you are on paper worth mid to high, low to, low to high hundreds of millions of dollars. Have you taken any money out of your company? Or has your only income for the last, I think you said 10 years you've been running this, just been like a, a normal mild salary?

• 33:42Speaker 02

  Yeah, so I didn't, I didn't pay myself for the first four years. So when we raised money then, I basically took my back salary. And then since then, I've not, not taken any money off the table. So yeah, I'm foolishly long or brilliantly long CBI insights. We'll, we'll see, we'll see how things play out. But yeah, I'm all in.

• 34:03Sam Parr?

  Were you wealthy before you started the company? Like, did you have banker wealth?

• 34:07Speaker 02

  No, no, no, I just, you know, I got married right before I started the company. I told my wife when we were dating that I don't want to work at a big company anymore. And we're gonna like, there's gonna, there's gonna be some lean times. And so she was down. And so I just saved religiously, like, we didn't go on vacations with friends and just like, you know, and it was always like awkward because they're like, oh, do you want to go somewhere? And I'm like, oh, I'm super busy. But I, because I just was like, no, I don't have money. So yeah, I just saved like.

• 34:35Shaan Puri?

  I'm busy, I'm busy being poor right now. So I can't go. Sorry. I'll take the calendar when I'm not poor, I'll start going.

• 34:42Speaker 02

  I just saved a ton of money. And then, yeah, for the first, like, two years of CBI, I just paid for a small team out of my pocket. And then we started generating revenue. But.

• 34:51Shaan Puri?

  Wait, why haven't you taken a few million bucks just off the table, just to make your life a little bit better? Wouldn't it, it would have no material output?

• 34:59Sam Parr?

  Yes. Yeah. And by the way, just so we have numbers, you basically have only made, I imagine, middle hundreds of thousands of dollars a year in salary. Is that right?

• 35:10Speaker 02

  Yeah, I mean, I'm, I now get paid like a fair CEO salary, right? So I'm not like, it's not like one of these big public company guys. But like, um, yeah, I think, I just, we've been really focused on the business. And like, I just think it's a giant opportunity. And candidly, a part of the reason we didn't raise in the beginning was because I don't think I'm good at pitching. And I also worked in venture and I didn't like wanna work for my investor. Right? Like that was always like a very guiding principle of mine. Like, you know, and I look at S1s of companies that go public and I'm like, you know, the founder owns like 5%. I'm like, that's just like, that's a backwards calculation.

• 35:50Speaker 02

  Yeah, probably, you know, should have, could have taken money off over the course of time. Right now would not be a good time to do that, given where the markets are. So I figure we'll just keep growing out of this current sort of malaise that we're in. And then, you know, opportunities sort of tend to present themselves. Even our fundraise was like a customer sent us a term sheet over email.

• 36:13Speaker 02

  I can't find this client info.

• 36:15Speaker 03

  Have you heard of HubSpot? HubSpot is a CRM platform, so it shares its data across every application. Every team can stay aligned. No out of sync spreadsheets or dueling databases. HubSpot, grow better.

• 36:28Shaan Puri?

  Tell the story of the, of, tell the story of the guy who offered you $100 million via DM.

• 36:36Shaan Puri?

  How did that go?

• 36:38Speaker 02

  You know, I get some interesting DMs on Twitter. And so somebody offered 100 million. I, you know, I think this guy was broke as a joke, but it was still funny. I said, uh, you know, not interested, not looking to sell. And I think then the email chain kind of devolved from there where he was like, you know, I'm gonna build a competitor and put you out of business. And, uh, yeah, it was good.

• 36:55Shaan Puri?

  What's his name?

• 36:57Speaker 02

  I don't recall. I don't recall. It was like some.

• 37:00Shaan Puri?

  You blurted out of the thing.

• 37:01Speaker 02

  I think I blurted it out. Yeah.

• 37:02Shaan Puri?

  So, so he sends this DM, you posted the DM screenshots. It starts like, hey, here's who I am, really interested, uh, you know, in partnering or in acquisition. Uh, let's talk. Please call me. And then you were like, thanks. Yeah. Not even thanks. THX, right? Just like the, the short thanks. Not for sale. Nice. And he goes, and then he goes, how about a partnership? And then he just keeps going and he's like, here's, how about this? I'll give you 100 million dollars for the business. You are now, if you're producing your responsibilities, is you have to present this to your board. You know, um, you know that. Let's go. And then you go, you go, okay, interesting strategy. Uh, best of luck. And he goes, so do you accept the offer?

