#52 - AI Teachers, Deskless Workforce & The Passion Economy with Zak Kukoff

Sam (@thesamparr) and Shaan (@shaanvp) talk ideas, trends and businesses. We're joined by Zak Kukoff (@ZCK), a 25 year old VC of $500M Emergence Capital (emcap.com) who's home runs have been Zoom, Salesforce, Veeva, Yammer and more. Topics for today: Introducing our guest Zak Kukoff (1:22), Equity vs Cash comp debate (3:40), Zak leaving school at 16 to raise money (6:49), Does investing in young people work? Should they be building businesses or partying? (11:12), Deskless workforce (17:49), The passion economy (23:43), How and when to build a sales team to accelerate growth (33:07), Buying engineering-led businesses and raising the prices (36:22), AI teachers in sales & language (38:35) & Optimizng your copy (46:39). See acast.com/privacy for privacy and opt-out information.

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

• 0:10Sam Parr?

  Yesterday, we asked people to

• 0:12Shaan Puri?

  Do a thing.

• 0:13Sam Parr?

  To do a thing. We asked, we told them that we would send them a, like a gif. I don't know what we said. Oh, I know. They could ask any question they wanted to ask and me and Sean would answer it.

• 0:22Shaan Puri?

  We'll do a Q and A.

• 0:22Sam Parr?

  And in exchange, they had to subscribe, unsubscribe and subscribe again. We're trying to game the podcast ranking system.

• 0:28Speaker 02

  I love it.

• 0:28Shaan Puri?

  We're willing to have our, our real listeners kind of click farm it, but we're not just being, you know, paying somebody in the Philippines to do it. That's our line.

• 0:36Sam Parr?

  I'm down to do it. No, I'll do that.

• 0:38Shaan Puri?

  Okay. Well, so far that's been our line. We dropped the Stu episode today. People are liking that. Dude, Christians everywhere are, are hitting me up.

• 0:48Sam Parr?

  Oh, yeah.

• 0:49Shaan Puri?

  The CEO of Prey reached out. I was like, hey, dude.

• 0:51Sam Parr?

  Prey.com, Hollid Stu.

• 0:53Shaan Puri?

  Cause we've been, we've been talking about religious stuff for like two or three. It's been a theme across a couple of episodes. And we went super deep on it. I don't know if you listened to the one with Stu. And so a bunch of people who are like church tech, a bunch of church tech entrepreneurs reached out.

• 1:07Sam Parr?

  I had a rabbi email me

• 1:08Speaker 02

  Really?

• 1:09Sam Parr?

  About this podcast. Um, I also had another guy email me saying, I'm out of a job and Stu's going to replace me. And for the record, I'm great with that.

• 1:20Sam Parr?

  I'm totally fine with that. Okay. So we have a guest here. You want to?

• 1:23Shaan Puri?

  Yeah. What's up? Who are you?

• 1:24Speaker 02

  Hey, how's it going? Um, my name is Zach Kukoff. I'm an investor at Emergence Capital. We're an early-stage enterprise SaaS fund. We're known for investing in Salesforce, Box, Yammer, Zoom, Viva, Gusto, et cetera, et cetera. It's a pretty cool job. So you get to meet with some of the most interesting people in the world all the time. Like you get to be the dumbest guy in the room. Although we'll see after this room at the end of the podcast how I'm feeling on that one.

• 1:45Shaan Puri?

  Yeah. You should be the smart guy here. So.

• 1:47Speaker 02

  Yeah. Edit out all my bad jokes at the end. Just keep the good jokes in, get rid of the bad jokes.

• 1:51Shaan Puri?

  So that portfolio is pretty badass. You said Salesforce, Zoom, Yammer, blah, blah, blah. Are those like? You guys get in that Series D and you just get the logo? Or did you like actually invest before it was obvious?

• 2:03Speaker 02

  We predominantly invest in Series A. Uh, it's like we do about 85% Series A, 15% Series B. Zoom, we're the largest investor of. Viva, we were the only-

• 2:12Sam Parr?

  What's Viva?

• 2:13Speaker 02

  Viva Systems was a pharmaceutical R and D, still is a pharmaceutical-

• 2:16Sam Parr?

  Damn, so that's big. That sounds huge.

• 2:18Speaker 02

  Yeah, it's a huge, I mean, think about for a second, like, you know, 10 years ago, right? Nobody was thinking about vertical SaaS as an investable category. The conventional wisdom was, oh, SaaS is a small category, but sort of if you go horizontal across 30 different industries, maybe there's enough investable space there. And Viva was the first multi-billion dollar hit in vertical SaaS. It was kind of Salesforce, but just for pharmaceutical companies. And they've done phenomenally well. We were the only institutional investor who led their Series A. And they went straight from Series A to IPO. So a huge, huge outcome there.

• 2:51Sam Parr?

  Right. And before this, you worked at Flexport and then you had your own thing?

• 2:55Speaker 02

  Yeah, years and years ago, back in 2011, started a company called Tru today in the ed tech space. And we can talk all about that because that was a very fun experience.

• 3:04Shaan Puri?

  Ask us how we know each other.

• 3:05Sam Parr?

  Uh, I asked them how they know each other. Let's hear the answer. How do you guys know?

• 3:08Shaan Puri?

  Don't know each other. We met downstairs. Uh, he's a funny guy on Twitter and I was like, hey, funny guy of Twitter. Come, uh, come on, come on the podcast.

• 3:17Sam Parr?

  I think the exact response was, all right, go, make me laugh.

• 3:20Speaker 02

  Make dance, dance for me.

• 3:21Sam Parr?

  Um, what do you mean he's funny?

• 3:23Shaan Puri?

  Uh, he's witty.

• 3:24Speaker 02

  What do you mean I'm funny? Please say a nice thing.

• 3:26Shaan Puri?

  Like, okay, I'm gonna, I'm gonna find one of your tweets that's funny, but, um-

• 3:30Sam Parr?

  Like, do you make like wisecracks?

• 3:32Shaan Puri?

  Yeah, he's trying to make a joke.

• 3:34Speaker 02

  I would say I make-

• 3:35Sam Parr?

  At whose expense?

• 3:36Speaker 02

  My own mostly.

• 3:37Sam Parr?

  Oh, that's cool.

• 3:38Speaker 02

  You know, some occasionally, some others too. We were talking before we started recording about the recent hot take on whether or not employers should offer equity. That was pretty fertile ground, but there are a lot of, the truth is Twitter's this weird engine where it rewards people for saying pretty dumb things all the time. And so I find it funny to comment on a lot of things I think are not particularly well reasoned, that people sort of tweet out without particularly-

• 4:02Shaan Puri?

  Right.

• 4:02Speaker 02

  -well-known or influential people who you feel like should probably know better. And yet instead just constantly say dumb stuff online.

• 4:10Shaan Puri?

  You want to give an example?

• 4:10Speaker 02

  Uh, I think that equity things are pretty good. For those who who may not have seen, uh, Jason Fried of Basecamp was tweeting about uh, the fact that employers shouldn't offer employees equity in their company, right? Which I think on the face of it, you think about like tech as a wealth creation engine. We were talking about beforehand a little bit too. The engine of wealth creation, it's not cash comp, it's equity, right? It's the ability to be 27, 28, 30, a relatively young person. Come into a startup and almost win the lottery in a serious way. It doesn't mean that everybody who joins a tech company is going to have a $5 million outcome at the end.

• 4:42Sam Parr?

  So what did Jason say?

• 4:43Speaker 02

  Jason said people employers shouldn't offer equity to employees.

• 4:46Sam Parr?

  Why?

• 4:47Shaan Puri?

  So hi- his take, if I'm Jason and I like Jason, uh, he's a

• 4:50Speaker 02

  Yeah, he's a good guy.

• 4:51Shaan Puri?

  I don't know if we're friends, but we know each other. Um, he, he basically was like, you know, uh, what tech companies do is they sort of low ball you on the cash side. Offer you this promise of equity, which most likely turns out to zero. And you're left holding a losing lottery ticket. Uh, better to just pay people, treat them well, give them great perks, give them good like work, like balance. That's how you should compensate people.

• 5:12Sam Parr?

  Well, so the

• 5:13Shaan Puri?

  That's his take.

• 5:13Sam Parr?

  The first part of that is right. Uh, second part is wrong.

• 5:17Speaker 02

  The first part is saying that people low ball on cash and offer equity instead?

• 5:20Shaan Puri?

  Yeah, like

• 5:20Sam Parr?

  Cause they don't have money.

• 5:21Speaker 02

  I, I don't know that I, so

• 5:23Shaan Puri?

  It's risk adjusted, I think, right? Like

• 5:24Speaker 02

  Here's what I saw. I saw a take and I forgot who said it, but I'm gonna totally rip it off, which was, if you think about the number of companies hiring people and you kind of wait that by the equity offered. It's predominantly like later stage companies that are really making equity offers. And really a lot of FAANG companies are making offers, right?

• 5:39Sam Parr?

  Yeah, but those aren't startups.

