#158 - Buying Michael Jordan's House (and Making a Profit), Investing in Athletes & Successful Startup-Studios

MFM #158 Andrew Chen story University of Washington has a program for gifted high schoolers who want to do college early. Andrew took part and graduated at 19. He met some pretty cool people doing this including emmit of twitch, and head of hedge funds. Shaan got into a Duke program as a teenager via TIP program by scoring high on PSAT. Shaan: This is a great marketing trick -- he’ll do this when he starts his school For athletics, the opposite is done. MJ’s house Michael Jordan’s Chicago home went on sale for $30m many years ago, but hasn’t sold. Today it’s on sale for $14m. Idea #1: Buy the house using crowdfunding and through NFTs, any fan can own a fraction of the property. From there, the property can be turned into a museum. Idea #2: Instead of turning the house into a museum, turn into a great Airbnb. Obama’s Hawaii house (the Plantation Estate) rents for $6k a night or $180k a month. You have to make it the dream “man cave”/sports fan getaway. Make it an alternative to Vegas for bachelor’s parties. Fill the house with Jordan memorabilia, and make it an incredible experience for fans to come to. Famous homes: There's a precedent for taking famous homes and turning them into museums. Graceland: Elvis’ former home receives 600k visitors each paying ~$30 Painted Ladies: Painted Ladies and “Full House” house are mainstay attractions. “Full House” house sold for a premium above market price. Counter: Sam is sceptical of crowdfunding on Rally Road because of the difficulty in liquidating. Shaan counters by saying fractional ownership makes liquidity less of an issue. Also many aren’t concerned about selling. Would rather wait and hold. Big League Advance BLA: Offers cash to minor league baseball players with the promise of making money if the baseball player hits it big. Fernando Tatis Jr: Took cash when he was in the minors from BLA, but now has to pay out ~$30m after signing a $300m+ deal Opportunity: Baseball is the easiest to model, but the NBA presents a great opportunity because of guaranteed contracts. If a player gets a $100m, 5 year deal, you can offer them $80m upfront for the contract. Instead of Counter: This is a risky business. The business only works if you can model properly and get big hits to cover the losses. Startup studio Instead of investing in companies or starting just one company, startup studios invest and incubate several businesses at once. Shaan: Historically very tough and didn’t work. Garret Camp, Mark Pincus, Kevin Rose, and Michael Birch (Monkey Inferno where Shaan worked) all had studios which had no big winners. Successful studios: The tides may be shifting as a few studios have begun getting hits. Thrive Capital by Josh Kushner (Oscar), Atomic by Jack Abraham (Hims), Prehype (Barkbox and Ro) Atomic: Only works at one project at a time and the team has 9 months to raise a series A or else may be out of a job. Also focused more on B2B than consumer. eFounders: European studio that only does SaaS. They’ve been able to make the model successful Kevin Ryan: Part of DoubleClick when it was sold. Made about $20m and created AlleyCorp which incubated companies like MongoDB, Business Insider, Zola and Guilt. Good: It’s a dream job because you work on multiple ideas. Unlike a traditional startup, when failure happens you can just move onto a new project as a team Bad: For a startup to work, you need laser focus. Often what happens, when a startup hits a plateau, you can pivot to an area that’s working. At studios, the team is more inclined to move onto another project altogether. No do-or-die, back-to-the-wall mentality as with startups. --------- 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.

• 0:00Sam Parr?

  Look, if you don't figure this out, you're fucked. You're broke.

• 0:07Shaan Puri?

  Yeah, what's up?

• 0:08Sam Parr?

  Sean, why, we keep getting two things that's kind of like keeping me up at night. The first, which doesn't keep me up at night, but weirds me out. Why do people keep confusing us? And the second thing, and the second thing that does keep me up at night is, I don't know if they're saying it just about me or about both of us, but they say that we look differently.

• 0:27Shaan Puri?

  Yeah, they, yeah, and I think both are like, I think both are insults wrapped in disguise. Like, they're not saying anything bad, but the way they're kind of like laughing makes me think, it's not a, it's not a good thing. I don't think it's an upgrade for them.

• 0:47Sam Parr?

  Someone said that I write like a bro, but I look like a nerd. And I'm like, you're, you're, you're insulting both I looks and I like, how do you make me look, I want to look like a bro maybe and talk, or wait, which one do I want to do? I want to look like a bro and talk and talk like a nerd, maybe.

• 1:07Shaan Puri?

  That's hilarious.

• 1:08Sam Parr?

  Um, yeah, so second thing.

• 1:10Shaan Puri?

  People mix it up. That means for months, they've just been listening to this. And they think I'm you and they think you're me. And when they follow us, they, uh, you know, they have it all wrong.

• 1:22Sam Parr?

  It's kind of funny. And then, um, I have, uh, do you know what e foiling?

• 1:27Shaan Puri?

  What's e foil? What are you talking about?

• 1:29Sam Parr?

  I'm about to rent one. So it's a $12,000 device. And it's looks kind of like a wakeboard, but it has like a three foot to four foot, like rudder that sticks on the bottom of it. And on the bottom of that rudder is a motor. And it's like a boosted skateboard with like a, with like a handheld acceleration device. And it, you lift off and it, you ride three feet above the water.

• 1:54Shaan Puri?

  I've seen this, uh, now that you say, I thought you were talking about something related to like, I don't know, microphones or voices. You just switched topics, uh, with the hard left turn, but I appreciate that. So I saw this because what's the name of that one surfer guy who's like, uh, super famous?

• 2:09Sam Parr?

  Laird Hamilton.

• 2:10Shaan Puri?

  Yeah, Laird Hamilton. I saw him doing this where he was go, I don't know if his, I think his was like even taller. But basically he was surfing with, you know, there's like a, there's like an underground fin. And then he's elevated above the water and he was like, and there's, it's like a jet ski that he's standing on. It was kind of crazy. Sounds like that's what this is.

• 2:30Sam Parr?

  Yeah, well, I'm about to go do it in an hour. I'm pumped.

• 2:33Shaan Puri?

  Is this the next pickable?

• 2:34Sam Parr?

  Before we get into ideas, it might be, it might be there. I'm getting ads for it constantly on social media. It might be. We have a good episode today because you brought something up incredibly interesting and I went deep on it. But before we get into that, can I tell you a quick story?

• 2:51Shaan Puri?

  Yeah, go for it.

• 2:53Sam Parr?

  Okay, so a few weeks ago, I got mocked on the internet for like doing this trapped in a closet for with Andrew Chen thing. So this guy named Andrew Chen is a partner at Andreessen Horowitz. He's got a cool startup blog. But I heard he told me one of the wilder stories I've heard recently. So when he was in, I think, I might get some of the details like wrong by a year or two. But when he was in about sixth grade, he took the SAT and scored really high. And when he did, I think it's the University of Washington does this thing where every five or 10 years, they take five or 10 students per year who are in sixth or seventh grade, sometimes younger, like 12 years old, whichever grade that is. And they asked them to come to college, to come to University of Washington.

• 3:37Sam Parr?

  And he was one of the students. And so he at sixth grade, I think he skipped seventh grade and went straight to college and he moved there in a dorm. Went to college and I asked him who else was in it and he actually said Emmett, Emmett Shear from Twitch was one of the folks.

• 3:54Shaan Puri?

  Wait, so he didn't go to college, he didn't like become a college student, he just went for like a camp or something? Or he's now he like enrolled and now he's a student?

• 4:02Sam Parr?

  Doogie Howser stuff, like he literally, instead of going to seventh grade, he moved into a dorm, went to college and, and here's where it gets even crazier. So he like moved there, moved away from home, which I think his parents are from the state as well. But it was like moved half an hour or however far away from home, lived there as a college student. And he understandably was kind of embarrassed and didn't really tell a lot of people. And so they thought that even though he was however, whatever age you are in seventh grade, they kind of assumed that he was just another 18 year old. And apparently he told me that he even dated a girl. He um. Just kind of acted normal and they didn't find out that he didn't like hide it from them, but he didn't bring it up and they didn't find out until senior year or something like

• 4:46Sam Parr?

  that when everyone was turning 21 and they're like, when do you turn 21? He's like, oh, I'm, I'm actually 17 years old or 16, whatever.

