#217 - Why Direct-to-Consumer Companies Are Awesome to Own

In this episode Shaan (@ShaanVP) and Sam (@theSamParr) debate the merits of owning and operating a direct-to-consumer e-commerce business. Shaan breaks down some of the basic ins-and-outs you should look for with ad spends and purchase multipliers. They also discuss the state of economy and whether or not we are in a bubble (or rather, many bubbles), a new NFT project called Loot, the recent raises of Whoop and Allbirds, and Sam's friends Bitcoin gamble. --------- * Want to be featured in a future episode? Drop your question/comment/criticism/love here: https://www.mfmpod.com/p/hotline/ * Support the pod by spreading the word, become a referrer here: https://refer.fm/million * 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. * The Everything Bubble: https://blog.ftx.com/blog/the-everything-bubble/ --------- Show notes: * (2:06) Back to school * (2:39) A psychedelic story * (10:23) The story that lead to a breathwork app * (17:40) An event better than SoulCycle * (19:32) The ranch retreat for deeper connections * (26:32) The 2018 Bitcoin gamble * (32:06) The Everything Bubble * (40:35) Loot - 10 words of gibberish * (42:40) Thoughts on Whoop's recent round & Allbirds S-1 * (47:58) Why DTC companies are awesome * (56:31) Shaan's award show

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

• 0:00Shaan Puri?

  If you got into Ethereum early on in the crowd sale and you bet on that thing at 30 cents because you're a developer and you really believed in this new programmable blockchain, you deserve your tens of millions of dollars. You deserve your 100 million dollars. If you're rich because you bought like a picture of a rock, you know, three months ago, or, you know, a computer-generated squiggle that's now worth a quarter million dollars, fuck you.

• 0:28Speaker 01

  I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back.

• 0:38Shaan Puri?

  I'm looking at my, uh, my phone. I just got a text message because my, my three nieces went back to the, went to, you know, first day of school today. And, uh, I was talking to one of them this morning and I go, "Ellie, how, you know, how are you feeling? First day ever going to a school?" And she goes, I go, "How are you feeling in one word?" She goes, "My heart is going fast." I was like, "Oh, I melted. I melted. Your uncle is a puddle on the ground now. He cannot function anymore."

• 1:06Sam Parr?

  Oh, that's awesome.

• 1:07Shaan Puri?

  Shout out to Ellie for, uh, her first day of school. Hopefully it's going well.

• 1:11Sam Parr?

  That's awesome. That's a great one.

• 1:14Shaan Puri?

  Okay.

• 1:14Sam Parr?

  Um, can I start by telling you a quick story that I don't think I've ever told you, but I think you'll get a kick out of. So about, this is the Bitcoin one. We'll tell that one soon. But about three years ago, I, so I talk about this all the time. So I don't want to like, rub it or like continue talking about this shit because it gets boring. But basically I don't do any drugs. I don't drink. I'm pretty straight-laced, right? I've been straight-laced for eight years. I don't do anything. I'm, I'm fearful of anything. But I was getting really curious about, uh, psychedelics. So like mushrooms, MDMA therapy, ketamine therapy. I did what a lot of people did. I read the book, How to Change Your Mind by Michael Pollan. And I was like, "Oh, this is great.

• 1:57Sam Parr?

  I'm really interested in this." And so I found a person who was going to lead a, an MDMA therapy, like session. And so I went to dinner at her house with, my wife came with me and it was like, three other couples. And we went to this thing and I was, we were, and she wanted to do like a, a session to get to know people in order to determine if this was a good fit. Because basically what you do is you take a dose of MDMA and then like she talks to you.

• 2:25Shaan Puri?

  Is MDMA Molly?

• 2:26Sam Parr?

  I think so.

• 2:27Shaan Puri?

  Same thing?

• 2:28Sam Parr?

  Yeah, I believe so. Uh, it's all, or similar at least. I'm not, I, I, I really frankly don't know, but I think it's like the same thing. And we, uh-

• 2:36Shaan Puri?

  You smoke it, you eat it, you drink it, you sniff it, what do you do to it?

• 2:39Sam Parr?

  It's like a pill, I guess. It's a pill. You swallow it.

• 2:42Shaan Puri?

  Okay.

• 2:42Sam Parr?

  And we go to this group and I'm in just like, the, the idea of psychedelics for therapy, like, uh, to like, you know, for veterans, but also people who just want breakthroughs or who have depression, I'm on board with. I've got friends who do it. I love it. I don't really do, I don't do drugs because I just don't feel comfortable doing it, but I really wanted to explore it and get, and get to know these people and try this out. And I went to this group and they were crazy hippie dippy, like super hippie dippy. But mind you, this is in San Francisco and she had a really nice place. And so like, we start talking and all of a sudden it gets so hippie dippy and woo woo that she's like, you know, like this medicine needs to be free for everyone and capitalism is just ruining everything.

• 3:27Sam Parr?

  And like, you know, we need to live in a society where we can just barter and trade and like, this way we can give this medicine-

• 3:34Shaan Puri?

  Let me just guess, Sam, triggered. Start a debate.

• 3:38Sam Parr?

  Triggered so hard. And, uh, and then we start talking, we, I'm like, in my back of my head, I'm like, well then why am I paying you like $4,000 for this? But-

• 3:48Shaan Puri?

  You're like, yeah, refund me, right?

• 3:49Sam Parr?

  Yeah, so give me my money back. And we start talking and like, this is just sitting in my head and I'm like, oh man, I made it-

• 3:56Shaan Puri?

  Four grand? This thing was four grand to do?

• 3:58Sam Parr?

  Or 2,500. It was like multiple thousands of dollars. I think it was closer to three or 4,000 than it was 2,000. I forget the exact amount.

• 4:06Shaan Puri?

  You can take a family of four to Disneyland, get the Fastpass, get the turkey leg, go get the Mickey Mouse ears, and still coming under four grand. That's a real psychedelic experience if you want it.

• 4:17Sam Parr?

  Yeah, I, look, I agree. It was crazy expensive. But like, I'm trying to be open minded. I wanted to explore this. I, I just read the book. I was enthused. But in my head, I'm just sitting there at this dinner with this in the back of my head and I'm thinking about this. I'm like, oh my God, like I can't believe, like this is, these people are so bullshit. And, and then I, I ask her and I go, what, what did you used to do for a living? She used to work at Lehman Brothers.

• 4:40Sam Parr?

  At Lehman Brothers and now has a venture capital firm on the side. And this whole, and I like, when I heard this, I was like, I started giggling and I was like, well, you do realize that this is like, just ridiculous what you said earlier, right? And I said this at the dinner. I'm like, you know, that's, that's, that's just like crazy. And they are also talking about how like this medicine needs to be available for everyone. And like, they need to help the masses. And they're like, where are you from? I'm like, I'm from Missouri. And they said, oh, flyover country. Uh, and I'm just like, oh my God, this is the most smug thing ever. So eventually I get into an argument with her at the dinner table and she was just like, you know, I don't think this is a good fit. And I was like, I agree. This is not a good fit. I can't do drugs with you. Not a good fit. And so.

• 5:24Shaan Puri?

  I can't, can't even do dinner with you.

• 5:25Sam Parr?

  Yeah. I can't do dinner with you, let alone like get high and talk about my feelings with you. Like, not gonna work. This is a horrible fit. And so I just, I had to leave. I got kicked out. Like, I basically got asked to leave. And.

• 5:37Shaan Puri?

  They're like, Sarah, you're cool.

• 5:39Sam Parr?

  Yeah. I, I just wasn't in a good place. And so I got kicked out of the group. I wasn't able to do drugs with them. And that was my experience with psychedelic. Uh, that was my only experience with like the psychedelic therapy. But I think that these style, these retreat styles for psychedelic stuff, starting in like 2015, I had friends that would go do ayahuasca. You know what ayahuasca is?

• 6:03Shaan Puri?

  So I've heard ayahuasca many times. So I know of it. I know kind of what the, what the, the, why people do it. You should explain it anyways. But if you said, hey, this is like my Dolly Parton thing. I couldn't pick Dolly Parton out of a lineup. If you said, hey, draw ayahuasca. I'd be like, ah, I draw some feathers in a, in a, in a bowl of liquid. I don't know what the hell is actually ayahuasca.

