Unicorn Founder on Unseen Arbitrages, the Paradox of Wealth + Charlie Munger Wisdom ft. Ryan Petersen

Episode 648: Shaan Puri ( https://x.com/ShaanVP ) talks to Flexport founder Ryan Petersen ( https://x.com/typesfast ) about playing both games: bootstrapping a startup to millions and raising venture capital to build a multi-billion dollar company. — Show Notes: (0:00) Import Genius (5:36) Paul Graham's superpower (9:34) Data-as-a-service framework (13:51) Charlie Munger's worldly wisdom (19:45) Prioritizing adventure (24:09) The paradox of wealth (28:51) Charlie Munger's student experiment (31:00) Negotiation masterclass (37:23) Inside Founders Fund (43:16) Being in a crowd v following a crowd (46:29) Highs and lows (48:52) "You can just do things" (50:16) Unseen arbitrages (53:00) $50M Phone booths — Links: • Flexport - https://www.flexport.com/ • Flexport on X - https://x.com/flexport • ImportGenius - https://www.importgenius.com/ • Schlep Blindness - https://paulgraham.com/schlep.html • Poor Charlie’s Almanack - https://www.stripe.press/poor-charlies-almanack • Founders Fund - https://foundersfund.com/ — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth • Sam’s List - http://samslist.co/ My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano

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

• 0:00Shaan Puri?

  All right. Today, we're talking to Ryan Peterson. Ryan's an interesting guy because he started out working in a pizza shop, bootstrapping his own company to millions of dollars. And now he runs Flexport, which is a multi-billion dollar company. So he's kind of done both sides, the big Silicon Valley game, as well as the bootstrap, make something out of nothing form of entrepreneurship. And we talk about three things. The one big lesson he learned when he became friends with Charlie Munger, what Charlie Munger really taught him. Number two is a masterclass in negotiation. So things that he learned about negotiation back when he was in business school that still help him today. And the paradox of wealth. So why chasing money? Well, money is great and you want to make money. And he says money is great too, but how instead of chasing money directly, you should do something else instead. He calls this the paradox of wealth. So enjoy this episode with Ryan Peterson.

• 0:52Shaan Puri?

  Okay, today you have the Silicon Valley success story. So you've got Flexport. This like behemoth of a company, multi-billion dollar company went through YC. You did the Silicon Valley. You won the Silicon Valley game, which is great. And I live in Silicon Valley. I like, you know, I spent 10 years trying to win that game. The other side of it, though, that's I think a lot more relatable is you were, you know, working at Domino's Pizza as a teen. You flipped scooters from, you know, on eBay. You then built Import Genius, which is a bootstrap company that I think had kind of like real EBITDA. Like I think you were making millions in EBITDA along the way, right?

• 1:27Speaker 01

  Still am, still am. It's still a good business.

• 1:29Shaan Puri?

  Exactly. So you've done both, right? You've done the bootstrapper game. You've done the the flipper game. And then now you've done the the big, you know, Silicon Valley disruptive disruptive game. And so I think that's cool that you did them. And not just that you did all those things, but one sort of led to the other. Is that right? Like the scooters led to Import Genius, which led to ultimately Flexport?

• 1:48Speaker 01

  Yeah, I think that definitely drawing the lines backwards, you can make that pattern really easily. That really the scooters, I was working for my older brother and and his business partner, Michael Kenko. And we had a lot of frustration with freight forwarders and customs brokers. And we had a lot of frustration with binding good factories. Those were kind of the two big problems that we saw.

• 2:12Shaan Puri?

  I have this econ business that has over, I started it kind of right before or right during COVID. Basically, we launched right after COVID and we've now done over, I don't know, 50 million in revenue. But I would not have found my factory had I not used Import Genius. And I, I remember I was like, I'm kind of like a shortcut taker in general. So I was like, okay, either I can go on Alibaba and I could try every single supplier on here. Try to find a good one, or I could go to whoever I think has the best quality and just try to reverse engineer. Who is their factory? Who is their supplier? And actually, I remember like buying the $99 or $199, I don't remember what it was, like Import Genius subscription. And then actually, there was somebody in your chat team that did the search for me because it wasn't showing up initially.

• 2:57Shaan Puri?

  And they went back like further in the records, 12 months, 15 months ago, and they found one manifest. And so if people don't know how this works, what you guys did was basically you took public data about the shipping manifest. And then you organized and structured it so you could see for any business, who's their supplier? And for any supplier, who are all the businesses they work with? Is that right? Is that the right way of describing it?

• 3:18Speaker 01

  Yeah, that's what Import Genius does. It's still, it's still, we haven't raised prices much either. It's still about the same as you said, 99 or 199. We might raise it a tiny bit, but importgenius.com is the business that I started. And you know, if I only mention Alibaba, because that's, I started that business out of frustration. I was living in China for a while and I would use Alibaba to find a factory. I would show up at the factory and they weren't expecting people to just show up. And it'd be like fake factory, like it's just a middleman, you know? Or like one time they, I did give them a couple of advanced days, but I showed up and they were like very clearly like faking it. Like this was not a bunch of guys in a warehouse with no equipment or anything.

• 3:56Speaker 01

  So yeah, it was frustration for that. I think if Import Genius kind of liked up organic search results. Like Google, you know, if it was all AdWords, that's kind of like what Alibaba is like people paying for price man, etc. Alibaba.com is of course, the original business was B2B searching for factories, but that that's not what drives their market cap. Their market cap is driven by Taobao and Alipay and all these other products.

• 4:22Shaan Puri?

  Right.

• 4:23Speaker 01

  But yeah, the original business is like finding factories. I think Import Genius is a much better way to do that. I do think that my brand is around seeing problems that somehow other people just kind of take for granted and they're blind to in some way that they just sort of accepted as, oh, that's just reality. And then actually getting really curious about it and looking at what could you do to solve it? And that's where Import Genius came from. That's where Flexport came from. And that's sort of that same problem. It's annoying. I'm kind of annoying in that way. Like when I go to a restaurant, I'm like doing bottleneck analysis on the cashier. Like, what would I do to like, you know, get this, get the traffic flowing faster through this place? But um, yeah, I can't help it.

• 5:00Shaan Puri?

  What does Paul Graham's worth for this Schlep, Schlep blindness, right?

• 5:04Speaker 01

  Yeah, I usually point people to that essay on Paul Graham's essays called Schlep blindness, which is this idea that you're kind of blind to the biggest problems in the world.

• 5:13Shaan Puri?

  Paul has a good quote about you. I found in my research. This is a, this is the make you blush section. All right. So it says, Paul Graham, founder of Y Combinator says, Ryan is what I call an armor piercing shell, a founder who keeps going through obstacles that would make other people give up. A, do you think it's true? And B, why do you think Paul thinks that about you?

• 5:32Speaker 01

  I don't know if it's true. We work, we, I do work really hard and don't give up easily. Paul and I've had a great relationship for a long time. He's seen me since the very early days. I met Paul when I was, before I even, I had started Flexport, but barely. My brother did Y Combinator the year before me. We were renting a house. Actually, it used to be Max Leptchen's house because we used to get his mail.