• 37:47Shaan Puri?

  And then he then he devolves into, all right, then I'm going to create a competitor. Have you seen this competitor launch? Is he is he eating your lunch yet or what? Surprise, surprise.

• 37:57Speaker 02

  We're, yeah, we're tracking religiously to see when this launches, but yeah, nothing, nothing yet.

• 38:02Shaan Puri?

  You should DM him back, be like, hey, how's it going, man? Curious about the launch details.

• 38:09Speaker 02

  Yeah, yeah, that was that was atypical. I think most of my my DMs are are nice. But yeah, that one was a little little out there.

• 38:16Sam Parr?

  What would you do with the money now if you sold?

• 38:19Speaker 02

  Um, I mean,

• 38:23Speaker 02

  I think the thing I'd do is I want to build a school of entrepreneur. Like, I think education is broken. And so I think like kids should just learn how to build businesses and not go to college. And so that's what I do. And I think there's a bunch of colleges that are struggling that I could go buy like a a plot and build like a dope campus for for a bunch of like high achieving kids and we'll just like go figure.

• 38:47Sam Parr?

  How much would that take?

• 38:48Speaker 02

  I have no idea. I have no idea. This is

• 38:50Sam Parr?

  But you'll have it.

• 38:51Speaker 02

  This is my distant dream. But yeah, I think like I just read a great book called The Case Against Education. That kind of breaks this down and it's really interesting. And yeah, I think it's like, I think there's an interesting thing to be done there. And and then, yeah, I'd love to like do some stuff in India along that lines. But yeah, this will be my last true startup.

• 39:13Shaan Puri?

  I've I've looked into a bunch of I have like alerts set for colleges for sale because I had a similar dream and idea at one point in time. I have I now don't want to do this, but it's amazing. You can buy full college campuses for sometimes single digit millions, sometimes just like 10 to 15 million dollars. It's crazy like

• 39:36Sam Parr?

  Which ones?

• 39:37Shaan Puri?

  It has to be less than the replacement cost of just the buildings and the land on the in this these places. So so I am not sure why. And these are accredited universities that a lot of them are are they start as just like they do one like things like just cosmetology or just whatever. There's like, there's like those, those are really cheap. Those are like, you know, 1.5 million, you can have a, you know, university or college that does that. All the way up to here's a campus in New York for this like small liberal arts college that's not doing so well. And like, you know, for 15 million dollars, you could take the whole thing. And I'm like,

• 40:11Sam Parr?

  Is there like a marketplace for that? Is there a Zillow for bankrupt universities?

• 40:15Shaan Puri?

  Uh, there should be, but there's uh, this one website called Deal Stream that ha- happens to have most of them that I see. Um, so Deal Stream will send me emails of one like, you know, multi-campus beauty school. Here you go. Um, you know, that just got this email two days ago.

• 40:31Speaker 02

  What made you sour on this idea, Sean?

• 40:34Shaan Puri?

  Uh, just like the lifestyle component. I was like, would I like, would I want to actually, if I was going to do this, it was like, okay, I'm going to basically go be the dean of this school and I'm going to like, basically this will be my baby and I will make this great. And I was like, oh, it's a lot easier to just like, have a business I could just do on my phone and my laptop, you know, four hours a day and not worry about this and just hang out with my kids and, and, you know, have fun. And so I was like, okay, yeah, there's an all-in version of entrepreneurship that I'm no longer like, super interested in because that would require, um, you know, same thing. Like, I'd rather do this podcast than go speak at events. I think in the last three years, I got invited to speak at maybe 150 events and I've said yes to two of them, right? Like, you know, so it's like, you could

• 41:19Shaan Puri?

  make good money and grow your audience doing this, but nah, seems like a lot of work, you know? I think I'll try to just win the way I want.

• 41:29Sam Parr?

  Sean, have you ever, um, have you read the blog post that Anand made years ago about, I think your father or someone in your family got sick and they couldn't run their factory in India anymore and you had to go, did you have to run the factory?

• 41:42Shaan Puri?