• 5:40Speaker 02

  Those aren't startups, so cut out like anything public. But even if you just wait private companies offering start like equity. There are many, many more jobs, these later stage companies where the equity has some defined value. And it's unlikely to go to zero. It may not have exponential upside, it's unbounded, but it's unlikely to go to zero. And the cash comp is pretty good, or at least relative to what you would make working for a non-tech company of the same size. Definitely an early stage, you can get low balled on cash and make it up in equity.

• 6:05Sam Parr?

  I think low balls are all, uh, not a good

• 6:07Speaker 02

  Yeah, that's his terminology, but

• 6:09Sam Parr?

  You, you just pay less.

• 6:10Speaker 02

  Yeah, maybe you're making a little bit less on cash. But if you're working like a series D startup, you're probably making a pretty good cash comp base. And you have real upside in the equity portion too. I think that's the part.

• 6:21Shaan Puri?

  His other piece was like, oh, because you have equity, hey, you got skin in the game, you should work your ass off for this. And your skin in the game is like, whatever, point one percent of the company. And he's saying that's not actually having skin in the game. So that was his take. He triggered everybody, which I think is his goal with 90% of these, right? It's like to trigger Silicon Valley. And then therefore stand out as the contrast, the anti Silicon Valley. That's the brand.

• 6:42Speaker 02

  It's a good.

• 6:43Shaan Puri?

  And he plays it like a fiddle. It's awesome.

• 6:45Sam Parr?

  So let's talk about, this is related, your.

• 6:48Shaan Puri?

  Flexport.

• 6:49Sam Parr?

  No, before that, he said he raised money. I wanted, and he said it turned into nothing.

• 6:52Shaan Puri?

  Well, but, but, but the flex for one is actually the perfect example. You worked at Flexport, which was a. Which was a hot startup.

• 7:00Sam Parr?

  Okay.

• 7:00Shaan Puri?

  So you joined at 200. How did you think about your cash versus equity? What was the equation you did in your head?

• 7:05Speaker 02

  I mean, I think it actually does help the backup a little bit to this, to my startup first, then we can kind of come back to Flexport. So think about my startup, I started really early. It was 2011, I was 16. Oh, it wasn't like, to be clear, like, this was not, yeah, this was like, I'm a, I'm still fairly young. And I was really young then. I didn't know I didn't know to a large extent. And so I sort of stumbled into startups. So you want to contrast for a minute? I think the Flexport approach was pretty well reasoned versus my startup, when literally it was a science fair project that I ended up raising some money and going to Techstars for, right? Like, I had no idea what was going on. I was frantically kind of paddling.

• 7:39Shaan Puri?

  Did you drop out?

• 7:40Speaker 02

  So I actually left my sophomore year of high school early. I like took AP tests and I was like, peace, I'm out of here. And I spent the like three months in Boulder, Colorado for Techstars. Back when Techstars was like two locations or three locations. Or there was like Boulder, Boston, Seattle.

• 7:54Shaan Puri?

  How old are you?

• 7:55Speaker 02

  I'm 25 now. So I was, yeah, I was young then, I'm still pretty young now, I think so at least. And so that was like very much not a well considered. It wasn't like I was thinking about this move and I was like, oh, I've evaluated all the options in my opportunity space. And I'm going just for the one that I think has the highest upside and learning or value or whatever. It was one of these situations where I fell into it. It became a really steep growth curve, but I couldn't have predicted that at the outset. Versus Flexport where I was.

• 8:20Sam Parr?

  How much did you raise for that one?

• 8:22Speaker 02

  We raised about 250k. So we didn't raise a ton of money.

• 8:24Sam Parr?

  And it went out of business?

• 8:25Speaker 02

  Yeah, it went out of business.

• 8:26Sam Parr?

  Did you ever make revenue?

• 8:27Speaker 02

  We made some revenue and we had some, actually some partnerships that went in. But the challenge was I was 16 and my two co-founders were 17.

• 8:34Sam Parr?

  They. Take you seriously.

• 8:36Speaker 02

  Well, actually.

• 8:36Shaan Puri?

  It's like funded via allowance.

• 8:40Speaker 02

  My lemonade stands about happened to run into this. No, I mean, we've raised a little bit of money, but the challenge was, uh, we actually had some investor interest and one of my co-founders has gotten into Stanford. His parents said to him, if you start, take time off from Stanford to go do a startup, that's it, we're disowning you. Like, we're, we're cold shoulder frozen.

• 8:57Sam Parr?

  Is he Asian?

• 8:58Speaker 02

  Yeah, they got, he was Asian. I grew up in an immigrant house.

• 9:02Sam Parr?

  All my Asian friends' parents had the same exact thing.

• 9:05Speaker 02

  If you take time off to do a startup, that's it. My folks were pretty supportive, but at that point, if you're losing one of the two co-founders of a company, your fundraising prospects. It's tough. Pretty good to not great. And still, by the way, I was 17 at that point, so I was still really, really young by, you know, by relation. That's kind of one end of the extreme. The other.

• 9:22Sam Parr?

  We have these guys who work out here, Andy and Alice, and they have a company that makes, I won't reveal it, but.

• 9:26Speaker 02

  Yeah.

• 9:27Sam Parr?

  Good, it's a great company.

• 9:28Speaker 02

  Yeah.

• 9:29Sam Parr?

  A great business to own. And their parents were like, when are you going to go back to being a consultant? And they're both, uh, have Chinese parents, like from China. And so I work all about the Asian culture this way.

• 9:41Speaker 02

  It's this like very, you know, my parents are both, uh, I guess, second generation. Their parents were immigrants, right? And there's very.

• 9:47Sam Parr?

  From where?

• 9:48Speaker 02

  From Italy on one side and from Eastern Europe and Argentina on the other side. And so it's this very like traditional immigrant mentality, which is, which is, by the way, been the right, like, if you were to pick a choice for the vast majority of time in America, the better wealth creation tool was to go to college, go to grad school, become a white collar professional. That was the successful path for a long time. It's only recently that kind of playing the startup lottery, for lack of a better term, has been the successful choice. And so for these, you know, my immigrant grandparents, their attitude was they're going to work hard. You know, my great grandfather was a factory worker in Argentina, right? And he worked his ass off so that my mother and grandmother could be schoolteachers so that in their minds, I could go get, you know, a PhD or an MD or whatever, become a professional. And clearly it's not necessarily happening.

• 10:33Speaker 02

  But that was like, that was the, the life plan for immigrant families in this country for generations was every generation, one more level of educational attainment, which correlates with one more level of professional success. It only recently has happened to couples.

• 10:46Shaan Puri?

  Totally. And then so, so you'd go to, you go to flex work. So you were saying, have that experience. Cool. You're now seventeen, eighteen.

• 10:52Speaker 02

  Yeah. So yeah, did the startup like seventeen, eighteen, decided to go to college. Went to NYU, really special program there called Gallatin, where you basically make up your own major. And so the whole school is, uh, it's like Build-A-Bear University is what I used to joke about, but it's really like you can do independent study. You can do work, study, you can do classes, sort of like hodgepodge this program together.

• 11:11Shaan Puri?

  That's cool.

• 11:12Speaker 02

  Uh, then while I was there, I was helping run Dorm Room Fund, which is first down capitals, college, university fund. It's a, but a million dollar a year. Actually, it might be more than that. I'm not sure now, but a million dollar a year vehicle just for investing at pre-seed for, uh, student founders.

• 11:26Sam Parr?

  Is this shit a good idea, investing in these young ass kids?

• 11:29Shaan Puri?

  I think how's dorm room, dorm room has been around for a while. How, how does it done?

• 11:32Sam Parr?

  Fucking horrible idea.

• 11:33Shaan Puri?

  Well, we have the, the experiment ran. What, what happened?

• 11:35Speaker 02

  Experiment ran. It was a pretty successful experiment.

• 11:37Shaan Puri?

  What, what came out of it? What was, uh?

• 11:39Speaker 02

  I mean, there have been some, listen, there have been some pretty big hits and there have been some pretty big misses, you know? And I think I had a big hit, like fiscal note was done pretty well at a dorm room fund, Bevy, the beverage company's done pretty well at dorm fund, Brooklyn.

• 11:49Sam Parr?

  Wait, those guys were?

• 11:50Speaker 02

  Yeah. Student founders. Yeah. Brooklyn in the Linens company. And I'm sure I'm gonna get probably railed on Twitter after for not having come up with the whole portfolio, but I'm sure there are more that I can't think of. And on the missus side, you have like Lily AI, which is the other, if you guys remember Lily drones.

• 12:03Sam Parr?

  Yeah.

• 12:03Shaan Puri?

  Oh, yeah.

• 12:04Speaker 02

  They like raised, um.

• 12:05Sam Parr?

  Failure.

• 12:05Speaker 02

  Yeah. They raised like, I don't know, like thirty million, something like that. I can't remember the exact number. They raised a bunch that kind of flamed out. And that's the, the counter side too, is you can have people who, and I remember it when I was one, were inexperienced founders who don't know how to manage.

• 12:17Shaan Puri?

  And what's the, what's the one out of Berkeley? There's another, uh, there's a Berkeley specific fund, Jeremy runs. Yeah, the house.

• 12:22Speaker 02

  Yeah. Jeremy's great.

• 12:23Sam Parr?

  And then the Peter Thiel thing. Dude, I'm down. Like, if you're like old enough to be an adult and that starts something. But I also think that you should just be getting drunk and like hooking up with people and.

