#136 with Jack Smith - Trading Cards and Collectables: A Deep Dive Into The Opportunities In The Space

Shaan Puri (@ShaanVP) and Sam Parr (@TheSamParr) are joined by Jack Smith (@_jacksmith). They discuss: - (0:59) Introduction to Jack Smith - (7:04) Jack introduces the world of collectible card investing - (14:40) What is Rally Rd - (23:29) How to make money lending against trading cards - (32:52) Collecting NBA moments? - (37:00) The opportunities in trading cards - (47:00) The massive size of eBay's collectible business - (49:00) Shaan hears from a sketchy entrepreneur and they discuss cards as ETF Thank you to our sponsor this episode, Flatfile! Spend less time on Excel and more time building your business by easily importing data using Flatfile. Check them out at flatfile.io/hustle. Have you joined our private FB group yet? It's a page where people share each others million dollar ideas or what they're already working on: https://www.facebook.com/groups/ourfirstmillion. See acast.com/privacy for privacy and opt-out information.

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

• 0:17Sam Parr?

  So, an introduction here, this is Jack Smith. He's one of my one or two closest friends.

• 0:23Shaan Puri?

  He's number one, dude.

• 0:24Sam Parr?

  Number one, he's up there.

• 0:25Shaan Puri?

  He's above him, nobody.

• 0:26Speaker 02

  Sam tells everyone they're the number one, so.

• 0:28Sam Parr?

  No, it's like, there's like a couple guys who are the crew. We have like a tight knit group. Jack doesn't like to brag, I'm gonna brag for him. But basically, he started this company called Vungle, which was sold to Blackstone, the large PE company, for, I think, 750 million in cash. They had raised a little bit of money, but not a significant amount. It was a wonderful exit. He also helped start this company called Chip, which crashed and burned, but it was awesome. It was cool while it lasted, and it was a good idea. And then he was, uh, he had his, did you know, Sean, Jack had his hands, he was involved slightly with that, remember that credit card that went viral in 2013 or 14 where it was like, called Coin?

• 1:05Shaan Puri?

  I remember this.

• 1:06Sam Parr?

  And you click a button and it would change your debit cards? You could have five cards on one card?

• 1:10Shaan Puri?

  Yeah, it was a sweet concept. It was one card and then you just switch over, you just push a button, it's like now it's your business, now it's your travel rewards card or whatever else. I think it was a Kickstarter project, right, Jack? Or like you've got a big?

• 1:19Speaker 02

  Yeah, I started as Kickstarter, yeah. Yeah, it was like one of the first to use, um, Sandwich Video, which is the guy that has done videos for like Square and all these lot after. His was one of the first ones to do it, and then it kind of went viral mainly through the video.

• 1:32Shaan Puri?

  So, talk about this Sandwich guy, cause that guy is interesting, right? So he has, if you haven't seen it, basically he was like an ad agency, or not ad agency, I don't know what to call it, but a marketing agency. And he would make videos, and so people wanted their version of the Dollar Shave Club launch video, which was like this really like funny, entertaining, but like told the company's story really well and got a bunch of customers, got a bunch of hype. And so, if you go to their portfolio page, it's like, kind of like a bunch of big winners, like Slack and others. And at some point, you know, he, they were just charging so, and the guy himself, I think his name's Adam, is that right?

• 2:04Sam Parr?

  Yeah.

• 2:04Shaan Puri?

  He's in all the videos, which is cool.

• 2:07Sam Parr?

  He's a good actor, he's like a good straight man.

• 2:09Shaan Puri?

  You know, he like, is the perfect, like, normal dude, just explaining this cool thing. And it got to the point where it was too expensive. He would only take equity or he would like require equity now for for these projects that he was helping launch into kind of the stratosphere. Is he still doing that or have they pivoted or what's what's the latest? Cause that was a few years ago.

• 2:26Speaker 02

  Well, actually, Coin was one of the first ones. So I think Coin, it was something like, the video was something like $75,000 or something. I don't know. So they paid in cash, but actually because was because of the video that they just did so much better than they thought. Then the guy just told him like, hey dude, like you pretty much blew it out of the park for us. So he just like gave him at tea.

• 2:47Shaan Puri?

  Amazing.

• 2:47Speaker 02

  Even though he never asked for it. And so after that, then the guy was like, hmm, probably should ask for just equity and any future deal I do. If this guy's giving it to me voluntarily, I probably should have asked for it.

• 2:57Sam Parr?

  We're going to talk about today is collectibles. And the reason why Jack is here is because Jack sold Von Gull, is it two years now or a year ago?

• 3:05Speaker 02

  Yeah, something like a year, one year.

• 3:06Sam Parr?

  But prior to that, he wasn't working there. He left and has had a lot of free time, like three years of free time, four years of free time. And what Jack does in his hobby is so weird. He just like buys and reviews tons of stuff and he definitely returns a lot of it, but he just could, he just consumes information and he and he loves trying new products. Like he's up so like, I remember for his birthday recently, his wife and me and a couple buds, she got, we went to Tahoe and she got him a cake that was an Amazon box. Like that's what he's famous for is like just buying stuff. And for my wedding, the gift that he got Sarah and I was, he wrote two or three pages. And he said, this is the best soap for black women's hair. This is the best low sugar gummy bears.

• 3:51Sam Parr?

  This is the best foot cream. This is the best towel because it has copper in it and copper prevents mold. And he like explained, and so he bought us like probably a thousand dollars worth of just gadgets that were his best. So he just reviews everything and the, his latest kick is collectible.

• 4:05Shaan Puri?

  Hold on, before we even go to the collectibles, cause that's an amazing intro. Jack, why do you do this? This is so funny that you do this.

• 4:12Speaker 02

  Just like, I mean, Sam is exaggerating the thing about like best shampoo for black people's hair.

• 4:18Sam Parr?

  That's what you got her, dude. You got her a diva curl.

• 4:21Speaker 02

  Yeah, but that's just the best shampoo in general. Like it doesn't matter that it's made of African Americans.

• 4:26Sam Parr?

  Well, she's black and I thought that you were being thoughtful and you got her like, I don't know.

• 4:30Speaker 02

  I just got her good shampoo. But it's just like, if I'm buying something like a backpack, then I want to have the best backpack. So I'll just buy 10 of them, trying them out and then. Return nine and then.

• 4:42Shaan Puri?

  And were you always this way? Like you're like, I got it. Cause I remember even when Product Hunt launched, I think you were the number one person on Product Hunt and you were like a successful, busy dude at this point, but you were like, just like kind of these randos on Product Hunt, but you were like all over it. You were on every, you had the number one most hunted products or something crazy too. So have you been this way for a long time?

• 5:01Speaker 02

  So I think Product Hunt is similar with the collectibles thing in terms of just like, I joined when it only had a couple of hundred users. And so it's like identifying something nascent and then seeing if there's, obviously when things are small, there's more opportunities around because there's lost competition. Product Hunt just joined early and then, as you said, I was kind of posting every day. I basically built a bot to post to it. Nowadays you can schedule a post, but then you couldn't. So I just built a bot to schedule a post each day, but I was still kind of manually involved having, reviewing products. But it was kind of just fun to be seeing what's new. I just like trying out new stuff because then I feel that is when there's like opportunities.

• 5:43Shaan Puri?

  Okay. And I called you a few weeks ago, maybe a month ago now. Because I had this very interesting collectibles situation and I, I didn't even know you were into collectibles, honestly. I just called you because I said, Jack's really, really clever. And I think for this business opportunity, it's a, you either out clever it or you don't do it at all. And so I just thought, only talk to the most clever guy I know. And it turned out that you were like super heavy into the collectible space. And you started telling me all these interesting things and now you can, we'll talk about it. And then anything you don't want to talk about, we can just cut afterwards. That's no, no problem. Just pull that back. But basically let's start with what I learned on that call. Okay. So I called Jack and I say, Hey Jack, I don't know if you know anything about the collectible space. And you were kind of, of course understated. You were like, yeah, I know a bit, which really was like, I know everything.

• 6:27Shaan Puri?

  You know, you don't know shit. And you were like, yeah, I know a bit. And I said, you know, there's this opportunity to buy this multimillion dollar collection for like kind of 10 cents on the dollar, but I don't know what I would do with it. I don't know how I would flip it. How would you flip this? And what you told me was like, okay, there are these platforms out there, these new emerging platforms for collectibles, like Rally Road, like Otis. And you said, I've been using these. And in fact, here are some of the things I learned from this. Conversation. Jack is not only an investor in a couple of these platforms, he is the number one probably power user of all these platforms. You are, it's like product hunt all over again. You are all over these platforms while they are small. You're probably the most active user on the platform, buying and selling stuff.

• 7:07Shaan Puri?

  You have a full operation in the Philippines, kind of like helping you, you know, like a machine work the system. So tell us what you could tell us about this stuff.

