#96 - The Entrepreneur Betting Billions On American Passenger Trains

Today's episode is brought to you by Lemon.io. They are offering an exclusive 15% discount for the first 6 weeks of work for all the MFM fans. Go to Lemon.io/mfm to claim your offer today. On today's episode, Shaan and Sam talk: (5:52) Charter cities and planned communities, (12:34) Wed Edens, the man investing billions in American trains, (30:41) SPACs and the world of financial engineers, (46:18) building for the creator economy. 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.

• 0:07Sam Parr?

  What's up?

• 0:08Shaan Puri?

  How are you?

• 0:10Sam Parr?

  I'm okay. I just, I'm packing up all my stuff and I had all my trash, which include garbage as well as furniture packed outside my house really nicely for the garbage people to come. And I just got into a big argument with these crazies that were like digging through it and throwing it all over the place. And I was like, can you guys not do that, please? And they're like, this is what we do. We destroy trash and we throw it all over the place. I was like, uh, don't do that. It, it, I got, it put me in a horrible mood.

• 0:36Shaan Puri?

  Uh, so where did you, where did you net out? Did you just walk away or did they stop?

• 0:40Sam Parr?

  No, I, we got into a little pushing match and eventually.

• 0:43Shaan Puri?

  A pushing match? What?

• 0:47Shaan Puri?

  Oh my God, that's amazing. You pushed the guy?

• 0:52Sam Parr?

  Yeah. It got into a fight or flight mode. Man, it pissed me off.

• 0:57Shaan Puri?

  You were, you were so easily triggered. It's amazing to me.

• 1:00Sam Parr?

  I'm on edge. I think that with Corona and, and the economy, like I said, I'm in fight or flight mode and like, I think something changed. This will, I imagine this happened to you already, but like something changed when I got married. I was like, I'm in, like, I gotta protect.

• 1:13Shaan Puri?

  Oh dude, I'm the exact opposite. I thought that would kick in. I had a kid. I thought it would kick in. It didn't. I'll tell you, on my first date with my, my wife, now Sonya, uh, first date, we go out, we get sushi. It's great. We go back to her place. And we're, we're hanging out and the doorbell rings and I'm like, it's pretty late at night. It's 11 or 12. Who's, who's at the door? So she just kind of like ignores it for a second. She's like, that was weird. And then the doorbell rings again. She's like, okay, wait, there's actually somebody there. So, she's like, just wait here. I don't know her that well. So I'm like, okay, whatever. I wait there. She goes downstairs. She opens up the door. I hear like a brief conversation for a second. Door closes. She comes back upstairs. She's like, sorry about that. And I was like, what, what happened? Who was it?

• 1:54Shaan Puri?

  And she's like, oh, it's nothing. And like, it's like a, you know, like a doorbell ditch. And I was like, odd. Okay. Kids doing pranks. No problem. We sit, we're sit, we sit down for a minute, doorbell rings again. She doesn't move. I'm like, are you gonna get that? And then she's like, no. And then the doorbell starts ringing like, just nonstop. It's like ding ding ding ding ding. And I was like, okay, you gotta go get that. And so she's like, okay, hold on, stay here. And so she goes downstairs. Anyways, I hear a voice, I hear a guy's voice to be like, he's like, who's here? And I hear this guy coming up the stairs. And it's, it's an ex-boyfriend who has shown up on our first date.

• 2:35Shaan Puri?

  You know what he had done? He was out, he was, he had come by the house to try to like pitch to get back with her. And he saw through the window that we were watching a TV show, Nip Tuck. And he's like, we've already seen that show. You wouldn't, you wouldn't be watching that show alone. He's like, somebody must be here. And so he was like, somebody's here, I know it. And so he comes up the stairs and I don't know who this guy is. I'm also not that invested in her at this point. So I'm just like, look, I'm not trying to. I was like, ah, I'm not trying to, you know, getting any drama here. This is, this is already kind of messy. So he, he comes upstairs and he doesn't know what he's supposed to do. He's like, he's here now and he's standing there facing me. And um, so I just take out my hand to shake his hand. I was like, hey, I'm shod, what's up? Cause I don't fully know what's going on, but I definitely know that something's up.