  I have it right now. His dad-

• 41:44Speaker 02

  Yeah, my father passed away in April 2017 and so he had a chemical business in India and uh, yeah, you know, like he built it over many years and, and like, I was like, all right, I can't just let it go to zero. So I ran it while I was running CBI for about 18 months.

• 41:59Shaan Puri?

  The, the title of the blog post is how to manage and sell a company in an industry and a company and a country you don't know. And uh, it's kind of great. It's like a full, like, full-length, sort of like, here's the whole thing. Um, do you want to tell like the short version of the story and then people can go read the blog?

• 42:17Speaker 02

  Yeah, I mean, so he died on April 17th, 2017. And as we're going to cremate him, we're Hindu. And this worker from the factory comes up to me in Hindi. My Hindi is pretty weak, but I understand it. And the worker was basically like, in, you know, what's going to happen to us? Right? And I was like, you know, I'm like a mess, but I was like, all right, I guess like there is this thing. And my mom and him basically built this business over 20 years, you know, kind of like a small chemical company, like nothing

• 42:46Shaan Puri?

  What's that mean?

• 42:46Speaker 02

  gargantuan in terms of size.

• 42:49Shaan Puri?

  No, or a chemical? What's a chemical?

• 42:51Speaker 02

  Oh, it was like a, it was a, it was, it's in a sector called fine chemicals. So it was a raw material that goes into perfumes and like flavors and fragrances.

• 43:01Shaan Puri?

  Okay.

• 43:02Speaker 02

  And so he built it, one of three manufacturers in the world that could make this product is a really finicky product. And like, I'm like, all right, I guess I gotta run this. And like, my dad was like a mad scientist, like off the chart smart. And I'm like, I'm not that, right? And so, uh, so I'm like, okay, what do I do here? Like, cause I don't, if something goes wrong in the factory, I can't help. So the only thing I can do is probably try to bring in more business. So I just went online and like cold called every large chemical company that's in this space. And I was like, hey, we make this product. If you ever need it, like come, you know, come talk to us. So we had like our best couple of quarters ever when I was running it and

• 43:42Shaan Puri?

  Cause you were doing outbound and he wasn't doing any, or he just wasn't doing it well?

• 43:46Speaker 02

  My dad was just like, he was a, he was like a product guy. So he's like, the best product will win, right?

• 43:52Shaan Puri?

  And like, Put this, put this picture up on the YouTube channel of the blog post where it's, it's the side of the building. It looks like, and it just says on one side, good quality. And then there's a giant equal sign and then it just says, good business. That's like, it looks like as, is that the side of the building as you approached to walk in? It's like, hey, reminder.

• 44:12Speaker 02

  And I was entering the factory. Yeah.

• 44:13Shaan Puri?

  Good quality equals good business.

• 44:17Sam Parr?

  And like Times New Roman font. Oh, my gosh, this is awesome.

• 44:22Speaker 02

  Yeah, I was just like, I can try to go sell because I can't help on the technical side. The team he had assembled was awesome. So they kept the factory running. You know, got had good sales. People kept reaching out to buy it. You know, a lot of them like, you know, when somebody, once a proprietor dies, like a lot of bottom feeders show up. So I was just like, trying to make sure that these weren't those people because I wanted to make sure the team landed on their feet. And then, yeah, just navigated through it. Met a banker was representing this buyer. They were above board people. And yeah, after 18 months for a while, because I'm like insanely ambitious. I was like, oh, I'll have like CBI as the data arm and I'll have like this industrial arm and we'll build that. And then like, you know,

• 45:03Sam Parr?

  It'd be a fucking tycoon.

• 45:05Speaker 02

  Yeah, well, I mean, for, you know, and then I was like telling my wife, I was like, yo, we gotta have more kids. Because like, we want to build, you gotta like, you gotta have a lot of kids to like, take this, take all these, these arms of this industrial conglomerate up. And she's like, you're insane. And then, uh, and then, yeah, like 10 weeks here or six weeks here, 10 days in India. Like, I mean, yeah, like that was brutal. So then I was just like, all right, I gotta sell this. And then was fortunate to sell it and the team's still all there. And yeah, everything worked out. So.

• 45:33Sam Parr?

  What did you sell it for?

• 45:35Speaker 02

  I can't disclose.

• 45:36Sam Parr?