• 7:16Speaker 02

  Sure. Yeah. I mean, as you said, like the CEO of Masterworks, just like they randomly just like sent me an email. Like, hey, can we chat? And then we got on the call and it's like, dude, what are you doing? We're looking at the logs, this many orders late at the time. They're like, and then I just told them like, hey, I have these guys in Philippines, like three dollars an hour, just placing bids. Because they were like, yeah, because we were pretty confused, like this guy who sold his company. Is he just bored in Hawaii that he's just logged onto our platform 24/7, like bidding on stuff? So they were a bit confused.

• 7:48Shaan Puri?

  Yeah, they think you're like a virus.

• 7:50Speaker 02

  Yeah. Or they were just trying to figure out like, dude, what are you actually trying to do? Like, how can we help you? Because this is not a good use of your time. But it's just, as you highlighted, like emerging platforms, there's kind of different arbitrage opportunities somewhat. And what I've seen is, so from speaking, I've spoken to like the founding teams of these different platforms. I believe I'm like, they didn't want to confirm that you said you're the number one or number two user. Probably in terms of like assets under management there, because they're so small, it's not that hard to be their biggest user. What I learned as well, speaking to these, some of these others, is that you've kind of got a few different users that are using these platforms.

• 8:32Speaker 02

  The majority of whom would fit into their calling stocks is just like the Robin Hood users that just don't care about valuation. And they're just buying stuff just because it sounds cool, you know? So kind of what they're saying about stocks with Robin Hood is what the most users in collectibles are doing as well. And then you actually, it seems like you have sophisticated collectible people, more sophisticated than me. I don't know anything about what these things are actually worth. You're actually seeing a pretty um strong, the market seems to be working there. Like assets that undervalued, they jump to being valued what they maybe should be. So for example, there's this Pokemon card collection that launched maybe like six months ago.

• 9:17Speaker 02

  And then now the platform got an offer that hey, someone actually wants to buy the collection. Four X the price they listed it at. And actually, what they do is they let the people that own that piece, they vote. Should we sell or should we not? And that you voted not to sell. And now it's trading at like six X the price. And so I was speaking to a founder of one of the other platforms and he's like, yeah, that piece was undervalued. Somehow people that are really into Pokemon cards, obviously have found the platform and found that it's undervalued. And now they've kind of bid it up to what it kind of should be.

• 9:50Sam Parr?

  How about we structure this conversation this way? So first of all, we got to get background here, which is last week Sean brought up PSA. What's PSA stand for? Does that important? I don't even know.

• 9:58Speaker 02

  Sports.

• 9:59Sam Parr?

  Yeah, it's a, it's a, it was a company that grades sports cards, right?

• 10:04Shaan Puri?

  They grade not just sports cards, they'll grade other cards as well.

• 10:07Sam Parr?

  They were doing, I looked it up, they're doing about 80 million in revenue, 20 million in profit, publicly traded company. And then this guy named Nat Turner alongside Steve Cohen. Steve Cohen is the guy who was inspired the TV show Billions or partially. He owns the Mets now, big time billionaire. And then a couple of other folks. Nat Turner is a tech guy who's very wealthy now. And they bought this company and I actually don't know what they're going to do with it. Maybe just like make it cooler. Anyway, Sean brought this up and it was very interesting and we're like, all right, let's do a whole episode just on collectibles. So for this conversation, how about we structure it like this? Let's just go through some of the interesting platforms and some of the big winners and some of the trends in this collectible space. Does that sound good?

• 10:44Speaker 02

  Well, and to highlight how I got into it is that um I actually started looking at the collectible stuff based on the um. Because I was listening a bit to the podcast that Sam you did with Gary Vee. And you know, you just kept asking him like, what's the best opportunity? And he just kept saying sports cards. And then you were like, yeah, but what else is interesting? And he just was like, I can't think of anything. Just sports card is the only decent thing. And so I'm like, okay, well, if he's going into that heavily, then maybe it might be interesting. And so actually, how I started is I, again, with people in the Philippines, I just bought my own collection of 500 or so trading cards, like individual ones. And I'm storing them, but then I was like, this is like so much work trying to research what

• 11:26Speaker 02

  the actual fair valuation for a card is and doing all the accounting for it and then listing it to sell. So even though I did actually buy and flip some cards for a profit myself, I'm like, this is kind of loads of work. And then I found that there's these fractional ownership platforms. And so they're basically doing all the work. And then they basically bring you like, hey, this, any collectibles but summer training cards is like, here's a really valuable card. It's worth a hundred thousand dollars, but users can buy like $25 pieces of it.

• 11:56Sam Parr?

  Let's talk about Rally Road because I think that's actually the one, the coolest one. Sean, do you know Rally Road?

• 12:01Shaan Puri?

  Yes, so I'll give you kind of the two second, I'll give you the layman version of Rally Road. So Rally Road is a platform that's letting you invest in what they call alternative assets. And these are things like, it could be a vintage car, it could be a Michael Jordan rookie card, it could be a Pokemon collector set that's, you know, unopened and, you know, they'll put it up and it'll be thousands of dollars. And then like Jack's saying, you could do the sort of fractional ownership component where I can buy, I don't have to buy the full collection, but I can invest in that asset in the same way, you know, I could buy shares of Apple, I can buy shares of Tesla. That's the way that Rally works. Is that, did I capture the main bits there, Jack? Did I leave anything important out?

• 12:39Speaker 02

  One of the main bits is that it, the way they've designed it is maybe like Tinder and Robin Hood-esque in that they're basically made a game. It's extremely gamified and addictive and awesome that basically they'll just be like, all right, we're dropping this asset. Like they do a drop, kind of like an IPO. You buy in and then basically that asset is locked up for three months. And then they'll basically trade each Asset once a quarter, but only for one day. And so they're like, all right, this asset is trading that day. So basically they're kind of compressing all the demand also into one day. And then it's really gamified because when they drop the IPO is they're like, oh, it's selling out. And it sells out in like under a minute. So like unless you're on the app at that time, you miss out. So it's really gamified.

• 13:22Sam Parr?

  And they don't actually have that many products. I think they have like dozens of products on there, right? Like they have like a.

• 13:28Speaker 02

  They have a few. It's blown up a lot recently. It's got a lot more recently.

• 13:31Sam Parr?

  Well, as of recently, they had like dozens and it was like a million dollar Ferrari to a like a Babe Ruth baseball card. Harry Potter, a first edition. So it was kind of a random collection, but it was all so cool looking. They make it look so cool.

• 13:45Shaan Puri?

  It's the Chicago Bulls six championship rings from Michael Jordan's run. It's a complete set of six rings. And I just click notify me when this goes live because it's, you know, valued at $300,000. And you can own a piece of the Michael Jordan kind of dynasty championship rings that they have.

• 14:03Sam Parr?

  And this company has raised about $30 million. They're based in New York. Very interesting company.

• 14:08Speaker 02

  So one other bit as well is that I think a lot of their users, they're not doing anything about valuation of it. They just want to own a piece. Maybe they support that sports team and they're like, oh, wow, I can own a piece of that ring thing. So what they do is when you invest, they also, sometimes they give, sometimes they actually sell memorabilia associated to it. So you can get like a share certificate being like, I own a piece of.

• 14:31Shaan Puri?

  Right. Something you can put on your wall at home because otherwise you have nothing to show for it, right? That's, that's how, when I used to go buy like an autographed basketball, that's going to sit in my office and people are going to see it. And you lose that value. You gain a lot of convenience, but you lose that value when you use one of these platforms. So it's smart, really smart. I think they're doing a bunch of really smart things. So I'll give you some examples of what's smart. So the things Jack talked about where they kind of gamified it, I think is really smart because in any marketplace, like a marketplace, all about liquidity. And early on you have pretty poor liquidity in the marketplace. So by compressing it where it's only going to IPO for one day and it's only going to trade one day a quarter. You're compressing all of the, whatever little supply and demand you have gets like aggregated into a short time window.

• 15:13Shaan Puri?

  So it actually feels like you have high liquidity during that period. So I think that's, that's really important. That also creates FOMO and it builds hype and it drives more demand, which is another way to fill the marketplace is by sort of manufacturing or amplifying the demand that already exists for it. So I think that's like a really smart business and product decision that I honestly don't think these businesses would work if you didn't do that at the early stage.

• 15:35Sam Parr?

  Where are they storing all this stuff, Jack? Because you were toying around with this idea of doing this like, what's it called, a Freeport? Or is that what it's called?

• 15:43Shaan Puri?

  That's what it's called in the art world.

• 15:44Speaker 02

  There's different rules for art and other assets have other rules. So the Freeport stuff is specifically to art. So it depends on the platform, but what, let's say Otis, for example, is doing, that they're just storing their stuff. They actually outsource it. They're just storing it in a normal collectibles vault. They're actually using PWCC, which is what I store my cards in.

• 16:08Sam Parr?

  What is that?