• 6:25Sam Parr?

  I don't think you're far off. Again, I'm total noob here as well, but my friends do it. I believe it's like a powder and you mix it with water and you put it in a bowl.

• 6:32Shaan Puri?

  It's a calma or whatever.

• 6:33Sam Parr?

  And you like pass around like this thing and you take a drink out of it. And then you stay up all night, like doing wild stuff. And like you, a lot of times they make, it makes you throw up and that's like part of the, the journey and experience. It's freaking weird, but like, whatever, I'm open to it. And I've been had, I've had friends like start doing this in 2015. Now on Instagram, I am seeing so many of my friends go to South America, go to Mexico, all talking about like these journeys. I started listening to this health podcast guy.

• 7:00Shaan Puri?

  The new backpack, backpacking through Europe is ayahuasca in South America.

• 7:04Sam Parr?

  And I, and I like to make fun of it because it's some basic bitch shit, but you want to know what? It's, I'm on board. I'm so on board with this. I am totally on board with this. And I think that psychedelic retreats, like I've been, I read a Bloomberg article about them and this guy in Jamaica and they charge like, it ranges from $25,000 to, $2,500 to $30,000 and they bring you to this like nice place. They get you, they give you the, the drugs, like it's a variety of, sometimes it's ayahuasca, ketamine. Uh, what's, is it psilocybin? What's mushrooms?

• 7:36Shaan Puri?

  Yeah.

• 7:37Sam Parr?

  And they like do this therapy stuff. I am so on board with this and unfortunately my one experience was horrible, but I'm so on board with this.

• 7:45Shaan Puri?

  But it wasn't the drugs. It was the people.

• 7:47Sam Parr?

  It was the people.

• 7:48Shaan Puri?

  It was the hypocrites that, that tried to get me to take this drug.

• 7:51Sam Parr?

  Yeah. I'm like, I like, I can't trust you. Like you're going to tell me like you want to solve, you want to like, like solve the world's problems and you're going to make fun of me for being from Missouri. Like that, that's like, this is a bad fit. Uh, you know, just tell me you're full of shit first.

• 8:03Shaan Puri?

  Dude, I, I have so many, yeah, exactly. It's like an AA meeting. It's like, hi, I'm Sam and I'm full of shit. All right. So, so I have a bunch of thoughts about this. Uh, where would I begin? First, shout out to the guy who came to our live podcast show in Austin, who is apparently mushroom dealer. Don't remember his name.

• 8:21Sam Parr?

  I remember that.

• 8:21Shaan Puri?

  Showed me some, showed, he, the guy loved to take out his phone and just show pictures of his, he opened up his camera roll. Not a single friend or family there, just different exotic mushrooms in his hand.

• 8:33Sam Parr?

  And they all look the same.

• 8:35Shaan Puri?

  They all look the same. He kept showing me different ones. I was like, yeah, cool, man. Cool. As somebody who's never, never done mushrooms, couldn't, couldn't, it was like showing me different bottles of wine and I'm sober. Like, uh, yeah, okay. It looks great. Looks fantastic. That one's, that was dark red. Cool. So that's one thing. I just remember that guy when you were telling this story. Second, I've, I met this guy who's really interesting. Uh, did I tell you about this guy Robbie Bent?

• 9:01Sam Parr?

  No.

• 9:02Shaan Puri?

  Okay, so this is, this is cool. Alright, so this guy, so Robbie Bent, what's his story? So he's a founder of a, he's a startup founder. He has this idea for, um, by the way, when I tell stories, I'm pretty sure like at least forty percent of them are just, the details are completely wrong, but I always get the essence of the story right. So I'll say that. So Robbie, if I butcher your story, sorry about that. Alright, so I think he had a startup that was like, this was back when cellphone roaming was a big problem. Like you would go travel somewhere and you're, if you like, turned your phone on for one minute, you'd like spent a thousand dollars. So basically roaming was a problem. And so he was trying to build this like SIM card company for like international roaming, like international SIM card. And he raises, I think like twenty-five million dollars or something like that.

• 9:47Shaan Puri?

  And, uh, you know, like pretty soon after that, uh, like roaming became like free or something. You know, something happened, the company like was pointless at some point and he's like, oh shit, okay. Uh, what do I do now? Company kind of fails. He's kind of in a funk. He's in a depression. And so I think he was, uh, he was, I think he was depressed. I think he was using drugs. I'm not sure exactly what the story was, but he's kind of in a low place in life. And his friend is like, you know what? You need to go backpacking through Europe. You need to go to South America, do some ayahuasca, or he decides he's gonna do it. So he goes on this ayahuasca trip. And he's like, uh, you know, same story as everybody who goes to Burning Man or South America for ayahuasca. They're like, oh, life-changing, best experience.

• 10:30Shaan Puri?

  I think if you don't have a good experience, they must just kill you because I've never met anybody who didn't have a life-changing experience. It's all positive. So, so he's got this all positive experience and he meets this person there also doing the trip. And, um, and they're, you know, ayahuas getting out together. And this guy's like, hey, he's like, you know, so what do you do? He's like, oh, you know, Robbie's like, I just went through this crazy thing. I'm like broke. My company failed. I'm like in the dumps. And this guy's like, oh, you know, I'm a, I'm actually creating this crypto venture capital fund. This is five years ago, six years ago now. And he's like, you know, I'm, we're raising one of the first funds for crypto to invest in crypto. And, um, you know, like a lot of these people we invest in, they're like, you know, great engineers or they're, uh, you know, just really into crypto, but they're not great at marketing.

• 11:14Shaan Puri?

  And so like, maybe you could just help out some of my portfolio companies. Like if you've got nothing else to do, just come hang out with me and let's, let's do this. And by the way, you should check out this thing called Ethereum. And so he's like, oh, Ethereum, what's that? They just done its crowd sale. I think Ethereum was like at $6 at the time. So Ethereum today is like $3,500 as of this morning. And, uh, and so he, he starts organizing all these like meetups. So he's like, I don't know anything about crypto, but this guy said, get in, there's a lot of energy here. And he followed his gut after the ayahuasca trip was like, yeah, like I got nothing to lose. So let me do this. And he starts organizing like basically a hackathons. And then with the hackathons, he gets engineers and then he tells the engineers, hey, you should go work at these like portfolio companies potentially. So he's like, kind of creating some value. He's just helping a bunch of people out.

• 12:00Shaan Puri?

  And he starts getting really interested in Ethereum because he's like, that's where the most energy is. So he starts organizing like all the Ethereum hackathons and people are loving it. The Ethereum Foundation reaches out and is like, hey, you should come on and be like the first marketing person for Ethereum. So this guy joins, joins, uh, the Ethereum project and he's the first kind of like marketer guy, non-technical person working on the thing. And he's basically building the community and the passion around it. He's hosting events and things like that. And so he went from like the dumps, he gets into Ethereum like under $10. Ethereum runs up. And by the way, I was like, I asked him, I was like, did you like, how big did you bet on this? He's like, well, I had nothing. He's like, but I took every dollar I had and I put it into Ethereum. He's like,

• 12:43Shaan Puri?

  I didn't have much. It was probably like 10 grand or something like that. He's like, I think I borrowed money from like my parents and I just put it all into Ethereum and it was like amazing for me. And so anyways, he, he makes life-changing money. And, uh, and after a couple of years in the crypto scene, he's like, you know what? Crypto is great. I made a bunch of money doing this now, but I'm ready for my next thing. And he's like, goes back to his roots. He's like, that psychedelic trip, ayahuasca trip was like so meaningful for me. So he, in the meantime, had been getting into all kinds of like different types of like kind of therapies. So he was like cold therapy, heat therapy, breath work, all these like kind of like, you know, kind of like these hippie dippy, like sort of alternative ways to like improve your body. And so when I called him, I met him for the first time, he's on the Zoom.

• 13:29Shaan Puri?