  A good, I mean, like a good amount?

• 45:39Speaker 02

  Yeah, it was, it was, you know, I wasn't optimizing for the dollars. I was optimizing for a clean deal to a person who would not fire everybody that my dad built the business with. So, you know, so I'm sure I could have gone to somebody else who'd have like torn it down and, you know, done other things with it, but I felt really good about these guys. So, yeah, I think it like it achieved non-financial objectives that I think were more important to my mom and to me than maybe the financial objectives.

• 46:06Sam Parr?

  This is a really, really good blog post that you have, and it kind of got lost over the years. You guys got to share this again more.

• 46:13Speaker 02

  Yeah, yeah, I mean, it was a, yeah, it was, you know, the team at CBI, I gotta give them credit. Like, I mean, I was kind of an absentee CEO for a little bit and they like kept trains running on time. So, yeah, it was, it was a, it was a good, a good thing to accomplish. I was glad, glad to get it.

• 46:26Shaan Puri?

  You had, you had some like takeaways on the M and A process. I'm, I'll just read the headlines, but you could decide which one of these you think you have a strong point of view on or strong message to deliver here. So you said, should I have hired an investment bank? And you're like, I didn't have one. I represented myself. Maybe I should have. You said, don't let lawyers run the process. So lawyers are often trying to mitigate risk, but it's easy to just like have everybody get entrenched in like, you know, risk management and not actually have the deal go through.

• 46:56Shaan Puri?

  Don't sweat the small stuff. Quote, "The industry standard" is a phrase to watch out for. So give me your thoughts on one of these.

• 47:03Speaker 02

  The industry standard one, I think is like the one that like I hate because like, people only use that when they can't justify the term. They just say like, oh, no, no, but that's just industry standard.

• 47:15Shaan Puri?

  How we do things. We always do things that way.

• 47:18Speaker 02

  There's no such thing as industry standard, right? Like if it's, it's, if it's good for you, then it's what you should aim for. And that, you know, it's somewhat, somewhat counter to the sweat the small stuff thing. So you don't want to negotiate on every little thing. But when I hear it's industry standard, like my ears always perk up because it's like, somebody's like trying to get one over on me on this, right? Or they're just trying to like make it, sweep this under the rug. So I think that's an important one. You know, sweat the small stuff. I think like, put some stuff in that you want to negotiate on that you don't care about, that you're just willing to give on, right? But like, you know, just don't make the, you know, don't make the negotiations super painful in all regards. On bankers, like I think for this deal, it didn't make sense to use a banker.

• 48:00Speaker 02

  And I have, I mean, with CBI, I have a bunch of data on like what comps are and all that stuff. So I had, it was good enough and it wasn't a big enough deal that I wanted to like cut in somebody for, you know, five, seven percent. You know, if CBI was doing a deal now, like we'd absolutely have a banker because I, I've definitely seen like the value of what a great banker offers. But yeah, I mean, I think the the industry standard stuff is probably the thing like anytime you hear that I think an entrepreneur should like just wonder like, okay, why are they just pushing for industry standard in this particular area? Because it usually it's always industry standard to the benefit of the person across the table. It's never industry standard and good for you. And so that's one I would definitely push on.

• 48:44Sam Parr?

  Can we um, one thing happened over the weekend, Sean, that you and I had talked about, and I actually think it's a good time to talk about it now, because I have a feeling that Anand is going to know a little bit about it. Do you remember, uh, probably two months ago, we talked about this guy named Gotam Adani, I think his name is, you know what I'm talking about? You were like, I mean, you're not to blame. We were just using the news and you were like, this guy's amazing. Look at what he's doing. He kind of looks like an Indian Mario guy. And he's like, doing all this cool stuff where he's like, doesn't really care about looking cool. And he gives his money away, yada, yada, yada. And now he's like, the third or first richest man in the world.

• 49:22Shaan Puri?

  The news was, I think he had gotten to second or third richest man in the world. And I didn't think most people knew his name. I says, hey, there's this guy Adani, here's what he does. And I think we even said it. I don't remember really saying this, but a lot of people DM being like, you guys called it because news came out that there's like some fraud going on or whatever with their company. And I guess we had said something that was like, you know, either this is just amazing, or, you know, you never know because of whatever. I we have to go back and listen. I'm not sure what the what the clip was. But a lot of people, you guys called that, which

• 49:54Sam Parr?