• 12:34Shaan Puri?

  Yeah. Get drunk and kiss some people.

• 12:36Sam Parr?

  Yeah.

• 12:37Shaan Puri?

  That's our fellowship. The Sam and Sean fellowship.

• 12:40Sam Parr?

  I mean, live a little.

• 12:41Shaan Puri?

  Booze and kiss him.

• 12:42Sam Parr?

  Like, at least that's what the dream was. The goal. I don't know.

• 12:47Shaan Puri?

  And then give it, then give it up, go keto and start intermittent fasting after that.

• 12:51Sam Parr?

  Yeah.

• 12:52Shaan Puri?

  That's the like plan.

• 12:53Sam Parr?

  Five AM, like a little bit later, but stay up until five AM.

• 12:57Speaker 02

  Yeah.

• 12:59Speaker 02

  I mean, listen, there's like an important socialization element of college, which helps you learn emotional maturity and learn how to deal with people. And it's tough if you don't have that. I don't know when you make it up. Certainly don't make it up by moving straight out here and working really hard early.

• 13:12Shaan Puri?

  Oh, plus you don't make friends. Dude, you don't make friends after you graduate. Your friends are who you who you met in college. And then the rest are just, you just go to work and then you go home and you're like, wait, where do people make friends after that? No more friends.

• 13:24Sam Parr?

  I'm like Uncle Rico. Like, I think of college, I'm like, oh, I would kill to go back.

• 13:28Shaan Puri?

  Yeah, give it all up.

• 13:29Sam Parr?

  Yeah, for sure.

• 13:30Shaan Puri?

  Like Yashon, who produces the podcast, he's always like, oh, well, you know, you know, he's like 2021. He's like, well, you have, you know, experience, you have capital, you have this network, you have, I'm like, dude, I would give all of it up just to be right back where you are in your position right now. Like, I'll trade you if we can do some Freaky Friday thing.

• 13:47Sam Parr?

  Completely agree. We, we, remember that young guy, oh, you were there. We met a young guy at our meetup and he was like 21 and he flew up. I'm like,

• 13:54Speaker 02

  wow.

• 13:54Sam Parr?

  So like, if I was, if I was 18 and I lived and I went to NYU, I would be not be in the door. I would only do the dorm room fun if it helped me, me girls. I mean, if you're in Soho and you're 18, that's the dream.

• 14:10Speaker 02

  NYU was a really fun college to go to and certainly had a really fun time there. But here's the flip side of it, right? Like, I, I see the other side of this, which is, it does feel today like there are compounding effects, both reputationally and professionally. So working and exposing yourself to like some kind of real tangible ownership of work really early. And the earlier you can do that, whether it's like a startup or working for a large company in a significant role or building some reputation, even if it's just tweeting dumb jokes on Twitter, like, that compounds over time. And if you wait five years, you can, you can both have fun and build compounding professional returns at the same time. It's sort of the argument I would make here, right? You can do.

• 14:48Shaan Puri?

  Yeah, you could do both, for sure. For sure, you could do both.

• 14:50Speaker 02

  It's not as fun as just doing the fun. It's not as successful as just doing the success. But a lot of folks try to walk that.

• 14:56Shaan Puri?

  But you'll end up way ahead of the curve because most people are just having fun and not doing anything that like builds their sort of like career foundation, ironically, when you're in college. Okay, so you, you do all this stuff. And by the way, when you. You said emergence, you really emphasized the C at the end of it. Is it because people think it's emergent capital?

• 15:15Speaker 02

  I think people, there's a couple of things. One is people think it's emergence capital. People think it's like emerge capital. I've heard like five or six different issues with the name. The other thing is our website is EMCAP.com. When I first joined, I'd say, oh, it's MCAP. And people were like, oh, the letter M and then the, you know, CA.

• 15:32Shaan Puri?

  Right.

• 15:33Speaker 02

  I probably.

• 15:33Shaan Puri?

  Yeah, you need to rebrand.

• 15:35Speaker 02

  Not up to me. I probably had like six months of emails I didn't get because people were like, oh, this jerk gave me like a wrong email address at that party.

• 15:41Shaan Puri?

  Yeah, it's bouncing.

• 15:42Speaker 02

  I was screaming MCAP on the top of my lungs. People were like, oh yeah, like Zach MCAP, MCAP.

• 15:48Shaan Puri?

  Right.

• 15:49Speaker 02

  So if it were up to me, it'd be a different URL.

• 15:51Shaan Puri?

  All right. So let's get to some of your ideas. Also, I promise you're a funny guy and I found a tweet from you.

• 15:56Speaker 02

  Oh, perfect.

• 15:56Shaan Puri?

  Okay. So Bird, did you hear about this? Bird launched Bird Pay?

• 15:59Sam Parr?

  Uh, yeah.

• 16:00Shaan Puri?

  Bird scooters launched Bird Pay. Zach comes in on Twitter, says, when you make scooters, but then you see four fintech companies get acquired in one week, you, you make this pivot.

• 16:08Speaker 02

  Yeah, for the last track afterwards. So it sounds like the.

• 16:10Shaan Puri?

  Turns out tweets aren't that funny when you read them out loud later in public.

• 16:13Speaker 02

  The room was like dying. No one could hear it, but the room was dying.

• 16:16Sam Parr?

  So how, how, how big is the fund?

• 16:18Speaker 02

  Yeah, about a half a billion dollar fund.

• 16:20Sam Parr?

  And how, what size checks do you write?

• 16:22Speaker 02

  It's a good question. Uh, we are less constrained by individual check size and, and so just from our perspective.

• 16:28Sam Parr?

  Just come on, give me the answer.

• 16:29Speaker 02

  This is the answer. This is the real answer. I, I've been here about a year and a half now. I've seen us do everything from like two million up to like 15 million.

• 16:35Sam Parr?

  Okay, there's my answer.

• 16:36Speaker 02

  Broad range.

• 16:37Sam Parr?

  So when you're coming from this perspective, are you going to come from this, these ideas of you think that wealth creation is in raising money or in owning all of it?

• 16:47Speaker 02

  It's a tough, I don't know that the dichotomy really makes a lot of sense from where I'm sitting, but I'm also.

• 16:52Sam Parr?

  It is a false dichotomy. I agree with you, but.

• 16:54Speaker 02

  My own book, but whatever. I guess what I would say is this, like most businesses probably shouldn't raise venture capital. Doesn't mean you shouldn't raise outside capital at all, but like when you raise venture capital, there's a very specific growth trajectory you are signing up for. And the challenge is that endeavor, it's unbounded upside, right? Like there's a huge opportunity if you do that well. And if you don't do that well, it can go to zero really easily. So it's a high risk, high reward sort of life to be in. If you're trying to build, you're thinking like, I just want to optimize for, I don't know, like what number is I can retire, but I'm not going to buy a yacht. Whatever number that means to you, maybe it's seven million, maybe it's 10 million, whatever. Like it's likelier to get that by building your own small business and growing sustainably and slowly, rather than having a venture sized outcome, whether that's positive or negative.

• 17:39Shaan Puri?

  Yeah, I'm going to throw out some bullets. You sent me some bullet points beforehand. I just, I don't know what they are. I don't know what they mean yet. I just have the headline. So deskless workforce. What is that?

• 17:49Speaker 02

  So that's one area we think a lot about in emergence. And so think about like, where do venture capitalists invest, right? Think about what are the biases that VCs have? Most VCs invest in things that are pretty easy for them to find, like things that are around them. So if I think about like every VC I know, where are their investments? It's, you know, it's SaaS tools for white collar workers. It's social, consumer social tools. It's like CPG products that have like pretty subway ads in New York. That's kind of the areas.

• 18:16Sam Parr?

  Coastal, coastal elite people.

• 18:18Speaker 02

  A hundred percent like, like yuppies who like have disposable income.

• 18:21Shaan Puri?

  Right, you get it really quickly. You see it.

• 18:23Speaker 02

  You know, it's like, oh, I viscerally understand.

• 18:25Sam Parr?

  Like people who listen to this shit.

• 18:27Speaker 02

  Right, anybody who's thinking.

• 18:28Shaan Puri?

  Yeah, all you yuppies out there.

• 18:32Speaker 02

  Yeah, I'm going to get dragged by Chapo later on that one. But yeah, like anybody who's like an upper middle class yuppie is solely in the demographic of venture. And you think about the fact that 80% of workers don't work behind a desk every day. And that doesn't mean they're all blue collar, but it means they might be like a nurse, they might be a doctor, might be a teacher, don't have desks, right? There's a huge segment, particularly in enterprise or in B2B SaaS, a huge segment of folks who fall into that category. And right now, 1% of venture funding goes to companies that sell to that category.

• 19:01Shaan Puri?

  Can you give me an example?

• 19:03Speaker 02

  Of a company that sells to that category?

• 19:04Sam Parr?

  Know what you're thinking about.

• 19:05Shaan Puri?

  So like an example of a company that does it was like a rig up or something like that. Um, or like whatever earning or something like that.

• 19:12Speaker 02

  Yeah, like upkeep is one of ours too, which down in LA, which is like facilities management, like any company selling software to a bit like we have another one.