  And his background is like this oasis. I'm like, oh, cool background, like cool background image. He's like, no, this is like my garage I built out. And he basically built this in he's in Canada. He built this epic like wood cabin looking thing. It's got this custom cold plunge you made. It's this 20 person sauna that he created because he hosts events there. It's got all this greenery. It's like a greenhouse. It's got this like musical stuff and he created basically this experience where you could come if you wanted to have one of these experiences, you could do hot cold therapy and he would take you through an intense cold plus heat, like, you know, you go back and forth between that, like a, like a Banya bath type situation. And then the second thing he did was these like kind of facilitated MDMA type, I don't

• 14:12Shaan Puri?

  know what drug it was, but facilitated like psychedelic experiences where they have a doctor on site. And then they do this like group experience together and you're guided through it. Exactly like what you're talking about.

• 14:21Sam Parr?

  Yeah.

• 14:22Shaan Puri?

  And I was like, dude, that's a great idea. I was like, because you know, I'm a pussy. I don't, like, I kind of want to have a life changing experience, but like with no risk, can you like, give me that? And this is like the closest you're gonna get, which is like, doctor supervised in a group of people with people who've done this before. And like, it's for beginners and it's not just go do drugs in the, in the, in this like sketchy place. It's like in a nice, beautiful environment with music and control. He's like, yeah, dude, I put this up like, I think he put it up on Airbnb as an experience, or he put it up on Groupon or some shit. I don't know where he put it. We put it somewhere and he's just like booked out. His, his little like garage is basically booked out like 24/7. And since then, he basically, he's, he's like, his next thing or the way he like evolved it. He's like, still, he still

• 15:03Shaan Puri?

  does the live events, but to scale it up, he created this app called Inward. And so I invested in this thing. It's basically a breathwork app. So I started doing this every morning now. The app's not even like fully out yet.

• 15:15Sam Parr?

  You've been doing it?

• 15:18Shaan Puri?

  Yeah, because I'm into, I'm into breathwork. I like kind of heard about Wim Hof and dabbled with that. And I went to this Buddhist thing once and like, they do chanting, which is like a form of like meditation.

• 15:28Sam Parr?

  Yeah, I've done it before too. It's great.

• 15:30Shaan Puri?

  And so you should, I'm gonna send you the SoundCloud link. And I had him come in my course, when I taught the writing course. I was like, dude, this thing's amazing. I use this now for my morning routine to like, wake me up, basically. So I was like, you know, teaching over Zoom can be the most fucking boring thing. And so I had him come in and do a five minute session for the students at the beginning. And everybody was like hyped out of their mind by the end of it. Also, some people were like, yo, I'm like lightheaded. I need to like go sit down. It's like, yeah, yeah, that happens. But he has this five minute guided thing where it's like dope music mixed with a guided breathwork session. And he did in five minutes. He was like waking everyone up. Anyway, so I'm pretty like excited about this. And I thought his story was pretty awesome of like his little journey to get here. So I wanted to share that with you.

• 16:11Sam Parr?

  So let's just keep going. So I went to, when I lived in San Francisco, these guys, I met these young guys on, they went to Stanford.

• 16:20Shaan Puri?

  Grinder?

• 16:21Sam Parr?

  Yeah, no, they, they, that didn't come out well. They, they weren't that young. These guys that went to, these guys that went to Stanford, they basically, I found this thing on Eventbrite where they were doing, like, it was very clear what was happening, which was it was two guys testing a startup idea. And they either got someone to donate them a really big room, or they like rented it for a very little amount of money. But I think someone just donated them this room. And one of them was like an enthusiast, enthusiastic person or enthusiast of breathwork. And he, they basically, we all went there and they put this Eventbrite link up. We each paid $30 and 30 of us went there. So what's 30 times 30? And is that?

• 17:06Shaan Puri?

  900.

• 17:07Sam Parr?

  Okay. Well, yeah, we don't do public math. And so.

• 17:11Shaan Puri?

  Yeah, I take that back, bleep that out. I don't do public math.

• 17:15Sam Parr?

  So I went to his, I went to this guy and he, the, the lights were down and they start playing this music. And like, I went with my coworker. He was like, hey, I found this thing on Eventbrite. Let's go check it out. And we went to his place and 30 of us did breath, like a breathwork session. It was, it was, have you been to a SoulCycle studio?

• 17:31Shaan Puri?

  I was gonna say, yeah, it sounds like SoulCycle or hot yoga. Yeah.

• 17:34Sam Parr?

  It felt exactly like that. And it was the best business ever. And they were clearly, I talked to him afterwards. He's like, yeah, we're just testing this out and we might turn it into a business. And they didn't do it. And they totally should have, because it was way better than SoulCycle. Why? They had nothing. It was just a room with lights, sound, and you're sitting there and they just hit play and the guy guides you a little bit. He kind of talks to you and it was awesome.

• 17:58Shaan Puri?

  But it works. Like the effect at the end, you, you walk out with a high. So you've given people an experience. So we talked about this a while ago with the Simone Biles thing. We made a prediction that. Next five years, mental fitness, not mental health, mental fitness, which is training your body and your brain to sort of like be able to master your mind a little bit better. And not just avoid disease and illness, but actually be fit mentally. This is going to become more in vogue. I think that this breath work, I think breath work is going to be the new meditation. I think that the same way that, you know, SoulCycle and Barry's Boot Camp and Hot Yoga

• 18:37Shaan Puri?

  have become these alternative, you know, we had the gym, which is this kind of cold, sterile, isolated, solo, one-player experience. And then you had SoulCycle come in, it's like, no, this is multiplayer with a leader you just submit to. They just tell you, they just shout and tell you what to do. And they're like, they look heroic on the stage with their body and their voice and their microphone. And then we're going to program you with this music that you can't help but feel like you just went to the club. We're going to heat you up so you sweat because that feels good. You're going to feel like you got a workout in. And we're going to guide you through a process and whether that process is cycling or it's boxing at Rumble or it's Barry's Boot Camp and you're running on a treadmill or it's Hot Yoga and you're, you know, trying to touch your toes.

• 19:19Shaan Puri?

  This is a model that works. It is an experience that you give somebody is a feeling. It is a one-hour guaranteed high that you get to, you get to get without the use of drugs. And so, um, so I'm pretty convinced that there's going to be a breath work style version of Barry's Boot Camp or, or Hot Yoga that becomes just as popular as some of those other ones, perhaps even more popular. And I think that the app that he's, he's building is going to be like a calm, calm style app if they execute well, because I think there's a big market for this. You know, these are sort of like ancient techniques that can be modernized.

• 19:52Sam Parr?

  Another thing that stood out during your story was, uh, I've actually read about this. So I, I, there's this like recurring theme of people I look up to. So Chris Saka, or is it Saka, Chris Saka? There's this Israeli guy named, uh, uh, Vivi. Have you heard of Vivi?

• 20:07Shaan Puri?

  V V?

• 20:07Sam Parr?

  V, so his, uh, his full name is Aviv Nevo. So A V I V space N E V O. So this guy, he's an Israeli guy. He's probably in his 60s now, 60s now. He kinda looks like Sting. Uh, he's like this like good looking, like suave looking dude who's like in shape. He's probably in his 60s. Uh, he came from Israel. His parents were wealthy. They died when he was young, gave him 10 million dollars, uh, in inheritance. He used that 10 million dollars to invest in some stuff, ends up becoming the largest shareholder of Time Warner. And now is this like big shot guy who hangs out with like Bono and like, he's like a Jay-Z. Like they all looked like, he's got like-

• 20:44Shaan Puri?

  They think he's Sting.

• 20:45Sam Parr?

  Yeah. Yeah. He's like this like spiritual guy. You could Google him. I mean, there's a lot of like really interesting articles about him. He's kinda like the Great Gatsby. So anyway, there's him, there's Chris Sacca. Another person who this story applies to is this guy named Cowboy Saroni. Cowboy Saroni, Donald Saroni, he's a famous UFC fighter. They all have locations outside of major cities. So Cowboy Saroni has a place in Denver. This V V guy has a- Yeah. He's got, and this V V guy has a place right outside of LA. And then Chris Sacca had a place in Tahoe, three hours outside of San Francisco. And their competitive advantage in getting into interesting deals is they have like interesting places that aren't necessarily expensive. V V's got, his place is expensive, Donald Saroni's at first probably wasn't that expensive. Chris Sacca's not that expensive. And he gets these like founders to come out to his place.