• 3:20Shaan Puri?

  No, so he shakes my hand and then I could see he gets angry at himself for shaking my hand. And she's just like, oh horrified. She's like, oh my God, you need to leave. Why are you here? And he's like, oh my God, I knew this would happen. Oh my, this is the worst. And then I start laughing because I'm like, this is a comical situation. First date, ex-boyfriend shows up, angry little Indian guy. Um, and I was just like, okay, I start laughing and then this tilts him like crazy. So she's in between me and him. He swings, punches me in the face, but he punches me with his left hand. So it was like, kind of like, you know, like a noodley kind of punch. It didn't really do anything. And so, and I again, I start laughing. So no fight or flight. I'm literally in a fight and there's no fight or flight. So I start laughing again.

• 4:04Shaan Puri?

  He gets really mad. So then he's embarrassed and he starts to come towards me. And Sonia just like body slams him while he's walking towards me. She just grabs him and throws him down. Now he's really embarrassed at this whole situation because he kind of got tripped up by a girl and, and I just, I just like, I grabbed him by the shirt and I was like, you need to leave. And um. And then he like, whatever, came to and he was like, what the hell am I doing? And so he like got all angry and he left. And I, and then so for five minutes, we're both sitting there, go back to watching Nip Tuck like nothing happened. And then I was like, yeah, so I'm gonna go, I'm gonna go home now, like I'm done. And she was like, I can't even speak, I'm so sorry, I don't know what the hell just happened.

• 4:44Sam Parr?

  Wait, I would have thought that like, you'd like, just totally get it on and like, it would love it, it would love. Your adrenaline was going.

• 4:51Shaan Puri?

  In my head, I was like, oh, this girl's shady, she probably is trying to get with that guy, and me at the same time, forget all of this. And I was like, I'm not trying to be involved in any of this, I'm, I'm, I'm gonna go home now.

• 4:59Sam Parr?

  And now she's the mother of your children.

• 5:01Shaan Puri?

  Yeah, exactly, so, so we, we ended up making, but, long story short, I don't even have the fight or flight, even when I'm in a fight, so, you know, there's something wrong with me.

• 5:09Sam Parr?

  That's a great story.

• 5:11Shaan Puri?

  Yeah, so I don't think most people even know that story, but now, you know, hundreds of thousands of listeners know, know that one. My family doesn't know.

• 5:17Sam Parr?

  That's a, that, that is a good story. Um, Mama Bear took care of it, it sounds like.

• 5:23Shaan Puri?

  Yeah, she, you know, snapped into gear, uh, in a way that I did not, so, we both kind of don't talk too much about that, but we both know if, if a situation goes down, um, she's much more likely to react than me. I'm just sort of like, easygoing, like, oh, this is interesting, the hell's going on here? Um, okay.

• 5:42Sam Parr?

  Well, at least you know your strengths.

• 5:43Shaan Puri?

  Yeah, oh, this is, um, okay, so let's talk, let's talk about some things, uh, it's been a little while since we, we hopped on without a guest. What's been interesting you?

• 5:52Sam Parr?

  Let me bring this up, and this is incredibly half-baked, we have a lot of topics here that seem like they have a lot more research, but, I met this guy named Ryan Beagleman, I think his name is, do you know who that is?

• 6:03Shaan Puri?

  No, never heard of him.

• 6:04Sam Parr?

  I, I met him in the trends group, so Ryan started Biz Now Media, Biz Now Media was a, it was basically what we do, I mean, we are what they are, they were first, um, for real estate. And it was a newsletter business, he sold it for like fifty million dollars, um, and then he went, or, in, like, congruently, he started Summit Series, which is,

• 6:24Shaan Puri?

  Dude, everybody fucking started Summit Series, I've met nine creators of Summit Series, how many of these guys are there?

• 6:30Sam Parr?

  Well, they all worked at Biz Now, and so I think hi- him and Elliot, I believe, were the guys. This guy Ryan was the, um, CEO of it.

• 6:37Shaan Puri?