• 19:19Sam Parr?

  Yeah, give, give some.

• 19:19Shaan Puri?

  So what's a, what's one that you think could exist?

• 19:22Speaker 02

  Okay.

• 19:22Shaan Puri?

  That doesn't.

• 19:22Speaker 02

  Got it, got it, got it. Um, I think there's a lot of innovation still in manufacturing itself. Like if you think about the line of manufacturing, we have one bet that helps people learn how to do artisanal manufacturing better. So like, there's a lot of manufacturing that's just put slot A into portion B and it's sort of rote over and over again. There's a lot of manufacturing that's human driven, whereas you actually have to know some skill to build the thing, right? And so we have a bet in that space. When you think about like the rest of a warehouse or a, um, the rest of the factory beyond just the line itself, like optimizing how everyone moves, optimizing where you store things, optimizing the actual process and workflow. I think there's a huge opportunity there still. I was in the ed tech back in the day. I think there's a lot of opportunities still in ed tech. That's a huge one that's considered.

• 20:05Sam Parr?

  Can you go back, go back to this first one?

• 20:06Speaker 02

  Yeah.

• 20:07Sam Parr?

  What's an example of a factory, uh, who would use this?

• 20:10Speaker 02

  So you could think about, um, okay, I know you guys have a lot of like to fill by Amazon guys in the show, right? You can think about any factory in like Shenzhen that's making a bunch of tools. If they could have like a 5% more efficient factory, that's probably creating some real gross margin if that doesn't exist before, it probably gives them some leverage on labor costs they had before. So any factory that's making commodities probably wants to optimize their ability to work quicker because the pricing is an area where they can't really increase their.

• 20:37Sam Parr?

  Who's the leader in the space now?

• 20:39Speaker 02

  A lot of this is blue field. A lot of this, like there's not anybody making software for it. Today it's like, I have a factory manager who might have a clipboard who walks around and says like, okay, step one is do this thing. Step two is do that thing. And they're on foot saying, hey, make sure you're doing this at this time, teaching a process. And so the question is, in the same way that like Salesforce for sales managers, created optimization or workflow for those folks to understand the actual levers of their business. Is there like a similar opportunity in manufacturing or you can kind of sit at this higher level and do that as well?

• 21:08Sam Parr?

  Which industry would you start at? This is interesting to me.

• 21:12Speaker 02

  That's a good question.

• 21:13Shaan Puri?

  So while you think about that for a sec, so there's one which is what he's talking about, which is a software tool for to manage the actual work that's being done. Uh, then there's all the like sort of robotics and automation that's going into these factories to improve them. So like, for example, I was looking at a video of this, um, printing factory. So basically they print, uh, you know, if you're wearing, you know, none of us in this room are wearing a pattern, but like, okay, Adam's wearing a striped shirt. So that fabric has to get printed and basically it gets printed on these like, you know, football field yards of fabric. And then they literally have a guy and the guy's job, there's a machine that unspools it really fast and he's just looking for defects. So he's just staring at it, not blinking and he's just looking.

• 21:53Sam Parr?

  Where was this?

• 21:54Shaan Puri?

  Does the, does the, do all the stripes look right in, in China? And so I was just thinking like, this is something that a camera with computer vision does way better than a human who's got to stand there and be like, is there any defects? Is there a defect? It's like QA, right? Quality control. You know, this guy's literally just staring at this thing as it unspools the whole roll. And then he's like, yep, looked good. Or if he, if he sees something, he has to hit the button, rewind the spool, be like, oh no, it was fine. Sorry. Continue.

• 22:18Sam Parr?

  You see that shit all the time. Uh, have you seen on the, the, remember, did you ever watch that TV show, How It's Made?

• 22:23Shaan Puri?

  Yeah.

• 22:24Sam Parr?

  I love that show. And you see it all the time, like when they're making candy and shit in Hershey's.

• 22:29Shaan Puri?

  Right.

• 22:29Sam Parr?

  They're just like staring at it.

• 22:31Speaker 02

  You have a Twitter account, MachinePix?

• 22:33Shaan Puri?

  No.

• 22:33Speaker 02

  It's the same thing. It's how it's made, just on Twitter. It's phenomenal.

• 22:36Shaan Puri?

  MachinePix.

• 22:37Speaker 02

  Scroll through and see like thousands of really cool examples of machines you never thought about. So I think that's like one opportunity. The other thing is if you particularly think about like really high margin goods, I think about an iPhone for a minute, right? Like our phone, iPhone has a big margin attached to it. Every component, Apple has like some presumably upsell they're paying that manufacturer for. That's the kind of situation where that may be humans who still do a lot of that work because it's, it's too much finesse for a robot to do effectively. It's not the stare at this like thing unblinking for five hours until your eyes give out.

• 23:04Shaan Puri?

  Right. Peel this, put it on the backside, put it back together and push it forward.

• 23:08Speaker 02

  It's delicate work in a lot of ways. And so people do that and it's expensive to have people. People are hard. And by the way, people get tired. They're not optimal. There's a lot of, of, uh, challenges you have in like a company that's built on human labor. And so if you can help people be better at their jobs, A, you can ideally uplevel them to, to more intellectual roles, but also B, you can increase the output of the whole factory entirely. So you're not thinking about a collection of individuals, but you for the first time can look at an entire system at once. If that distinction makes sense.

• 23:37Shaan Puri?

  Right.

• 23:37Sam Parr?

  What else? What else we got?

• 23:39Speaker 02

  Can we scroll down a little bit?

• 23:40Shaan Puri?

  Uh, so, so your stuff's at the top right now. So, uh, passion economy.

• 23:44Speaker 02

  Yeah, I think there's, oh yeah, this is kind of something I'm thinking a lot about. Um, and this is a term that Andreas and

• 23:49Sam Parr?

  Dude, you're speaking my, my language. These are all boring ass topics.

• 23:53Speaker 02

  I love, maybe this is like five listeners, but I love boring stuff.

• 23:56Sam Parr?

  No, people like that. We talk about that a lot.

• 23:59Speaker 02

  That's my, like, that's my go, I mean, listen, emergence, everything we do is, is boring.

• 24:02Sam Parr?

  It makes way more money.

• 24:03Speaker 02

  It's, I think so, yeah. These are things that do really well. And by the way, boring is good. The more like sexy, big, like press and tech crunch stuff you get, the more competition you have for that slice of your market. If you are boring, under the radar, like Viva, great example, right? No one knows who they are, multi-billion dollar company that only raised one round of funding in, in a, in a huge, like, big whale hunting market.

• 24:24Shaan Puri?

  Yeah, that's magic.

• 24:25Speaker 02

  That's, that's the kind of like, that's the dream scenario, because then you can really walk that tightrope of raising money and still owning a ton of your

• 24:31Sam Parr?

  How much did they raise?

• 24:32Speaker 02

  Uh, we put in seven, I don't know, I think they only in total raised like 10, and then went public on that, which is

• 24:38Sam Parr?

  That's shit.

• 24:39Speaker 02

  Seemingly capital efficient.

• 24:40Shaan Puri?

  That's crazy. I haven't even heard of this.

• 24:42Sam Parr?

  What's their market cap?

• 24:43Speaker 02

  Ooh, I would say it's like 20 bill now.

• 24:45Sam Parr?

  What the fuck? I feel like I know of all the cool shit.

• 24:47Speaker 02

  This is like, this is saying, it's not, it's not

• 24:49Shaan Puri?

  Sam's upset at himself. How could I let this guy buy me?

• 24:52Sam Parr?

  What do they make?

• 24:54Speaker 02

  Uh, sorry, say again?

• 24:55Sam Parr?

  What do they make?

• 24:56Speaker 02

  In like revenue or in

• 24:57Sam Parr?

  No.

• 24:57Speaker 02

  The products?

• 24:58Sam Parr?

  Yeah.

• 24:58Speaker 02

  It's, think about like, everything Salesforce says for sales managers, it's a CRM or a CRM-esque tool just for pharmaceutical companies. So like for research, for clinical trials, for managing new drug development pipelines, like all this kind of wonky, gourpy stuff that no one from the outside looks at, that is hugely lucrative.

• 25:15Sam Parr?

  Did the founders work and they mu, they had to have worked in that industry?

• 25:18Speaker 02

  Yeah, it's a good question. Uh, I believe, actually should know stuff off my head, but I believe, uh, one was from the industry and I believe one maybe even came from Salesforce or had some Salesforce background beforehand too.

• 25:28Sam Parr?

  Cause how do you even find that that's a problem that you have to make?

• 25:30Speaker 02

  I mean, it's how, it's always helpful when you can come from the industry you're tackling, because not only do you know like where all the boring, gourpy stuff that's not public visible is, you also know which of those are good business ideas. A lot of boring stuff that is impossible to go after, or not possible unless you have millions of dollars to burn, which is less attractive. So this idea of like passion economy, think about for a minute, alright, there's like a long tail of people who are building really small businesses, in some cases like

• 25:54Shaan Puri?

  Podcasters.

• 25:55Speaker 02

  Podcasters are a great example of that, right? Podcasters, newsletter writers are kind of the classic examples. Anybody who's on Patreon, like, there's a huge long tail of these folks.

• 26:05Shaan Puri?