• 21:30Sam Parr?

  He's like, hey, look, I have this cabin out in the woods. You wanna come chill and hang out? And he like shows them around and gives them this amazing experience. And that's how they like end up investing in different stuff. I actually think that strategy is amazing to have a place just to live. You can live a little bit on the outskirts and like everyone comes to you, they're on your terms, because that's the best way to like get shit done is everyone on, at your house on your terms where you're the boss, they get to know you. I think that's a competitive advantage. I've thought about doing that in either Texas or New York where I'm staying now, is getting a place that's like two hours outside of the main area.

• 22:00Shaan Puri?

  Dude, let's time, let's time share it. My, my first million ranch, I'll go in, I'll invest in it with you. We'll get five other cool people that we like. And then whoever wants to retreat to the ranch at any given time can.

• 22:10Sam Parr?

  It, it would totally work. Like I, I think it's a really, like a huge competitive advantage, don't you?

• 22:16Shaan Puri?

  Well, I think it's cool. I think it's definitely cool. I don't know if it's a competitive, it's a competitive advantage in that you can go deep. So there's this idea of like, do you go wide or do you go deep? I would say most people go wide. I go deep in terms of, in terms of your strategy with people. So what is wide? Wide means you have a lot of light connections, loose ties, you know, a lot of acquaintances, a lot of, a lot of friends, but not a lot of friends that you could call when you need something, or not a lot of friends who are going to think of you first when they see something awesome. And going deep is the exact opposite. It's having a group of, you know, 10 or less people that you're like, okay, I would go, I don't go to war for you and you would go to war for me. And I think that both of us have more of this deep strategy than wide,

• 23:01Shaan Puri?

  where it's like, we have a handful of people that we just trust implicitly. I could give them my bank account and sleep well at night. And, and because of that, we can share information, we can say, dude, so like, how, how do you do this? How much you make doing this? How do I set this up? Like, what, is this good for me? Bad for me? You know, what do you think? Or a deal happens. And like this morning, I'm in a deal that's going really well. Startup deal is going really well. And a buddy texted me, he was just like, hey, like, can you get me into that? And I was like, okay, I will, I will put as much credibility as I can into this to get you into that deal. And, and vice versa. If they, if they had something, then, then, then the same. And so I

• 23:42Shaan Puri?

  think that the ranch style escape is a great tool for going deep. So Chris Saka talks about, he would, he had the founder of Instagram early on. He was like, I think, working out of Dog Patch Labs as his like coworking space. And he invited him up to his Tahoe cabin to come like work out of there. And I think he like stayed there for like, a few weeks, if I remember the story correctly, like living in the guest house or whatever. And then Travis Kalanick, when he was starting Uber, the story is, yeah, he came to Tahoe, we spent four nights or three, three days together. He was, we were in the hot tub, just jamming on what, what could happen. It's like immersion. By the end of three days with somebody, like, you really trust that person, you like that person. It's so different than a meeting, than a Zoom call, and trying to have eight back to back

• 24:26Shaan Puri?

  Zoom calls. And we had, what's her name, Bree Kimmel on the show, and she showed us her calendar. And it was like, 30 minute Zoom, then 30 minute Zoom, then 40 minute email follow up, then 20 minute Zoom, then, and it's like, okay, that's one strategy. I want to basically say, clear the calendar, you know, let's go road tripping together. Let's go, you know, let's spend a day, let's go to this MMA fight together. Let's have unique experiences that are longer, more in depth, and that build more trust. And I'd rather do that with a few people than try to do it, try to know everybody.

• 24:54Sam Parr?

  Same, we're the exact same. I find it to be exhausting. You want to do a few topics here?

• 25:00Shaan Puri?

  Yeah, let's do it. Which one do you want to do?

• 25:02Sam Parr?

  You drive.

• 25:04Shaan Puri?

  Um, okay, I'll do, let's see, let's do this, um, let's do the, I don't know. You want to tell the story about the consultant? Well, I think that's probably the most interesting one.

• 25:16Sam Parr?

  All right, uh, so I, I, I've not told you about this guy?

• 25:21Shaan Puri?

  I don't think so. It's a pretty memorable story.

• 25:23Sam Parr?

  All right, so I have this friend that I was, I was talking to recently and, um, I'm gonna, I'm trying to be a fair bit vague, but I'm gonna try and give as many details as I possibly can. And basically, this person, um, they had a normal job, a normal, high-paying job. Like, a lot of people listening to this, they were a consultant at a, at a large place, and they lived very frugally, and they were able to save a million dollars by the time that they were in their, uh, lower to mid 30s. And when this happened, this was around four years ago. Bitcoin, uh, was priced around $2,500, $3,000 when this happened. And this person is eccentric. They're crazy.

• 26:05Sam Parr?

  Even though, like, they have the normal job and you would talk to them and you think that they're normal, he likes to bet. He just loves gambling, like, in a sense of, like, betting it all. Like, he, it seems like, that's just like in his DNA. He, he's not afraid. I think you're a little bit like that. Not as extreme, but definitely have a touch of that. And so, you know, he started talking, he goes, you know, I don't see any good place to invest this money right now, and I've been doing crazy amounts of research. I'm gonna go all in on Bitcoin. And this was, when it was $3,000, $2,500, we thought it was crazy. So he cashed out his 401K, he borrowed a little bit of money, and he used Kraken, or something like Kraken, to get massive amounts of leverage, like, five or 10 times leverage. And he invested all of his money, to the point where he had, like, $4,000 left of his 1 million.

• 26:49Sam Parr?

  All of it into Bitcoin. And recently, when Bitcoin hit its high-

• 26:55Shaan Puri?

  By the way, this was, this was Bitcoin after it had crashed from about 20,000 down, back down to 3,000. So it's not like it was just all on the up and up.

• 27:04Sam Parr?

  No, and recently, when it got to $60,000, his sum, his one million, it was worth about like $95 million. And, and, and

• 27:16Shaan Puri?

  You talked to him, you caught up with him?

• 27:18Sam Parr?

  I, I had a, a mutual friend was with him and he, and he called me and he goes, man, this guy, you, like, we were talking, you know, I was like, hey, whatever happened to this, this person? And he goes, well, you know, I caught up with them. He's worth almost about a hundred million dollars right now. And it totally worked. And I was like, wait, what? He goes, yeah, he's got a hundred million dollars of Bitcoin right now. And started with a million.

• 27:38Shaan Puri?

  Did you know him when he was making the bet? Like, were you there? What the hell are you doing?

• 27:42Sam Parr?

  Yeah. And I, and I went out to dinner with him in 2000 and when did the, three years ago was what? Uh, when did that?

• 27:50Shaan Puri?

  So I think, I think 2017 or 2018, I can't remember which one, but there was a, a peaked, I think 2017, December or something like that. And then it crashed back down.

• 27:59Sam Parr?

  We went out to dinner and he was telling me about this and I was like, you, you're crazy. You're a crazy person. This is a horrible idea. Just invest in the index fund. You know, I'm really conservative. And I'm like, just invest in index funds. You're nuts. This is a horrible idea. Do not do it. And he was enthused, so enthused, I couldn't talk him out of it. And he was like, thinking I was crazy. He was like, what are you crazy? This is like, it totally makes sense. And I'm like, it doesn't. This is a horrible idea. Do not do this. And he did it. And so recently, uh, when, when about four months ago, whenever it was at like 50, 60 grand, it was worth close to a hundred million dollars. And I was asking about their lifestyle, like not a lot had changed. Um, and

• 28:39Shaan Puri?

  Cashing out or leaving it, letting it run?

• 28:41Sam Parr?

  Cashed out a little bit. I think like 10 or 20%, I believe, but still letting it ride. So now it's halved or I guess it's back up again. But, and, and, and the point of the story is basically, I am so enthused.

• 28:54Shaan Puri?

  The point of the story is a dude bet a million dollars and made a hundred million dollars. There is a moral, but that's the point of the story. Let's be clear.

• 29:00Sam Parr?

  The, the point is that like,

• 29:02Shaan Puri?

  I love that part of the story.

• 29:03Sam Parr?