• 4:52Shaan Puri?

  16, yeah.

• 4:54Sam Parr?

  And I, it's a pretty wild story and I asked him like, who else was part of this program? He said the founder of Twitch was some person running a huge hedge fund, just like baby genius, like real baby geniuses, crazy fascinating story. And apparently the University of Washington still does this every year where they select, I forget what they call the program, but it's like a thing where they have psychologists and therapists meet with the kids every quarter, every month to discuss what's going on. And it was incredibly fascinating. And in a very typical genius response, I said, isn't that weird that you skipped high school? And he was like, well, what do you think about it? Adolescence is really just like a societal constraint. And I kind of experienced the same, and I was like, oh yeah, I mean, I

• 5:37Sam Parr?

  guess you're right, but like, thanks for proving my point.

• 5:40Shaan Puri?

  Right. Age is just a figment of my imagination.

• 5:42Sam Parr?

  Yeah. Isn't that wild?

• 5:44Shaan Puri?

  That is wild. Also, I don't know if that's true because Emmett definitely went to Yale and so did Justin Khan. So I don't know.

• 5:51Sam Parr?

  Oh, maybe it was through Yale, but he said that Emmett was part of the same program or maybe he dropped out. But he said that Emmett was part of-

• 5:59Shaan Puri?

  Age 13. I love it.

• 6:01Sam Parr?

  He said that Emmett was part of his program. I don't know what program that they do it in a ton of different schools, but like a 13 year old freshman in college.

• 6:11Shaan Puri?

  Would you let your kid do this or would you want your kid to do this? Let's say your kid's 12, scores high on a test. Would you want them to skip high school and go and be a 13 year old college student and like amongst the, you know, amongst the crazy 18 year olds?

• 6:25Sam Parr?

  So it's a good question because your, my gut instinct is probably the same as everyone else's, which is high school is important. You learn about yourself and, and it's important to go through all that normal stuff. But we also complain that high school often, or that like what you learn in high school is kind of bullshit and, and you know, What does the world look like if you do combine the two? So like, maybe it is, I don't, so I don't know. But isn't that, isn't that a wild story?

• 6:53Shaan Puri?

  Yeah, that's crazy. I um.

• 6:55Sam Parr?

  Such a fun fact about someone.

• 6:58Shaan Puri?

  Yeah, I also think it's an interesting strategy for the colleges. Like, why are they doing this? Um, I think it's kind of cool. I remember the reason I ended up going to Duke is because they had this thing called the, the TIP program, which is the Talent Identification Program. And you would take the, I don't know, the PSATs or something like that. And then if you scored above a certain thing, Duke would send you this kind of like kit, this goodie bag. And it basically was like, it felt like getting an owl from Hogwarts. And it's like, hey, you're 12 and like, we want to invite you to this special school for the gifted and talented. And it just said, like, you scored high on this. We have identified you as a talented person. We would love to, you know, like, have you come visit our campus and like eventually, and the shit worked. I went to Duke eventually. I didn't

• 7:41Shaan Puri?

  put two and two together. That's why. But like, if I think about it, that's why I started paying attention to them. And that's why I started following the basketball teams. That's how I even heard about it. Otherwise, as a 12 year old kid, you don't even, you don't even hear about colleges, right? So I thought that was pretty interesting. And if you think about it, you know, these schools are for profit. These schools are trying to get, um, you know, they're trying to get tuition. They're trying to get people to come in and pay the 40, 50 grand to go to school. And so these little investments, um, and, and, you know, who doesn't like to be called talented? Who doesn't like to be called kind of like a phenom? Uh, what parent doesn't want their kid to be identified as a special? That shit works. And I'm surprised that more schools don't do this. And when I start my school, I, I too am going to do this.

• 8:24Sam Parr?

  Yeah, I'm, I'm, I'm trying to like, do some research on it right now while we're talking and it's not really effective. But, uh, you'll have to look up this program when you're done. It's just a really cool, interesting thing. Uh, and it was funny to meet someone who went through it and it was just such a silly fun fact about someone.

• 8:40Shaan Puri?

  By the way, my roommate in college, um, we, when he got, when we got to college, I was like, yeah, yeah, you know, we're all 17 or 18, whatever we were as freshmen. And he was like, yeah, like, um, he would say like, yeah, but then like, I noticed his expression. I was like, well, what? And he's like, well, I'm like 19 and a half, about to turn 20. And I was like, what? Uh, why are you so old? And basically they do the exact opposite when it comes to sports. So in sports, uh, the common thing to do is to like sandbag your kid and basically. Hold your kid back a grade or like send them to school a year late so that they're always bigger, faster, stronger than all the other kids in their grade. And you're always like the star athlete because you have like an extra year of development or you have a better shot, I should say, of being

• 9:22Shaan Puri?

  a star athlete. And so he was from Wyoming. He's like, oh dude, in Wyoming, this is, that's par for the course, dude. Every, you know, every sixth grader is like an eighth grader's age because everybody wants to like have their kid be.

• 9:33Sam Parr?

  When I

• 9:36Sam Parr?

  My first two years of college, I was an athlete and I would compete against these guys. And there was two groups of people that we would like, and I was friends with them, but we would tease about they're not really, it's like, it's a little unfair, which is the first was Kenyan, so Kenyan runners. I think that there's, I don't know, I don't know, I don't think they were lying about their age, but I think there's an exemption if you serve in the military. So you get to compete in college and college athletics, I think until you're, this was 10 years or eight years ago, however long, you get to compete until you're 26 years old. And then the second is for religious stuff. So the Mormons at age 18 would bounce for two years. So they would be a 20 year old freshman, which means they'd be a 24 year old senior in college. So I was 18, my

• 10:20Sam Parr?

  freshman year, competing against 24, 25 year olds. And so, yeah, the Mormons and the Kenyans, if they, and anyone who served in the military.

• 10:28Shaan Puri?

  And I know this topic is basically, nobody gives a shit about what we're talking about, but I will say there is a lesson. In life, you get to choose, are you going to punch up or punch down? And the Andrew Chen thing, going to college at 12 or 13, that's a kid who's punching up. You're, you know, you're in unfamiliar circumstance, you're stretching beyond, you know, what, you're playing in the bigger leagues than where you are. And then there's the athletes that are, that are held back years or, you know, come back and compete against people, you know, two to five years younger than them. That's punching down in weight. And I would say like punching down has some benefits because typically you're going to score better, do better in these little like

• 11:10Shaan Puri?

  games, you know, in, you know, high school or college athletics. But in the end, you really want to be somebody who punches up. You always want to, I think, you know, for long-term success, you want to be somebody who punches up, who's somebody, somebody who's always in a room where you're just barely hanging on because it'll push you to get better, more so than just dominating people because you're older and stronger than them.

• 11:30Sam Parr?

  Well, it works for Andrew Chen. I think he's 38 years old, but I was like, but you're really like 45. Right? Like you're gonna experience like a 45 year old.

• 11:40Shaan Puri?

  All right, let's get to the topic.

• 11:41Sam Parr?

  First full-time job at AT&T. Okay, let's get to the first one. So Sean put something on here that I actually think I was telling a friend as I was researching, I actually think that this is one of the better ideas that we and you you've ever come up with. The Michael Jordan thing.

• 11:59Shaan Puri?

  All right, you want me to, yeah, you want me to explain it? Okay, so um, I've been looking at this house for a long time. Michael Jordan's house has been for sale for like a decade and it hasn't sold. And this is his house, uh, kind of like, you know, in Illinois, near Chicago, where, you know, Michael Jordan was on the Bulls and he had this 56,000 square foot home in Highland Park. And so this thing originally he put it up for sale and like, I don't know, nine years ago for $30 million, $29 million. And now it's, you know, the price has been cut in half and the thing is still not selling. And if you look at the photos, you could just go, it's like on Zillow.

• 12:39Shaan Puri?