• 16:08Speaker 02

  PWCC is a company that does their own grading, but they're not really reputable like PSA. So they're kind of just not that reputable for grading, but they grade stuff and they're the largest auction house for trading cards. So it's kind of like the, whatever the big art auction houses are, they are that for sports cards. But then as well, they're in somewhere, maybe it's Texas or somewhere that basically doesn't have any sales tax. And then there was news articles about it. They spent $3 million building a vault in the basement of their office, kind of like a bank vault. And so they can

• 16:48Speaker 02

  store trading cards for you as well. So they're kind of a all services shop, grading, storage, listing it on their own auction house or eBay. And they also do lines of credit against your collection, which I can talk about more. But Otis and stuff store their trading cards there. However, some of the places like Masterworks actually have their own art gallery and are doing their own storage in New York because one of the aspects they wanted, and Rally Road does this with some of their cars, is pre coronavirus, it's a bit tougher now, they wanted that users come and see the assets they own. Like, hey, come and see the car and you can tell your buddy, like, I own $25 of this car, but you can see it in real life, a real life museum art gallery.

• 17:29Shaan Puri?

  So if I was going to invest in these companies, I think if I was going to rank them, PSA would have been number one because I think that they have the dominance of they're the certifiers. And so they become the kingmakers and obviously the demand has far outstripped their ability to fulfill it. So Jack, give people a sense of like, you send something in to be graded by PSA. Roughly, what does that cost? Roughly, what's the turnaround time right now, which I think is kind of shows the opportunity that they have.

• 17:54Speaker 02

  Well, you say opportunity they have, but they're like the dinosaur incumbent, you know? So it doesn't, just because they've got the opportunity doesn't mean someone else can come up and grab it. PSA, basically all of the collectors respect their gradings. But this is because they have decades long reputation and history of being the market leader. There's actually a competitive company called Beckett, which is they were head and head. But then basically Beckett, maybe even like a decade ago, I'm not super expert on this, but this is what I remember. They basically had a scandal where some like professor had been like doctoring cards. He would just like take a knife and like cut the edges, like he was like really precise.

• 18:36Speaker 02

  And then it kind of got exposed that he had been doctoring them and Beckett had graded them like, oh, these are 10 out of 10, amazing. And then so basically all the collectors started boycotting them and like, we don't trust their ratings. So PSA is like the only one that people trust because of these decades long reputation. So if someone new comes up, they're not going to respect them because they don't have a history and track record. I don't know if I would invest in them now because I'm not sure how much growth potential there is, you know? It's a decades old one. But to answer your question, right now, apparently they have a massive backlog, like four to six weeks or something. And basically the price that you pay to have your card graded varies based on what you estimate it's actually worth.

• 19:19Speaker 02

  So they have different price brackets, like if your card is, you think it's worth over 5,000, then you have to pay more. I think the cheapest is something like. Twenty five, fifty dollars.

• 19:29Shaan Puri?

  Yeah, I think it might go down as low as ten, but, but yeah, they have like kind of like a three month backlog right now. And I think that the opportunity for them would be you have the brand and the trust can use technology to drive, you know, more velocity, more volume and, and make more money, right? And I think they have the defensibility, but they don't have the innovation yet. The other thing that I think is interesting is PWCC, ever since you told me about that, I really liked what they're doing. Can you talk about the lending thing that you're doing with them? I thought that was really smart.

• 19:56Speaker 02

  Yeah, so I actually, I've only got a small amount of money here, but this for me is like a really good safer side of investment opportunity. So right now, like my wealth advisor and stuff, like typically wealth advisors will want you to just buy bonds as long as they're safe. But then even though they've tried explaining to me like multiple times about us, I still don't get what the hell they are. And I'm just like, these are so boring because they want you to just put your money in that. And then it's like, oh, this will go up four percent a year and it's tax free. So this is so boring and I don't even get what I'm investing in. It's like California water supply bond or whatever, I don't understand it.

• 20:35Speaker 02

  So PWCC have this lending program, which basically how it works is, as I said, let's say, Sean, you have a collection of a thousand trading cards and you're storing them at PWCC. Now PWCC, when you send them the cards, they like were able to grade them. And because they're the largest auction house, they have all the data about how much your card is really worth. Like they're monitoring in real time, you know? So they basically know, have a very accurate idea about how much your trading card is, collection is worth. So they'll be like, your collection is worth like fifty thousand dollars, according to us. They also are storing your collection, so they actually have your asset in their possession. And so they'll say like, hey, listen, your collection's worth fifty thousand dollars.

• 21:18Speaker 02

  I'll give you a line of credit because you need to buy a house or something. So I'll give you a line of credit of like fifty percent of the value of your collection. So I'll give you like a loan of twenty five thousand dollars. And they're going to charge you pretty high interest on that because you can do the loan just for like one month or something. So it's about ten percent a year interest. But this is like way safer than normal loans because like normally a bank giving you a loan. You're banking on like your paychecks, whereas you might just lose your job or like a mortgage. I've never seen your house and it could get blown up by a storm or something versus, or you could just run away. But PWCC, they own your trading card collection.

• 21:58Shaan Puri?

  They have custody, right?

• 22:00Speaker 02

  Yeah, they've got custody. And so basically me as a lender, I can lend money against that trading card collection. And it basically pools all of the users. So basically what for me as a lender, I put in, let's say, two hundred and fifty thousand dollars that I'm lending. And PWCC will then spread that across all the loans that they have. And I get paid like nine percent a year interest. That is tax at ordinary income, so it's the highest tax, so you know, up to fifty percent interest. So it's not the most lucrative thing. You're looking at a stable nine percent before tax, maybe five percent after tax. However, it seems very safe to me and is stable income because they've been doing this program for ten years.

• 22:42Speaker 02

  They've never had anyone default. If someone did default, as in like they gave them a loan, the guys refused to pay it back. PWCC would just sell their trading card collection. They know how much it's worth. They only gave a loan against fifty percent of the value anyway, so the trading collection should be more than enough in value. If that wasn't enough to pay back your debt, then they use all of the other collection of trading cards they have because it's a pooled. It's not, you're not only doing a loan to one user, that you're investing in all of them.

• 23:11Sam Parr?

  What's your current net worth is in, what percent is in these alternative?

• 23:16Shaan Puri?

  Assets.

• 23:17Sam Parr?

  Assets.

• 23:17Speaker 02

  Maybe ten percent.

• 23:19Sam Parr?

  That's a substantial amount.

• 23:20Shaan Puri?

  Right.

• 23:21Sam Parr?

  That's a lot.

• 23:22Speaker 02

  I view these loans as like a separate asset class to owning. For me, I view this as like fixed income. Basically, I'm just getting a check in the mail every month.

• 23:30Sam Parr?

  Yeah, that's true, but to a normal person, like to my parents or your parents, they're like, Jack, this is kind of strange.

• 23:35Speaker 02

  Sure, sure.

• 23:36Sam Parr?

  Falls on that category of alternative.

• 23:38Shaan Puri?

  You're saying ten percent is just the collectibles part, not the lending part?

• 23:41Speaker 02

  Yeah, well, I mean, the lending have only really started with it, so I only have a small.

• 23:45Shaan Puri?

  Yeah.

• 23:46Sam Parr?

  So right now you do Rally Road, which is, which is everything, baseball cards, cars, boxing gloves, whatever. You do Masterworks, which is basically you can buy a portion of a Picasso. You can buy, it's high-end art. What's Otis?

• 24:00Speaker 02

  It's very similar to Rally Road. It's kind of a mix between Rally Road and Masterworks. They have high-end art, but also high-end collectibles.

• 24:10Sam Parr?

  What's Mythic Markets?

• 24:11Speaker 02

  It's more like niche. They're figuring out, they're the one of the, they're the smallest player, I think. They're figuring out the positioning. I gave them the feedback. Some of their stuff is like so niche. It's just targeting people that play Magic the Gathering. Like, so they have like this painting of a card from Magic the Gathering. I'm like, what the fuck is that? I don't even know what the hell this is. Like, Valley Road is awesome because your parents would know most of the assets on there and be like, alright, that's pretty unique. They have like the joystick controller that they used for the NASA mission that landed on the moon. Or they have the first edition signed Harry Potter. Like, everyone knows this stuff. But then Mythic Markets has like some stuff that's kind of decent, some stuff that's just like,

• 24:53Speaker 02

  oh, this is the highest value card in Myth, in Magic the Gathering. It's like this plant. I'm like, what the fuck is that?

• 25:01Sam Parr?

  What, what other categories interest you? Cause I have a few that I'm thinking about. Do you have any that you're like, there needs to be a marketplace for this? Or this is a category that I think is gonna pop in the next five years?

• 25:12Speaker 02

  Well, kind of Valley Road is trying to be the platform with all of those. They have a different tabs for all of the assets. They have wine, all of these. They, they don't have art, but there isn't really much of an asset class in terms of collectibles I could think of that. I guess one I haven't seen is maybe like currencies, like unique currencies? Or historical artifacts from like dinosaur bones or something?