  Crazy people exist. I'm not one of them and I'm happy that they exist. So we just did this episode with Ramit and I align with the Ramit. We're both fairly conservative, just like 10% a year, boring shit. I love that these nuts, these nutty people are real and exist because that's where progress come from, comes from, and I'm happy that they're real. And so that, that, yeah, I just wanted to tell a quick story because I caught up with them recently.

• 29:28Shaan Puri?

  That's an amazing story. So I saw this, I saw this tweet that was great. And basically, what it said was, great, to be great at investing, just make bets that everybody agrees with, dot, dot, dot, later. That's so true, which is, there's a lot like baked into that, which is that ultimately.

• 29:49Sam Parr?

  Oh, was that by Shane Parrish?

• 29:53Shaan Puri?

  He tweeted something like it, and then somebody, somebody replied with a simpler version of it. Shane had, had the original one. I think Sahil Bloom had the, the, the, the punchier one liner version of it.

• 30:03Sam Parr?

  Yeah.

• 30:04Shaan Puri?

  And I thought there's so much baked into that, which is, you have to remember that if you're going to invest, if everybody agrees it's a great investment, then the price is baked in, right? So ultimately, if you want to have any kind of outsized return, you have to be betting on something that not everybody is agreeing with you is a, is a good investment. And so, and so I think that's important. I think, so I think it's important to know. And so when you're doing something, that doesn't mean everybody just reviews me, that's going to be a great investment. It's almost the opposite is true. If everybody agrees with me on this, then this probably isn't going to be a great investment. It might be a good or solid investment. It's probably just not going to be, it's almost definitely not going to be a great, great investment. So that's how you kind of use that advice.

• 30:47Sam Parr?

  Yeah, I saw that. I thought that was good. All right. What do you want to do now?

• 30:51Shaan Puri?

  By the way, on this, because the world's crazy and we're talking about like people just making a hundred million dollars on random bets. There's this great blog post that I think everybody should go read. I don't know how they'll link to it because it's weird. Maybe put in the show notes.

• 31:03Sam Parr?

  It's got a great headline.

• 31:05Shaan Puri?

  The Everything Bubble. And it's written by FTX, which is a crypto cryptocurrency exchange. We talked about the guy, he was our Billy of the week once, Sam Bankman Fried, who had also made a pretty crazy trade to build, to get the bankroll to be able to do this, to build this exchange. I think he's the youngest crypto billionaire, or he's the youngest, he's the wealthiest known crypto billionaire. I think he's got a net worth of $10 billion. I think something like that. Somehow that's more than Vitalik. I don't know how that works, but I guess so. So anyways, he, it's just packed with data. So it basically starts with like, Bubbles. People talk about bubbles and it's like, what is a bubble, right?

• 31:48Shaan Puri?

  Bubble is when you get this like sort of enthusiasm, delusion, greed, and everybody sort of thinks that everything can only go up. And then, you know, then there's this pullback or a pop. And it talks about like the size of pops and how when they happen and how that's played out through different bubble times and where we might be in this thing. Then it talks about like, maybe this is a bubble that will never pop, right? Why would that be? And it's basically talks about, it goes through all the data around stimulus, right? So it's like $32 trillion of stimulus has happened globally just since COVID, which is the largest stimulus the world has ever seen in terms of, even in terms of percentage

• 32:26Shaan Puri?

  of global GDP. You know, global banks are printing 834 million dollars per hour to buy bonds right now. And 25% of those bonds are negative yielding. So it's just like, he starts to talk about all these different macro indicators and there's all these charts and graphs and and numbers and it's very simple. And it basically talks about where are we at? Where are we at with stimulus? Where are we at with commodities like copper, aluminum? Why are used cars up 45% year over year? And then it talks about, you know, what's happening in the crypto market and equity market? And I think there's one great quote, which is basically, it talks about like risk assets. So traditionally you'd have like a risk asset, which is, let's

• 33:09Shaan Puri?

  say, bonds. And bonds are like the safest thing. And so the quote here, I'll just read this out, which is because of the amount of printing, so the quantitative easing, because they call it QE infinity, which is basically the central bank and the Fed just deciding to print an unstoppable amount of money with no end in sight. So it says, because of this, your savings account turned into your checking account. The bond market turned into your savings account. The equity market turned into the bond market. The venture market turned into the equity market and the crypto market became the new venture market. Basically, like everything shifted over one unit. So things that were low risk became, everybody seeked higher, higher risk and higher returns because

• 33:52Shaan Puri?

  the safe stuff was this sort of negative yielding. And so everything shifted over one notch. And I thought that was a good kind of observation. So anyways, it's very, you find a blog post that's this high density of like signal to noise. I would go read this. It's called the everything bubble.

• 34:05Sam Parr?

  And so what's your, what's your opinion of, I know that you're texting with me and a few guys earlier.

• 34:12Shaan Puri?

  Yeah.

• 34:12Sam Parr?

  You, you have some strong opinions. What's your opinion of what's going on with like the, the NFTs and, and, and all the rock, like the, the, I don't even know.

• 34:21Shaan Puri?

  Yeah, I was joking around. I basically said like, look, okay, if you got into Bitcoin early because you, you understood the difference between fiat currency and sound money and you were a technologist, you understood cryptography, like props to you. You deserve, you deserve your tens of millions, hundreds of millions of dollars. If you got into Ethereum early on in the crowd sale and you, you bet on that thing at 30 cents, because you're a developer and you, you really believed in this new programmable blockchain, you deserve your tens of millions of dollars. You deserve your hundred million dollars. If you're rich because you bought like a picture of an rock, you know, three months ago, or, you know, a, a computer generated squiggle, that's now worth a quarter million dollars, fuck you. That was my, that was my point of view.

• 35:06Shaan Puri?

  Um, I like my level of respect and like the level of durability, I think, that comes with these different waves. I might regret this later. It might be that all these people, they just truly understood this intersection of technology, financial markets and art in a way that I don't get. And, you know, to, basically to get rich with Bitcoin early on, you had to understand, like, uh, you know, the financial, you had a certain economic understanding of the world and a technical understanding of the world. And you had to be sort of a little, you know, a little libertarian. You had to have those three to bet on it super early on. And for Ethereum, the same thing. You had to have a certain mix of technical plus financial, like, uh, savviness. For this, it's basically like art plus finance, uh, plus technology.

• 35:51Shaan Puri?

  If you, if you're going to get rich during this. And I just feel like, I don't know if it's my Twitter feed or if it's everybody's Twitter feed, but, um, I feel like half the people I know have lost their mind and, um, and I know I sound like that sometimes with crypto. So this is just one of them that I don't get, but. I really don't see the sustainability of this NFT market. I think it is like, it is built on greater fool theory. This is people that are not buying things because they like the art. They're buying things because they think they're going to get rich. They think that the next person is going to come in and buy it. I think there's a whole lot of like, either, you know, wash trading or painting the tape, which is basically when, when two friends sort of pass something amongst each other in order to drive up the price and then they sell it, you know?

• 36:33Shaan Puri?

  And then, you know, the next sucker comes in and buys it, you know, for, because they think that's the market price. And I think that it could be one person with multiple accounts. It could be, you know, a handful of people that are manipulating these markets. I don't believe in the NFT craze in the same way that it seems like a lot of people in tech do. I think it's really cool technology. I think there's a lot of cool stuff that's going to happen. But I think people are just diving into every fricking project. And that to me seems misguided and the, the crazy returns that they're getting like, I'm the hater, you know, sort of rooting for it to fail because I don't, I don't get it. I'm not participating in it. And it just doesn't seem like, it doesn't seem like a true value creation. It just seems like, you know, um, delusion.

• 37:16Sam Parr?

  I completely agree. I'm freaked out by it. I, we're on the exact same page. It, it, like the.

• 37:22Shaan Puri?

  And by the way, I was gonna say, when I, when I say that, like, I will still buy a few NFTs because I'm a, I'm a believer of like, when I have this strong of an emotion, it's a signal to me that that's where I need to go lean in and learn. Now, I don't go crazy with it. I will make small bets. I'll talk to people. I will be open minded because I've felt this way many times before and been wrong. I've felt it and I've been right, but I felt it and I've been wrong. And so all I know is that that means there's something really interesting going on. I will still play in that field. I will make small bets. I will meet a bunch of smart people. And if something changes my mind, I'll go make a big bold bet. But I would say like, the thing that seems off to me is. You know, it just seems like every third week, there's a new crypto project like yes, just yesterday,

• 38:07Shaan Puri?

  there was this thing called Loot. Did you see this?