  Streamers, YouTubers.

• 26:07Speaker 02

  Anybody on Twitch, right?

• 26:09Shaan Puri?

  Writers.

• 26:10Speaker 02

  Family fans, right? There's like a literally a huge tail of these people. And today, there's a lot of work that there's some software that's starting to be developed to make their jobs easier. So I don't know what you guys use to distribute this podcast, like Substack for newsletters is a kind of a classic example of this, right? Patreon for creatives in general. I think that's a horrible business.

• 26:28Shaan Puri?

  I like that you call it Patreon as well.

• 26:30Speaker 02

  Yeah, I call it Patreon.

• 26:31Shaan Puri?

  It's nice. It's nice, Patreon.

• 26:33Speaker 02

  Like a patriot, like a patriot.

• 26:36Speaker 02

  You know, I feel like that makes a lot of sense. That's alright. Learning in real life.

• 26:40Shaan Puri?

  Welcome to the Passion Economy.

• 26:41Speaker 02

  Yeah, the Passion Economy is so

• 26:42Shaan Puri?

  That's the password to get in.

• 26:45Speaker 02

  Patreon, but like, it's interesting because some of them are not good businesses, and some of them, the whole business is just collecting payments and having a huge margin on top, which is a really great, like GoFundMe is a great business, because the whole thing is cash comes in, you take your margin on top and you distribute cash out. So it's a really easy business to run. Anyway, think about, okay, there's a long tail of these folks, and there's a lot, the people who have been doing the long tail to date have been focused mostly on creatives. Like, a lot of people who produce or create new products or content, I think there's a similar long tail emerging in the world of professional services. So think about anybody who's like a one or two man consultant shop, anybody who's like a tiny little law firm, kind of middle of nowhere, anybody who's like a two or three person accounting firm, and think about the fact, they're probably very good at running

• 27:29Speaker 02

  their specific business, they're probably great at being a local doctor, a local accountant, a local lawyer, but they're not great at all the stuff around running the business, like collecting invoices on time, having docs, sending out documents in a secure way, generating documents used 30 times a month. And I think there's an opportunity to build a pretty low capital efficient business that just rolls up like five or six features around these, and then picks their vertical and just sells aggressively into this SMB long tail of them.

• 27:57Shaan Puri?

  What features?

• 27:59Speaker 02

  Probably like someone was saying, invoicing is a kind of classic one where you can just collect cash flow, build margins, send cash flow back out. Document generations are really good ones. So if you're an attorney and every, you know, week you have a new client who comes in and they have to submit the same like five pieces of information, maybe some of them use DocuSign, but DocuSign is expensive. If you're like a two man, you know, a law firm in like Idaho, you're not going to spend a thousand bucks a month on a DocuSign subscription so you can have your four clients a month without a form, right? And so it's the generation of the form, it's filling it in. Again, these are like boring features. This is not a tech problem that needs to be solved, but there's a massive distribution opportunity in the long tail.

• 28:38Sam Parr?

  Right. Here, let me, can I chime in on this? Yeah, go for it. Okay, so I'm a co-owner in a small software company that makes fifty, sixty, seventy thousand dollars a month.

• 28:46Speaker 02

  Hmm.

• 28:47Sam Parr?

  And it's a checklist software.

• 28:49Speaker 02

  Hmm.

• 28:49Sam Parr?

  Um, we try, so here's what we did.

• 28:52Speaker 02

  Yeah.

• 28:52Sam Parr?

  Checklist as in like to-do list? Yeah, to-do list. Yeah. And what we did was, we, I bought it.

• 28:58Speaker 02

  Yeah.

• 28:58Sam Parr?

  And we tripled prices and that's all we did.

• 29:00Speaker 02

  Yeah.

• 29:01Sam Parr?

  And we just made a lot more money.

• 29:02Speaker 02

  And you hear the guys at Tiny?

• 29:03Sam Parr?

  He's my friend.

• 29:04Speaker 02

  Oh, okay. So that's, I'm telling you things you already know, like that's a great model.

• 29:07Sam Parr?

  Yeah, that's what we did. We bought a company for a single digit, hundreds of thousands of dollars, triple or quadruple the prices. I mean, we're talking like two dollars and ninety-nine cents a month to like eight dollars and ninety-nine cents a month. Uh, no big deal. Uh, then what we tried to do was, we learned that selling things that are eight dollars a month is really hard.

• 29:24Speaker 02

  Yeah.

• 29:25Sam Parr?

  Uh, and so what we did was, we looked at who uses us and we went to, we- Hard in, hard in what way? What do you mean by that? Uh, it costs, it's really hard to acquire customers. So you can't spend on, if you're acquiring someone-

• 29:36Speaker 02

  Yeah.

• 29:37Sam Parr?

  For a five dollar a month product, that means it's sixty dollars a year. And it's really hard to spend money on advertising to get a customer properly for sixty dollars a year. You could blog-

• 29:48Speaker 02

  Yeah.

• 29:48Sam Parr?

  And build a brand, but that's a little bit harder for guys like me who are just buying companies that only make money and not like making, making it like a personality-driven thing.

• 29:56Speaker 02

  And by the way, it's hard too because you can't invest in customer success then too. So if you have, you churn somebody-

• 30:01Sam Parr?

  Right.

• 30:01Speaker 02

  There's like, there's not a mechanism in place, you correct me if I'm wrong, but I don't see often mechanisms in place that capture those folks in a profitable way if you're selling ten dollar a month software.

• 30:10Sam Parr?

  Yeah, it only works if like you're buffer and you could like pick your face behind it and you'd be like, oh, this is, I buy it because this guy, I follow this guy on Twitter. For us, we were just buying them- It was just cash cow. It still is a miniature. And so what we did was we looked at which industries use it the most. And for some reason, this one company that was a dentist had a lot of their customers on it. And so we, our vision was let's talk to them and build something for them. Were they, any job that has a to do list, let's build something just for them and see if we can do like a dentist to do list.

• 30:41Speaker 02

  Yeah.

• 30:41Sam Parr?

  And we did it and what we found was it was really hard to go after these small businesses. Cause even then, when we raised prices, it was prohibitively expensive to go after these small to medium sized customers. It was very expensive and very hard. And so my opinion with that is that an idea like that that goes after these people only makes sense. If you're gonna, if you have an interesting way to get your product into their hands.

• 31:07Speaker 02

  That's exactly right. This is not a tech problem. It's a distribution problem. I think you said it really well.

• 31:11Sam Parr?

  And people typically don't understand that. They say, well, I've created this interesting thing. Therefore everyone will buy it.

• 31:16Speaker 02

  Yeah.

• 31:17Sam Parr?

  They're actually unfortunately wrong. I think that what I always say is if you have amazing distribution in a shit product, you're gonna win. If you have amazing distribution and amazing product, you're gonna dominate.

• 31:27Speaker 02

  Yeah.

• 31:27Sam Parr?

  And so it's kind of like Kylie Card.

• 31:29Shaan Puri?

  What's the fuck? Kylie Card Jenner.

• 31:31Sam Parr?

  Kylie Card Jenner. What's that girl's name?

• 31:34Shaan Puri?

  Kylie Jenner.

• 31:34Speaker 02

  Uh, Jenner, yeah.

• 31:35Sam Parr?

  Dude, it doesn't matter what the fuck she sells. It's gonna crush it.

• 31:38Speaker 02

  Right. She has a huge distribution channel. She owns, but this is relationship with, you know, millions and millions of people. And by the way, that's what I think about my startup back in 2011. We fell into the trap you just said a second ago. We built a really great product. They spent so much time and effort on product and we had no idea how to distribute it to this long tail of like schools and teachers are trying to sell to, right?

• 31:58Sam Parr?

  It's like the hardest people to sell to.

• 31:59Speaker 02

  Oh, impossible because the person who buys is not the person who pays. You have this crazy cash crunch every month where it's like, oh, even though I have committed ARR of, you know, a hundred grand, whatever it is, a hundred K. I in fact have real ARR of zero because it goes through like provisioning, it goes through um, the accounting cycle. Like in the district, you don't get the money for six months after they have signed the contract. If you die, and that's six months, by the way.

• 32:24Shaan Puri?

  Yeah, this generically, this is like what they call the SMB problem, right? Uh, and some people crack it, and when you do crack it, it works. Like even in education, I really want to have the guys from Mystery Science on because I feel like they actually have cracked this problem. Um, or more than anybody else I've seen in that space where they said, you know, 50% of elementary schools use Mystery Science.

• 32:45Sam Parr?

  And there's actually-

• 32:46Shaan Puri?

  That's amazing penetration.

• 32:47Sam Parr?

  There's a calculator that you can use to do this, but you could, in my opinion, I'm gonna launch another software, or I'm gonna launch a software product one day. What I'm gonna do is make sure, uh, that it costs enough money that I could hire a sales team.

• 33:01Speaker 02

  Yeah.

• 33:01Sam Parr?

  And I think that number is, the minimum would probably be five or 10 grand a month. Oh, sorry, a year.

• 33:07Speaker 02

  There's this trend right now where it's very sexy and fun, say we're bottoms up adoption and we're growing bottoms up.

• 33:13Sam Parr?

  No, fuck that.