• 5:53Speaker 01

  I don't know how long before. It must've been a long time before because it wasn't a very nice. It was like

• 5:59Speaker 01

  It was like before he got rich. But uh, we were renting this apartment and it was near a dog. It was there a park where Paul would take his kid, George, who's now older, but when he was, and we would, uh, we would take my dog there to play. So we would just like run into Paul and my brother was in Y C at the time. So we got this striking up conversation. So Paul's seen me since like Flexport was just an idea, basically. He's been a great advisor for us, said nice things to a lot of people.

• 6:27Shaan Puri?

  What uh, what did Paul help you with? Cause I've asked people this a couple of times and I feel like everybody's got a great Paul Graham story of like, there was a, you know, these, there's these like crucible moments in every startup or there's these moments of uncertainty and Paul either brings either a certain level of confidence or clarity or a question or a bit of advice that was, was helpful early on. Do you, do you feel like there was one of those for you?

• 6:48Speaker 01

  I think Paul's got, his superpower is like not, he only sees what's possible and like, how valuable or big could this thing be if everything works? And he ignores every other outcome that's possible.

• 7:01Speaker 01

  And that is probably the right way to do seed investing, you know, in a power law world to find like that. And so he always saw, Flexport really worked. The outcome is so outsized and enormous, given the industry size and their importance. Then, and, and then he could help us sell that story to other investors, to candidates. He would send emails early days to like top engineers, saying really great things about us, quotes like the one you mentioned to different press and stuff like that. He's also been a really big supporter of flexport.org, which is our humanitarian relief logistics division that, that helps nonprofits doing refugee camp logistics or other sorts of disaster recovery logistics.

• 7:46Speaker 01

  He's been, he's donated billions of dollars to us there and helped us get the word out about all that stuff. So he's a huge supporter of Flexport.

• 7:53Shaan Puri?

  That's amazing. Yeah. I always think about like the, the first believer. I think everybody has this person who uh, believes in you more than you believe in yourself for a period of time. And it's sort of like a, it's like a short loan. It's like a short-term loan that you can get of, of conviction. And um, it's very helpful to an entrepreneur and it's actually very helpful to be that person, especially once you have a little bit of success as an entrepreneur. You now can lend a little bit of conviction to other people you believe in when they, when they don't really have it.

• 8:20Speaker 01

  Yeah. I mean, Paul's job is hard. Well, he's, he's retired now, but the job of being a YC partner or leader of YCs is just super hard design. A lot, most of those people are going to fail. So you have to kind of delude yourself. Uh, if you really want to say only focus on what could happen, well, that's probably not what's going to happen in most of the cases. That's very hard psychologically, I'm sure.

• 8:41Shaan Puri?

  Yeah, maybe he needs another essay that's like schlep windus, but it's on the investor's side. It's like, you know, fail, fail blindness. It's like the ability to easily forget. With Import Genius, you took publicly available data, you structured it, you made it into a useful business that generates millions of dollars of your profit. It seems like your brother also did that same business model, right? In a different space with Build Zoom. Can you explain, maybe, what is the underlying, you know, way, framework of how to think about business ideas like that, that might, that might succeed? Because it seems like there's a pattern, that there's multiple ideas like that.

• 9:13Speaker 01

  That, yeah, Build Zoom was born out of the frustration of finding a contractor. Build Zoom's my older brother David's company, one of his companies. And he was my co-founder with Import Genius and my boss for a while. And, you know, he was sort of my mentor in startup world. Build Zoom was born out of the frustration of finding a contractor to work on your house. And underlying it is this public data set of building permits are largely public record, but hard to access. And we had a lot of experience of doing that with Import Genius. So they built the search engine on building permits and lets you look up any, wherever you are, any house, you can see who the contractors were that built on, that, that worked on it, which is pretty useful as a homeowner, by the way, as a tool. See who, who built the problem. If you have a problem, go find that person, they probably

• 9:57Speaker 01

  can help you with it. But also, you're doing due diligence on contractors. No, you know, be able to talk to the actual homeowner, she worked, like, who worked with them, making sure that the reviews are actually for people that hired this contractor. Like, there's a great data set out there. So they built, they built a nice little business on top of that data set. I think that government data is a big opportunity. The government has tons of public records on all kinds of stuff and no real incentive to organize it in ways that are particularly useful. It, it makes it hard to build defensibility onto these businesses because other people can, if it's public record, other people can access the

• 10:37Speaker 01

  data too. So you have to get distribution, or build some kind of a network effect on top of it. Like in Build Zoom's case, it's like reviews that you're layering on to this. And, and sort of brand is always the ultimate network effect that you can build on to it. But. You know, I think people overthink defensibility a little bit like, how could you have defensibility? You're a startup just like, you know, if it was defensive, how could you possibly do it yourself?

• 11:07Shaan Puri?

  Yeah, we did an episode recently on, I was like, I found this app that's called Oasis. It's a water, water quality tracking app. So basically like how much, how much, you know, forever chemicals are in your water?

• 11:19Speaker 01

  Oh, yeah.

• 11:20Shaan Puri?

  This, it's this kid, it's this kid who did the same thing. He basically was like, he lived in, I think Minnesota where they had like clean water. He drank tap all the time. He moved to LA, started drinking tap water. It tasted funny. He got a little bit sick. He's like, oh, man, I wish I could figure this out. Turns out every city has their own testing data that's publicly available. Turns out that you can request from every bottled water company their reports as well. So then he created this app that basically presented to the consumer and then he goes viral on TikTok with these like, kind of like fear based, like, did you know that blah, blah, blah? But you can check this using this app and he's built a, you know, a thriving business on this thing. I think he's at like 50K MRR and he's just a kid in his twenties. It's not the most defensible thing.

• 12:03Speaker 01

  You gotta get this to RFK Junior, man. He'll be all great.

• 12:07Shaan Puri?

  That's right. But I think it's kind of amazing that you could do this, taking public data and making that happen.

• 12:13Speaker 01

  Yeah. Brand and network effect distribution, getting users, getting people loyal to it, execute high velocity. Yeah, I got, I remember I got in a fight on Twitter like five years ago with some guy talking about moats. And I was just making a play on words saying, well, you had a moat, turned out to be not that useful once someone invented artillery.

• 12:34Shaan Puri?

  Right, right.

• 12:36Speaker 01

  We don't use a moats. Like, what are you gonna put alligators to defend your business? So I was talking, like, actually, you know, you don't really want to hide behind some walls, like the real ever, ever since the blitzkrieg in like 1940, 1939, whatever, we learned that like high velocity attack is the way to win, not like sitting behind defensive walls.

• 12:57Shaan Puri?

  Right.

• 12:58Speaker 01

  And I don't know, some investor like got really upset with me that I didn't believe in moats. Of course, you know, it's, I'm just making a play on words, but.

• 13:07Shaan Puri?

  Right. Well, you, you wrote in here something that I found pretty interesting. I didn't know you were friends with Charlie Munger. And speaking of moats, Buffett Munger famously talked about how defensibility and moats are super important. Can you tell the story? How did you become friends with Charlie Munger?

• 13:21Speaker 01

  Yeah, RIP. What?

• 13:24Speaker 01

  Oh, I know Fred Friendly with Charlie Munger, let's say, I had dinner at his house seven or eight times before he passed. I went to his 99th birthday party last year, actually. I'm a huge fan of, he has this essay, which I think every young, every person should read, especially young people trying to figure their way through the world called, he's called The Art of Worldly Wisdom.

• 13:44Shaan Puri?