• 38:10Sam Parr?

  Well, what is that? I don't understand it. Explain to me.

• 38:13Shaan Puri?

  So here's what I know about it. The, uh, the founder, you know, you know, this guy Dom Hoffman, he created Vine? And then he created, uh, some other shit since Vine. I don't know if he was with H, maybe he was HQ. Yeah, maybe, maybe he was. Uh, he's one of the, one of the Vine founders early on. So he just released a new project yesterday called Loot. And so instead of it being like a, uh, you know, a Crypto Punk, which is like a little eight bit character or, uh, you know, an ape from 48, 48 yacht club, which is like a, you know, monkey, a picture of monkey. This is a black square with like, I don't know, 10 words of white text that make no sense, just gibberish. It's just computer generated gibberish.

• 38:55Shaan Puri?

  And that's the whole NFT. And you just yesterday, you could just, all you had to do was pay the gas fee, which means just pay the processing fee to like mint one. So it came out, Ben saw the tweet, Ben minted one. And, uh, I think today it's worth 10 ETH, which is about $30,000. This is in one day.

• 39:11Sam Parr?

  No way.

• 39:11Shaan Puri?

  He paid, he paid, you know, probably under a hundred dollars to mint one of these, just to, just the processing fee. He paid 50 bucks or whatever, eat the gas price. And then today I think the floor is like six or six or 10 ETH, which is like, you know,

• 39:23Sam Parr?

  No way.

• 39:25Shaan Puri?

  For this black square that will say like lions, mountain spiking, diagonal line, castle, you know, Valerant, you know, it's like, doesn't mean anything, right? And then, and it's, it's like open IP. You can go like, you can build like games on top of it. This is cool stuff you could do on top of it, but like,

• 39:44Shaan Puri?

  it's so hard to wrap my head around like this. And it just feels like every third day, there's like a new one. And, um, and this is where I'm like the old guy on the lawn shaking my fist, you know, like you kids don't understand the meaning of hard work. And usually I'm the one laughing at the old guys who are saying that and just saying, you don't get it. In this case, I don't get it.

• 40:03Sam Parr?

  Do we want to keep hating on stuff and go to whoop?

• 40:08Shaan Puri?

  Uh, yeah, okay. This is the play. What would you call it? The player haters ball? This is the player haters ball episode because I have another one that I that I could hate on. Uh, let's do, let's do whoop first.

• 40:19Sam Parr?

  Yeah. So, um, well, you, you go ahead. You go ahead.

• 40:24Shaan Puri?

  I'll, I'll frame it. Whoop raised 200 million dollars, a series F whoop, which if you don't know is like a wristband, uh, like a kind of health tracker, fitness tracker thing you wear. I have one. Uh, I lost the charger, so it's dead right now. Um, but it's basically like a little Fitbit you wear and it tracks your sleep. It tracks your exercise. And it's like, I think that the, the word on the street with whoop is basically amazing marketing. And product is, uh, it's like, you know, not the most accurate, but who gives a shit? And, uh, basically they charge you, you know, some amount for the band and then there's a monthly subscription, 20, 30 bucks a month or something like that.

• 40:59Sam Parr?

  I think the, the, the band, right now the band is free and it's $30 a month.

• 41:04Shaan Puri?

  Yeah. If you subscribe for the year or something like that.

• 41:07Sam Parr?

  You have to subscribe in order to use it.

• 41:10Shaan Puri?

  Yeah. So that's whoop. Uh, and then same thing, eight sleep, which is a, a bed that tracks your sleep. And it can kind of, it can, it's thermo regulating. So it can make you cold, hot. I had one. I returned it, uh, cause I wasn't super impressed by it. Um, they raised 86 million dollars at a $500 million valuation. So what do you, what's, I think I know based on the way you, you started it, but I, my, the reason I put it on here, I wanted to know, are you a believer or are you like, you know, where do you bet that these end up? How, how, how much do you believe in these?

• 41:40Sam Parr?

  How much was the whoop valuation?

• 41:43Shaan Puri?

  Um, I don't know. I think whoop's over a billion dollars is my guess.

• 41:46Sam Parr?

  I don't, I would have to think, I would have to see the numbers.

• 41:49Shaan Puri?

  Whoop is 3.6, 3.6 billion dollars.

• 41:52Sam Parr?

  Ooh.

• 41:53Shaan Puri?

  And, oh, and, and also the wonderful kiss of death, SoftBank, and then Kevin Durant and other athletes are investing. You know, that's, uh, that's called the sucker round. It's not called the series F. It's called the sucker round.

• 42:04Sam Parr?

  So the eight sleep thing, um, well, check this out. Look up right now. What's Casper's market cap right now?

• 42:12Sam Parr?

  So Casper.

• 42:13Shaan Puri?

  Between one and three billion dollars is my guess. Uh, let's see. Oh my God, way worse. Two hundred million dollars.

• 42:20Sam Parr?

  Okay, so Casper has a market cap right now of two hundred million dollars. We had the founder of Casper speak at HustleCon. Awesome guy, great story, really great business when it was just getting started. I made a million dollars in I think its first week. They raised, prior to going public, around two hundred and fifty million dollars, I think. As of this second, they have a market cap, they went public of two hundred million dollars. So they are worth less than um, the amount of money that they raised.

• 42:48Shaan Puri?

  Point five X of revenue.

• 42:50Sam Parr?

  Point five X of revenue. I think that for Eight Sleep, I, I, and I think that that is a good valuation for Casper. I'm on board with that because it's really hard to do. I think that that is what's gonna happen to Eight Sleep. Whoop, I think is a little bit different because it has subscription revenue. Um, you know, I, I'll buy.

• 43:10Shaan Puri?

  By the way, I think, I think Eight Sleep's trying to do the same thing. So they don't just sell you the mattress, they sell you the subscription with the mattress. They're like, they want, they, the bull case is it's Peloton. It's a piece of hardware, everybody sleeps, you sleep eight hours a night, you can optimize your sleep. It has such good health impacts for you, right? Like, all true. And, um, you know, mattress industry is big. So what we're gonna do is we're gonna sell the best, you know, connected mattress, and then we're gonna charge you a monthly subscription on top of that. That's my guess. I think they might already.

• 43:39Sam Parr?

  I don't know, man. I think that's a really hard argument to make, but that, that's expensive. That's, that's an expensive.

• 43:46Shaan Puri?

  Tesla of beds, says their, their ad.

• 43:49Sam Parr?

  I, um, so when we first, when we were getting the hustle going, um, this company called Quip advertised with us. And I used to write these advertorials. I'm not sure if I made this up or if I stole it from somewhere else.

• 44:02Shaan Puri?

  That's the toothbrush, right?

• 44:03Sam Parr?

  Yeah, and I wrote, and I, when we were getting started, I used to write these articles. And I wrote this one article for Hint. And the headline was like, um, I forget what the headline was, but it was great. Like, and it got like 10 million views, 5 million views, and they spent so much money driving traffic to it. And so if you go to Outbrain and you scroll down and you see these little articles,

• 44:25Sam Parr?

  you see these little articles on the bottom of CNN and it says like a headline, you would see the Hustles article, and I wrote that article. And it was called like, it was like-

• 44:31Shaan Puri?

  About Hint?

• 44:32Sam Parr?

  Yeah, it was called like, it had the word sweetie, like, "Sweetie, this is never gonna work," said this one Coke executive. Or something like that. Or what was it? Do you see like-

• 44:42Shaan Puri?

  I'm trying to find it right now.

• 44:43Sam Parr?

  And so I wrote an article like that and it crushed. Then Quip saw it and they're like, "That's great, write one for us." So I wrote one for them and I called them the Tesla of toothbrushes. And that crushed and they said, they spent a ton of money driving traffic to them. Now, I'm not gonna take credit for it, I actually think I did copy it from someone, but I don't remember. Now, the Tesla of like a bed, the Tesla of-

• 45:03Shaan Puri?