  Yeah, people were saying that too. And I'm like, I said, thanks, but I don't actually remember.

• 49:57Shaan Puri?

  I don't remember calling that. I do remember when I was reading about it was a lot of people were like, hey, this is kind of a shell game. Like, he's basically raising money. He's raising money in one company using the like, basically borrowing against another company that he owns and That company is borrowed against another company that he owns and he had like so many entities that were each sort of like the justification for the next in terms of either the valuation or borrowing money or whatever it was. I don't, I mean, this is a couple of months ago. I don't even remember what the details were, but I think we just said that as a footnote. It's not like we were calling him out on anything. I think people are giving us a little more credit than we deserved on that one. So, sorry to interrupt you, Sam.

• 50:34Sam Parr?

  Yeah, so that's the back, that's the background. So I think on Friday Hindenburg Research, I think they're a short seller. So they, they short companies, but they produce scathing reports and they've done this a dozen times. I can't, I'm sure, Anand, you probably know some of their examples, but they're just like known for these really good reports where they'll write and say, this company we think is total bullshit. Here's why. And then it tanks. And obviously they aren't financially incentivized to, for it to tank. But as far as I'm concerned, I think some of the research is actually kind of spot on sometimes and they have like a good track record. But Anand, have you followed this?

• 51:10Speaker 02

  I followed it a little bit. I mean, I like Hindenburgs. I think like there's like, we live in like the age of grifters. And so like you need people, and I don't know if Adani is, but I think like you need people like Hindenburg who like, you know, or Coffeezilla or like Wendover Productions or any of these folks that are out there even on YouTube are trying to hold and at least shine a light on some of the griftiness that's out there. And so I, you know, I like what they do in, at a high level. I don't know if their case with Adani is like a good one or a bad one, but yeah.

• 51:38Sam Parr?

  Yeah. Well, basically they, they said like the entire company, like there's a bunch of weird things going on with it. Of all the, like he, they list all these companies and each person that runs one of the companies is one of his like relatives or former executives. So it's all like, kind of like, uh, uh, it's kind of like his cronies are kind of like running everything. And yeah, he's like loaning money from other companies that he owns and he's making the valuations of each of those companies really high. And so it turns out it's basically like a little FTX-esque where of just like similar or entities that he owns loaning money to other entities with the collateral being a company that he values himself, among other things.

• 52:24Sam Parr?

  And so anyway, I thought you guys would have like an interesting take on this because, I don't know, you had, you had spent a little time in India, you're in the finance world. So I wasn't sure if you, if you had an opinion there.

• 52:33Speaker 02

  Yeah. No, I don't have an opinion on that. I will say like, when you see like org structures that are really convoluted, like. You know, FTX or Adani or Enron before that, like people always like in the moment are just like, oh, these guys are geniuses. They figured out how to move stuff and do X, Y, and Z. And then when you look back, it's always like, no, it was just like a giant shell game. You know, Sean said like that, that's an interesting lens, I think, to look at companies through. And it's like, the innovation isn't the product. The innovation is like cap structure or some weird thing. It's like, okay, that's a weird, that's a kind of a weird business to build, right? Where like, that's what you're innovating on. Uh, it's like companies that innovate in HR, right? Like, I'm always like, you know, they're doing all these weird things. It's like, don't you have to build a product?

• 53:18Speaker 02

  Like, why are you doing like 3.5 days of work and like, you know, all this weird shit? It's just like, why don't you just work and like, build a product? So.

• 53:25Shaan Puri?

  Have you been able to capture, uh, or like catch any scams? Just or like make any right predictions based off the data that you guys have?

• 53:34Speaker 02

  Yeah, I mean, we don't, we don't publish that stuff. We usually send it to media, right? Cause we're not like a media outlet, but we'll find stuff where we're like, you know, this company raised at, I'm not going to name. But there was a company recently that raised like at a $4 billion valuation. And then when you looked at like the founders and you looked at like the number of employees and everything, it was like, something's off here. Right? And so, you know, and so like, we would send it to somebody and say like, hey, like this looks odd. Like you should go do what journalists do and dig into it. So we'll find stuff that's a little odd at times. And then, you know, I think the more interesting thing sometimes is like, you'll dig into filings of companies after they've been acquired by a public company.