  Gotcha.

• 6:38Sam Parr?

  So I believe he was the guy, Elliot's last name is Biz Now, as in Biz Now Media, I believe, I think they were the two guys, and everyone else was also a guy, but not the other guy. Um, and so, um, he started Summit Series, for those of you who don't know, it's like, Um, I don't know what it's kind of like a party.

• 6:55Shaan Puri?

  It's like a South by Southwest kind of thing.

• 6:57Sam Parr?

  And they'll rent like a cruise ship and people go, it kind of turns into like an orgy. It sounds like we're just people party. You pay three grand. It's not that good of a business, but I think it's okay. Like, I think it just affords a lifestyle.

• 7:08Shaan Puri?

  They created a sweet life for them. They bought, they bought the mountain that they did the summit series on and now they own the mountain.

• 7:13Sam Parr?

  Yeah, so here's what they did is they, they bought a mountain. So they raised money from people and investors and you, rich people who went to the summit series.

• 7:21Shaan Puri?

  Attendees, basically, yeah.

• 7:22Sam Parr?

  Yeah, would put in a million dollars and you bought a plot of land on this mountain and they're trying to build the city. This town, it's called Powder Mountain. I met him in our trends group and so I'm, I'm going to go and stay with him for a week on Thursday. And um.

• 7:37Shaan Puri?

  It's in Utah.

• 7:37Sam Parr?

  He's got this big, yeah, in Utah. He's got this big house that he's going to let me crash at. Really interesting guy and I'll do a podcast with him and we could do a threesome, do it all together or we could do it. I can do it just with him, but really interesting guy. And I also talked to Joe Lonsdale, did I tell you about him?

• 7:53Shaan Puri?

  I know about him loosely. I've heard, I've heard his name before. He's with eight VC, so what, what was your conversation with him about?

• 7:59Sam Parr?

  I met him on Twitter and then we did a phone call. He's the guy, he was like a, he was like employee number 12 or something, or some early thing at PayPal as an intern. Then eventually partnered with Peter Thiel and started Palantir, which is going to go public for like 50 billion dollars, some crazy stuff. And anyway, what I'm getting at, what we are all discussing, and I talked to Joe about new cities.

• 8:22Shaan Puri?

  Right.

• 8:22Sam Parr?

  This is something that we've discussed a little bit and it's something I'm very fascinated about. And what I'm noticing is, and I can't tell it's because I've got a lot of like affluent friends who make a lot of money. But many of them are saying that they want to spend six months in one part of the, the country and six months in another part of the country. And I can't decide if this is like one of those things where you learn, where you like, what's it called? Like the yellow taxi thing where like, where you know that taxis are yellow and then you start seeing them all over the place.

• 8:46Shaan Puri?

  Right.

• 8:46Sam Parr?

  Or this is like actual like trending. And so anyway, something that I'm fascinated about is like these new planned cities and it's so interesting to me.

• 8:56Shaan Puri?

  So was this the one, because I just saw one recently and I might, I mean, we might be talking about the same thing. The five minute city? Is this that? So Five Minute City, so somebody's creating a little city and the core premise, might not even be a whole city, might just be like kind of a living community, like a smaller version of town, bigger than a neighborhood, smaller than a town. Uh, but the idea is that everything is a five minute walk. So everything you need, um groceries, um the gym, uh whatever, all the kind of basic things that people go do with regularity will be a five minute walk from where you live. And they want to create a walking lifestyle city, um based around that one constraint. And they're going to build it out that way and they're going to try to find people who want to live in that that manner.

• 9:38Shaan Puri?

  And I like that. I like all these experiments around new cities. There are some that are trying to do it around self-driving cars. So they're basically saying, hey, self-driving cars, the tech can actually work, but the tech is risky when you have a whole bunch of human-powered cars also on the road. And so, um, if you could, just start with a blank slate and have roads that are designed a certain way that don't have, you know, pedestrian traffic and don't have, um, human drivers on it. You could actually have autonomous vehicles zipping up and down these roads and transporting people back and forth. It could be awesome. And so some people are trying to start cities just around that. Some people are buying old ghost towns like in, you know, Nebraska and Wyoming where infrastructure all got built. It got abandoned for one reason or another and they picked it up on the cheap and they're trying to revitalize it.