  Yeah.

• 45:04Sam Parr?

  It crushes it. Do you see the article? What was it called?

• 45:07Shaan Puri?

  Dude, why didn't you start a D to C brand? I feel like everything, every bone in your body was made to build a brand like this.

• 45:14Sam Parr?

  I'll tell you why. So, um, Allbirds filed to go public today. I was reading through their S1. Here's why I didn't start a D to C. I think it's fun. I think a D to C brand is like the hardest thing, that, one of the hardest things that you could do in business. It is so challenging. I looked at their, the Allbirds S1. Here's why commerce kinda sucks. The more revenue you, you, you make, the less money you have. It's such a pain in the ass. Am I wrong about this?

• 45:44Shaan Puri?

  Uh, yeah, you're wrong about this. Let me show you something real quick.

• 45:47Sam Parr?

  That's crazy dude. You, I, I, I think these D to C companies are such a pain in the ass to run.

• 45:53Shaan Puri?

  Can you see this number?

• 45:56Sam Parr?

  AJ, hang on.

• 45:59Shaan Puri?

  My camera focus on that.

• 46:00Sam Parr?

  There it is.

• 46:05Sam Parr?

  What is that?

• 46:06Shaan Puri?

  That's, that's the last 30 days.

• 46:08Sam Parr?

  So your, your business has made

• 46:11Sam Parr?

  sales in the last 30 days?

• 46:13Shaan Puri?

  That's right. It's not that hard to build these businesses. It's okay. It's a lot of schlep work. There is a lot of schlep work, right? Like I spent hours yesterday trying to find a forklift for the warehouse, but the, the electrical and the building doesn't support the battery that we need. And I'm like, ah, where do I get this forklift from? I'm calling forklift providers. Turns out, by the way, great business to be in, just selling used heavy machinery like forklifts. And there's a lot of room for like building an aggregator there, but, uh, but yeah, dude, if you have the marketing chops you have, it's like, it's like, where do you plug in that? If you're A plus at that scale, and I think you are, like your writing skills and your advertorial skills, your marketing skills are so strong.

• 46:55Shaan Puri?

  If you had plugged that in on a D to C brand, uh, and by the way, this is, we are one year and one month into this business.

• 47:04Sam Parr?

  That's crazy.

• 47:05Shaan Puri?

  And that's in a month doing basically, so.

• 47:08Sam Parr?

  Okay. How much, how much cash do you have in the business bank account?

• 47:14Shaan Puri?

  A good amount. Yeah, a lot. Why?

• 47:17Sam Parr?

  Because are you buying a shit ton of stuff for November? And December?

• 47:22Shaan Puri?

  Uh, yeah, we have, we have a bunch of inventory. Yeah, we, we do spend a lot on inventory, but there's, uh, yes, it took cash. Uh, so I put in, when I started the business, I put in a good amount of money. So I put in.

• 47:35Sam Parr?

  So do you have, wow, you don't, you don't have to say these numbers, but do you, do you, or you can, but do you have more money in the business bank account than you started?

• 47:47Shaan Puri?

  No, uh, we, so we have a line of credit basically that we, we use. So since then, we basically pulled that out, use the line of credit. But what I'm, I guess the point, yes, it, but yes, we, you do have to wait some time to be able to pull profits out because while you're scaling, great, this month was profitable. You're going to reinvest that into either marketing or inventory for the next month. So yes, you are cash poor for a while. But you do turn the corner like this month is a, is a turn the corner type of month where, oh, good. Like there's actually leftovers after you reinvest everything in growth and all that. And so I think that if you have a good product, if you have a really truly great product.

• 48:28Sam Parr?

  Do you, do you think that you have a great product?

• 48:31Shaan Puri?

  We do. We have a great product, like a truly great product. And so, and so when I think when you have that, you're not just like, is you're not just an arbiter charger, you're not just a drop shipper, just taking some shit from a, you know, random shit off of AliExpress and, and, and sending it to, to customers and trying to capture your margin. Like, we spend a lot of time on product development, things like that, uh, to get it right. And we also use the product ourselves. So, so it's not like, so, so we have to live with any issues with the product. So I would say you, um, you can turn the corner. And also there's a bunch of different companies that have popped up that let you float money. So like, let's, let's just take a normal D to C business. Here's how it can work. You can, uh, let's say you rank Facebook ads, you put the Facebook ads on a credit card.

• 49:15Shaan Puri?

  Cool. Your Facebook ads should be returning more than one X, um, you know, within seven days. How much do they return? Thirty, um, yeah, it depends on your product and your, your, your brand and all that stuff. But let's say you're returning 1.4X or you might be returning 2.5X, whatever, different brands do a different amount. You know, if you're doing 3X, you're, you're, you're amazing. You're laughing. If you're doing one and a half X, you know, you're all right. You're doing okay. Um, so let's say you, uh, you do that. You're, you're paying back your ad spend in seven days, but you don't pay your credit card for, let's say 30 days. So all of your marketing spend, you should be paying, it should be paying itself off. You don't need an external investment to do that. Okay. So now you have to deal with inventory. Well, for inventory, you have supply, you have terms with your supplier. So you don't have to pay for it all upfront.

• 50:00Shaan Puri?

  As we get bigger, we get better and better terms with our suppliers. In addition to that, there's all these companies that have popped up like ClearBank or Settle or whatever, Wayflyer, different companies that will basically say, cool, for 1% interest, we will front your inventory financing for you. We'll pay all your kind of accounts payable for, for you. And so 1% is, 1% per month is not cheap. But that basically replaces the need for external investment. And so then by the time you have to pay your bill for your inventory, you've already received it and sold it. And so if you do those two things, you can manage cash flow well.

• 50:41Shaan Puri?

  You, your ads pay themselves back before your credit card bill is due and your inventory pays itself off before your inventory bill is due. And you just pay a small vig on insurance. So there's a lot out there now to help you scale. And I think a business, uh, these businesses I think sell for about one X revenue. Which is, you know, maybe four or five X times even a.

• 51:04Sam Parr?

  And do you think that, um, what do you think's going to happen with it? Do you think you'll sell it or is this something that you want to run for and own? Is this like a family business that you want to own forever?

• 51:12Shaan Puri?

  Yeah, I like running it. So, and I definitely think we can grow it more. So, you know, if we could do this in one year, you know, let's give it four more and let's see where we can take it.

• 51:21Sam Parr?

  I do think that there's like some amazing thing about these companies, which is you probably, if I had a guess, have, I, I don't know how you quantify it because you have so many projects, but you probably have a skeleton crew.

• 51:32Shaan Puri?

  Yeah, like this doesn't require, there's no office, you know, there's, there's some employees. The biggest thing we have now is we brought the, we, you know, we do our own warehouse, but you could also not do that. You could use a three PL, you know, pay somebody else basically to, to do your fulfillment for you. And, uh, and then you don't have any crew there. So, so you don't have that headache. So, so you could do this with a pretty small team of people. There are people doing this with like, like, I think, you know, um, we had, we did an episode with the founder of Native Deodorant. I think he was the only employee for like the first, I don't remember what it was, maybe five, 10 million revenue.

• 52:08Sam Parr?

  Yeah.

• 52:08Shaan Puri?

  And then, you know, and then, and then he hired a customer service person, which is basically, you know, you can hire somebody for $6 an hour overseas to answer your customer service emails. And that's your first hire. And then you might hire another one of those people. Then you might hire somebody for operations to deal with like supply chain, you know, but so, so it depends on kind of like how complicated your business is, but. Yeah, like you don't need, this is, I would say, I think it's probably whatever you had with the hustle. This is probably one fourth the manpower you need for that.

• 52:38Sam Parr?

  It is cool. I, look, I think there's a lot of, I was down on it, but I, there are a lot of cons. I think there's a lot of pros as well. The cons.

• 52:46Shaan Puri?

  It depends what, what month you catch somebody. You catch them in a month where the Facebook algorithm is not treating people well and they're crying. You know, the business doesn't work anymore. It's like, it went from great, it was a money printer and now it's a money suck. Uh, and there's nothing you could do about it. Facebook just changed something.

• 53:02Sam Parr?