• 54:15Speaker 02

  And you see, it's not, this isn't like a scam or anything, but you see like, you know, hot company that says they got acquired. And then you actually see how much the public company paid for them. And it's like, you know, one eighth of what they raised, right? And so like, you just sort of get, it shines a light on like, what was a real success versus what isn't. I think that's probably what we tend to see more, you know, people who are, want to do fraud or like, if they're good, they're hard to catch, period. Right? Like, it's just not something that, and it's not where we spend our time.

• 54:46Shaan Puri?

  Also, some of these things, like the same exact signal that later you look at and you say, oh, man, we should have known something was off. Like you said, at the beginning, it's a sign of, of the genius of the, of what's going on. Like, uh, I know with FTX, um, there was a bunch of things that now people are like, wow. This is, you know, those should have been red flags, but at the same time, those are the things that in stories they were saying were like kind of the remarkable things about about them like, you know, for example, the, you know, like, oh, the, the, you know, they, they all sleep in the same house and on beanbags and whatever. And now it's like, oh, they had this weird, like inappropriate, you know, like, sort of like group dating thing going

• 55:29Shaan Puri?

  on. But it's like, ah, before that, it was like, these are just 20 something year olds that, you know, are all like, you know, living in this hacker house that are making it happen. It's like, no, if on one hand, it's one thing. And then, then like, you know, after it's exposed, it becomes labeled as another. And I've seen this with, I've seen this many times where it's like, oh, you know, same thing. Sam Bankman Fried is this sort of like this, this, you know, this quirky genius. And then he turns out to be this sort of like, you know, this drugged up liar. It's like the same thing he was doing before where he's, you know, taking whatever, you know, Adderall or whatever the hell he's taking in order to, you know, stay up and trade. It was like, yeah, these guys are fueled by, you know, you know, Red Bull and whatever. And they're just working, you know, they're

• 56:12Shaan Puri?

  geniuses that are outsmarting everybody in the market to like, they're gamblers who were reckless and, you know, were not making good decisions because of, you know, their lifestyle and what they were choosing to do. And I've seen this, this happen before. I remember with Tesla, there was a point in time where I think Tesla had had like 10 or 15 different CFOs. And my friend had told me this, because I was like, you know, I'm reading a lot of stuff online about how like, there's might just be like some, you know, there's a lot of smoke. I don't know if there's a fire, but there's a lot of smoke about Tesla not being in good financial shape. What do you guys, you know, what do you think about this? Am I overreacting to these like conspiracy theorists on Reddit and Twitter? And he's like, well, he's like, I noticed something interesting. He goes, I always

• 56:56Shaan Puri?

  have this phrase, follow the CFOs. Like the CFOs know the health of the business. And what you never want to see was what was happening with Tesla, which was like, a rotating door of CFOs that would come in for three to six months and then leave. And secondly, like the new CFO, it's like, the shy 24 year old or 26 year old that's, you know, now Tesla's CFO. Wow. He's amazing. The same thing happened at FTX. I remember when we, we did, we were, they were sponsoring us for something. And the guy who was paying us, Was their head of strategy and you know, I didn't go on the call, but I asked Ben later, I was like, so was he like, you know, super sharp or what was that guy's story? He goes, yeah, he's 24, he's 23 years old or 24 years old.

• 57:39Shaan Puri?

  And he started as whatever. And now he's promoted. He's like the, he's the head of strategy for all of FTX. And again, it was like, wow, that's crazy. I guess they're just a real meritocracy around there and they just, land of equal opportunity and this guy just proved his worth. Or it's like, no, this is his college buddy. He's not going to ask too many questions and he can just trust him to, to do whatever and say whatever, right? Like these things from the outside. I remember reading articles about this wonder kid. And, uh, and then later it's like a bad thing.

• 58:05Sam Parr?

  And you were right about the CFO thing with Tesla at that time, weren't, weren't they on the brink?

• 58:10Shaan Puri?

  Well, people don't talk about that much now, but it did seem like they were on the brink or, you know, just, you know, narrowly survived either, either properly or improperly. I'm not sure, but like later, I remember one, one, interview Elon finally admitted it. He, he was like, we were six weeks away from like, you know, the show being over for Tesla with, when they were having the model three production ramp. And, uh, and he had said something in a separate interview that alarmed me as well, which was about, um, there was like some, what's that famous green, clean energy thing that Obama funded like?