  Yeah.

• 13:45Speaker 01

  Definitely. If you go to worldly wisdom, Charlie Munger, you'll find it. I actually found it on Paul Graham's website. I believe PG published it to the Y Combinator website at some point. And I had read it when I was young and feeling uninspired or like trying to figure things out, what should I do with my life? And the essay basically argues that there's, in every discipline, like biology or chemistry or whatever the, you know, you can define number of disciplines however you want, sort of, but somewhat arbitrary, but to say there's a few hundred disciplines in the world. And that in each one, there's two, there's two or three big ideas that carry 80% of the freight. That if you know those two or three big ideas, you kind of will get 80% of that whole discipline. Like

• 14:30Speaker 01

  in biology, it's probably like Darwin, you know, Darwinian evolution and something to do with genetics, which are obviously related. But like, you can get those two or three big ideas, you'll have enough biology to be dangerous.

• 14:45Shaan Puri?

  Right.

• 14:45Speaker 01

  And that you can learn these ideas by going to read the textbook. And so if there's only 300 disciplines and two or three ideas, you're like, okay, I've got to do about 600 to 1,000 ideas. That if I could learn them, I'd be like what Munger calls worldly wise. It's an interesting concept that set me off on a journey of, I'd probably read hundreds of books as a result of that. And so-

• 15:13Shaan Puri?

  Searching for the big ideas in every space.

• 15:15Speaker 01

  Yeah. I'm like, what are these disciplines? And like disciplines, I don't really- That I found boring. Well, like, okay, whatever. I'll just go find. I still learn the top ideas from it. Um, no, I'm not saying I've succeeded. There are some disciplines I just can't bring myself to.

• 15:28Shaan Puri?

  And by the way, hi- his essay isn't just saying there are these ideas. He actually lists a bunch of them. So he's like, for example, things gravitate towards winner take all. Therefore, it pays to be number one or number two, or just be out. And then he gives example, right? So he'll give he the essay isn't just the concept that these ideas exist. He gives a bunch of examples.

• 15:44Speaker 01

  Yeah. And then there, you know, he calls them like mental models. Do you build these mental models from one discipline? It turns out they're often applicable in another, and that's where a lot of the good ideas can come from. Um, and a lot, a lot of innovation comes from applying an idea like Richard Feynman is a great example of this famous businesses. He spent like two years as a biologist and like I did some groundbreaking work in biology just because he took ideas from physics that people hadn't really thought of frameworks and applied it in biology.

• 16:09Shaan Puri?

  Right.

• 16:10Speaker 01

  Anyways, I was very inspired by Munger for many, you know, decades, really silly him. And I was at a party at one of my investors' houses and I was just talking to this older guy. Neither of us knew anybody at this party or didn't know many people. And I'll, he asked me what my favorite book is. And I started talking about Poor Charlie's Almanack, which is a great book that Stripe just reprinted, reprinted, by the way. I, I told him that book is my favorite. And he started telling me why. And I told the story of the, you know, worldly wisdom and how I was living in China. I was bored out of my mind sometimes. And so I bought all these books and just started reading books like hours a day, every day. Um, and he let me talk for a long time before he was like, yeah, I know that book really well. I wrote that book.

• 16:54Speaker 01

  And it turned out the guy I was talking to is a guy named Peter Kaufman, who wrote the book Poor Charlie's Almanack. He's like one of Charlie Munger's best friends. And he just thought, got such a kick out of me. Telling him so much about how great his book was that he brought me to Charlie's house for dinner and many, what, many times we became friends with a few other of Charlie's friends and gotten involved, you know, invited to lots of dinners. And Charlie, I remember when I first told him about what Flight Sport does, he was like, oh, this is. That's great. You have a great business because the key to success is dumb competition. And he started ranting about like all of his experience working with freight companies. And I also think that's a great little tagline too is like, remember, yeah, when you're trying to think of what business to do.

• 17:39Speaker 01

  All these guys doing AI startups like make, I think applying AI to some old school frozen industry is a great idea, but just going straight head in, head on against other AI geniuses is like a recipe. Like who wants to compete with people that smart like? You'd rather compete with knuckleheads wherever you can.

• 17:56Shaan Puri?

  Yeah, exactly. That's a very simple principle. Like in poker, table selection is like probably the most important decision you make. So everyone thinks poker is about like, you know, the, the bluffs and the advanced betting strategies or whatever it is. And a huge amount of your success comes down to which table did you choose to sit down at? If you chose to sit down at the fish table, you're going to do pretty well. And that one decision was the most important decision you could have made. If you sit down with all the sharks, well, good luck. It doesn't matter how good you are, you, you're probably just going to, you know, bash your head against the wall for a while.

• 18:24Speaker 01

  That's why I don't play poker.

• 18:27Shaan Puri?

  When you met this guy, I like how you said you were at a party and you're like, we both didn't know anybody. There's this like, alliance of the outcasts that happens. I don't know if you, you've heard the story about Ben and Jerry's, but they, they asked Ben, you know, Ben, how'd you meet Jerry? And he goes, well, they go, were you guys friends immediately? Cause they've been friends for a long time. He goes, no, he goes, we, we just were in the same PE class and they had, we had to run the mile and both of us hated running. So we were the only two guys walking. And eventually if you're just walking at the back with one other guy, eventually you'll start talking. And he's like, that was the foundation of Ben and Jerry's also.

• 19:04Shaan Puri?

  I want to ask you about this. You said you moved to China. What was the thought process that got you there? And then what'd you get out of doing that?

• 19:10Speaker 01

  Um, it was 2005. It was clearly booming. It seemed like the future. We were at that time was working for my brother. We had this scooter company buying dirt bikes and rode, we say scooters, but off-road vehicles, doing buggies, all kinds of cool motorsports products. And we were buying everything from China, but not like they were buying everything off the internet. No one had been to China.

• 19:37Shaan Puri?

  Right.

• 19:37Speaker 01

  And during college, I lived in South America. I lived in Chile and Brazil. And I learned, I speak Spanish and Portuguese. So I was like, I can, if anyone could learn Chinese, I could probably learn Chinese. I learned these other two languages, which was very naive. Um, so I saved up a little money and just like moved there.

• 19:57Shaan Puri?

  Did you plan to be there for a while? Did you buy a one-way ticket? What was the, what'd you tell yourself going in?

• 20:02Speaker 01

  Uh, I don't know. I didn't have an exit plan. I was just gonna learn Chinese and, and learn about Chinese culture and history and economics and what's going on in the boom.

• 20:11Shaan Puri?

  What, what's your tip if somebody's in their twenties and they're, they're kind of intrigued by this, like the adventure path? What would you tell them? Like, how would you tell them to think about this now that you've done it?

• 20:20Speaker 01

  Well, I, I think it's really about your values, you know, and, and really introspective. You can select your values too. Well, a lot of people just kind of go through life without thinking about this. I, I did. And my value, without knowing it consciously, my number one value in life until I was about 25 or 26 was adventure. And I just wanted to like, try all kinds of, go all over the world. And remember, this was pre-iPhone, so it was like pretty adventurous. Like I didn't have GPS in my pocket or translation apps or any, I mean, I just had to like figure stuff out, walking around, asking people for directions and hoping they'd be nice to me, which they were. But it was definitely an adventure. I, I, and so at that time, that was my value was like chasing adventure. That's not for

• 21:01Speaker 01

  everybody, but if it is, like it's pretty easy to achieve, going to cheap places. It's a lot less adventurous these days. I mean, you show up, you call, now you go to China, you call Uber or DD or DD, I guess. And, uh, you got Google Trans, you got Maps, you got translation apps. It's like a little too easy. Um, I, I once rode my bicycle from China to Vietnam and no map. The map we had was all wrong, which is worse than no map almost. And we just had to figure it out. We slept at people's houses at certain times. Like it was like, yeah, old school adventures.