  So you can go look at the photos. He's got like an indoor basketball court, you know, the gate leading up to the driveway has his big 23 number like embossed in it. He's got, you know, everything you would want, like huge, you know, closets, because he's got, you know, all his Air Jordans or whatever. And so his house is, it's pretty unbelievable, right? There's, there's all kinds of epic shit here, but it's not selling and it's not selling for, I think, a couple of reasons. It's like, you know, it's very custom to Michael Jordan. Um, like it's just, it's like, it was custom made in many senses. So, you know, the other rich people don't necessarily want to live in a house that's like made for another dude. It's also, you know, it's very expensive for the area. The property taxes are really expensive, all that stuff.

• 13:21Shaan Puri?

  But I was thinking, okay, the price is now cut in half. Now it's, now it's a $13 million house or a 12, you know, $13 million home that you could buy. 13, 14. And now it's in range where maybe there's something fun you could do with it. Now you might be getting a value buy. So I was thinking, all right, there's a bunch of people, obviously, that are basketball fans that love Michael Jordan. There's a bunch of, you know, new ways to crowdfund that we've been talking about, NFTs or Kickstarter or different crowdfunding platforms. So. The question is, should we buy Michael Jordan's house? Should we start a crowdfunding campaign and buy Michael Jordan's house? So if you could get 5,000 people to each put in $2,500,

• 14:04Shaan Puri?

  then you could own a fractional share of Michael Jordan's house. You could, you could own a piece of, of this history. And we could just buy it out, take it off the market. And we could own this thing. And then the question is like, what do you do with it? And so I wanted to brainstorm with you. A, should we buy Michael Jordan's house? And B, what could we do with it if we did buy it? What do you think?

• 14:27Sam Parr?

  So the whole NFT thing, I wouldn't do that. I think that, I think you've had two ideas here. One is to buy his house and two is to do the NFT thing. One of those ideas is great. I think the other one is over complicating it. I would 100% buy it. And the reason why I think it's such a great idea is immediately after you, seeing you write this, my thought right away went to Graceland. You know what Graceland is?

• 14:51Shaan Puri?

  No.

• 14:52Sam Parr?

  That's funny that you don't know what that is. It's because it is such a big deal in my family or Elvis is at least. So Graceland is Elvis Presley's house. It's in Memphis. It's in downtown Memphis. It's actually in a pretty crappy neighborhood now, or the neighborhood is not nice. And it's like, kind of gross, but it's just like a cutesy thing to do if you visit Memphis. And I went and did research on it. And so around 600,000 people a year go to Graceland, which brings in something like, where I have the numbers here. Okay, so Graceland, just in attendance, just in ticket sales, brings in $21 million. So it's, yeah, pretty wild, just on tickets.

• 15:32Shaan Puri?

  600,000 visitors a year, $36 a ticket, right?

• 15:38Sam Parr?

  Yes. And I got interested in this. So I thought, what are the most visited homes in America? So I came up with a few and I want to fill you in on them. So the White House doesn't count because you can just, you, I think you can get a tour, but you could also just walk outside of it. But Graceland, 600,000. The second one, I'm, you guys are going to make fun of me. I don't know how to pronounce this. What, is it Monticello?

• 15:58Shaan Puri?

  I think so.

• 15:59Sam Parr?

  Okay, Monticello, that's Thomas Jefferson's house. And so the interesting thing about this place, as well as a few other I'm going to mention, is that they're nonprofits, which means all of their numbers are public. And so the revenue for Monticello, which includes a ton of investment revenue, was around? $200 million in 2010, but around 8 million, 7 million came just from ticket sales. So 8 million a year in ticket sales, which is crazy. And they have around 500,000 people. Another most visited home is never like homes that people drive by Neverland Ranch. People don't go there. But the other, another great one is Mount Vernon, which is, I think,

• 16:39Sam Parr?

  what's our first president? George Washington's house. And they do in, in, in food sales alone. This is crazy. Just in food, $17 million a year. Is that crazy?

• 16:54Shaan Puri?

  This is insane.

• 16:55Sam Parr?

  The whole operations, and then they do $15 million a year in admission sales. And in total, they do about $51 million a year in total income, which includes 10 million from contributions. Is that crazy?

• 17:10Shaan Puri?

  But no, that's absolutely insane. So let me ask you, these, okay, so this, all of a sudden, this starts to get really interesting, right? Because I think Michael Jordan is on par with Elvis and, you know, Thomas Jefferson. Michael Jordan's got TJ beat by a long shot. So, you know, MJ over TJ, I think, is, is part of the slogan that we have when we, when we buy this thing. But if they're doing this much in traffic, I gotta know, is there something else? Meaning like, are these in really like, popular areas where there's already just a lot of tourists or something like that? And this is just a pit stop? Because, you know, Michael Jordan's house is in a neighborhood, you'd have to only be going to go to this place.

• 17:46Sam Parr?

  I looked up Michael Jordan's address. Guess how far away it is from Chicago Airport? One of the most popular airports in the world.

• 17:52Shaan Puri?

  I'm gonna guess 45 minutes.

• 17:55Sam Parr?

  20 minutes. It's 20 minutes away. Okay, so it's at, like, have you been to Memphis? Memphis is like, there's not that much going on in Memphis, and all these people are going to Memphis. People are, Chicago's what, the fifth most populous city in America? Or maybe third, something like that? Something is interesting here. So what I would do is I wouldn't do the NFT thing. I would raise two or three million dollars from a bunch of rich people. Or I would try to use my own money if I had two or three million dollars that I wanted to spend on this. And I would buy it and then it would probably cost a fair bit of money to get it set up. It would probably cost a lot of money, another many more millions.

• 18:37Sam Parr?

  But then you'd have to convince collectors to lend you the stuff and you create a Michael Jordan museum.

• 18:44Shaan Puri?

  Yes.

• 18:45Sam Parr?

  And that's how you do this. And the companies that we've just mentioned, Graceland, Monticello and Mountain Vernon. So those, obviously, those folks lived in the 1700s or probably died in the 1800s. So they've been around, those properties have been around as tourist destinations for a hundred plus years. But they've done 50 million revenue, which is a shit ton. But even if you've just done two or three million dollars in revenue and you could do that and adjust for inflation for 50 plus years, kind of like Graceland has done it for 60 years. That's incredibly fascinating.

• 19:21Shaan Puri?

  Right. Yeah, I'm with you. So I think you know, you're shitting on the NFT thing a little bit, but it's not about NFT. What I'm saying is crowdfunding. So I think that there's a benefit to crowdfunding, which is that crowdfunding is a way to make the story more viral. It is a, it's a more PR worthy story that, you know, people from the internet, people from Reddit, whoever, got together and bought Michael Jordan's home off the market for 15 million dollars. They raised 15 million dollars and bought the house. Versus a rich guy went to his rich friends, raised some money. The second thing is those become, you know, your evangelist to spread the word and to come make the pilgrimage to go see Michael Jordan's house.

• 20:01Shaan Puri?

  And I think you could do two or three things with it. I think you could make it a museum that's like a modern museum that we've been talking about, like the Museum of Ice Cream. Or something like that where the tour is very heavy photo based. And so you're, you know, you're going through and it's all these different photo exhibits of, you know, you in Michael Jordan's bed and, you know, wearing, you know, a pair of his Air Jordans or standing in a pair of his giant Air Jordans or something like that. And you make it like a museum of ice cream where you're going to walk out with, you know, 10 photos that are Instagram worthy at the end of it. I also think.

• 20:36Sam Parr?

  Give, give people background on Ice Cream Museum.

• 20:40Shaan Puri?

  Yeah, Brad, you can pull the latest numbers, but I think these guys raised at like a hundred million dollar plus valuation. And if you, if you ever go to one, they're pretty cool. It's, you know, it's not the most amazing thing. I honestly, I was a little bit disappointed, but the photos do turn out cool. It's a museum that you walk through. Uh, so it's like a guided path and you go through maybe like 13 different rooms and every room is something cool and you get a little, you know, you get an ice cream cone of some flavor and then you can take photos next to some like exhibit that they've set up. And the idea is not for you to look at the art like a traditional museum, but for you to like take a photo in the art and post it on Instagram. And that's their marketing. That's the free marketing that they get. And so Museum of Ice Cream, oh yeah, here, everybody has it.