• 58:44Sam Parr?

  Like the Green New Deal or something?

• 58:46Shaan Puri?

  No, it was like $600 million to Soy Vera, Soy Lent, Soy whatever. I don't know. Some soy legend. I don't know what it was. Some company that, uh, got a bunch of money and it failed. And like up until the day they declared bankruptcy, it was like, we're, we're good. I don't know what you guys are talking about. And Solyndra, that's exactly right. And they asked Elon about that, like, you know, does clean energy get a bad rap because of the, you know, the problems with Solyndra and others? People say it's hard to make new tech work and all this stuff. And he said something in a, in a separate interview where he was like, What are they supposed to say? As soon as they, if they ever admitted any weakness, the stock would tank and it would guarantee their demise. Like, they have to say, "It's all good,

• 59:30Shaan Puri?

  you guys are nuts." Whether they are or aren't, because the other one is, is it, it will tank their stock and they will die for sure. It'll accelerate their death. So then I was like, "Well, you can't believe anything this guy says about how Tesla's doing." If that's his mentality when they're, you know, "I'm reading these things about how they might be on the brink. He's saying they're all fine." But he even says that that's the CEO's job in this situation. So now, you know, what to do? And that's a long story short about why I sold my Tesla stock too early.

• 59:57Speaker 02

  I, I do think like there's, the signal that I look for, it's not in the data, is like the narrative when it's like a crazy founder narrative. Like, uh, like they were in Southeast Asia, living in a monastery, and they talk about like their clothing choices. Like, that's always a weird one, right? When it's like, "We're not gonna talk about the business. We're gonna talk about, like, they wear some, like, moleskin t-shirt made from like, you know..."

• 1:00:19Sam Parr?

  Yeah, but it, it worked with Zuck.

• 1:00:22Speaker 02

  Yeah, but he wasn't, like, he built the product to start. He wasn't known for his, like, weird...

• 1:00:26Shaan Puri?

  And I think it's the key thing when you can't see the product or the, or the financials, right? Like, like for a lot of these things where it's like, is the product legit? And is, are the financials, like, visible, right? But, but even then, you can't, like, you know, FTX was a, like, a real product that, that people used, and the financials made sense at the time that, like, they were obviously gonna, they're making money on every trade, right? People doing a lot of crypto trading. How can they not make money? Um, you know, it seemed like it would work in both cases. Another example on the FTX side, they had 25 engineers, and I remember reading stories about how, he was just like, "Yeah, we create, like, we're not like these Silicon Valley companies with all this bloat. Coinbase has, like, you know, thousands of

• 1:01:09Shaan Puri?

  employees. We have a whole engineering team of 25, and we do more volume than them, because we hire 10x engineers, and we, we go for extreme operational leverage." And later, it was like, "Of course these guys had, like, terrible security practices and all the stuff." Like, they didn't even have, they, they refused to even invest in engineering, right? It's like, the same story, the two sides of the same story, once you, once you know the result.

• 1:01:32Speaker 02

  Yeah, 100%. I, I do think there's signals when, I don't think fraud, but there's signals right now that companies are not doing well. Right? So like you'll see companies raise at a billion dollar valuation and when we dig in, we see like the liquidation preference is 3X. But that stuff doesn't get reported, right? Or you see the CRO or the CMO leaves every six months, kind of Sean's point on the CFO. Like that indicates there's problems. It's not fraud. It's just like, hey, this company's not killing it the way outsiders might look at it. I think fraud's a tough one. I think underperformance and, and companies that are not doing well, that's a lot easier for us to figure out.

• 1:02:07Shaan Puri?

  What's a company that's impressed you that we, most people don't talk about? Cause you guys see a bunch of companies that are, that are interesting. What's a company that's a, kind of flies under the radar, but kind of secretly crushes it?

• 1:02:17Speaker 02

  I'm like a, it's gonna be, it's probably gonna end up in the data world. So let me think.

• 1:02:23Sam Parr?

  That's all right.