• 21:37Shaan Puri?

  I, I think back to my question about why Paul Graham called you, you know, an armor piercing shell who just, you know, who figures things out. I, I think, I think this is where you get the reps in, right? Like it doesn't start. The problem solving and confidence that I'm gonna figure things out doesn't just start the day you incorporate your startup in Delaware. It starts by getting a bunch of reps earlier in life, maybe.

• 21:57Speaker 01

  I think learning a foreign language in that country is extremely valuable. It's not a good ROI from like, you probably won't make any money off of this. Especially now with ChatGPT, it's incredible. I can do live translation into every app and every language. I mean, but like the humility of like, everyone thought I was a freaking idiot. I mean, I was like, I couldn't speak. And like, you know, bus drivers think I'm an idiot. And having that over and over and over again, every day is pretty good for your ego and your humility. And also for relating to other people like in your country.

• 22:35Shaan Puri?

  And when you went there, so you're like, I'm gonna go, I'm gonna learn the language, I'm gonna travel, eat. But you're a business junkie. Like you said something I saw in the research, which was like, you know, I was like, oh, this guy's my kind of people. You go, my form of entertainment is making a landing page one night and sending some traffic and seeing if people click to buy, right? So did you, were you kind of scheming and dreaming about business while you were there? What were you doing on the business side while you were?

• 22:59Speaker 01

  Yeah, so we were sourcing all of our products from China. And so I was like, I would go to factories, find like evaluate quality, manage shipments. I would do a lot of everything, make websites, do marketing, customer service.

• 23:12Shaan Puri?

  Was that scooter business any good? Did you make any money doing that or what was the result?

• 23:16Speaker 01

  It was pretty good for like, you know, you made salary, like W2 level income that was above all of our friends at the time, but not like change your life kind of income.

• 23:29Shaan Puri?

  Right. You know, this podcast, the title of it is called My First Million. And one of the things I, at the beginning, the premise of the podcast was always gonna be, let me bring people on, ask them how they made their first million. And that's, that's where it started. It ended up pivoting to something else and we kept the name because when something gets popular, changing the name is a little risky. But I still do like the question of like, when you did make your first million, what changed? Because I view money as a tool to improve the quality of your life. And I think it's very easy to slip into money is this kind of measuring stake or just think this thing. You accumulate over time. And so I'm curious for you, once you kind of had a win, probably during the import genius days where, okay, you've made some like real money that you freeze up your time. How'd you use it? And how did it feel? And what you, what was your mindset during that time?

• 24:13Shaan Puri?

  Can you share anything like that? Because I think that's where a lot of people want to get to, or they're, they're just who listen to this. And I think that would be pretty relatable for them.

• 24:20Speaker 01

  First thing I did when I started making money was paying off all my student debt.

• 24:24Shaan Puri?

  Okay.

• 24:25Speaker 01

  That, that, that felt great. I invested it wisely, put a lot in the wealth front, index fund investing, bought a couple of like real estate, cash generating real estate properties. I made some stupid decisions too. I once invented, invested in a nightclub that failed. That was stupid. But it didn't change much. Well, first off, people will tell you that money's not important or won't. I don't believe these studies that say like, oh, like, you know, you stop.

• 24:54Shaan Puri?

  At 75.

• 24:55Speaker 01

  Stops improving your life at a certain point. I'm certain that that can't be replicated. You know, most, most of these psychology studies turn out to be not, there's a replication crisis in psychology. And I'm certain that that's one. And, and like, you know, that money is great because the more people have, the more they want.

• 25:15Speaker 01

  Must be great.

• 25:16Shaan Puri?

  Right.

• 25:18Speaker 01

  Must be amazing. Can't get enough of it.

• 25:21Shaan Puri?

  Wait, could you say more about this paradox of wealth? Because I saw you write down this idea. I want to read you a line from this and just kind of hear, hear you talk about this. So here's what you wrote. You wrote, paradox of wealth, focusing on making money will cause you to make less money. Nobody wants to give money to people who are too focused on money. They perceive them as greedy and self-interested, try to avoid them. They give money to people who add value for them. It is fine to want money. It's great. In fact, money is one of the best things in the world, but it's a paradox. The more of it you want, the less of it you get. So hack your brain into instead focusing on the things that are upstream of making money. What's upstream of making money?

• 25:56Speaker 01

  Yeah, I think upstream making money is solving problems for people at the end of the day, which means learning, you gotta build your skill set up so you can learn. And upstream of that is learning what the problems are and, and developing a set of skills and capabilities to let you solve them. Salespeople can suffer from this, or they can be great. Like great salespeople are really consultative, like good at asking questions, good at diagnosing problems, understanding what their product or their firm can do. To solve that problem and you know, you bring those together, you win, everybody wins, creating win wins.

• 26:28Shaan Puri?

  But the perception of a salesperson is a pusher that I'm going to make you, I'm going to try to get you to buy something you don't want or need.

• 26:34Speaker 01

  There's a lot of bad salespeople that aren't like.

• 26:35Shaan Puri?

  Which is a bad salesperson. Yeah.

• 26:37Speaker 01

  We're like, but that's the image that most people have when they think of salespeople. And you know, this is true because we can't even call people a salesperson.

• 26:47Shaan Puri?

  Account executive.

• 26:50Speaker 01

  Cause sales is such a bad word.

• 26:53Shaan Puri?

  Yeah, we had to rebrand it. We had to go A O L E instead of Mayo.

• 26:56Speaker 01

  There's only a couple of, this may have changed. I think it did. In fact, a few years ago, when I looked into it, there were only three universities in the United States that offered a major in sales.

• 27:06Shaan Puri?

  Wow.

• 27:07Speaker 01

  You know, like it's part of everybody's job. It's like probably 10% of all the jobs in the whole world are sales explicitly. And then everybody has to sell their ideas. Um, and we've, yeah, kind of been wrongly scapegoated as though this was like a terrible profession. When in fact, they're the key driver of every company, even tech, so many good tech companies fail with good technology because they can't ever learn how to sell it. Get customers. And then there's companies where the tech is just, they don't even have tech and they're just good at selling. So.

• 27:38Shaan Puri?

  Right.

• 27:39Speaker 01

  Yeah, I think hacking the brain, I used to say things are correlated with money, but I think it's better to go upstream and actually causing.

• 27:45Shaan Puri?

  Right.

• 27:46Speaker 01

  Generation of wealth. Uh, and the more you can study that, um, then you'll get lots of wealth. And I, I don't think it's bad to want money, but you just have to realize like.

• 27:57Speaker 01

  It, it, it might cause you to get less. It's a bit like love. By the way, someone's obsessed with finding a girlfriend or husband or something like, it get kind of creepy. Like. You know, work on yourself instead.

• 28:11Shaan Puri?