• 21:22Shaan Puri?

  They raised $40 million, they raised a $40 million Series A at a $200 million valuation last year. And, um, and I think this could be bigger. Uh, I think this could be much, much bigger as a brand. Um, the other thing, uh, the other thing that you could do is, uh, sports cards are having this incredible boom right now. And I think what you could do is you could have certain collectors put their collection, um, uh, in, in the house. The house could be basically the vault to store some of the most rare memorabilia in the sports world. Signed basketball shoes and sports cards. And that could be part of the museum and you, you basically store it and you, um, you store it for some of these collectors. So I think, I think there's a bunch of stuff you could do to make this work, but the idea

• 22:06Shaan Puri?

  is like, can you buy this thing for 13 million? Put another four or five million into, um, you know, getting it all set up. And then could you make $5 million a year? Could you make $10 million a year like you're saying these other guys do? As a pilgrimage for, you know, tourists going to Chicago and basketball junkies.

• 22:25Sam Parr?

  I think the answer is definitely yes, and I think it's so interesting. I found a, I found another example of one, and it's called the,

• 22:36Sam Parr?

  it's called the National Trust for Historic Preservation. And it's a nonprofit, and all they do is buy national, historical buildings. And they're historic, I looked at their numbers, they've been doing like 50 or 60 million in revenue for years. And I'm still trying to figure out how to entirely read nonprofit statements. But they have a buy, a line item that's revenue less expenses, which I guess that just means profit. I mean, I don't know how they define.

• 23:06Shaan Puri?

  Yeah, it's EBITDA.

• 23:07Sam Parr?

  I don't know how they define either of those, but it was 26 million.

• 23:12Sam Parr?

  And it's been doing that for years. Is that nuts?

• 23:15Shaan Puri?

  So I like this idea, I like this idea a lot, and I kind of want to dig a little further into how these

• 23:21Shaan Puri?

  homes, home museums work, because I think this is pretty interesting. The other good thing about this, by the way, is that the Basketball Hall of Fame sucks. Nobody cares about it, nobody goes to visit it. All the other sports like, you know, Canton for football, these are like tourist destinations, you know, tons of people go there every year, it's really cool. And the basketball one is known to be super lame because they let way too many people in. And, and it's not like, it's not a thing that basketball fans really care to go do.

• 23:52Sam Parr?

  Can I give you two more examples that we, what we could consider doing instead of even doing a museum? Maybe this is even simpler. So I'm staying at my friend Jack's house. It's a badass house. Five doors down, or 10 doors down, something like that nearby is what they call it the Obama House. And when Obama was in office from, when was he in office? Oh, the 08, 12, the second, the second term?

• 24:20Sam Parr?

  Or whatever it was, he would stay at this house down here. And the owners let him stay, I think for a massive discount. Now, it's like, it has its own Wikipedia page, and it's called like the Obama House. And it sold 10 years ago for 7 million, after he had already stayed there, which, or sorry, 7 million, I said, I say 7, for 7 million, which is a lot of money, but they rent it out right now on Airbnb for $6,000 a night. Or if it's booked all the way up 180k a month and it's branded as the Obama House. I think that you could absolutely crush it with a Jordan Airbnb house. Would you and a group of friends be willing to pull together $3,000 a day to stay there? Maybe.

• 25:03Shaan Puri?

  I think the way you'd have to do it is you'd have to make it like a Vegas alternative for bachelor parties and stuff like that, birthdays. It's like, what is the man cave, man dream vacation? It's like, dude, we're gonna go stay in Michael Jordan's house. 14 of us are going and it comes with like all the amenities and you know, all that stuff. This is where you go, this is where you want to go. If you want to live like the sports fans dream, I think you could do that. I do like the museum one better. What was the second idea you had? You said you had two.

• 25:34Sam Parr?

  Oh, what wasn't the second? I guess it was more so, uh, just another example, the Fresh Prince of Bel Air House.

• 25:42Sam Parr?

  It's, it's kind of interesting, but do you remember living in San Francisco? How there's like the, what's it called? The Painted Ladies, which is the full, the full house house? And then there's the Missed Out Firehouse.

• 25:54Sam Parr?

  I would just want to buy all these and turn them all into tours.

• 25:56Shaan Puri?

  So I lived a block away from the, uh, from the full house house. And, uh, literally 24/7, there is somebody standing outside of that house during the daytime, taking a photo of it. So there's just a constant, and it's not like, it's not like a huge line of people, but there's always like four people standing outside, taking a photo in front of the full house house every single day for the whole year. It's kind of crazy. And then it just sold actually, and it's sold at basically like, I think 1.5 or 2X the market rate in that area. So, um, they got basically like a double premium because it is the full house house, which I think is, you know, kind of interesting. But okay, I think we should, uh, I think we should buy Michael Jordan's house. I think we should crowdfund, uh, I think we should crowdfund 5,000 people together. We should own this thing or we could go to Rally Road and we could say, hey, Rally,

• 26:41Shaan Puri?

  let's put Michael Jordan's house on Rally and, uh, you know, let's sell this baby out. I think if 5,000, right now with, if you go on Rally Road, you'll get 2,000 or 3,000 people buying a fractional share of, you know, a pair of Jordans or a signed autograph or a signed rookie card or something like that. Fuck all that, let's own the guy's house. So I think you could easily get 5,000 people on Rally Road to buy a fractional share of Michael Jordan's house. I'm surprised they don't already do this. If they're listening to this, uh, you know, go, go for it. Just give us credit and give me a share of the house.

• 27:15Sam Parr?

  I actually think that they wouldn't do that because how do you liquidate that? It's been on the market for 20 or how long 10 years? No one is obviously no one's buying it. So like, how do you get liquidity from that after seven years? I don't think you don't. I think the game here is-

• 27:30Shaan Puri?

  Right? The point of rally is that they take things that are not assets and they make them not liquid assets. They make them liquid assets. So because you can own a fractional share, now there's liquidity. Any one person who owns a piece of Michael Jordan's house can swap it for anybody else who wants to own a piece of it. So you don't need a $15 million buyer because you can sell them in blocks of $1,000 or $1,500. And so when you bring that price point down, there's people who want to own a piece of the, a piece of the art, a piece of the asset, which is how they do like, you know, they'll sell, um, you know, a Harry Potter first edition signed, you know, set of books. And, uh, you know, instead of selling it for $25,000, they'll get, you know, 2,000 investors to each put in whatever, whatever the math comes out to, 150 bucks to go buy,

• 28:15Shaan Puri?

  you know, to own a piece of that thing. So they introduce liquidity by making it fractionally owned.

• 28:23Sam Parr?

  Yes, but there's still no cash flow. You have to create an operation around this to create cash flow.

• 28:27Shaan Puri?

  There's no cash flow in a basketball card. There's no cash flow in Air Jordans. There's no cash flow in, in a Harry Potter first edition.

• 28:33Sam Parr?

  Rich Asian investor who's willing to buy it.

• 28:36Shaan Puri?

  No, dude, you're, you're, you're still thinking like the old world. You haven't seen what's going on in rally. You're staying with Jack Smith? You should go ask Jack Smith about how this stuff works. Uh, he's the one who, who taught me and he's one of the biggest investors in this stuff. He's not buying it for cash flow. Um, you know, he's buying it because, yeah, there are, there is another, there is another collector. And when you make it fractional, now way more people can get in on collecting it versus just the rich, deep pocketed people who could buy the whole asset 100%.

• 29:06Sam Parr?

  Yeah, bro, but who liquidates it after a handful of years? On Rally Road, someone actually buys the car after a few years.

• 29:15Shaan Puri?