• 25:38Sam Parr?

  That's interesting. Do you guys know, uh, I actually don't know how to pronounce it, even though I go to it all the time. Is it called Hadoki? It's the watch one? Yeah, it's, how do you, I don't even know how to pronounce it. It's one of those words that you like read it all the time. Hodenki or Hadoki? Oh, yeah, yeah. They just sold a majority of stake. So basically, it's a weird company. I don't know if it's considered a media company or an e-company, but they started out by just blogging about watches. Now they sell special edition watches and I believe, and Abreu, you'll have to double check. I believe they just sold on Friday or Thursday last week. And I think they sold for around a hundred million dollars and they're doing 20 million in revenue. But basically the idea, and I, I'm a very low collector.

• 26:19Sam Parr?

  Of watches, it's I'm very new to it, but it's for like roll, you know, high end Rolex's and things like that. And I noticed that when I went to go and buy, I bought a two, I owned two Rolex's from the eighties and seventies. And if you want to buy an older Submariner, they are so hard to find right now. Watches, I mean, they've always been popular, but Louis Vuitton bought this company, which is an interesting signal.

• 26:40Speaker 02

  Well, also, they also had an interesting background because they were a company that had been going for many years. And then Kevin Rose, who's kind of digging stuff, he had raised maybe like five or 10 million, like a startup studio. But he was kind of messing around with ideas and he didn't really know what to work on. And so he just like merged with the age of companies and then just kind of made them like sexy, was CEO for like a year or two, then quit. And then so maybe he just made them like more tech respectable to.

• 27:09Sam Parr?

  So that's an, I think that's an interesting category is watches. I think they're growing, you know, a lot of young celebrities, John Mayer, like cool people are like super into them. I think that's categories can actually get a lot bigger.

• 27:20Shaan Puri?

  I think that categories is hard because like Jack was saying, I think that the larger, the most popular platforms will do well as they can just add your category fashion and you can become large. There might be some exceptions, like I was looking at a company to invest in that's comic book space. And they have like a good reputation in the comic space. They are, you know, well known in that community. They already have relationships with all the kind of brick and mortar stores. And so, you know, they might be able to get to escape velocity in, let's say, the comic book world, which would maybe have a different population. I think that for the most part, there's the opportunities in this are look a little bit different. So there's things like, Sam, do you know NBA Top Shot?

• 27:57Sam Parr?

  The game you played the bar?

• 27:58Shaan Puri?

  No, that's Papa Shot. So Top Shot is a new collectibles type of thing. You know, the guys who started Crypto Kitties, do you remember Crypto Kitties?

• 28:05Sam Parr?

  Yeah, it was like a joke that turned into like a huge thing on accident.

• 28:08Shaan Puri?

  Yeah, kind of. So they pivoted to something called NBA Top Shot, or that's what they focus on now. I don't know if they fully pivoted or what, but what it is, is it's a crypto based thing. These are called NFTs, non-fungible tokens, meaning like for Bitcoin, all Bitcoin are the same, my Bitcoin or your Bitcoin, you can't tell the difference. But like for a collectible, like mine and yours are two distinct things and there may be only 10 of mine in existence, right? So that's what NFTs are. The blockchain now allows for people to build NFT based things. And so what these guys did was they initially made Crypto Kitties, which was a, a collectible of these different types of kitties that they made. And it kind of went viral because it was kind of funny and goofy and whatever, and it kind of faded out. But what they're doing with NBA Top Shot is they licensed, they partnered with the NBA and they licensed out moments, highlights, basically.

• 28:51Shaan Puri?

  So you open up a pack and instead of getting a player's card, you get LeBron dunking in 2009 on the, against the Atlanta Magic, this one awesome dunk he had. And you get that. And they basically say that there are 400 of these highlights, these moments, these top shots, in existence, you got one of them and that's in your collection now. They tried to turn, instead of a static trading card, they're saying, of this video moment that's five seconds long from, you know, the NBA, that's actually like, they, they sort of artificially create the scarcity around it by saying, there will only be this many of this moment ever created.

• 29:23Sam Parr?

  That bullshit to me, right?

• 29:24Shaan Puri?

  Well, everyone's got a different opinion of it. I don't know, I've opened up one pack just to see what it was like and, and actually, Ben, Ben, you should, Ben's on the call too. Ben, you should tell them about the top shot you just opened and your reaction to it.

• 29:35Speaker 03

  Yeah, I opened a pack and I got a Cam Reddish dunk for like $30. I don't know if you guys know who that is? He's like a subpar NBA player.

• 29:44Shaan Puri?

  He's like a scrub.

• 29:45Speaker 03

  And I was like, I was like, how the fuck is this gonna be worth anything at any point?

• 29:48Sam Parr?

  This is kinda odd to me. I'm on it right now. They're selling stuff for $200, $300.

• 29:52Speaker 02

  The reason that I wouldn't be bullish on this is because they are the ones claiming that the assets are valuable and facilitating the trading. Like, in the basketball or the collectible world, it kinda works because the grading authority saying how scary something is, is independent of the producers that are making the basketball stuff. So PSA is the one saying, this is valuable, we have the data, like, if you're just creating, otherwise you could just give a value to every clip on YouTube.

• 30:22Shaan Puri?

  Right. And also just collecting clips, I think, is, I can see why you would talk yourself into the idea and why it would sound cool in a pitch deck, but in practice, I don't think it's that cool.

• 30:32Speaker 02

  So one thing I do think would be interesting, actually, sorry to interrupt, Sean, is that, so I don't think that this, like, virtual asset on the blockchain is interesting to me right now, it's too early, and these assets, the video clip, has no underlying value. But I would be interested to see Otis or Rally Road or a competitor put physical collectibles on a blockchain. So then I could own, like, let's say, they could just tokenize assets. So then a Michael Jordan training card, I would have it as a coin and then I could send it to my friend, the coin, or like sell it on, then you could have like multiple trading platforms, you know, then are independent. So that could be kind of interesting, physical collectibles on.

• 31:15Shaan Puri?

  Does Rally or anyone, do they let you send, send a fraction to a friend?

• 31:18Speaker 02

  No.

• 31:18Shaan Puri?

  Can you gift?

• 31:18Speaker 02

  No.

• 31:19Shaan Puri?

  Okay, that's kind of interesting. So, so I would say, okay, one opportunity is these guys who were trying to basically say, okay, shit, all the traditional collectibles, they're already on traditional platforms. So let's create a new collectible, right? That's what they're trying to do with this like moments thing. Now, may, may work, Manali.

• 31:32Speaker 02

  Sorry, just adding, Sean, actually, Otis is doing one bit like that. Otis is doing collaborations. So they're doing like Otis X some guy. They haven't done that well so far with it, to be honest, because again, they're kind of creating a collectible just for Otis. There's no data on what his actual value is.

• 31:53Shaan Puri?

  Then there's another kind of like angle here, which is like making it easier, right? So one of the problems when I was looking at buying this collection was like, I was like, shit, I don't know what any of this is worth. You know, I'd have to send it in to go get graded. That's kind of expensive. And then, you know, we, we looked at, for example, there's a couple of apps that are doing what are called live breaks. Sam, do you know what these are?

• 32:10Sam Parr?

  Yeah. Yes. And you talked about it last week and then people on YouTube are doing it. I looked up this, I watched this Logan Paul video, 10 million views of him opening a deck of cards. And then there's this other guy named, is his name Pac-Man, I think his name is. And it's a channel with 2 million subscribers and all he does is opens packs of cards.

• 32:26Shaan Puri?

  Yeah, it's crazy. And this also happens on Twitch. There's this guy Castro who does this on FIFA. FIFA is not even collectibles, right? It's just like, within the game, there's these microtransactions. And every kid kind of like begging their mom, like, can I, can I get some coins so I can buy more FIFA packs? And the mom's like, what? I already bought you the game. What are you talking about? But like, the games have started building in these microtransactions. So this guy will just buy like four grand worth of packs and just open them for three hours. And while he's opening them, people are subscribing and donating to them. So he can keep it going. And like for a kid, it's like the dream. It's like, dude, what if my mom gave me $3,000 and I could just buy all the diamond packs? And like, they could just, they just watch him do it instead because that's like the closest they'll ever get. So I think that's kind of interesting. It's interesting that it's interesting to people, watch people open. But I was on one of these. So there's

• 33:07Shaan Puri?

  Loop, which is L O U P E. That's for sports card live breaks. So it's like a live stream, like a Periscope or a Twitch stream. But what it is, is it's a table and the guys, if you push the buy button, the guy will open up the pack you just bought and you'll see, the whole group will, together will see what you got inside. And then there's whatnot, which is doing this for Pokemon cards, basically non-sports. And they're doing quite well. And so I was looking at these. I was like, okay, that's cool. Problem was, again, if this guy's opening this pack, I don't really know enough. Like a collector will know, oh, my God, that's a rare card. That was worth $360 that you just got. It would take me like a three day process to figure out what I really got and what it's worth. I was curious to see, have people done the thing, I don't know if you know this, Jack.