  Yeah, that's a great one. There's a great story about Buffett. I don't know if you heard this one, where he goes to a classroom and there's a bunch of kids sitting there and he says, all right. Let's play a game. And he basically says, I want you to point to one person in this classroom. You could choose any classmate, not yourself, but somebody else. And you get to get 10% of their earnings for the rest of their life.

• 28:31Shaan Puri?

  Write down on a piece of paper, the name of the person you're picking and why. And so, have you heard the story before? I don't want to bore you.

• 28:37Speaker 01

  Yeah, but maybe.

• 28:38Shaan Puri?

  It's not going to surprise you, but like, it's, it's interesting. The first, I think it makes the point well. So he, everybody writes down the name. And then he brings it up. He's like, you know, okay, who here, just raise your hand. Did you pick the person with the best grades? And there's, nobody raises their hands. So there's already, that tells you something, right? About school and what we think is the valuable thing versus what everybody intuitively in their gut knew is the valuable thing. He says, okay, did you just pick the person with the highest IQ? And a couple of people raised their hands. Did you pick the guy who could throw the football the farthest? Nobody raises their hand. Um, and so then he finds, it starts asking, he's like, what qualities did you pick? And basically that's where, you know, it came down to some version of the following characteristics that Buffett ultimately used for, for picking people, which is,

• 29:23Shaan Puri?

  you know, he talks about like energy. So it was, it was people who are really, they're really obsessed with things, really into things. When they get, when they put their mind to a project, they just never stop. They just never give up. They just kind of have an endless energy towards something. Another one was like integrity, right? Cause if this person is going to act out of bounds, then you know, owning 10% of their future, if they're in jail, it's not going to do me much good. I gotta have somebody who's going to play by the rules and play by the law. They know what rules to break and what rules not to break. And then the last one was intelligence, which was somebody who's good at figuring things out specifically. So not your grades or just your raw IQ, but somebody who tends to figure things out. And, um, he's like, great. So now you have the formula of what you need to be, right? Like if that's what you would pick in others, that's what you need to be. And there's, that sort of reminds me of the, the paradox of wealth, which is like, if you put a hundred people together, you're like, all right,

• 30:08Shaan Puri?

  who's going to be the wealthiest? I think intuitively, we would know it's not the person who's going to just like, sort of only chase money and try to just extract as much money as they could out of some system. It's probably not going to work as well as somebody who does the things you talked about.

• 30:22Speaker 01

  Speaking of school, I, I took a negotiations class once and it was one of my favorite classes. Um, everyone should try to get into one of these things. Cause the way you, the way they work is you're.

• 30:30Shaan Puri?

  I've always wanted to take this. I gotta want to go to business school, but I'd love to take a negotiation class.

• 30:33Speaker 01

  Yeah, they're, you're given like a case study where both parties read this document. You have slightly different roles to play. And then you negotiate with each other under those conditions. But what's, what's amazing is that in a class, there's 30 other pairs. If there's 60 people in your class, there's 30 other pairs or 15, whatever, however many people, um, doing the exact same thing. So you can compare yourself, how you did against other people in the same seat as you. And that was over almost 20 years ago. It was very interesting because I've stayed in touch with a lot of these people. And you could track the people who were the best negotiators in a classroom environment were not the most successful. Because they're very good at extracting too much in a one-off negotiation, but that's not how life works.

• 31:12Shaan Puri?

  Right.

• 31:12Speaker 01

  In life, there's repeat games, like you gotta let the other guy win. You gotta, you know. If you just took advantage of someone like they're never going to want to do business with you again. Guess what? Like, you're not going to do that well. So it's kind of interesting.

• 31:27Speaker 01

  A like, long longitudinal study that someone could do on these things.

• 31:31Shaan Puri?

  I worked with my dad for about nine months and working with your dad's an interesting experience in a bunch of different ways. But one of the things you actually get to see your dad in a new context. I got to see my dad at work. And one of the things that I asked other people at work, I go, what's my dad good at? What's his strength? And they all said, um, you know, he's a good negotiator. He's a great negotiator. But he's a little too tough. And I, okay, interesting. That's because I asked strength and weakness and they kind of said the same thing. So I got into the situation where it was one, like high stakes negotiations, basically like the future of the company was like kind of up for grabs. And somebody had leverage, somebody else had leverage. We all sat down at this table. And my dad did one thing really great, which was he was like, we didn't really like the options on the table. And he's like, oh, okay, cool. I'll always go with the third option then. No.

• 32:17Shaan Puri?

  I was like, no, what? Like, what's your counter? He's like, no counter. No. And he's, you know, he's like, basically in a negotiation, he's like, um, I was like, well, how are you going to, you know, explain this? He's like, oh, it's not about explaining, you know, in a negotiation, the more irrational person tends to win. The more stubborn party wins because the other person will just realize this person's irrational. So I just have to play by their rules. So he was super stubborn and he won. And at the end, they took a break. They's kind of like, okay, let's go break before we kind of come back and finalize. And I asked this other guy who was kind of the arbitrator sitting there. I said, uh, what do you think? And he goes, I think you took too much. And my dad kind of smiled. He took that as a point of pride. And I sort of was like, well, what do you mean by that? He's like, he's like, you, you were at a poker table and you tilted the table and all the chips went towards you? There's no way this deal gets done, eventually gets done, right?

• 33:02Shaan Puri?

  Because they have nothing to gain. You've taken everything away from them. So they have nothing to gain out of this transaction. Today, they feel forced, but soon they'll just realize, ah, this is not even, I don't have to do that. I'd rather not. And that's exactly how it played out. And I, you know, I learned a lesson sort of at my dad's expense about in a negotiation, you sort of, both sides need to leave a little wanting. Or even if you take too much, you seem to need to sort of give back at the end in order for something to be sustainable, or especially if you're playing a repeat game. Where have you had, you know, negotiation in your life since then, right? Because negotiation is not a, not a, not an everyday thing. It's a, it's a once in a while thing.

• 33:38Speaker 01

  Oh man, we run a global logistics company where we're, we have to procure ocean freight and air freight, and then we have to sell air freight and ocean freight.

• 33:46Shaan Puri?

  Maybe it's a daily thing for you.

• 33:47Speaker 01

  Trucking, custom services, everything else that we do on the end to end basis. So there's a huge amount of negotiation. I think one of the big opportunities we have in this industry is, I think the industry is very short term focused and transactional, almost mercenary. And some of these things you have to kind of go with the industry. You can't change everything about the industry at once, but being able to play the long game and say, hey, we're going to win, we're going to make tons of money by building trust with people and showing them where the profit pools are and not, not taking too much of it and figuring out how do we create the right win win scenario and not, I think it's a good framework, actually, for evaluating any company is kind of, there's six stakeholders at the table for every company.

• 34:29Speaker 01

  You have your customers, you have your vendors, which in some cases don't matter that much, but for us, they matter a lot. You've got your employees, your investors, you have regulators, and you have like the communities where you live and operate. And so you've got these six stakeholders and you got to create a win win. And it's a very simple way for each of them, they need to win in an ideal scenario. And you can go through almost any, any company and say, okay, let's score them A through F on, for each one of those things. Very rare to find a company where every single party's winning. Um, somebody's usually, you know.

• 35:07Shaan Puri?

  So, so what's the goal? Is it mostly As and that, but nothing below a C? What's the, what are you trying to do?