• 33:14Speaker 02

  Well, listen, look at, I'll go through the S1s of all these major tech companies that have gone public in the last two years. Look at Zoom, which we're in, look at PagerDuty, look at Slack, and look at where their revenue comes from. I think it's like Slack, like five of their, or maybe it's another one, but like, in many cases, five of their customers have like 30% of their revenue. It's super, super concentrated in just a few huge customers. And so the bottoms up motion can, it actually can work in early days and it works for a little bit, but when you get big enough that you have a billion dollar outcome, you need big whales to actually pay for the whole company.

• 33:47Sam Parr?

  So at our company, I didn't wanna, I was like that, I was like, I'm not gonna hire a sales team. And we did, and it was like putting a match on the fuel.

• 33:54Speaker 02

  100%.

• 33:55Shaan Puri?

  And normally with BB, you said something like five to 10K per year.

• 33:59Sam Parr?

  Yeah.

• 34:00Shaan Puri?

  That's too low because, uh, like if you're gonna actually have a sales force, right? Like a fully loaded salesperson, they're like, uh, you know, 200 grand or whatever.

• 34:08Sam Parr?

  Well, I guess what I mean is, there's actually a stat that shows like, the companies that achieve 100 million ARR, there's like a dead zone. So you either need loads and loads and loads of customers at a really affordable rate of like $100 a month, or you have to start minimum five, five Gs a year.

• 34:25Shaan Puri?

  Right.

• 34:25Sam Parr?

  Um, but in order to have a sales team, I think that, uh, for software, what's the sales quota, $500,000 a year?

• 34:33Shaan Puri?

  There's a, so David Sacks, who was the founder of Yammer, uh, put out a beautiful post, uh, or maybe it's a YouTube video that says how to, how to build your sales team. He's like, "Look, I didn't know this when I got into it. We started Yammer. We thought we were going to get this bottoms up adoption, that we needed to make money." They did actually get bottoms up adoption, but they didn't make bottoms up revenue.

• 34:53Speaker 02

  Yeah, that's a good distinction.

• 34:54Shaan Puri?

  And, and so they, they got the product in and then they go to the CIO and they're like, "Hey, every, you know, 20% of your employees are using this. Don't you want control over this?" And so, uh, then he just walks through, he's like, "Look, this thing, you don't need to be, um, a genius. Like, just follow the playbook. Don't try to deviate and invent your own sales system."

• 35:10Sam Parr?

  What's the playbook?

• 35:11Shaan Puri?

  And so he was, uh, so he walks through it. I don't, I don't remember off the top of my head, but he walks through it on YouTube. He's like, "Look, uh, here's how you calculate your comp for your salespeople. Here's how you calculate your quotas. There's these two options. You're either going to go with this path or this path. Depends on the price of your product and here's how you need to think about it. Uh, here's when you hire, you know, sort of a sales manager and here's what you, here's how you compensate them." And he literally just lays it out and it's like, "Oh, this is, if you're somebody who's in that, who's, you know, building your sales organization and you kind of don't know what you're doing, just Google David Sacks YouTube, how to build your sales team or whatever, and you'll find, uh, this YouTube video with like a hundred views, but it's great."

• 35:44Speaker 02

  Sacks is the best. He's super smart on this and has obviously done it a bunch of times. What I think is interesting is, you know, Sam, what you said earlier, like when we come into companies, one of the first things we help them do is just triple prices. And that does, that's the same thing if it's a 5K ARR, just there, a 5K ACV, same thing if it's a-

• 35:59Shaan Puri?

  Doesn't matter what it is, yeah.

• 36:01Speaker 02

  You almost always can price things significantly higher than you think you can. And generally, the companies we work with, we want to see them at a minimum, like 25K ACV. That's like that, if you're having, if you have 25K accounts, like that's $25,000 accounts, rather, that's where-

• 36:15Sam Parr?

  A year?

• 36:16Speaker 02

  Yeah, a year. That's where you start to see some real leverage from running out of sales team. If you, if you're a little stung of that, it can be a little bit tough to break even on the-

• 36:22Sam Parr?

  Here's a little trick to make money. I, I don't think it's the easiest way, but this is a small trick. Find a business and you could buy these businesses for cheap.

• 36:30Speaker 02

  Hmm.

• 36:30Sam Parr?

  Um, find a business that's engineering led. So someone who made the software, built it, okay? And you could buy these companies for as cheap as $10,000 or all the way to billion. I mean, it doesn't matter, but you could buy- All these Quiet Life Brokerage who sponsored this is one of them. You could find these widgets or whatever. You can buy them for one times revenue. And if it's too expensive for you, you can put a small business loan. You could put only 10% down. So you could buy a hundred thousand dollar business that make that for 10 grand. And if it's engineering led, the likelihood that the pricing is wrong is high.

• 37:03Speaker 02

  Yeah.

• 37:03Sam Parr?

  So you literally just need to buy a product, okay, and just change the number on.

• 37:09Shaan Puri?

  Command F1.

• 37:10Sam Parr?

  Yeah.

• 37:11Shaan Puri?

  Price.

• 37:11Sam Parr?

  Like command F dollars.

• 37:12Shaan Puri?

  Boom. You're a coder now.

• 37:14Sam Parr?

  Price, okay, and put a zero, like, so if it's like one dollar a month, you make it $10 a month. If it's $10 a month, make it $100 a month. And if that's all you did, people will bitch and complain to you. Customers might bitch and complain to you. The numbers will likely stay the same, except for the revenue will change.

• 37:30Speaker 02

  Yeah.

• 37:31Sam Parr?

  That is like, mo- most people are shocked by that.

• 37:33Speaker 02

  No, it's, it's, it is always surprising the price elasticity of most customers. Like, if you have a good product, not even a great product, a good one, an average product. Most people will pay so much more than you think.

• 37:44Sam Parr?

  But engineers in particular are always guilty of this.

• 37:48Speaker 02

  And by the way, that's the same thing too. If you are even a decent marketer buying one of these businesses is a huge opportunity for you. Thing is, A, you could just jack up prices, you so aptly pointed out. And B, if you can even get like 1% more efficient at acquiring customers, between that and higher prices, you basically built yourself a substantial flywheel that can really be a multimillion dollar business.

• 38:09Shaan Puri?

  One of the best Twitter guys to follow if you want enterprise stuff is this guy, Chetan from Benchmark.

• 38:14Speaker 02

  Yeah, yeah, he's great.

• 38:15Shaan Puri?

  Just follow this guy. It's C-H-E-T-A-N, and then the letter P. So Chetan P.

• 38:20Speaker 02

  I text him that we're plugging him on the show and I'll listen to it.

• 38:22Shaan Puri?

  Yeah, he's great. A good guy too.

• 38:26Shaan Puri?

  He, literally, he'll just summarize the whole business in a tweet and you'll learn a lot about how these enterprise businesses are structured just from following this guy on Twitter. And so that's good. What are some of the sort of different, different companies you wanted to call out? So what's Guru?

• 38:39Speaker 02

  Yeah, so Guru is a company that we're, I'll talk my own book. We're investors. I have two here I listed.

• 38:44Shaan Puri?

  Wait, that phrase, "talk my own book." I gotta.

• 38:46Speaker 02

  I'm starting using that. I love, listen, any opportunity I can, uh, twenty five. Talking to some fucking twenty five.

• 38:55Speaker 02

  Okay, so. No, it's all good. Here's what I'll say. So Guru. Guru is, we have this broader idea that there's like a whole bunch of AI companies that exist, people are investing in. And a lot of the AI businesses that are out there are centered around replacing the ability of people to do their job. We think there's money in that. There's a lot of money in that. We think there's a bigger opportunity, much larger. In not replacing people, but augmenting them to do their job better. So for example, think for a minute. Uh, if you have a tool that could write sales emails for you, right? Maybe it does a pretty good job. Maybe it's not perfect, but AI is, is a long way to go before we get to true AI. And so it probably is like doing the job of your, you know, fourth or fifth best SDR. Not your number one salesperson, but your middle of the tier salesperson.

• 39:37Speaker 02

  We think the promise of these AI enabled businesses is they can learn, what is the best salesperson in your business do? That's different from the thirtieth or fortieth best salesperson in your business. And then you help teach those thirty or fortieth ranked people to act more like the top one.

• 39:51Sam Parr?

  How the hell do you do that?

• 39:52Speaker 02

  Well, here's the idea. You can listen to, uh, every, almost everything is quantifiable. So you can listen to a conversation. If I'm talking to you, you're a prospect and I'm trying to get you to, to buy my product. Maybe you have an objection that you bring up. You say, oh, it's too expensive or oh, we use this thing as an integrate with whatever. And I flub it. I have no idea how to handle that objection and the call goes really poorly and you're like, I'm never going to open this company at the end. We're done. The idea of like a lot of these businesses is you can hear, what is the top ranked salesperson do? Uh, that like, how do they handle objection really well? And no sales coach or sales manager can sit in on every sales call in your business. And actually understand the way that you respond to every objection. But an AI tool can sit in on every call in your business.

• 40:35Sam Parr?

  Is that really good?