  Or there's a pandemic and you can't, you can't order anything.

• 53:06Shaan Puri?

  Or shipping containers went from 3,000 a container to $20,000 a container. Uh, okay. Now, you know, how does that mess up your margins?

• 53:12Sam Parr?

  And that, that hasn't messed you up?

• 53:15Shaan Puri?

  It, I mean, all of these things have happened, right? Like all of, we've had theft, we've had, uh, Facebook ad changes, we've had container costs go up. We've had our stuff sitting on a boat at the port for three weeks and it's just floating there. Um, you know, we've had to go get line of credit. We've had to do a lot of things in this amount of time, but, um, so I would say, that's why I said, there's a lot of schlep work. It's not clean and easy, like, uh, doing a podcast and, and just having a bunch of people listen to it and make money. Like this is a lot easier, a lot more fun, but those can, those can get bigger. So I, I guess I don't even remember how I started this, but basically I was just saying, dude, I can't believe you haven't built one of these. Um, it's insane to me, given your skillset.

• 53:54Sam Parr?

  So maybe, maybe I will one day and we'll wrap up. It doesn't have been a second, but let me ask you one more question because this is interesting to me. Because, so you've done a social app that is like the most poppy, cute thing ever. And had mild, had some, had some mild success. You've also have family that are mega successful in real estate. We have interviewed all types of people. You now have an e-comm thing that's like, appears to be a, like a potentially a home run. What would you, if, go back now to, uh, 10 years prior, you're, you know, you know now, what do you think you would like to do?

• 54:31Shaan Puri?

  That's a hard question. That's a really, really hard question. Okay, I'll, I'll rank, I'll give them, it's like the Oscars. I'll give them some awards. Okay, so most likely to succeed goes to real estate. Congratulations. Come up and get your prize. If I had just said, cool, I'd like to be worth, you know, a few million bucks. My twenties, by the time I end my twenties, I want to be worth a few million dollars, maybe, you know, liquid, maybe a couple million on paper. I could have, you know, 10 to 20 million dollar net worth. I could have done that in real estate.

• 55:08Shaan Puri?

  With pretty much like no luck required, right? Most likely to succeed is real estate because there's no luck required. It's just hard work, blocking and tackling, doing the things. So that's real estate. But I wouldn't go do it myself. Like if I could go back now, I wouldn't switch paths to that. But I would have told myself, hey, look, here's, here's one option.

• 55:30Shaan Puri?

  And the award for absolute worst idea goes to trying to create the next social media app, you know, this required maximum difficulty. Light, highest luck factor, trying to catch lightning in a bottle. And honestly, the prize, okay, it would have been fucking sweet if we had invented Twitter or YouTube. I gotta admit, that would be amazing. But I can be just as happy not having done it. And yeah, I can name all five guys who've done that. So like, you know, that's, that's not the path. Okay. Then if I say, all right,

• 56:08Shaan Puri?

  you know, sort of like medium return, this is the mediocre playbook, you know, the sort of mild success playbook. Pretty good chance of a pretty good outcome, but kind of a lot of work. And, you know, would I do that? E-commerce is the answer for that one, which is like, e-commerce is one that I think you can definitely make work if you just keep trying.

• 56:33Shaan Puri?

  It's kind of a pain in the ass and it's never going to be the most fun or the most successful, right?

• 56:40Sam Parr?

  However, however, Ecom of maybe all three of those, I think is the most exciting.

• 56:48Shaan Puri?

  The most exciting, no way.

• 56:50Sam Parr?

  Dude, it's so fun running ads and seeing cash. Like, that is so exciting.

• 56:54Shaan Puri?

  Okay, that that that loop is fun. Uh, that I give you that. The feedback loop is instantaneous and it's and it's monetary. It's not likes or reviews.

• 57:03Sam Parr?

  Real estate's not that very, like, real estate can be kind of fun, but I wouldn't, I wouldn't call it, it's not like an adrenaline, like a dopamine rush.

• 57:10Shaan Puri?

  Right. So, okay, so if I was gonna go back and convince myself of anything, it would have just been to say this. Uh, look, you could, you could win in all these different ways. Every flavor works. The, choose the one with the most fun journey. Clowny, yeah, I know this is cliche, but choose the one that's gonna be fun before the success comes. Basically, in that case, you win-win. You have fun while you're doing it. Because you have fun, you keep doing it. Because you keep doing it, you get good at it. Because you get good at it, you eventually win. And, uh, look, all these things, as long as they leverage, you know, either, uh, either like physical real estate or the internet, the scale is big enough. You'll, you'll have enough money. You don't need to worry about money ever again. And so I would have advised myself to say, look, there's some pretty interesting shit going on in these like

• 57:55Shaan Puri?

  new waves, like genomics, you know, biotechnology, uh, cryptocurrency. Just go dive in, become a, there's no experts, because the thing's like a year old. Go become an expert, meet all the cool people doing it. Take a bunch of, invest in shit and build, build in that space. Um, you know, create a podcast talking about that stuff, like, just do all the things in that space.

• 58:17Sam Parr?

  You know, information, so you know podcasting, so media, you know, information, like courses, and you know, uh, crypto, you know, investing. So, I mean, you have a pretty eclectic experience.

• 58:26Shaan Puri?

  I, I think the, of all of them, I've had the most fun doing the podcast, the media thing. And really, it's more of just like, do the thing that doesn't feel like work to you. Do the thing that feels like play to you. All right. So like, imagine you already had the money, but you still were gonna work on some projects. What would you work on? That, my answer was, I would wanna basically like, I would wanna make content based on stuff I'm learning, stuff I think is cool. I think it'd be really fun to have an audience. I find it like energizing. I don't feel, I don't feel like it's work when I have to do the podcast, prepare for the podcast. And, um, and yeah, it keeps me kind of like on my toes, because I gotta come up with new stuff to talk about, so I gotta keep learning. So that's like, that was the most fun path for me. So I would have done that, or I would have similarly done this in a domain. Like, this is a general podcast.

• 59:11Shaan Puri?

  I would have done the same thing, but like in crypto. Like, there's these guys that do this podcast called Bankless. Have you seen them?

• 59:16Sam Parr?

  No, is it awesome?

• 59:17Shaan Puri?

  It's like, yeah, it's cool. I mean, I don't listen regularly, but like, okay, DeFi is this new thing. This is new wave. Crypto is this new wave. There's so much to learn about, so much to talk about. So these guys, they went in, they created a podcast called Bankless and Bankless is basically about-

• 59:32Sam Parr?

  Great name.

• 59:33Shaan Puri?

  Great name. And they just talk, every week, they're just like, oh, here's the new shit going on in the world of DeFi. Here's the new thing to talk about. Here's the ups, the downs, the prices. Because of that, they're building a good community around them. They can make money off sponsorships. They're seeing a bunch of stuff. If they're smart, they're investing a bunch and getting equity in all those businesses. And eventually they should launch their own branded business in there. Maybe it's an exchange or an ETF or something else with that following. And so that's kind of the playbook I would do, given my strengths and what I've seen, but like, yeah, try it all. I've tried a bunch of these different things and that's, that's what I think.

• 1:00:06Sam Parr?

  This is good. I think this is, um, I think maybe we should end here. I think this is a, a, a sick episode. I was thoroughly in, uh, like, I was enjoying hearing, hearing the stories. Hopefully people will enjoy it. What do you think?

• 1:00:19Shaan Puri?

  We gotta title this one. This is the play haters ball. We will try next time to, to hate on less stuff and we will talk about stuff we like more. But that's all right. This is, this is the episode that we hated on everything.

• 1:00:28Sam Parr?

  Well, I'll pat ourselves on the back here. We don't default to hate most of the time, like, right?

• 1:00:33Shaan Puri?

  We hate on everything except for ourselves. We compliment ourselves.

• 1:00:36Sam Parr?

  We, we typically are not haters. I, I think I default to optimism. So do you on most everything. We want it all to work. But, uh, yeah, I, I feel you and I completely, I agree with just about everything you said.

• 1:00:48Shaan Puri?

  All right. Dope. Uh, okay. I'm gonna go eat a steak and a salad and enjoy myself.

• 1:00:52Sam Parr?

  All right. That's the pod.