• 35:12Speaker 01

  It should be As, but, but where you have something that's bad, like you've got a lot of risk and that's no good, right? It could all come to a stop, like if there, especially if that, like the regulators are not happy. Communities are like, I don't know, protesting you, trying to run you out of town. Like, I think Airbnb is a good example. I think it's a great company. Guests pretty much love it. The homeowners definitely love it. They're making free cash off this unused asset. Investors done really great.

• 35:44Speaker 01

  The employees seem really happy over there. The regulators, they not thrilled in some cases. They did manage it. Sometimes they like it because it generates tax remnants. Communities, I don't know. I don't want people throwing a party in the house next door to mine. And so that's an area for them as they have this framework. Okay, where should we emphasize what are we doing? And they have, they look at this. I don't know. They use that exact framework, but they certainly are going, okay, let's ban partying. What else can we do to make neighbors like us more, right? Like, and so it's a pretty simple framework. I think someone looking for a job at a company, they should definitely take, take the time to score each company they're considering on this framework or investors the same way. Because, you know, if everybody's not winning, then the thing might not be sustainable for the long term.

• 36:30Speaker 01

  And all the good returns as an investor come by holding for a very long time and letting the compounding machine run.

• 36:37Shaan Puri?

  Yeah, the risk accumulates. It may not be a problem right now, but it's accumulating. Eventually, that's a powder keg.

• 36:47Shaan Puri?

  You are also a partner at Founders Fund, right?

• 36:50Speaker 01

  Yeah, a venture partner.

• 36:52Shaan Puri?

  A venture partner at Founders Fund. Your LinkedIn says, looking for a generational company to back. How's that going?

• 36:58Speaker 01

  Great. I mean, I've been a very loyal part of the Founders Fund network for a while. They were our first Series A investor. They lent our A and our B and participated, I think, in every other round that we've done, basically. And when they asked me to join, it was kind of no brainer for me. I mean, it would take me a little while. I said no a bunch of times. I shouldn't say no brainer. But the only fund that we consider joining because I think they're really unique in their. Refusal to follow the herd and to think for themselves. But I joined actually full time as a general partner and then I came back to Fletchport. I took about six months where I was the executive chairman. And then I realized I had to come back and be the CEO again at Fletchport.

• 37:42Speaker 01

  And so I kind of scaled my role way back at Founders One, but I'm still part of the team.

• 37:47Shaan Puri?

  You said like, you know, they're unique in how they do things. I've interacted with them a bunch too and felt that. But I'm always interested like, what's the cause of that effect? So like, what, what is an example of something that they do differently on the input side? That leads to the output of being, you know, sort of independent thinkers or contrarian, or willing to make bets that others don't.

• 38:07Speaker 01

  Well, a lot of it just comes from Peter being refusing. Like he's just like, that's his whole life thesis is that people are memetic and they will chase the same outcome, the same goal, the same object, the same memetic desire. Everybody wants the same thing. And if you can avoid that, there's a huge arbitrage opportunity. If you can go look where other people are looking. And so a lot of it just comes, I would say probably it's just from Peter. But they've, they've really trained it into the team. It's, how does that manifest itself? It's a very high paying job. Founders One actually has a vendor compensation structure. It's almost all tied to the outcomes, the performance. But like a lot of VCs just make super huge, you'd be surprised how high the salaries are. And at a lot of, at other VCs.

• 38:52Speaker 01

  So they make a lot of money in a job that can't really be measured except on a 10 year time horizon, even on that, it could be luck. And so, and, and you don't have like an overseeing, like a boss breathing down your neck. Like you can do it from anywhere, kinda. Nobody's, every time I email a VC, they seem to be in France. So it's, it's a, it's a job that like is kind of a dream where you just, so what's the incentive structure there for? Like? Just don't get fired. And it's hard to fire you for performance because it takes a long time for these things to mature. And again, it could be luck. So the way you get fired is by everybody consensus agreeing that you're doing dumb things. It's not by

• 39:33Speaker 01

  doing dumb things. It's by having a consensus forum around you that this guy's making dumb decisions. We got to fire him. And there's a lot of cases where funds fired someone who it turned out a few years later had like been their best guy, but they didn't know it. So therefore, the way to avoid getting fired in VC, again, this is not founders one is what I like about them, that they're very different. But is the way to avoid getting fired is to be, well, to double check everything you do with other VCs.

• 40:02Shaan Puri?

  Right.

• 40:02Speaker 01

  To make sure everybody agree. And you don't want to do it internally because then you look like you got no opinions. You can't operate. So you do it with all your buddies at all the other VCs. So it's just a collusion, massive collusion racket on like, there's no, the incentives are just structured since that everybody's talking to everybody to double check and make sure. And then that leads to regression herd mentality, regression to the mean. It leads to people not wanting to take a lot of risk, which is just a lay is just lame, right? Like venture capitals reveal about risk taking, but it's not often it's not. And they found this one's very good at not participating in those things. They don't really go to conferences. The conference they do do is called heretic on.

• 40:47Speaker 01

  It's like literally about heretical ideas that you're not allowed to say aloud.

• 40:50Shaan Puri?

  That's probably the most unique conference. Most people probably don't know what it is. Can you explain what heretic on is? And then maybe some examples of what a talk at heretic on might be about?

• 41:00Speaker 01

  It's heretic on is idea. But most conferences, people on stage are like, can't say anything that's not fitting the mainstream narrative.

• 41:08Shaan Puri?

  Right.

• 41:09Speaker 01

  And heretic on the idea is that you come up into the stage and say something that would like get you canceled or. Some heretical idea.

• 41:16Shaan Puri?

  The definition.

• 41:16Speaker 01

  Again, they don't publish the talks online. I don't think because of the nature of it all. But I'm, I'm, I'm working on, I'm gonna do a talk if, if I can make, maybe next year I'll try to do a talk.

• 41:27Shaan Puri?

  The definition of heretic, a person holding opinion at odds with what is generally accepted. I texted a bunch of friends who went, I said, hey, what was the best thing? And they were like, well, like, you know, somebody gave this to, I like, my belief in the probability that aliens exist has like, has like actually meaningfully changed based on X talk. Or this person gave this talk about, you know, the conspiracy around XYZ. And it just sounds fascinating. It sounds like, you know, one of the few conferences where I, I would get there early and stay late. Which is like the market.

• 41:57Speaker 01

  They're like, own brand, right? Like, don't, don't just follow the herd. And they're not trying to like, just reference check every deals. They'll put their neck out there, make some crazy bets. What's amazing, and I didn't, haven't yet figured out is how they have such an amazing track record. Because I don't think just YOLOing it in the, they're very good at picking founders, I think.

• 42:16Shaan Puri?

  Right.

• 42:16Speaker 01

  There's no formula for it because people are unique, but it's, it is a really interesting. And they're writing, they're very big fun these days and they write large checks with conviction, but without being like spreadsheet monkeys who are just, you know, it's not all. Then of course they do a due diligence and analysis and stuff, but there's a, they're much more built on who the founder is and what they're all about.

• 42:40Shaan Puri?

  Right. Before you came on, I asked, I, in the, I sent this like doc to every guest. And I, one of the questions I asked is like, what are three strong opinions or life philosophies you live by? So one is related to what we're talking about. You had this quote from Emerson, it says, "The great man is he who in the midst of the crowd, keeps with perfect sweetness the independence of solitude." And you had some examples under this. Can you talk about that? What, what that means to you and what are some examples?