  Very rarely. Occasionally, somebody comes and offers to buy out the whole lot. And then they put it to a vote. I don't know if you've seen this, but like, you know, let's say a box of Pokemon cards went on there, like a super rare Pokemon card set. They, I don't know what the IPO was, but on Rally, they IPO'd it. Let's pretend it was $50,000. And then what happened is a big, you know, Asian investor came in and said, we'll buy this thing out for $85,000 now, so you'll all get a profit. But we want to own this thing. And they put it to the vote of all the shareholders and they said, no. They said, we're going to hold it. We think it's going to go up. So they voted no, they voted to keep it. So they're not all trying to liquidate soon. You know, some people who are buy and hold investors will want to own these assets for a long time because they think, hey, you know, if I just hold this now,

• 30:00Shaan Puri?

  you know, what's Michael Jordan going to be? What's Michael Jordan's fame going to be 20 years from now? If Michael Jordan passes away, how much is it going to be worth? And there's people who are in it for the long term. So I think there's, I think the collectibles thing is a little bit different than, I think about it differently than you do, I would say.

• 30:16Sam Parr?

  You basically need Jordan to have like a tragic accident.

• 30:20Shaan Puri?

  Or like, for example, The Last Dance came out. So, so The Last Dance, this 10-part documentary that came out on Netflix and ESPN,

• 30:29Shaan Puri?

  you know, millions and millions of people watched this thing and Jordan's brand, you could see all the price of Jordans went up. Jordans like brand visibility and brand sentiment went up because this documentary came out and he's still alive. It wasn't a tragic event, but somebody told the Jordan story to the younger generation who, you know, grew up where, you know, they were two years old when Jordan was at his prime. And so Jordan Brand got stronger with The Last Dance coming out. And I think that's just going to continue, you know, over time because he's got all these different, you know, the legacy becomes bigger than the person itself. But I have a different thing that's sports related.

• 31:02Sam Parr?

  Okay.

• 31:04Shaan Puri?

  Yeah, can I do this one? So a different thing that's sports related and ties into the idea of making assets out of things, making liquid assets out of things that were non-liquid assets. So there's this company called Big League Advanced. Did you see this thing?

• 31:21Sam Parr?

  No, keep going.

• 31:22Shaan Puri?

  All right.

• 31:22Sam Parr?

  I'm looking it up.

• 31:23Shaan Puri?

  So, um, so shout out to, uh, Joe Pompliano, uh, you know, Pomp's, Pomp's brother, one of his, one of his brothers, who, you know, does these Twitter threads all the time. So he did this Twitter thread that caught my eye. And it was about this player Fernando Tatis. So this guy's one of the young, I don't follow baseball anymore because baseball's slow and boring to me now, but I used to, and you know, back in the day, I remember-

• 31:46Sam Parr?

  Fernando Tatis, his, is that, is it Fernando Testy, Tatis Jr.?

• 31:50Shaan Puri?

  Yes.

• 31:51Sam Parr?

  Because, okay, when I was a kid, the senior played in St. Louis and he was like a huge deal. I think he hit like, he hits three grand slams in one inning and he was like our hometown hero for years.

• 32:02Shaan Puri?

  Okay, that sounds crazy, but, um, uh, yeah, basically this guy's like one of the youngest star baseball players. And now like, um, he, he, you know, signed one of the big contracts. So he signed a $340 million deal with the Padres. And the interesting thing that came out of that was that this company that I had never heard of called Big League Advance, made $30 million off of that deal. So who, who is Big League Advance? So basically what these guys do is they go to minor league baseball players, of which there are thousands, and they say, look, you're making, you know, you don't make shit in, in the minor leagues. Um, you, you know, you're, you're riding the bus, you, you, you get paid nothing. Um, and you're hoping to one day get to the league and you're hoping one day to become a star. You're hoping for the Fernando Tatis story where someday you'll sign a huge contract.

• 32:47Shaan Puri?

  And what they do is they go and they offer you a deal. So they'll say like, hey, we'll give you $100,000 for 1% of your future earnings. So it's an income share agreement, like we've talked about with Lambda School and whatnot. And they'll go and they'll say, you know, $350,000 for 8% of all your future earnings. So we'll bet on you, we'll take a risk on you. So you get some money today, you can give your family a better life today. You don't have to keep like roughing it while you work your way up. Uh, but hey, if you hit it big, like we're going to get paid out. And, uh, they basically do a bunch of analytics on their side to try to guess which players to invest in. What, what, what is the exact deal to offer them? So it's like a startup investor who's coming up with the valuation of every minor league baseball player. And, um, they know they'll lose many money on like 80% of the deals that don't pan out.

• 33:31Shaan Puri?

  And they're hoping that the 20% that do turn into huge returns like a Fernando Tatis Jr. And so, um, I think this is an awesome idea. This actually is similar to- A company that we've talked about called Pipe. Pipe is, uh, they basically take companies that have SaaS revenue and they say, hey, you got all the SaaS revenue, um, let's turn that into a tradable, investable asset. Let's take your contracts you have with customers and let's make it so that anyone could just buy some of your SaaS contracts off you and, uh, you get money today upfront for, for those contracts. You don't have to wait the 12 months for, for your customer to pay you every month. And, um, and for that, that investor, they're going to get a premium, you know?

• 34:11Shaan Puri?

  So they'll pay you the year's worth of the contract and in exchange, they get like a 12% return on, on their money and you get money upfront, which you can reinvest into your business. So I really like these companies that are taking things that were not investable, tradable assets and making them investable, tradable assets. And I think big league events is a cool one because it's basically betting on minor league players that might turn into stars. What do you think of this?

• 34:38Sam Parr?

  Well, I'm looking at their website. So how can a minor league, does that ruin the amateur stat or is there still amateur status with an?

• 34:48Shaan Puri?

  Is pro, minor league is, is that you're a pro, you're a professional player, you're part of a team's farm system and you get paid, you're not, you're out of the college system by then, by then.

• 34:57Sam Parr?

  So you can only do, you can't do this for college kids.

• 35:00Shaan Puri?

  Correct.

• 35:01Sam Parr?

  Correct? That's cool. So I think that you, I'm looking at their website now. So I imagine this would work for golf, baseball.

• 35:10Shaan Puri?

  Tennis.

• 35:10Sam Parr?

  Basketball. Tennis, I guess. Anything that's like crazy numbers related, right? Like you can kind of like, I wonder which sports do you think are the most predictive in terms of?

• 35:21Shaan Puri?

  Baseball is known to be the most predictive, um, and the most like kind of statistically modelable because your teammates kind of don't matter. When you're up there batting, it's just you and there's no like team dynamics. Whereas in basketball, a player can be better or worse because there's five other people on the court all moving around and it all affects each other. But you know, that, that doesn't really matter in this case. What here, what you're basically saying is, let's say there's a, like this guy Spencer Dinwiddie tried to do this on the Nets. He, um, he, he had signed like, let's call it a $30 million contract. And what he tried to do was offer people token shares in his future. So he said, look, I, I, I think today I'm a like a B level player.

• 36:01Shaan Puri?

  I think I'm going to be an all star someday. So if you invest in me now, you'll get a share of my future contract. And so you're just betting on a player. You're just saying, I think that this player is going to be a star. And I think this player is going to earn this much in his career. So I will, um, I'll invest now in an income share agreement of his future earnings. And so for the player, they get money upfront. They don't have to wait to earn their contracts and they get a little bit of insurance. Like if anything happens, they get hurt or, you know, something bad happens in their career. Hey, at least they didn't risk it all. They got paid some upfront. And for a fan, it's a way to kind of bet and invest in players that you think are going to have more future earnings than, uh, than their, what they're offering today as a valuation.

• 36:44Sam Parr?

  This is so amazing. I'm looking at their, uh, so they've raised a hundred and fifty million dollars. I think that from the looks of it, it looks like they only have like thirty employees. Do you think that's accurate? And if they made thirty million from.

• 36:57Shaan Puri?

  From this, this one guy alone. So this was like the big home run. Um, and you know, they've had other things where like they, they, they got sued by a player because they offered him three hundred sixty thousand dollars for 10% of his future earnings. And then he, you know, he tried to sue them being like, oh shit, that was like a predatory deal. I didn't want to give up 10% of my, all my future earnings for just 360K. But in actuality, the guy only made 1.2 million in his career. So it actually turned out to be a profitable deal. You know, he took 360K upfront and ended up only paying 120K out, uh, to these guys in the end. So, so he dropped his lawsuit.