• 33:48Shaan Puri?

  Have people done the thing where they kind of like use like an iPhone app, kind of like that plant scanner app? That basically just lets you just hold up your phone to a card you own and tells you like, this is this card, it's worth between this and this, depending on how it got graded. You could send it in to go get graded and like find out if it's the $30 version or the $300 version. Do you know if something like that exists? Cause I think that technology has been used for plant identification, bird identification, like, um, you know, math problem solving. I don't see why they couldn't do that with cards.

• 34:17Speaker 02

  Well, actually had been approached by a couple of users in the trends, Facebook group that are working on, um, business ideas in the trading card space. And one of them is looking to build an iPhone app that will try and use AI and stuff to give you their opinion about the grade as well.

• 34:34Shaan Puri?

  Right.

• 34:34Speaker 02

  So kind of doing that and grading it. That they would maybe grade it for a dollar instead of $25.

• 34:39Shaan Puri?

  Right.

• 34:40Speaker 02

  Obviously, this is just their opinion, but you could maybe just have a rough idea.

• 34:44Shaan Puri?

  So one of the reasons I think that's interesting is because there's a lot of people out there that just have a collection. And when they were a kid, when this was not a money-making.

• 34:52Sam Parr?

  And they're just like, ah, for the hell of it. Let's just see what happens.

• 34:54Shaan Puri?

  Yeah, they have a binder and like, they're not going to go spend $10 a card to send it into PSA.

• 34:58Sam Parr?

  Right.

• 34:59Shaan Puri?

  That's way too extreme. You know, are they really going to spend the time to list each one on eBay? And then like fulfill it and whatever. Like, I think that's kind of like interesting. So, so I think there's a latent demand. If you could just aggregate. My friend Xavier did this with books where he just got people to just send in old books that they didn't want. And it's like, it's a social impact project, but like he would sell the books and then he would, it's called Better World Books. And he would sell, he created a marketplace like Amazon to sell the books. All the books he was getting for free. All he had to do was just receive mail from people in libraries and stuff. And then he would also donate books on their behalf to, you know, libraries and need. So I think somebody could do that. If you could get everybody to go into their garage or their attic and go get their card collection and just mail you all their shit.

• 35:40Shaan Puri?

  And if you had an efficient way to like scan those, I think that could be a somewhat interesting opportunity, kind of like the junk, the junk.

• 35:47Sam Parr?

  Isn't this, I always get caught up in this shit because I'm like, all right, Jack's talking, he's got a large, potentially maybe millions of dollars involved in this, but he said himself that he knows nothing about sports cards. It's so odd though, that you've got these people that are creating, like at the end of the day, there's gotta be someone who wants to buy this, just to hold on to it and look at it or hang it on their wall. Isn't it so weird how this market is being created around people who actually aren't fans of it?

• 36:13Shaan Puri?

  Well, I think that's the beauty of it, right? This is just like Bitcoin or many other things, which is that the value is in the belief of it. So some people want it for the tangible use, the same way some people want gold for jewelry, right? They want to put it on the wall, they want to look at it, they want to think fuzzy thoughts about Michael Jordan every time they see it. And other people like Jack are just saying, oh, here's a scarce asset, here's a rare asset that I can put some percentage of my net worth into, and I see the trends of where this stuff is trading, and I know that not more is being produced, and it's a safe store of value for me. I don't think my wealth is gonna go down.

• 36:43Sam Parr?

  That's my, that's my question. Is it that safe? So for example, let's say that you have a card of a guy, and tomorrow he says something racist, or he rapes someone, or he dies, or like let's say.

• 36:54Shaan Puri?

  This happens in NBA, this guys get injured, right? And their card value goes down.

• 36:57Sam Parr?

  Yeah, like what happens if Jordan does something tomorrow, he has a OJ Simpson moment where it's like, oh my God, you are not a good guy, you're a bad guy. Something crazy happens, does that mean?

• 37:07Speaker 02

  When they die, when they die, the price goes up 4X overnight.

• 37:13Shaan Puri?

  Jack's waiting for these guys to die. I don't know who Wayne Gretzky is, but I can't wait till that guy crooks.

• 37:18Speaker 02

  They say any news is good news, right? If he says something racist, it gets banned or whatever, it makes his card more valuable. Like OJ Simpson's cards are probably really valuable.

• 37:28Shaan Puri?

  That's true. It also happens, right? Because right now, all these rookie cards for like Luka Doncic, or in the NFL, this guy, Joe Burrow, he was a rookie, he was the number one pick, his card was worth X, he got hurt, he like blew out his knee in a recent game, his card value went down by about 50%. And a whole bunch of people are buying because they're like, look, I believe in Joe Burrow over the 15 years, this is my opportunity to buy, it's kind of like a growth asset then. I'm trying to make a bet because I think I can get a 4X multiple on this. If I'm right, and that game of being right and wrong, I think is what makes it fun. Just like, you know, in many ways, people do that with the stock market, right?

• 38:02Sam Parr?

  It's like, I love listening to mob stories and I listen, I follow on YouTube, all these guys who are in the mob. And they're like, yeah, two things would happen. First of all, we would take so much money for a sports game. And in the seventies and eighties, you know, the athletes weren't making as much. And so they were able, like, we were able to bribe them. Or the athletes were notorious gamblers and they would get into debt with us and we would say, all right, make sure that you, this happens next game, so we could bet money on it. I wonder if you're gonna see anything like that going on, because this is like one of the very few assets. I guess you could do this with stocks, although there's way more regulation around it. But this is one of the few assets that it seems like you can meaningfully manipulate.

• 38:38Speaker 02

  Yeah, so you're highlighting good things. So actually Otis, their tagline is they want to be the NASDAQ of everything. However, unlike the NASDAQ, NASDAQ has all these regulations that you can't do insider trading and stuff. Here is the Wild West, like anything goes, there's no insider trading rules or whatever. Like, that's why there's also room for opportunity, because it's so new, there's no rules yet.

• 38:58Shaan Puri?

  Jack, if Jack wanted to, could partner up with three other people and could pump. You could pump and dump like all day probably on these assets, because there's not enough volume.

• 39:07Sam Parr?

  That's what I'm saying, it's crazy.

• 39:09Shaan Puri?

  You could take $10 million probably, and you could move markets and just profit every single time you do because of that. The same way people did this with ICOs, kind of like these shitcoins in 2017, 2018.

• 39:21Sam Parr?

  There's this famous episode from Entourage, that TV show Entourage. And I'm not a baseball guy, so I'm not gonna remember this, but there was a baseball player in the sixties and seventies with the Yankees, Sonny something, I don't know, maybe you guys know. And one of the guys on Entourage was like, hey, my grandpa's neighbors with ex-player, they say he's really, really sick, he's about to die. And so they go and buy his card for $250,000. And then they're like, oh, my grandpa said that he recovered. And they're like, they're like, shit, and they lose all this money. What's that, you know what I'm talking about, the famous? Yeah, I don't, I'll have to remember. But anyway, it was like, I'm afraid of that happening.

• 39:57Shaan Puri?

  In terms of the tampering or sort of like the mob, I mean, sports betting is the way better way to go about it. If you wanted to do it right, betting on a game and getting somebody to shave points or throw is much easier than like decapitating or killing somebody for their card value, right? So I think sports betting is a much bigger market, would be much easier to tamper with. Now, there is of course, risk, right? If there was no risk, there would be no reward. So the risks that you're talking about are the risks that go associated with this. I think that's like, okay. I wanted to bring up two other things that are interesting. I probably should have led with this one, which is eBay.

• 40:27Sam Parr?

  Sandy Koufax, by the way.

• 40:28Shaan Puri?

  Sandy, Sandy, okay, not Sunny Koufax.

• 40:31Sam Parr?

  I'm so not a baseball guy. I know he's like a big deal.

• 40:33Shaan Puri?

  So eBay announced today that they had a new program, which is interesting. And with it, they released some new news. So the program, I'll say, was really simple. It's like, if you're selling a trading card that's worth $20 or less in value, now they guarantee that you can mail it for a dollar envelope guaranteed by USPS, which is like 70% less than it would normally cost. So it's really helpful for, for sending, you know, the buying and selling of trading cards. The reason they did this and they announced this number is because in 2020, they, eBay, which is still the biggest platform that all these other guys are trying to unbundle, did 45 million cards sold in 2020. If you just take an average of $20, that's 900 million of GMV just on trading cards,

• 41:16Shaan Puri?

  let alone any other type of collectible that's sold on eBay, right? So that's the like, the size of the prize, I would say is probably that or double that. If you just add everybody else up, it'd probably add up to maybe half of what eBay is, something like that. So let's say it's 1.5 billion in GMV is kind of like where this market is today. Not the biggest market, but also much bigger than, you know, the average person would expect it, you know, about like Pokemon cards and garbage pill kids and baseball cards and stuff like that. So I think that was pretty interesting to see the scale that eBay has on this stuff. And they're being really aggressive now because they know that they already like messed up with sneakers. Sneakers got taken away by StockX and Goat and stuff like that. And so if you go on Reddit right now, every Reddit ad I see is eBay talking about how you can trade sports cards easily on eBay.