• 43:03Speaker 01

  Well, there's some great, very practical examples that you can use in your life and you'll be able to see that this is true. Okay. And literally related to crowds. And next time you are entering a stadium, watch, your brain will wanna just follow the people mindlessly into the stadium. But if you're able to snap out of that and go, wait, let me think for myself right now. These people have no idea. Most of them have never been to this stadium before. They don't know where the entrance is.

• 43:25Shaan Puri?

  Right.

• 43:25Speaker 01

  There's always another entrance that nobody's lined up for and you can just walk right in, always like, or a parking, I'm a big skier. Whenever you go to the ski resort, there are these guys that are like waving, parking attendants. And their, their job is to park all the cars. But their job is not to park your car as close to the mountain as you could be like their job. Like there's not a thousand spaces right next to the chairlift. So they're going to point everybody to where there's a thousand chairlift spaces, which like for sure, you're going to have to take some kind of shuttle.

• 43:56Shaan Puri?

  Right.

• 43:56Speaker 01

  It'll take you an hour to get to the ski lift. But if you just ignore that guy, I mean, I don't want to be rude and do a way to do this. It's not like breaking the rules or whatever, but go straight to the front and there will be a spot right next to the chairlift because somebody leaves. Somebody's always leaving and, and so, yeah, you could, you can apply this at the very practical level of like moving your own body around when there's large groups of people and watching the herd mentality play out. It's very difficult often for people to do like people are terrified of public speaking for good reason. Like for thousands of, tens of thousands of years, if you were standing in front of a large group of other humans, they were probably about to kill you. You're either their leader or they were going to kill you.

• 44:39Shaan Puri?

  Something bad's gonna happen.

• 44:42Speaker 01

  This should be, of course, it's terrifying and learning how to become their leader is not instinctual. I think it maybe for certain sub, you know, certainly not for me. It took me a long time to get practice, uh, some, some degree of just practicing, uh, to not feel terrified in front of groups and then to enjoy it. And like, I don't think leaders are terrified. They, they love the crowd or like, but even Bruce Spring, Bruce Springsteen says he still gets nervous when he goes and plays. And then he has to like hack his brain to believe that that, that's like energy he can harness to give the fans what they want.

• 45:15Shaan Puri?

  Yeah. Like you've mentioned a couple of things that just like that Bruce Springsteen, the mindset hacking your mind. Are you big into mindset?

• 45:21Speaker 01

  Uh, I think any founder is, it's a, it's very hard for people to understand what a roller coaster it is emotionally, um, and how painful, like the lows are pretty low and the, and the high and the low can come in the same day. You get punched in the face constantly. And, uh, yeah, you can get pretty down. You need to have release mechanisms and hacks and ways to get yourself back up. Cause it's not, it's certainly not, not for everybody.

• 45:54Shaan Puri?

  Can I tell you a little hack I do that maybe maybe is useful for for anybody out there? So I have a Slack channel called literally highs and lows. And what I do is that anytime there's a high or a low, I'll go post it there. And the beautiful thing about it, because of the Slack channel, you could just scroll up and realize you're like three months ago. Oh yeah, I remember that felt like kind of the end of the world. That felt really bad. And now I don't, it's like a stubbed toe. It's like, do you remember how your last stubbed toe felt like?

• 46:19Speaker 01

  Is this like a private channel? Is this for yourself?

• 46:21Shaan Puri?

  It's me and my co-founder. So we do this and I do this in across every business I have. And so whether it's a high, I remember, and then I go back and I get humbled immediately by a low. I'm like, okay, don't, don't get too high on your own supply here. Or it's a low currently. And I'm like, well, I've already gone through, if you just scroll up, I've already conquered a bunch of mountains like this before I've dealt with this, I'll be fine. And it's like an immediate, like, kind of perspective machine. And it's not even like somebody else's perspective. It's like, I also was in the same channel three months ago, saying the same thing, crying wolf, basically about this high or this low. And neither, neither are as good or as bad as they seem in the moment.

• 46:57Speaker 01

  It's, yeah, I like that. I might try that, but it's, it's very hard for another non-founder to appreciate how difficult that it, my, my wife is a former journalist, tech reporter, in fact.

• 47:09Shaan Puri?

  Oh, nice.

• 47:10Speaker 01

  Her, uh, watching my ride firsthand, watching is the wrong word, participating in it, um, has really kind of, I hope she's like, man, I wish I would have known this side of the thing when I was writing about tech. Understood like, cause you know, I think tech reporters are, um, they, all reporters play a very important function of like, holding the powerful accountable. But like founders are not that powerful or kind of suffering through like,

• 47:39Shaan Puri?

  Right.

• 47:40Speaker 01

  You know, we're, we're up against some very powerful forces in the world. Like, we feel like we're the ones like trying to, you know, speak truth to power and fight for the little guy and stuff. And then meantime, the, the narrative within the media has been like, oh, the tech, that, you know, the founders are the ones that we have to hold accountable. You're like, what about this like multi-billion dollar, trillion, almost tens of billion dollar mega corporation that I compete with? Like, I'm,

• 48:02Shaan Puri?

  Right.

• 48:03Speaker 01

  I'm kind of pathetic sometimes. I mean, we, we beat them every day, but like, sometimes they're better than us at certain things. I'm like, we're trying to get better. We get better much faster than they do, but we're not always the best. We're starting out, like, especially as an early stage founder.

• 48:17Shaan Puri?

  You have another one of the life philosophies that was simple. It had no extra words. So I want, kind of want you to hear, I kind of want to hear your explanation of it. You said, you can just do things.

• 48:27Shaan Puri?

  What does that motto do for you?

• 48:30Speaker 01

  Oh, I don't know. I think there's this idea that you need somebody's permission to do. I mean, you should have, it's why, by the way, the, a law class is useful for people if you're in undergrad to try to get like into a basic class.

• 48:41Shaan Puri?

  A law class?

• 48:43Speaker 01

  Yeah, law. Like, don't break the law, but you should have an understanding what's legal and what's not. Chat G P T is pretty amazing for this. But in general, like, it's not illegal. You can just do it. And there's a lot of things that people are expecting. You know, we come up through this, like, education system where it's everything's gated and you can't get to 12th grade math until you finish 11th grade math or whatever. And you don't get to go to college unless you get these grades and stuff. So within the institutions of the world, like, yeah, there's, you can't just do things. You have to follow the rules. But like, in the real world, that's not how it works. Like, there's no boss, like, waiting to tell you what you could do. A lot of people are believe that they have to raise venture capital to start a company, for example. And we're like, well, maybe you should think of a different idea that doesn't need any money and just do it.

• 49:30Speaker 01

  And that's what we did. And we raised V C after 10 years of doing companies without.

• 49:35Shaan Puri?

  Right. Yeah, you don't need to have like the victim mindset. You have, um, you, on the Y C application, there's this question about like, what? I mean, the Y C application is not long either. So if the question's on there, it must have some value. There's only like seven questions on the, on the whole application. And it was, uh, it's what's an example of a real world system that you've hacked, meaning like, kind of like this, like you could just do things or not following the crowd, finding the side door into something. I asked a friend, my friend Sheil, who I think invested in Flexport early on. I go, hey, I got Ryan on the podcast today. What's a good Ryan story from early days? He goes, oh, there's a bunch. He gave me one. He goes, he bought AdWords for the keyword, um, Uber promo

• 50:18Shaan Puri?

  and just put his own promo code there and just got a bunch of cheap Uber rides for himself that way. Is that true? Did you do that?