• 40:36Speaker 02

  So, so what's the, what's the? So that's the broad concept. Guru. What's the URL? Yeah. Guru, it's, what's the, it's a. It's not Git Guru. No, it is Git Guru. Oh, it is Git Guru. What I was describing is like the thesis broadly, but Guru's.

• 40:47Sam Parr?

  They should use that to teach dudes how to meet girls.

• 40:51Shaan Puri?

  Sam's really this like, uh, you know, college days, enjoy, you know.

• 40:56Sam Parr?

  My thing with business is like the best products either help people get laid, helps them make money. Or that's probably it, actually.

• 41:04Shaan Puri?

  Made, paid, laid, that's the.

• 41:05Sam Parr?

  What is it?

• 41:06Shaan Puri?

  Made, paid, or laid.

• 41:07Sam Parr?

  What's made?

• 41:08Shaan Puri?

  Famous, so fame, money, or get laid.

• 41:11Sam Parr?

  There, okay, there are trades for it. And so when I hear get guru, I think, okay, cool, you're gonna teach companies how to get more sales, love it.

• 41:18Shaan Puri?

  Yeah.

• 41:18Sam Parr?

  But like, I just think that all, this is like an early stage thing, and it's like on the cutting edge. I just think that the sex, the sex industry is at the forefront of everything interesting. So the internet.

• 41:29Shaan Puri?

  Listen to you have sex.

• 41:30Sam Parr?

  What?

• 41:30Shaan Puri?

  And listen to you have sex, and then it tells you some tips. Maybe you wanna last a little longer.

• 41:34Speaker 02

  Let's cut that part out.

• 41:36Sam Parr?

  Like video streaming, uh, the DVD, DVDs.

• 41:39Speaker 02

  Yeah, yeah, that's true.

• 41:40Sam Parr?

  It was all porn. I think that Oculus, if, if they let the porn guys get a hold of it, it's gonna make it way better. That's what I would do with this. If I was just like.

• 41:49Speaker 02

  I mean, no, it's true. Listen, you can think about a lot of consumer applications. Obviously, the sex industry is a big one. The other ones like the, the example I always think about is you wanna learn to play guitar, right? You're kind of limited because A, you're gonna learn from whoever the local guitarist who can teach you is, and maybe they're not a very good teacher, or maybe they're frankly not a very good guitar player. And so at some point, you're gonna hit a wall where you can't learn anything more from them. But if instead you could learn from an AI that's been trained on all the best guitar performances in history, and all the best teachers in the world, wouldn't you learn better and faster how to be a good guitarist? Ideally. By the way, who knows?

• 42:22Shaan Puri?

  So here's an idea that's like that, that is working. Elsa AI, are you familiar?

• 42:26Sam Parr?

  Yeah, yeah.

• 42:26Shaan Puri?

  Elsa, so correct me if I'm wrong, cuz I only know the surface level. Elsa is basically for English language learning. Um, so there's a lot of people, you know, especially in Asia, who really desperately wanna learn English. Um, and so Elsa, what Elsa is, they don't wanna just learn English to read it, they wanna speak it.

• 42:42Sam Parr?

  Right.

• 42:43Shaan Puri?

  Like, if I, if I wanna learn English just because I wanna speak English. And so what they do is, they have you, you speak into the mic of your phone, and it basically corrects your pronunciation.

• 42:53Speaker 02

  Yeah.

• 42:53Shaan Puri?

  So it's like a really smart insight. Like my mom's, you know, her insecurity with her English when she was, you know, first moving to America was, not do I know the vocabulary, but does it sound right? Do I, and so these guys were making, you know, a while back, yeah, so they were, they had crazy stats. Uh, so I think, I think Vietnam was their biggest market at the time. They were doing like. I forgot what it was, like I think like six million a year already annual from their just like in-app subscriptions of people paying for their pronunciation coach, their AI pronunciation coach. And I was like, when I saw that, I was like, this is a genius idea because there's, I don't know the exact number, but there's in the hundreds of millions of people who are trying to learn English at any given time. And this is a sort of novel

• 43:37Shaan Puri?

  take that I think resonates because pronunciation is so important and so hard to come by.

• 43:41Speaker 02

  Yeah, that's a really good example. And so you could imagine like, basically infinite applications of the same type of tech and Guru was one of them.

• 43:49Sam Parr?

  How do you build this Guru? Like, if I'm building this, if I want to start this from scratch, what do I have to do?

• 43:55Speaker 02

  Yeah, it's a hard business to build because what you need is a data set to learn from. And what you need is not just the data set to learn from that's static, but one that continually evolves over time. So an example of Guru, they do kind of the, the sales example I was talking through, that's similar work, but for customer success. So you could think about it sits in your knowledge base, it becomes your knowledge base. And as your customer success or customer support agents are responding to inquiries, it actually knows what they need to say back and the content from your knowledge base they need to reference and then brings it up to them in real time. So they're not sending five minutes searching for an article in Jira that was written 10 years ago, that may or may not describe the actual scenario they're doing.

• 44:33Sam Parr?

  So they'll like read your email?

• 44:35Speaker 02

  It sits, well, it sits alongside, like usually it's, it's, yeah, it could be email, it could be customer chat. Like it sits alongside the method of interaction.

• 44:41Sam Parr?

  But your companies or all companies?

• 44:43Speaker 02

  Ah, good question. So it, it sits in the, in your company.

• 44:47Shaan Puri?

  Internal, internal.

• 44:48Sam Parr?

  So that would only work then if you had a huge.

• 44:50Shaan Puri?

  You need, you need repository of, of like a corpus of data.

• 44:55Sam Parr?

  That's pretty cool.

• 44:55Speaker 02

  It's an enterprise tool.

• 44:56Sam Parr?

  So then if I wanted to start with these companies, I would look at something that has a lot of information. So what are other examples, you think?

• 45:01Speaker 02

  So we have another.

• 45:02Sam Parr?

  Language is a great one.

• 45:03Shaan Puri?

  So like, for example, you, you need, you need a big, you need training data. So, so the tools for this have all become pretty democratized. So like Google and whatnot, Facebook, they've basically open sourced a lot of their ML stuff, the models and whatnot. So now, you know, people on our team, um, you know, who are, let's call like, They're not PhD in machine learning or AI, right? They're just like engineers, capable, smart engineers. They are able to, in a couple of weeks, take stuff that's off the shelf, ML tools that are off the shelf, customize it for this application. Like when we did it at Bebo, we wanted to say, hey, watch this video game stream. So watch a video game video and tell us what's happening when somebody gets a kill, when they win, when they lose, when they die, whatever, right?

• 45:46Shaan Puri?

  And we were able to train a computer vision system within, I don't know, two months, to be able to detect in real time what's happening in a game as if somebody was watching it. And then we used it to score esports and do like refereeing and scorekeeping and all this. We automated esports, which is like a goofy application of it, but it was so easy given where the tools are. So for example, if you had a corpus of data like, I don't know, like all the YouTube videos that are out there for like some topic or whatever, you can train, you can train your systems off of either data that you have or just public data that's out there, books and whatnot. This depends what you're, what the applications are trying to do. So for language learning, you, you need a whole bunch of people who are speaking and then you have to go in and label it and correct it and say, okay,

• 46:31Shaan Puri?

  when this person said this thing that was incorrect, here's what it should be. That's hard, but, uh, but once you build that data set, you can sort of get the flywheel going.

• 46:39Speaker 02

  And that's where the opportunity is. The opportunity is having either a unique data set or a unique take on that data set. Like the, the challenge, the reason why it can be hard to build this kind of business is you have to have some set of data that everybody in the world doesn't have. Because as you said, the tools to make use of the data are publicly available. And so whether it's like, we have another one in our portfolio called Textio, which is similar. It's kind of the same idea for job posts, right? The idea is if you're writing a job post.

• 47:02Shaan Puri?

  Yeah, I saw this, yeah.

• 47:03Speaker 02

  So you might've seen it.

• 47:04Shaan Puri?

  You write a job post and it tells you how to make it better, how to make your job post better.

• 47:07Speaker 02

  So it started like that. And now what it does is you can just say, I want to hire a junior web designer.

• 47:11Shaan Puri?

  And it writes it.

• 47:12Speaker 02

  And it writes the whole thing for you.

• 47:13Shaan Puri?

  Yeah, that's so smart. That's so smart. What most people do anyways is just go copy their competitors' job postings and use it anyways.

• 47:21Sam Parr?

  You want to hear another thing that, that you could do is, um, I think Axios is doing this and now I understand a little bit why. So Axios, um, you know, they're like us, or I guess we're like them, they started first and they have a bunch of newsletters. And what they've, what they're doing is they're building this technology that. Optimizes your newsletter, your internal company newsletter for best practices. So if you're fucking Salesforce or Morgan Stanley.

• 47:49Shaan Puri?

  To be more concise, right?

• 47:50Sam Parr?

  Yeah, and you're the head of HR and you need to make sure that all 10,000 of your employees understand this new policy.

• 47:57Shaan Puri?

  I'm a believer in that. If dude, if Grammarly can be as big as it is, that shows how much people care about the quality and the sort of looking smart and being smart in their writing. And so if you can help people be more concise, dude, look at how much I'm talking. Dude, imagine if I could be more concise, that would be amazing.

• 48:16Sam Parr?