• 37:33Sam Parr?

  Why, why is there so little information about these guys online? You think there's really not a lot.

• 37:39Shaan Puri?

  They try to fly under the radar.

• 37:40Sam Parr?

  I can't find a Crunchbase page.

• 37:41Shaan Puri?

  They, they're not a tech company. Uh, it's just a financing company. Basically they, um, they tried to fly under the radar. They also got like, kind of disavowed, like the major league baseball doesn't like them. The players association said, we do not like, we don't like, like, we don't say that this is a good thing. Uh, but for a player, you know, it's, it's, they're cutting a deal with an individual player and, um, and I guess it's allowed in baseball, whereas in basketball, the NBA blocked the thing I was talking about. They blocked Spencer Dinwiddie from tokenizing his future contract and, and basically selling off future, future earnings. So some leagues are not allowing it, but major league baseball still, uh, still does allow it and minor league baseball still allows it.

• 38:20Sam Parr?

  So my question is this, and you're more a sports guy than I am, and I'm looking at this, and it seems awesome. My question is, what actually would make this fail and not work well?

• 38:31Shaan Puri?

  So bad predictions. So you invest in a bunch of players that don't pan out, you could go underwater. Like, I don't know, I don't know how favorable their, I don't know how much room, margin of safety they have when they do this stuff. Like with startups, for example, just like, just like startup investing, a lot of people are angel investors, or a lot of, you know, average VC funds actually can't even beat the stock market in terms of returns. And they're illiquid, and they're risky, and they don't, they don't outperform. And so it really comes down to these guys' ability to pick and value players accurately. If they can't do it well, they're gonna go, they're gonna go broke. And if they can do it well, they're gonna make a bunch of money. And I think that's a healthy setup.

• 39:14Sam Parr?

  How challenging is it to, to do this? Because I don't, I don't know anything about sports, but I feel like this whole Moneyball thing seems kind of like table stakes at this point for, for professional teams.

• 39:27Shaan Puri?

  Right. I don't think it's that challenging, to be honest with you. I think that there's, you know, you're getting, you're collecting data all the time. You have scouts, you have all these different ways to value players. And in this case, it's such an inefficient market, because the minor league players just make nothing. And the baseball teams don't want to pay them a lot. It's like, hey dude, you know, do you want to live out your dream or not? And so we'll pay you the absolute minimum required for, you know, just to have you in our, our minor league system. And so what these guys are doing that's smart is they're taking a percentage of all the future earnings. And, uh, and so I think they're, they're basically going up against nobody right now. But I think, and I think there's even an easier way to do this in the NBA, because the NBA has guaranteed contracts. So let's say I sign a five-year, $100 million deal. I'm an NBA star.

• 40:10Shaan Puri?

  Cool. That means I'm gonna get $20 million a year drip to me. And so somebody could come and offer this guy $80 million upfront or $75 million upfront lump sum. Here's your money today and good. You can use that. You can go ball out if you want.

• 40:25Sam Parr?

  NBA, does the NBA, does the NBA have big, as big of a minor league? I know they have the D league, but I feel like I know so many, I've got so many friends that go in the minor league of baseball.

• 40:36Shaan Puri?

  Yeah. So the NBA G League is not anywhere near like all baseball players, stars and don't, stars and not go through minor league baseball. Stars in the NBA go straight to the NBA. They skip the G League. G League is like journeyman. And so it, you wouldn't do this with minor league in, in the NBA. You do it with the actual NBA athletes. And for them, what you would be doing is saying, cool, you're on your first contract. I'm betting that your second and third contract are going to be bigger. And I'm willing to pay you upfront on this multi-year contract because hey, it's guaranteed. You could go and break your leg tomorrow and you're still going to get all this money from your team. So the NBA has guaranteed contracts, so it's way less risky. You could just say, look, I'll give you this money upfront so you can go invest it and you can go ball out. You go buy, buy your mom a house. You can go buy that, buy that thing you always wanted.

• 41:21Shaan Puri?

  And in exchange, I want to get some, some margin on the, because I'm willing to wait the four or five years for your contract to play out. And I can bet on your next contract and I can, you know, give you some future money, some money today. In exchange for some percentage of your future, because I think you're going to be a star.

• 41:39Sam Parr?

  I, I think that this is, this is awesome. Would you value this at a software company? Because how, if it's like a, at the light, if the average length of an MLB or NBA player, I don't know what it is, but I bet it's in the eight to 10 year range. Which means you're, you have a really high LTV. You have a, I imagine of quite predictable stream of income. Would you value this at software or close to software?

• 42:05Shaan Puri?

  No, I don't think so because it can't scale. That's the beauty, the beauty of software is that it scales sort of infinitely. And, um, you know, for every additional customer you have, you don't have that many additional costs. In this case, I think this is more like real estate. I think they're, it's just people as property. You're buying this asset, this multifamily property that has this much rent. And, um, it's going to, it's going to cash flow for this many years. And so you basically are. I think you're just buying properties.

• 42:30Sam Parr?

  Yeah, but real estate sells for almost SaaS like multiples. Real estate sells at like what, like a five or six percent cap rate?

• 42:39Shaan Puri?

  Yeah, but software is like 50, dude. Like if you go look, go look at Salesforce or Slack or go look at these guys multiples. You know, it's, it's like you're at HubSpot. HubSpot is doing a billion dollars a year of top line revenue. That's not profit. And, you know, even on the revenue, I think HubSpot's valued at what? It's like a $30 billion company or something like that.

• 42:59Shaan Puri?

  So it's a 30x, 30x of revenue in that case. So software has better, better multiples than real estate.

• 43:07Sam Parr?

  Sure. Well, do you want to talk about one more thing?

• 43:09Shaan Puri?

  Yeah, go for it.

• 43:13Sam Parr?

  Let's talk about, we don't have enough time, I think, to really dive deep into the studio model. But I'm really interested in this. So there's two companies that I've been eyeing. The first is Atomic, which is, uh, started by this guy named Jack Abraham. And he has launched maybe 10 different startups, one of them being Hims, which is a multi-billion dollar company. But the more interesting person is this guy named Josh Kushner. Kushner, his brother, everyone might know as Jared Kushner. He's the guy who was on Trump's cabinet. Josh Kushner is married to this model. What's her, what's her name? Carly Claus, I think. So he's like, can have quite of a fascinating lifestyle or a fascinating life. But with, he started a small fund.

• 43:57Sam Parr?

  He was born into a wealthy family, so he, he had money early on, invested $400,000 into Instagram, made a significant sum from that and then has since, uh, not invested in companies through his, his fund, but really started them. And one of them, or he has two of them. One is Oscar, which just went public and his stake in that is 1.2. The other one is Caadre, Caadre, I think it's called, which is a rich person's investment platform. But what do you think? And the reason I brought this up is because you kinda had that experience a little bit. Like your, uh, Bebo was kind of a startup studio. Do you like this model of starting companies and operating them, but doing more than one at a time?

• 44:41Sam Parr?

  Or do you think that just passively investing is better?

• 44:45Shaan Puri?

  Um, all right. So the thing we did, which was it was called Monkey Inferno. Bebo was one of the companies inside. Monkey Inferno was definitely a studio. And in fact, before Jack started Atomic, we met up in our office and he said, Hey, I'm thinking about doing this studio. Tell me everything you've you've learned good and bad about running the studio. So I can kind of learn from those mistakes. And I told him, Hey, like, here's what I think is great. Here's some of the things I think that that trip us up. If I was you, starting from scratch, here's how I would do it. And then he's, you know, he took that and he took. Wait, so Jack came to you? Yeah, he came to our office and we hung out and we brainstormed and I kind of told him, look, these are the strengths and weaknesses of the studio model. How are you planning to do it? And to his credit, he already, what he had as an idea coming in was already

• 45:30Shaan Puri?

  the exact advice I was recommending. And so it's not like, oh, I told him you should do XYZ, then he went and did it. He was already planning to do it that way. But, um, but yeah, and at the time I was like, you know, good luck because very few studios, there are many, many studios. A studio is like, the reason studios happen is like, successful entrepreneur wins, they take some of their lottery winnings. And they're like, all right, fuck it. I'm gonna do a studio this time because I can't pick one idea and I just want to do a bunch of shit. I want to do a bunch of cool things and like, now I have my own money. I don't need other investors so much. Or I can, I can easily raise money from investors because I have this big reputation. And so you saw, you know, Garrett Camp, the co-founder of Uber, he starts a studio. Mark Pincus, the founder of Zynga, he starts a studio. Kevin Rose, you know, sold his company to Google, then he starts a studio.