• 50:24Speaker 01

  I got, I, I became Uber's best customer lifetime, probably because I did, I got like $10,000 in Uber credits by doing that. And then I treated Uber like it was free because it was free for me for a while. And I probably net out, netted out the spending, like, I bet you that, you know, I spent way too much with Uber as a result. Um, yeah, that was a good hack. I didn't come up with that. I copied it from a friend, but uh.

• 50:50Shaan Puri?

  You know, what's funny is I had two friends that did that and I never, it never occurred to me to also do that. Right? Like, I just assumed it was done because other people had done it and uh.

• 50:59Speaker 01

  I do think they kind of shut it down. I'm not sure. I'm not sure it was even bad. Like, I think I paid for Google's adverts campaign for, or Uber's adverts campaign for them, so.

• 51:06Shaan Puri?

  We had this dude call into the podcast once and he's a guy in India and what he was doing was he realizes an arbitrage where Uber had this like cred, like kind of um, you give credits to somebody and then you'll get credits, right? That was the, the, kind of like the PayPal, give 10, get 10 type of model. But what they didn't do was they didn't account for geographic differences at the time. So he would just get a bunch of people in India to sign up. He'd give them, you know, $10 of Uber credits, which was like a big deal. And they would sign up and they would take a ride and a ride in India is really cheap and he would get $10 of credits and he would sell it to Americans. And so I bought thousands of dollars of credits off this guy and I rode really, really cheap because you could buy like five grand of credits for like a thousand dollars.

• 51:47Shaan Puri?

  Because this guy was farming them in India, basically, and this worked for years and he called into the podcast and he was like literally in like a small apartment in rural India. And he was like, it's a, he's like, I make, you know, like, I forgot what it was, like $15,000 a month, which is more than like my entire village makes, basically. Doing this. He goes, I don't know how long it'll last. That's why I'm still living here. I'm just saving it up for now. But eventually they'll close this loophole and when they do, you know, that'll be a sad day, but uh, it was amazing to see that, that loophole, that hack.

• 52:15Speaker 01

  Yeah, I, I definitely uh, sped through the credits pretty quick and then just became Uber's biggest customer for a long time. Now, now I'm mostly riding my bike and I stopped riding Uber to work.

• 52:24Shaan Puri?

  One thing I find fascinating is you have a side hustle. And I, I find this interesting when entrepreneurs have these like side things that just work right off the bat. You did this one about phone booths, like phone booths and companies. Could you just quickly tell this story? Cause I think it's kind of inspiring.

• 52:38Speaker 01

  Yeah, well, unfortunately it closed down. Uh, they sold the company and I didn't make any money. Uh, I think it was kind of mismanaged to be honest.

• 52:44Shaan Puri?

  Okay, fair enough.

• 52:45Speaker 01

  We, we basically, it, it started at Flexport. Um, we never had enough conference rooms or uh, and so I made of, I got this carpenters on Craigslist to make a couple of phone booths out of just like wood, built a phone booth in our office at Flexport. And put like a lot of foam padding in there to make it somewhat soundproof. And they were terrible. The ones I made myself on Craigslist. Because I didn't put, uh, we put a fan, but not enough ventilation. So you'd come out of this thing just dripping in sweat. And yet people were in there nonstop using it. I was like, if the product's this bad and yet everybody wants to use it. There's like something here.

• 53:25Shaan Puri?

  Yeah.

• 53:26Speaker 01

  So my friend Henrik, um, who's the founder of AirHelp really ran with this idea. I should give him all the credit. He built it into a company. Uh, I kept talking about it. This is another thing to do is like, talk about your business ideas at parties and stuff. And if everybody want, I would, every time I talked about this idea with founders, they'd be like, I want to buy five of them.

• 53:46Speaker 01

  It was like, oh man, I should just start this company. I've got like a waiting list to buy this stuff. Um, so we made like these really nice Swedish design. And now that the company's failed or been sold, I can tell you the IP's the secret here. The intellectual property was we didn't, we put three fans in that.

• 54:05Shaan Puri?

  Genius, the genius hack.

• 54:08Speaker 01

  So we was doing like $50 million in sales.

• 54:10Shaan Puri?

  Fifty?

• 54:12Speaker 01

  Yeah. We're selling thousands of them and somehow we couldn't make money. I was very frustrated. We hired a CEO.

• 54:18Shaan Puri?

  Just the unit economics wrong or the overhead was the problem?

• 54:20Speaker 01

  Too many people on the team, spending money on PS. I'm not sure what happened. I'm, I'm a little pissed about it because it's like, dude, you're selling $50 million of the phone booth. You should make 10 million in profit at least, like the high margin.

• 54:30Shaan Puri?

  All right. Somebody should reboot this idea and just do it. Do it without the mismanagement.

• 54:34Speaker 01

  I, I believe so. Uh, now it might've become very competitive space. Like there's a lot of people at the time, there was no good cheap phone booth out there. Trying to make like, I think we sold them for like three grand. But you can make a phone booth for a thousand bucks. Like, come on, it's not that hard.

• 54:48Shaan Puri?

  So I think, I think in the, uh, you could just do things category, I'm going to put this in there. I think somebody could just do this again.

• 54:53Speaker 01

  Yeah. Feel free to run with that one because that company didn't work. They sold to somebody, but I think the founder had ambition to be like billion dollar unicorn company instead of like, dude, let's, let's sell this thing to Staples for $50 million and like be happy.

• 55:07Shaan Puri?

  Right.

• 55:09Shaan Puri?

  Exactly. Ryan, thanks for coming on, man. This has been fun. I'm a user of Flexport. I use it for my econ biz. You've helped me forward a bunch of freight. Here's how I know you've helped me. I still don't know what freight forwarding really is. And we've done, you know, tens of millions a year in revenue. And that's the beauty of it. I don't have to know. I just know that our shit gets taken care of. It's a low price. It's the easiest to use tool. So thank you for making that happen. Thank you for Import Genius also, because I would have never found my supplier had I not used that. Where should people follow you and find out more?

• 55:40Speaker 01

  I'm on Twitter. My handle on X.com slash typesfast is my handle. And go to flexport.com if you're a econ business or you run any kind of logistics. You need to ship things from anywhere to anywhere. We started in freight forwarding, which is, well, I joke it should be called freight email forwarding. Sean is like passing emails around the world to get a container or some air freight move. But last year, we acquired Shopify Logistics. And now we do direct to consumer fulfillment all the way to the door, as well as like distribution into Amazon, FBA, handling that problem of like getting appointments and managing all of that. So helping brands solve problems in their supply chain is what we're all about.

• 56:19Shaan Puri?

  There we go. By the way, your handle is typesfast. And I love it. Your brother's is typesfaster. Ultimate big brother move for him to do that.

• 56:27Speaker 01

  Well, it's true. He does type fast for the music.

• 56:30Shaan Puri?

  All right, Ryan, thanks so much, man.

• 56:32Speaker 01

  Thank you.