  I think this actually, that actually could be a big business, which is it. So it would be all about making people concise, just making people understand information faster via email. Okay, that sounds so small and then I'll make it even smaller in nature, which is the HR company or the HR department. Make sure employees understand new policy.

• 48:36Shaan Puri?

  Internal emails.

• 48:37Sam Parr?

  Know what the coronavirus and what they have to do. And then what I, here's what I would build is I would build a basically a MailChimp for internal companies. And at the bottom, I'd be like, to confirm that you read this, click this. And then if you didn't click it in 24 hours, you get, you didn't.

• 48:51Shaan Puri?

  I like this MailChimp internal thing. That is actually really smart.

• 48:54Sam Parr?

  I, that's what.

• 48:55Shaan Puri?

  That's one of the better ideas that's come out of this podcast.

• 48:57Sam Parr?

  I would build that. If someone wants to build that contract.

• 49:00Shaan Puri?

  Yeah, you should build that.

• 49:01Sam Parr?

  I think that is a great idea and I would charge.

• 49:03Shaan Puri?

  Forget the AI, just MailChimp for internal companies that has the feedback.

• 49:06Sam Parr?

  What you can do is you can crawl all the most successful emails of all time, uh, which is there's days for that. Like for example, my company, I have, uh, how many fucking emails have we sent? We've probably sent half a billion emails. I could, I could, I have all that saved on SendGrid. Fuck, I would work with SendGrid and be like, hey, let's talk about this.

• 49:24Speaker 02

  And that's really smart because again, you have that proprietary data set that nobody else has, that they haven't built out years and years and years of emails that are sent.

• 49:34Sam Parr?

  How much, how big a checks do you write?

• 49:36Speaker 02

  Talk offline.

• 49:37Shaan Puri?

  Yeah, you can be in that book of business.

• 49:40Speaker 02

  I'll talk my book for you guys.

• 49:42Shaan Puri?

  Let's talk book real quick.

• 49:44Sam Parr?

  Just check this out. At my company, we create all these sales training things and I've written all these long blog posts and I'm like, no one's gonna fucking read this.

• 49:50Shaan Puri?

  Dude, I send your how to write better, your writer guide. What's it called? Your copy guide or your writing guide?

• 49:55Sam Parr?

  I don't know.

• 49:55Shaan Puri?

  I sent that to people on my team. For many years I've been doing that.

• 49:58Sam Parr?

  Really?

• 49:59Shaan Puri?

  Yeah. You also have this tweet that I love that's basically, I don't think, you didn't do this, but you stole it from somebody, I think. It's like, it's like a paragraph and it's like, look at these sentences.

• 50:08Sam Parr?

  Oh, it's called making your writing sing. So I've been preaching that shit forever. It's how to make your writing sing.

• 50:13Shaan Puri?

  So that is something where you can just do a Grammarly style analysis over the, over somebody's email and be like, hey, suggestion, break it up this way. Because now, look how punchy your email is.

• 50:23Sam Parr?

  Because a lot of people don't realize, there's, so here, I'll tell you the secrets.

• 50:26Shaan Puri?

  There's a science to this.

• 50:27Sam Parr?

  Keep sentences below 25 words. Average paragraph, you want to be three or four sentences. You need to vary up your, your length in a certain way. If there's a comma, put a period instead.

• 50:38Shaan Puri?

  No adjectives or no adverbs.

• 50:40Sam Parr?

  No adverbs. Like, there is totally math behind this.

• 50:43Speaker 02

  Yeah, I mean, I would love to get better at it because again, it's not, I also think it's not a skill you get from talking. You can talk a lot and be a terrible writer, because none of these rules are obvious. At least to me, they're not obvious because I'm not a writer.

• 50:53Shaan Puri?

  And you have, you're not, realistically, most people, even when they read this, like, oh yeah, huh, that's cool. That paragraph is better. Uh, how do I, yeah, how do I use it to get better?

• 51:02Sam Parr?

  I want to buy that company and deploy it in this way and make way more money.

• 51:07Shaan Puri?

  Yeah, Hemingway should be built into your email client. It should be built in, right? That's the problem with Hemingway's. It's a separate standalone app.

• 51:14Speaker 02

  You gotta check out Textio because that's where they live now. You can stick and stick to emails.

• 51:18Shaan Puri?

  Talking his book already.

• 51:18Speaker 02

  I'm talking my book, Cosmo, get help myself.

• 51:20Sam Parr?

  So far, this is the most, this is gonna be the most lucrative episode for me personally.

• 51:25Shaan Puri?

  And this is like the great founder fit for you is like,

• 51:28Sam Parr?

  I like this.

• 51:28Shaan Puri?

  helping people send better email. Uh, okay. Anything else that we should talk about before we go? We're sort of over time, I think.

• 51:33Sam Parr?

  Oh, we are?

• 51:34Shaan Puri?

  Yeah, we're, we're, we're, we are, we are at the hour. Um, anything else that you loved?

• 51:40Speaker 02

  Nah, listen, these are all really good.

• 51:42Sam Parr?

  One of his notes says a microwave that doesn't beep at the end.

• 51:44Shaan Puri?

  That's mine, that's mine.

• 51:46Speaker 02

  I wish, I wish I was smart enough.

• 51:49Shaan Puri?

  So, so this,

• 51:50Speaker 02

  I wish I was smart enough.

• 51:51Shaan Puri?

  So I stole this from my, my homie Farza in his Instagram story yesterday. He goes, guys, I got it. A microwave that doesn't beep at the fucking end. Cause it is so annoying when your microwave starts beeping at the end. Just a silent. Far as that.

• 52:06Sam Parr?

  Smoke more weed.

• 52:08Shaan Puri?

  So he, he actually has a great, a great little startup. I'll bring it up. Actually, it's sort of related to what you were talking about earlier. I was gonna bring it up then. So he was like, he's looking into homeschooling and we might actually bring him on and do a office hours with him because he needs some help. Uh, like coaching in his business, but he's a young guy. He's interested in homeschooling. He wishes that he was homeschooled and he's like, more people need to be homeschooled. So he's like, okay, homeschooling is on the rise. I think it's at like, whatever, let's call it 3%. Uh, which is bigger than you'd expect, but why isn't it bigger? And so his philosophy was it's not bigger because if you ever tried to start a homeschool as a parent, there's all this like complexity of like, oh, I gotta file this paperwork and every state has different rules. And then I gotta take a photo of my kid every day, blah, blah, blah. So he's building Stripe Atlas for homeschooling.

• 52:51Shaan Puri?

  Push a button, you spin up your homeschool, it's compliant in your state and it sets you up to, for success in two minutes. And so like the idea a lot, we're gonna bring him in, we'll do an office.

• 53:00Speaker 02

  How much money has he raised? Yeah. It's gonna be a lucrative episode for me too.

• 53:04Shaan Puri?

  Just from his, uh, couple of friends, uh, friends and family, he's raised some.

• 53:07Sam Parr?

  I like that. The only problem is you gotta deal with, are you homeschooled?

• 53:10Speaker 02

  No.

• 53:10Sam Parr?

  Alright, you gotta deal with fucking people who.

• 53:14Shaan Puri?

  I like how you checked, if he said yes. He would've still said.

• 53:21Sam Parr?

  I don't wanna deal with like, no disrespect to people who are homeschooled, but like.

• 53:25Shaan Puri?

  That'd be dope if we just had a huge homeschooled audience.

• 53:28Sam Parr?

  It's like.

• 53:29Speaker 02

  They're writing in tomorrow.

• 53:30Shaan Puri?

  If parents are just having their kids listen to this.

• 53:32Sam Parr?

  It's like dealing with vegans, right? Like I'm not against veganism. I just don't wanna like hang, it's like, I love going to an improv show. I just don't wanna hang out with a bunch of nerds who do improv. You know what I mean?

• 53:41Shaan Puri?

  I like how you said, I'm just at the end of the episode, it was like. Empties the clip of like, you know, controversial opinions. Hold on before we go. All right, where should people find you? How do they follow you?

• 53:52Speaker 02

  Uh, follow me on Twitter, I'm at ZCK, so it's nice and short.

• 53:55Shaan Puri?

  ZCK.

• 53:56Speaker 02

  ZCK.

• 53:57Shaan Puri?

  That's a good handle.

• 53:58Speaker 02

  Yeah.

• 53:58Sam Parr?

  Yeah, when did you join Twitter?

• 54:00Speaker 02

  I don't know, like 20, 2010.

• 54:02Shaan Puri?

  When he was 14.

• 54:03Sam Parr?

  Yeah.

• 54:03Shaan Puri?

  First business.

• 54:04Speaker 02

  It was my embryo that joined Twitter for me, it's not a good handle. Um, and honestly, I mean, listen, you DM me, that's how we got in touch, and I love when people DM me if you're starting a great business, particularly in the spaces we're talking about, I would love to hear from you.

• 54:17Shaan Puri?

  All right, thanks for coming, thanks for listening, just remember, don't shake anyone's hand, coronavirus is out there.

• 54:22Sam Parr?

  Like, or subscribe, then unsubscribe and subscribe again, and record this on your iPhone, you can do it by swiping, as if you're doing to turn wifi on and off, send Sean or me on Twitter a video of this and ask any question and we'll answer it.