• 46:16Shaan Puri?

  Michael Birch, does Bebo, sells it to AOL, he started the studio that I ran. You know, there's a whole bunch of these guys that do this stuff and very few of them have success. We didn't have any breakout wins. Garrett Camp from Uber, he didn't win. Mark Pincus, he didn't win. Kevin Rose, he didn't win. So, so, you know, there was, for a long time, there was literally zero like breakout winners from studios. And recently, there's been a few that have worked. Atomic has had a few that have worked. Hymns is like the big win for them. It's a public company now, I believe, and, uh, multi, you know, a multi-billion dollar win that they incubated in their studio.

• 46:55Shaan Puri?

  Then there's the Bark Bark Box guys. So I think their their studio is called Pre-Hype. So they, you know, they took Bark Box, uh, public and, um, They've done very well, and I think they also have Ro, which is a competitor to him. So now there's been a few, like, there's somebody got on the scoreboard. So it definitely can work. I would say the odds are that studios don't. Guy thrive. And now thrive, yeah, thrive with Oscar going public is great. And so I would say the odds are still, you know, it's just like startups where it's startups. Ninety percent of startups, you know, fail similar, similar odds with the studio. It's not like you get that much better. I would say a couple of things. Super fun to do because who wouldn't want this? It's like an entrepreneur's playground. You get to go to work, dream up ideas.

• 47:40Shaan Puri?

  You have a team, you have a bunch of teams that are building them all in parallel. In theory, you're killing the losers and you're doubling down on the winners. And, uh, you know, you're just being super creative every day. So it's like the dream job. Then does it, do you actually increase your odds of success? On one hand, yes, because you're getting multiple shots on goal. You're not, you don't have all your eggs in one basket with one idea. The second thing is that you're learning pretty rapidly. So you're learning from all these different reps, these different attempts you're doing. And you're keeping the team together. So like when a team, even if you fail, the team retains those learnings and just applies it to the next project right away. Whereas in a normal startup, if you fail, it's like everybody goes and gets a job for two years. Cause now you're, you know, you just did this thing for three years. It didn't work, you're in debt, you need to go make some money.

• 48:24Shaan Puri?

  And so typically the team breaks up and goes and does something else. In this case, the team sticks together, the learnings are retained. So that's, that's what's good. The bad part, which I think is what you're gonna focus on. The big but of this whole model that I think is what makes it not a great idea. If you, if you're, if you're optimizing for success, I don't think this is the best way. Is, uh, you're not focused because you have multiple ideas. And, you know, one of the benefits of, one of the key things in life is, is focus and laser focus on, on making something successful. And the second thing, which is kind of related to that is like shiny object syndrome. Every project goes through like kind of periods of plateaus. Like I remember with the hustle. You started off, you know, with the events and then you started the blog. And then like, there was a moment, I remember our conversations where you were like,

• 49:09Shaan Puri?

  "The blogs are bringing in a bunch of traffic, but I don't think this is working. I need to figure out something else. What if I did this daily email newsletter?" Right? You were like, trying to figure out, "What do we do? Is it video? Is it this newsletter? What is it?" And in a studio, when that happens, when you plateau or things just stop working or growth stalls, it's super easy to, instead of being like, "Fuck, how do we find a way out of this? How, what can we try to make this work?" It's really easy to be like, "Hey, what about that other idea that we're doing? Like, that one's still super exciting. It's not in a plateau right now." So you just like unconsciously start to spend more energy on the thing that's not stuck. Cause like, who wants to stay in a fucking stuck, on a stuck project? But as an entrepreneur, you have no choice. You told everybody. You told your investors. You told your team. You told your mom, "I am building this."

• 49:54Shaan Puri?

  And you have to find a way. And that's like, the most valuable thing a startup has is that like, the do or die situation for a startup. And I think a studio takes away the do or die mentality. Cause it's like, "Do this, or do that, or do that, or do the other thing." And so you have all these options and those options actually, they actually take away your biggest asset as a startup. So I would say, if you're going for fun, studios are dope. If you're going for success, I think that going, like dabbling and picking a startup to go all in on is a better model than trying to run a studio with multiple projects.

• 50:29Sam Parr?

  And that's actually what I remember my, what I spoke to you about years ago when we started hanging out at Monkey Inferno is, I don't remember which one it was. Blab, Bebo, one of them, like, it seemed pretty good, but like every business, there were some problems where you're like, "People are coming, but we're getting hacked." Or I don't remember what the problem was. Or it was like, kinda good, kinda bad. And I was like, "Dude, just like..."

• 50:56Sam Parr?

  Just figure it out. And I actually thought that you were at for a part of me was like, oh, Sean's at this great place where he can do anything. He makes money and he has an unlimited budget. He could do anything. I actually think that that hurt a lot of times. And it would have been a little bit better if it was like, look, if you don't figure this out, you're, you're, you're fucked. You're broke.

• 51:17Shaan Puri?

  Right. Yeah, exactly. I think you, you called it for what it was. Like really early on, you were like, dude, I think having everything, right? We had like a fucking private chef. We had the dopest office. We had all the engineers we needed. We had unlimited funding and runway. We could just keep going. And you were like, dude, it's gonna make you soft. Like, don't, you know, having all this shit is like, not good for you. I remember you like pointing that out really early on. And then also, like, just pick one of these and stick to it. Don't like, don't get distracted by having a lab or a studio where you have all these different things going on. And you're just dividing up your attention 20% here, 30% here, 10% here. And like, what if you just put 120% into like, the one, and you just found a way, you know? I, you, I remember you saying that stuff.

• 52:05Sam Parr?

  But it seems really fun.

• 52:08Shaan Puri?

  It is.

• 52:08Sam Parr?

  And when it works, it's like, oh, wow, it worked and it's fun. And that's what I'm seeing when I, when I, when I, I mean, I don't know these guys, but from an outside perspective, and I'm sure it sucks on the inside, just like everything else has pros and cons. It seems quite fun. It seems really exciting to be able to win big and have multiple shots on target. It seems really interesting.

• 52:30Shaan Puri?

  So one thing, by the way, one thing I think Atomic did good, that they changed the model. So he was, so I told him, I was like, I told him about these problems. And he was like, yeah, we're gonna do it differently. He's like, we're gonna only do one project at a time. That team is do or die on that project. He goes, they have nine months to raise their, their series A. If they can't raise their series A in nine months, they're out. Like, you're out of a job. And he's like, in reality, we're gonna keep the good people. We're gonna offer them a job on the next one. But like, it's not a given that like, oh, if this doesn't work, no problem. Like, just work on this other thing that we're doing. And he's like, that's gonna have urgency. That's gonna have focus. They're not gonna split their time between different projects. And he's like, I'm gonna be the CEO of, of the project, you know, like, that we're doing. And the other big thing was, they weren't going after consumer.

• 53:15Shaan Puri?

  Like, we were doing consumer and like, social apps, which are, you know, lower odds of, of hitting the lottery. Whereas he was like, yeah, consumer's super hard. You know, it's just really hard to, you know, the consumers are fickle. We're gonna do B to B. And so that they started doing only B to B stuff for a long time. And, um, and Hims was the one kind of like, consumer hit that they've had. The other things that they've had that have done okay are, are B to B companies, which I think are a smarter model to do. Efounders is a great example of one of that, that's working in Europe, where it's like, they only do SaaS. And they really focus on, um, problems that they know that are in the B to B space, because their own companies have this problem. So then they build a product for that, and they build it, make a company out of it. They've had big hits like Front came out of that and different things like that.

• 54:02Sam Parr?