• 1:02:27Speaker 02

  I don't know if anybody, I will say like the area that I like right now, and I don't think these are great businesses, but I think like, I think are interesting is like the, the, the folks that are analyzing the grifters, right? Like, I really like love this space because I think there's something to be built here. Like there are more media companies than they are great big tech companies. But there was like, there's a couple that like are digging into like pastors and like the whole like evangelical pastor world. And like, it's phenomenal, like the stuff that they do. So like, that's probably the area I go down a lot more in. And then like, looking at the businesses of folks like Andrew Schultz and folks like that, like,

• 1:03:09Speaker 02

  you know, cause I think there's a lot to learn from how they do marketing and how they build audience. So I tend to look at businesses that I think we can learn from versus like, just like random sort of businesses that are out there.

• 1:03:20Sam Parr?

  What, what, what can a boring company like yours learn from Andrew Schultz?

• 1:03:25Speaker 02

  So the thing that, so I think the thing that he's done really.

• 1:03:28Sam Parr?

  But I, I was purposely insulting you in order to make, make the average listener be like, oh yeah, I'm not that cool.

• 1:03:35Speaker 02

  I think the thing that he does really well is he doesn't just interview other comedians. Right? I think he like, he interviews other people who are kind of adjacent to him. Right? And so what he does then is he keeps expanding his audience. And I think most other folks like, you know, like I like Theo Von and Theo Von's like interviewing other comedians, right?

• 1:03:54Sam Parr?

  Right.

• 1:03:54Speaker 02

  But like, he interviewed Neil deGrasse Tyson and I bet you that brought him a whole bunch of new people, right? And so I think like-

• 1:03:59Sam Parr?

  And it was very funny.

• 1:04:00Speaker 02

  Yeah, it was awesome. And so this sort of like Schultz strategy of like adjacent folks, I think is really smart to bring in, like the Venn diagram is not as heavily overlapped. And I think like he keeps building that way, which I think is really interesting. And so for us, like, it's always like, who has an audience that's not exactly our audience, but that has maybe a slight overlap? And, but would those people kind of like us if they knew about us, right? And so it's kind of like thinking about partnerships there, whether it's newsletter partnerships or whether it's, you know, research that we do, whatever it might be. So, yeah, I think like, looking at what's happening in the consumer side of media is always interesting because that's where like the innovation tends to happen. It doesn't usually tend to happen in B2B.

• 1:04:44Sam Parr?

  Well, dude, I appreciate you doing this. You're fun to talk to. Sean, what do you think?

• 1:04:48Shaan Puri?

  And we, we only got through maybe half of the, half of the shortlist ideas. So, uh, if people like this, we should do a part two and, uh, do more, do more of the ideas. Thanks for coming on, man. This is fun and, uh, appreciate, you know, that you've been, you know, come, I, I feel like I've seen you tweet about the show, you know, for a while now. So, you know, that's, uh, I really appreciate that. That's one of the cool moments of this, doing this for us is that people we respect, if they like our stuff too, that gives you a little extra juice, a little extra wind in your sails to, uh, to go out and keep going. Cause it's, it's different than just, oh, the numbers are going up, but numbers don't have that same kind of like pull as, you know, um, somebody who you think is cool, you know, liking your stuff.

• 1:05:31Sam Parr?

  And by the way, Anand, it's your fault. It's kind of my fault. It's most, it's part your fault. Basically, I get like lots of messages a day, but like five of them a day. It's usually a young man in his twenties and he'll just message me and he'll say, let's fuck. That's all I get. And the reason being, one time I was either on my way home or en route to the airport and I was ta, I hate flying, so I take a lot of Xanax. And so that's the only time I'm ever inebriated and I was very high. And I messaged you and I said, I'm in your hood, let's fuck. And you replied like- I'm down like here's a restaurant, meet me there or something like that.

• 1:06:13Sam Parr?

  And I told that story and uh now because of that I get I get a bunch of men messaging me that.

• 1:06:22Speaker 02

  Living, living the dream, Sam. You're living the dream.

• 1:06:24Sam Parr?

  Someone's dream, someone's dream, not my dream, but someone's dream. Yeah, I'm living, I'm living a person's dream.

• 1:06:37Sam Parr?

  So you're to blame for that, but I appreciate you coming on and this is fun. We'll talk soon.

• 1:06:42Speaker 02

  All right. Thanks, guys.