• 42:00Shaan Puri?

  You can trust them and it's going to be hard for them to fight off all these competitors.

• 42:05Speaker 02

  They've also been featuring on their homepage, trading cards for quite a long time. So, you know, they're pushing that to every user that visits the homepage of eBay.

• 42:12Shaan Puri?

  Here's another opportunity or here's another idea that I've seen that I actually really like. So what are the opportunities people are trying to stretch? So there's Rally Road and others who are trying to be the marketplace. They're trying to be eBay. Then you have people who are trying to create new collectible moments or items. That's like eBay Top Shot. And then you have people that are what I call making the on-ramp easier. So that's kind of what I was saying where I was like, even if I bought a pack, I wouldn't know what the hell it's worth. So there's a company that we, I talked to yesterday about potentially investing in. It's called Dibs. And actually, D I B B S dot I O. I'll tell you a funny story about the pitch. It had like every red flag you can imagine during the pitch. I hope the guys are listening. I feel bad if I do, but like, I gotta say, it was hilarious pitch. He's like, he's a nice guy, but he's like, yeah, I'll tell you the five red flags.

• 42:54Shaan Puri?

  Red flag number one, he's like, oh, my background is I, you know, was doing social media marketing. I was like, that's like to me, like, I know that type of person. Did he have abs? Yeah, he was like, good looking, funny and had abs. And I was like, okay, already I don't want to invest. You're too good looking for. Yes. Second thing was, oh yeah, I live in Columbia. Well, I live in Medellin. I was like, ah, why do you live in Columbia? I don't, I don't want to know this story. You're like, okay, that's already like. Is it American living in Columbia? American living in Columbia. Did he have an ICO under his belt? Yes. So that was the next thing. Oh my God. Spent the last three years doing, uh, marketing for random ICOs. Oh my God, I just predicted this. Does he have a Ferrari? Okay, very close, very close. So there's two other ones. One was, I can't say his name.

• 43:36Shaan Puri?

  I don't want to totally, totally bash the guy because this is just for jokes, but his name is the name of a city and his partner's name is like this total white guy name who lives in Santa Monica. And I was like, oh God, these names, I can't even deal with these names. And then the last piece was he had posted, I was stalking him on Instagram during the call. And he had posted like this video of like Grant Cardone. He was like, Grant Cardone is the man. I love Grant Cardone. I aspire to be like him one day. And I was like, you know, no offense to Grant Cardone, I think actually he's kind of interesting, but like, anybody who admires him that like, I'm like, okay, that's the sort of like level of depth you have around kind of your, you know, who you are, what you admire in many ways. And so like for people who are like, Gary Vee is the most brilliant businessman I've ever met. And it's like, you know, he's just so inspirational. I'm like, okay, that's cool.

• 44:17Shaan Puri?

  Like, I'm glad he's inspiring you, but you know, that's one specific type of like celebrity entrepreneur. Or maybe for that to be your hero.

• 44:24Sam Parr?

  This guy just checked all the boxes, man.

• 44:25Shaan Puri?

  But their idea is actually really good. So one thing I really liked that they're doing their idea is that you just buy into a player. So how do you make this so approachable for the average person? So you just say, hey, you think LeBron is awesome? Or let's say, let's take an up and coming player like Giannis or Luca. You know, these like NBA players were still young in their career. You say, oh, you believe in Luca? You could just buy into the Luca collection. So they're turning players into like their own little ETF of a collection of cards that are associated with that player. So you don't have to know that this is a nineteen, you know, or sorry, like a twenty ten rookie card of this mint grade from this base set collection that's never going to get reproduced or whatever, right? You don't have to know all that. You just have to buy into the player at a certain price point and you know that it's

• 45:08Shaan Puri?

  collateralized by the underlying card assets. And so I think that's actually like a kind of a smart idea to let people buy into these kind of like known entities and not have to know the science underneath underneath what they're doing. So I like that idea of making it more approachable.

• 45:21Speaker 02

  Well, I mean, the idea that I was having on this call, I was just thinking you could abstract it a step further. Like if you get someone who actually knows financial markets, they could just launch an actual ETF on the New York Stock Exchange. So I would just start with, well, one, you could just have alternative assets as an ETF, just have it so broad. But then going in deeper, then you could just have sports cards or art. Because like actually one guy I know, he's just launched an ETF for Bitcoin in Egypt and Africa region and Europe. You can't trade it in US for some reasons, but um he's making a bunch of money, just made an ETF for Bitcoin.

• 46:00Shaan Puri?

  How easy is it to make an ETF? Because I know people have been trying this for Bitcoin in the US and just getting blocked. But I don't know.

• 46:05Speaker 02

  Well, just don't do it in the US.

• 46:06Shaan Puri?

  I don't know if that's a Bitcoin regulation.

• 46:08Sam Parr?

  Do it in Colombia. How's your boy? Rip guy.

• 46:12Shaan Puri?

  Oh, that was the, that was the other one. He's like, oh yeah, we, we use the blockchain. And I was like, oh, why do you use the blockchain? He's like, um, sort of our secret sauce. I don't really want to talk about it. And I was like, wow, okay.

• 46:24Sam Parr?

  Hadi San Diego, that's his name. Hadi San Diego doesn't know his shit.

• 46:28Shaan Puri?

  Okay, so you could launch, so, so, uh, Jack, do you know how long this guy was working on launching an ETF in Egypt or wherever you just said?

• 46:34Speaker 02

  Well, you can, it's quite big actually, and you can trade it in, um, he's in Egypt, but then it's basically you just can't do it in the US because of some rules. But, um, basically what you, I don't know how long it takes. I would guess maybe like six to 12 months or something. But basically what you can also do is the simpler thing, how these things often start is you, there's ETFs and then there's indexes. So indexes you can't actually trade against, they are just a way of tracking. But then basically people can create ETFs that like mirror an index. So there's probably already an index for the art world. Just create an ETF, allows it to be tradable.

• 47:13Shaan Puri?

  You could do this in Europe. So I was looking at, so this company that's behind this stuff is called Panini. And Panini is a European company. And what ended up happening, I was like, why does this European company make all the basketball cards? And what happened was Panini was like a billion dollar company back in 2009, something like that. They were doing a billion dollar revenues, probably worth a bit more than that. And they were big in the space in soccer, I believe, and in Europe. And I don't know the full history, but what happened was they came to the US and they outbid TOPS and Upper Deck for the basketball rights. Uh, so they got the, the NBA rights, they outbid them. And so all the basketball cards that are like super, super hot right now, like that's probably like the most bought into card collection right now is basketball cards. And they're all by this company called, you know, the, the cards are by Prism, Prism is owned by Panini, and Panini is the maker of it.

• 47:58Shaan Puri?

  And so I don't know how long these rights work, but they got basketball, they got hockey, they got for baseball, they got like a certain type of right where they can't show the player in uniform. They can show like something else, but they were basically pretty aggressive and they, they outleaped those guys. And so I think you could do potentially an ETF in Europe where you have to have the belief in alternative assets. And maybe the regulation is looser there. So I like that. This could be like the way Chamath and these guys are making like a hundred million dollars per stack. Um, this could be like that.

• 48:28Sam Parr?

  Is that how much you're making by the way?

• 48:29Speaker 02

  Oh, more than that, dude.

• 48:31Shaan Puri?

  I think he's making like a hundred million dollars or more purse back and he's doing 26 packs.

• 48:35Speaker 02

  They get like 20% of the capital raised as the manager and some of these are like hundred million. I just had another idea. So basically the opposite of that kitty cards thing, whatever. I think lots of stuff is going virtual, but I think there just is intrinsic value in physical. The more stuff goes virtual and virtual, that's why I'm bullish about physical stuff like Harry Potter stuff stored in a vault. Is you're preserving a time capsule, like physical is important. I just had another idea, um, bit more niche, but couldn't they just create trading card, physical trading cards, but for like esports players?

• 49:09Shaan Puri?

  Yeah. So there's a couple of companies that are doing this esports. The more popular version of it actually, because esports players themselves are actually not that popular. But the idea of like an YouTuber slash Twitch streamer, which is basically the subset of either really good player who actually gets famous. Because otherwise esports players kind of like this nameless, faceless, well, the hardcore people know about them. There's a company called LMAO. So what I saw this come out and I thought this was interesting or L A M O, Lamo, Lamo cards. Or not cards, they're what they're doing is dolls. U2's is another one that's making these little collectible dolls that are on either memes or influencers. And what Lamo did was they partnered with the four biggest Twitch streamers. And the way they did this was they gave a piece of the company to the agency that manages it.