  Well, Rocket Internet does it as well. And they're, they have, they're tens of billions of dollars with the value that they've created. But the best example of this, my favorite actually, and I just realized this as we were talking, is Kevin Ryan. Kevin Ryan is someone who I admire. And, and I, I joke that we kind of look like, he's probably, uh, 30 years older than me. But I tease that we like, he kind of looks like, I look like him. We kind of look alike. And he, um, he was the 20th employee at, I forget what it was called, but it was DoubleClick. It was called DoubleClick, and it was sold to Google for multi billions, and eventually became Google AdWords and AdSense. And he told me that he made around $20 million when he sold it. Which is definitely a shit ton of money.

• 54:44Sam Parr?

  And then using that, him and this guy named Dwight would invest $300,000 and give a company six months to show traction. And the outcome of their companies, there's a couple losers and a couple winners, probably a lot more losers than winners. But the first one is MongoDB, which is currently publicly traded at a $21 billion valuation. The second one is Business Insider, which is probably a billion, it was sold for $500 million, probably worth a lot more now. The third one is Zola, which prior to the pandemic was doing hundreds of millions of dollars in sales. And I think that there's like four or five more that have been hits.

• 55:19Shaan Puri?

  Right.

• 55:20Sam Parr?

  And he told me, I actually called him and I emailed him like every month for like three years to try to get him to talk to me. And eventually he let me fly out there and meet with him. And he told me that all he does is him and Dwight, I mean, they're wealthy, right? So they can do this, but they, he, they just come up with an idea and they just get a piece of paper and a pencil and they do like write out the math and they're like, oh, that's kind of interesting. All right, let's try to find someone to do it and we'll give them 300K to do it. Now, this sounds like a very simple process and it might be simple, but it's still quite hard to pull off, but they've done it. And it's, and it's called Silicon Alley Insider is the name of his thing. And you'll have to look this guy up. It's really interesting.

• 55:58Shaan Puri?

  I think that's Jason Calacanis's thing. That's not, that's not those guys.

• 56:01Sam Parr?

  No, it's, it's, they have the same name.

• 56:03Shaan Puri?

  Oh, okay. Interesting.

• 56:05Sam Parr?

  It's, it's called, wait, is it called Silicon Alley Insider?

• 56:10Sam Parr?

  It's called Alley Corp. Sorry, you're right. It's called Alley Corp.

• 56:15Shaan Puri?

  So, so I think there's.

• 56:17Sam Parr?

  Business Insider was called Silicon Alley Insider.

• 56:22Shaan Puri?

  Interesting. So, so I think, so, so there's, it's just like accelerators, right? There's like a million accelerators in the world. Every college has one, every little city has one. And then you have Y Combinator that just like kicks ass. And you know, so Y Combinator is the best.

• 56:36Sam Parr?

  Sorry to interrupt. Gilt, guilt, guilt is the other one that he started.

• 56:40Shaan Puri?

  Right.

• 56:40Sam Parr?

  Go ahead.

• 56:41Shaan Puri?

  That's, that's a bunch of hits. So basically you have like, it's not that is this model good or bad? It's like, how do you execute it and who are the people involved in it? So like Y Combinator is an accelerator that is probably created, you know, I don't know a hundred billion dollars worth of value now out of the companies that have come out of it.

• 56:58Shaan Puri?

  Easily over a hundred billion, actually Airbnb alone is a hundred billion. Um, so, so Y Combinator is like the best and then you have tech stars and then you have like all these other accelerators that like have never had a hit. And um, so our accelerator model is good or bad. Like if you said it was bad, you'd be wrong because Y Combinator is that a hit. But if you said it's just great and you can repeatedly make success using this model. No, that's not true. I think the same is true for studios and everyone is different because you have to make a bunch of choices. It's like, for example, are you going to do multiple ideas at once or are you going to do one at a time? Are you going to have shared staff working across projects? You're going to have staff dedicated to their one and they live and die with the one. Are you going to fund it indefinitely? Or are you going to give it a, a six month or nine month time period to, to get to some traction and raise money from external investors?

• 57:41Shaan Puri?

  Or are you just going to let it run forever? Um, do you come up with the ideas or do you invite in founders and they spend some time coming up with the idea like E I R? Right? There's all these different differences that like, there's all these like little choices that will lead to a totally different outcome. It sounds like in that case, they come up with the ideas and then they find an operator. In Jack's case, he came up with ideas and he was the initial operator and then he hires a CEO. You know, in X plus case, they bring in an operator and they, the operator comes up with the idea. And so there's all these different versions of it and um, you know, a lot of it just depends on both luck as well as who's involved, like truly great entrepreneurs and investors can have success where somebody else copying the same model that they have won't, they won't be able to pull it off because they don't have the right judgment.

• 58:27Shaan Puri?

  And that's why I think I failed. I think I didn't have the same judgment that these guys who have had success, like with their, with their model. I think they were better at playing that game than I was.

• 58:38Sam Parr?

  It also helps to be wealthy, I think, and be able to write uh, ten to twenty, three hundred thousand dollar checks and have the, the time to do it. And so I don't want to dismiss that.

• 58:50Shaan Puri?

  But a lot of them raised money like Jack, he raised money. He raised, I don't know, like a hundred million dollars or something from Andreessen Horowitz and others to fund his lab, even though he himself was like, you know, you know, doing super well. He had sold the company to eBay. He was like crushing it at PayPal or whatever, like eBay when he was there. Um, you know, he sold his company for $75 million when he was 24.

• 59:11Sam Parr?

  Well, I'm not just, I'm not dismissing any of their skill. I'm just saying this is definitely like a after you get your hit. It's a lot of, I'm not dismissing that at all. It's like, it's a lot easier to become a good golfer if you have some money to afford a fancy, uh, uh, fancy clubs and a membership.

• 59:28Shaan Puri?

  And there's a bunch of people trying to do this who that don't have that, right? There's, there's a group, uh, this guy Bobby, he listens to podcasts. He's doing this for creators. He's like, all right, we're going to make a studio. We're going to just build products for the creator economy. And I don't think they have a big track record or anything like that, but that's their focus. They're trying to do a studio for that.

• 59:44Sam Parr?

  I'm not saying it's impossible.

• 59:45Shaan Puri?

  I know another group of guys, another group of guys that I'm bet, I would bet on that, um, the main guy is this guy Kumar. And if you should follow him on Twitter, he's amazing. Uh, he's super interesting on Twitter and Facebook. Uh, his handle is, uh, data raid.

• 59:59Sam Parr?

  I know him. I know who he is.

• 1:00:00Shaan Puri?

  And he's just like really into all these alternative.

• 1:00:03Sam Parr?

  He's a weird guy.

• 1:00:04Shaan Puri?

  Yeah, he's a weird dude, but he's really sharp and he's really out there, different type of thinker. And so he's like, he's like really into like, you know, the, the energy industry. And, um, so he'll build like little products for the energy industry that you didn't even know, like there was a need for. So I think this guy is going to do well because he knows where to sniff. He knows where to sniff out some money because he's looking at problems that the average kind of engineer in Silicon Valley or New York or LA, they don't even know these problems exist. They don't even know these companies exist. And so, um, you know, he's, he was doing one, for example, like his friend is a lawyer. And, uh, you know, there's like all these like little rule changes in like your local regulation or your local law. And he's just made an alert system where it'll alert you about whenever this rule changes.

• 1:00:50Shaan Puri?

  And, uh, he can go get a bunch of lawyers to sign up for these email alerts. And it's a SaaS business that, you know, can do well, or, you know, energy prices when they, when they rise and fall. Um, how, you know, how are you going to track that? How do you get, how do you build a database of that, that information? So he's got all these like really random ideas that I think the average entrepreneur doesn't really even know about those markets enough to like, to know those problems. And therefore he finds the kind of untapped opportunities.

• 1:01:17Sam Parr?

  Well, I think we should dive deep on this sometime, like even more. And I want to get Jack on here. And I would love to get Kevin Ryan on here. Because I, this sounds cool. It definitely sounds like a rich guy's playground. And frankly, I want to do it.