• 49:52Shaan Puri?

  Or the agents that manages it incubated this company. I'm not fully sure what the deal was. But there was this agency called Loaded. And what Loaded did was they said, hey, we represent Ninja, who's the number one streamer in the world. Also Dr. Disrespect, also Summit and Lyric. And what these guys did was they made this collectible little figurine, action figure, basically of each of those streamers. They actually sell them in physical stores. They did a activation at like Comic Con where they built like a six foot tall version of it. Put it outside and said, scan your phone on this, like, uh, put your, hold your phone up to this. And they put a QR code on the body so that when you held it up on your camera. It launched their website and said, this is coming soon. And it also was like an AR thing, like when you were holding your phone up to it. Action figure like came to life like a transformer and had like smoke coming out and whatever. It was like buy this thing coming soon.

• 50:38Shaan Puri?

  Pretty intense. It didn't take off as big as I thought it would have. But I don't think that that's a bad idea. I would still go after that if I could, right? Cause it's the same idea, right? What's the difference between LeBron and Ninja at this point, right? Both of them have 20 million followers and, you know, armies of 13 year olds who think that they're gods. Could you turn that into a physical trading card asset and license their brand and likeness? Probably in a way that you could never do with sports because it's all too, it's done already.

• 51:04Speaker 02

  Is anyone doing like income share agreements for Twitch people?

• 51:07Sam Parr?

  Now you're talking Sean's language.

• 51:09Speaker 02

  Like someone is just a brand new streamer and you know, you join together to give them a hundred thousand dollars because you think they're going to be massive. And then in exchange, they give you 25% of their next five years income.

• 51:21Shaan Puri?

  So there's two things that are like this that are interesting. One is some people have tried to copy the K-pop model. So this is how K-pop works right in Korea, which is they basically say, okay, come to our factory, right? We have a studio with cameras and lights. You get to come into our accelerator like a Y combinator and we're going to teach you how to build your brand and all this stuff, but we get a piece of you and we get to represent you as your agency and

• 51:42Sam Parr?

  I think that's what like what BTS, what's it called BTS?

• 51:46Shaan Puri?

  I don't know if BTS came out of that. Maybe they did, but that's a very common, very popular thing in Korea. So some people have tried that in the US to mixed results. But the bigger version of this was actually the other day, Mr. Beast, who's one of the, probably the fastest growing YouTuber, are you guys familiar with Mr. Beast?

• 52:00Sam Parr?

  Yeah.

• 52:00Shaan Puri?

  He does these videos that are like, kind of just like random ass.

• 52:03Sam Parr?

  He like will give away five cars to people who need them.

• 52:05Shaan Puri?

  He'll go to a restaurant, he'll tip $20,000 and just record the waiter's reaction. Or he'll say, he'll buy a Lamborghini and tell his four friends, come here, put your hand on the Lamborghini. And the last person to have their hand on this Lamborghini gets the Lamborghini. And he just films them 48 hours and then someone has to go pee and then they, you know, like eventually they all fall asleep or whatever and one person's left. So what he said was like, yo, there's all these up and coming channels that I think could make really good content. I would love to do like an ISA, like I'll promote you and you keep doing your thing. I'll help you, but I'll take, you know, 10, 15% of your, your channel's revenue. This is like a pretty compelling idea because I think more than the, you have to do it like an income share agreement where you're not just giving them capital. You have to help them get the exposure in the same way that Lambda School helps you get the job and actually trains you to learn how to code.

• 52:50Shaan Puri?

  It's a little bit more than just the money for future money.

• 52:53Speaker 02

  How's that different to getting an agent?

• 52:55Shaan Puri?

  Because Mr. Beast can blow you up, right? So he can shout you out on his channel. He can basically king make anybody who he thinks has the raw ingredients. But what's the incentive for him to shout out these cool people? Well, if he owned a piece of them, like if he had a portfolio of these up and comers. So he's not on the content treadmill every day. He uses his following to put the next person on the treadmill. And he just, you know, sits back and relaxes from there.

• 53:15Sam Parr?

  Yeah, I'm into all this shit. I think that this is, we're at the hour. I think that this is, I want to go work at Rally Road. That's what I want to do. How fun would it be to work at those places?

• 53:25Shaan Puri?

  What type of returns are you seeing investing in these IPOs? When you think like, I guess what's good, what's normal? Is it super volatile? What are you seeing?

• 53:32Speaker 02

  Not sure about blended returns and I'm doing this with a longer time horizon. It's kind of hard to quickly flip stuff. But Rally Road has had some awesome exits in the past year. So basically you can buy in at the IPO stage and then maybe someone off the platform is acquiring it for double the price, quadruple the price. Or you can just buy a bunch of shares during the IPO and then like flip them to someone else later, you know? The challenge is that you kind of have to have some money to start with. I think the people, if you're coming there not with much money, like if you're coming there wanting to buy $25 worth, I don't think you're going to make much money because you're just like washed out by the whales.

• 54:17Speaker 02

  They all, all these platforms are having stuff like for me as a whale, like they're doing like pre-sales for me. Like I can just buy in before anyone else actually sees it.

• 54:26Shaan Puri?

  JP Morgan does this or whoever will do this before an IPO, right? They go to their big clients and they say, hey, you get the early bid on the IPO before DoorDash goes public or whatever.

• 54:35Speaker 02

  So I'm not sure about blended returns, pretty low at the moment because as I said, looking, want to have a few years horizon. I mean, hopefully I don't.

• 54:45Shaan Puri?

  Do you have like a goal or you have like a goal?

• 54:47Speaker 02

  10 to 20% a year.

• 54:49Sam Parr?

  What did you say? 10 to 20?

• 54:50Speaker 02

  Percent a year return. I mean, if something's like an alternative asset, it should be paying outsized returns for the risk.

• 54:58Shaan Puri?

  Are you doing it for that reason or you're just doing it because you just want to do it?

• 55:02Speaker 02

  Just both. Yeah, it's kind of fun.

• 55:04Shaan Puri?

  By the way, Ben just linked us this thing in the chat, so. After Mr. Beast tweeted that out, he then made a video saying, get this random person a million subscribers on YouTube. And he just tagged this guy at Zealous. And if you go to Zealous's YouTube channel now, he has almost 2 million subscribers now.

• 55:20Sam Parr?

  No way.

• 55:20Shaan Puri?

  Thanks to Mr. Beast, right? So he just literally, it's like if Sequoia could invest in you and get you your first 10 million DAU, basically. That's basically what he was able to do.

• 55:30Sam Parr?

  Wow, what is that, that one that he got 2 million views, what's that called?

• 55:34Shaan Puri?

  Zealous, Z E A L O U S.

• 55:37Speaker 02

  Yeah, I posted it. I'm not sure how many he had beforehand, but I think it was a small account. And he made a video about it, like he made it into a contest. I mean, that just grew the power, you know, Mr. Beast. I just got one other idea, though, is Sam related to the Houdinki thing you were saying? That are they a media company or are they an investment company? Would kind of interesting to see like a media type company join, tapped on to Rally Road or something, you know, like.

• 56:02Sam Parr?

  Well, that's kind of what they are, you know, like a good example of this is Huckberry. Huckberry is a weird store. Huckberry is a store that sells just like guy stuff. So camping gear or guy clothes or outdoor stuff. It's like REI, but for like kind of yuppie guys. And they tell the story behind the clothing. And with Rally, Rally Road, whenever I go to the stuff, I'm a car fan, so I like hearing the history of that car. Or I like hearing the history of that baseball card. I want to know the history around it. And I actually do think that they do need to do a better job of telling the story. Because I used to work for this TV show called American Pickers. And we had six or seven million viewers a week. At the time when I worked there, we were number two on cable. So it was the second most popular show in the country.

• 56:43Sam Parr?

  And the guy, Mike Wolf, the main guy, would go and tell the story behind a gas pump. He would find a 1960s gas pump and he would say, this was created by Mobile Oil. Mobile Oil made it this way because in World War II, they didn't have enough supplies, so they had to do that, whatever. And people would come in from around the world and they would buy this gas pump because of that story. And they would pay a massive premium for it. And I do think that a lot of these platforms, they need to do a much better job of telling a story. And if they could copy media companies' strategy of storytelling, I think they'll have a significantly larger business. And I think Ben said something about, what was this, someone's newsletter for fractional assets? What are your?

• 57:20Shaan Puri?

  Atlin Insights, they're basically a new company, they're raising money right now. They're trying the media approach in addition to having a, as they say, a stock market for physical things where basically it's a buy and sell platform for collectibles. If somebody's listening to this and you're like, okay, yeah, I don't know shit about Pokemon cards or whatever. One thing I would recommend is I've learned over time that what smart guys like Jack kind of do as their hobby or where they start kicking the tires. And it seems a little bit weird and it's kind of like laughable, then you're like, four years later, that's going to be the thing that's really interesting that like, you're going to wish you got in. Like this is how crypto was for me. I kind of ignored it initially. Enough of my kind of really smart friends were dabbling with the stuff on the weekends. And when they were dabbling with on the weekends, that was a strong signal.

• 58:03Shaan Puri?

  And actually I just went to my old, old laptop and I found the Bitcoin that I have stored on that laptop. And the Bitcoin I have from back then, right? I think I had taken like a $2,000 or $3,000 budget. I just been like, okay, I'm just going to buy some Bitcoin. I bought a little bit of Ethereum as well when that came out. And that's not worth like almost a hundred grand. And I don't know if that's going to happen, right? Like Bitcoin was one of these things that panned out as sort of the investment of the decade. But I would say just for a learning exercise, I would go download Rally and Otis and Loop or one of these live breaking platforms as well. And I would take like $300, right? Like go take like, I don't know, 90 days of coffee money, like skip your daily coffee and like, be like, okay, that's 300 bucks. And go like, get a little bit of skin in the game just to learn how these platforms work.

• 58:47Shaan Puri?

  And look at, and then you'll, once you've skinned in the game, you'll start checking on it. And you'll start learning a little bit about it. And like, then you decide later, like if this is a good idea or a bad idea, whatever. Nine times out of 10, it's not something you're going to pursue. But that's like the simple way to get in. And you don't have to take such a huge amount of money to do it.

• 59:02Sam Parr?

  Well, this one went a little long. We normally keep them at an hour, but I think it's good. This was fun. Anything else we want to go over, Sean?

• 59:08Speaker 02

  No, I mean, thanks to Jack for coming on. Jack, is there anything else that we didn't talk about that we should have? You learn by watching how the markets react over time that I've just seen like, oh, okay, this Pokemon thing, it was available at this price and it now has gone up to this price. And I would kind of just see how the markets move. I mean, one insight is for Masterworks, they have a minimum of $10,000 per art piece, because these are like $5 million piece of art. But what they do is they segment their users. Like when they're doing Google ads and stuff, they're like, hey, if you have over $10,000 to spend, go here. If you don't, then they direct them to the trading platform where you can buy a piece for like $20 a piece. And so actually, what I'm observing on Masterworks is that on average, like every single piece on their platform,

• 59:53Speaker 02

  none of them are trading below the IPO price. So basically, if you'd bought, you would not have lost money. The challenge is that they don't have much liquidity yet. So you wouldn't be able to like sell all your shares all at once, because $10,000 would flood the market. But it is kind of interesting observing on the countryside, Rally Road, a bunch of their cars are like, some of them are down 50% from the IPO price. So it's not to say that you can't lose money on this. That's why Rally Road does seem to have more accurate market for what the true valuation of the set is, because some of their assets are trading below IPO price. Gotcha. Uh, I love it. Okay. And Jack, do you have a lot of Bitcoin? Um, yeah. And what's your take on Bitcoin? What's your like?

• 1:00:36Speaker 02

  So I was into all of the different altcoins and stuff, like when it was at the bubble a few years ago, you could very easily see when the market was going to crash, because I went to a friend's wedding in England, met this random guy and he's like, oh yeah, I just um, took a mortgage, an extra mortgage on my house and put it all into For Tron. All into crypto. And I'm like, what are you doing? And then so that's what I said, like when your taxi driver is giving you stop tapes, that's the time to get out of that market. So for me now, I'm buying for the long term, but I only have Bitcoin and Ethereum.

• 1:01:10Shaan Puri?

  Okay, that's great. By the way, I did the same. I went to a wedding in DC and my aunt, who has a thick Indian accent, tried to tell me about how great Ethereum was. And she's like, Ethereum is very good. And I was like, you know Ethereum? What's so good about it? She's like, very good, very good investment. And I was like, oh God. So I came back, I tried to sell every crypto I had. And this was when Bitcoin was at 3,000. So I had gotten like a 10x. And I sold as much as Coinbase would let me. And then I hit the limits and I'm so upset. And it turned out to be a horrible move, right? If I just held it, it would have done better. Which reminds me of, I think your rule of thumb is absolutely right, right? It did, it ran up to 20,000 and then it crashed back down. But there's another phrase that goes around, around money is the bubble that never pops.

• 1:01:55Shaan Puri?

  It's unlike other assets because there is no checks and balances around it. Like a stock can, like Tesla stock is like running up out of control. And at some point, they will have to deliver profits against that valuation. And if they ever have a setback in their production or their profits or whatever, it's going to hurt their stock. There is no revenue, there is no profits of Bitcoin. The price is the stock, the price is the profits. And so the more the price goes up, the more people believe that this thing will keep going up. And that is the beauty of Bitcoin.

• 1:02:25Speaker 02

  My understanding is it's either in the top five or top 10 of all currencies in the world right now, in terms of assets in that currency. So could easily become the number one held currency in the world. It's very appealing because it's not owned by any government or whatever.

• 1:02:45Shaan Puri?

  I had a long talk with my wife last night because I told her how much Bitcoin I'd been buying over the last two weeks. And she's like, what are you doing? So she was more like, why didn't you talk about this? And I was like, it's an investment. I'm not buying things, it's an investment. And she's like, that's like if I went and bought a house and didn't tell you. And I was like, no, but this is an investment. It's not like I'm buying things.

• 1:03:07Sam Parr?

  Speaking of which, Sean, did you ever sell your house?

• 1:03:09Shaan Puri?

  Yes, I did.

• 1:03:10Sam Parr?

  Was it a bloodbath?

• 1:03:11Shaan Puri?

  Yeah, I lost like 180K total.

• 1:03:13Sam Parr?

  Oh, oh, well, I mean, yeah, that sucks. But like, I would have thought it would have been even worse.

• 1:03:17Shaan Puri?

  Well, it's just like, right, like you lose that out of your down payment, right? So I lost like whatever. Twenty percent of the money I had in the in the property I lost, right? It's a twenty percent loss. It's not.

• 1:03:26Sam Parr?

  That sucks.

• 1:03:27Shaan Puri?

  Not great.

• 1:03:28Sam Parr?

  That's not great, but like the way that I see the headlines now in San Francisco, it's like death and over and carnage.

• 1:03:34Shaan Puri?

  I'm lucky that I got out at all. I think it would have gotten much worse.

• 1:03:38Sam Parr?

  That's what I'm saying.

• 1:03:39Shaan Puri?

  I only had one offer. I have one offer and I took it and ran.

• 1:03:44Sam Parr?

  Who was it? Like a family or just a rich person or what?

• 1:03:47Shaan Puri?

  Yeah, they are like kind of an exec at Wealthfront. They're both execs at Wealthfront. One's like the head of whatever engineering or design, the other one's head of design or something like that. I don't know. They're both like, kind of like top-ish people at Wealthfront, I guess. So they were unaffected, you know, by the, you know, they weren't like, the economy was not hurting their business necessarily.

• 1:04:06Sam Parr?

  Right. But it seems everyone else is getting the hell out of there.

• 1:04:09Shaan Puri?

  Yeah.

• 1:04:10Sam Parr?

  I mean, everyone I know at least, but yeah.

• 1:04:13Speaker 02

  Create an ETF to go to short San Francisco.

• 1:04:15Shaan Puri?

  Ah, now you're talking. I really think, Jack, I'm surprised you're not in the SPAC game. I'm surprised you're not the guy with the ETF in Egypt or like, you know.

• 1:04:23Sam Parr?

  But the thing about Jack is he's got the IQ and the ability to pretty much pull off all this stuff, but he's missing one major component. What's that component, Jack, that you're missing? You know what it is.

• 1:04:32Speaker 02

  Um, social, emotional, television.

• 1:04:36Sam Parr?

  You're incredibly lazy.

• 1:04:38Speaker 02

  Okay, that as well.

• 1:04:40Sam Parr?

  You, I, I'll say, Jack, I'll say, Jack, why don't you do this? And the answer is always, uh, too much work.

• 1:04:48Shaan Puri?

  They overboard on things that most people wouldn't lift a finger on. Didn't you like spend like a month building a chair, like a super ergonomic chair for yourself?

• 1:04:56Speaker 02

  Oh, I didn't actually send you the photo. I actually, um, I bought the alt work now, which is like the actual.

• 1:05:03Shaan Puri?

  Gotcha, gotcha.

• 1:05:04Speaker 02

  Yeah. But SPACs, I can't say anything, but actually like speak to me in like three months about SPACs.

• 1:05:11Shaan Puri?

  Oh, okay. Okay. Great. I love it.

• 1:05:13Speaker 02

  Crazy, crazy.

• 1:05:14Shaan Puri?

  Okay, we should stop recording and we should start talking then. All right, we should, we should wrap it up. Thanks, Jack, for coming on, man. I appreciate it.

• 1:05:20Sam Parr?

  Thank you.