• 10:23Shaan Puri?

  So I think these are awesome projects, like really, really awesome projects.

• 10:27Sam Parr?

  Yeah, I agree. And I think it's really cool. So a lot of times they call it a charter city. And a charter city is a, is a city that's granted, I'm just reading the definition, a city that's granted special jurisdictions to create a new governance system. And this isn't like a new thing. I, I think that even San Francisco is considered a charter city where you can like make your own rules a little bit, um, within some type of constraints. Um, I know, and then there's like planned communities. One of those is Steubenville in Ohio. It was started by two brothers in nineteen twenties where they just bought a large plot of land and they started planning it out. And they were very meticulous about what happened to what, and people started buying homes there. Um, Silicon Valley actually was a little bit like this. Um, the Mark Andreessen's father-in-law actually, uh, owned, is a bill, Mark Andreessen, the famous investor, his.

• 11:12Sam Parr?

  Father-in-law is a billionaire real estate guy and in the 40s, 50s and 60s Silicon Valley was farmland and they like said, let's make this a town. And so anyway, it's kind of an interesting concept and I've been reading a lot of history about it. So like the reason I like reading about Titans and Vanderbilt and all this stuff is you can see how they did stuff and like a lot of towns in Staten Island and places like that were created because Vanderbilt was like, let's create a ferry to go there and whole towns are built around it. So it's not like a new concept, but it's incredibly interesting right now because I can't tell if people are truly fed up with cities or if it's just something I'm fed up with and I notice others are too. So.

• 11:54Shaan Puri?

  Yeah, this is sort of like, you know, if you think about what are the coolest sort of, what are the sounds cool ideas? So a few years ago or many years ago, the sort of the sounds cool idea was I'm going to create a new school system. I'm going to create a new university. So you had like alt school and you have Lambda School, you have Make School and you have all these other schools. And that was sort of like, wait, that's a, that's a startup. That's not a startup, right? Like that's different. And there's a whole bunch now that are in the like rockets space. So there's a whole bunch of rocketry and satellite startups that are like, yeah, we don't, we don't just do make apps. We like, you know, launch shit into the, into fucking orbit and yeah, that's what we do. And I feel like the sounds cool ideas of today, a lot of them are around

• 12:36Shaan Puri?

  cities, starting a new, a new jurisdiction that's either going to be different on policy or like the kind of urban planning and design. And that doesn't mean it's not actually cool, but you do have to be careful because some people are going to go into it just because it sounds like a cool project to be working on. But I want to meet some of the people who are behind this. I know Y Combinator had a, had a project called New Cities that they were working on. I don't know. I haven't heard anything about it. So I'm like, I don't know what's, what's actually, I don't know if it failed or what. This was years ago.

• 13:07Shaan Puri?

  And we have a friend of a friend who um who I know has bought one of these. So I I'd love to have him on and come talk about this. But it reminds me of a different thing I wanted to talk to you about. And we can come back to the cities thing if you if you want, but you do you know who Wed Edens is?

• 13:22Sam Parr?

  No.

• 13:23Shaan Puri?

  So Wed Edens is a billionaire. So this Wes would be the Billy of the week because he's doing something cool. So he owns the Milwaukee Bucks, but that's not obviously how he made his money. That's how he spent his money. And then he has this, I think his investment firm is called like Fortress Capital. I think he's a private. I think he's a private equity guy. I'd have to go confirm that, but.

• 13:41Sam Parr?

  Yeah, I'm looking up Fortress is like a really big name hedge fund. I I think SoftBank owns it.

• 13:47Shaan Puri?

  Right, right, right. Uh, yeah, he sold. He sold a stake of it to SoftBank.

• 13:50Sam Parr?

  So he's just a big billionaire rich guy who made his money.

• 13:53Shaan Puri?

  Goes with the finance world, right?

• 13:54Sam Parr?

  Yeah.

• 13:54Shaan Puri?

  So I saw this article a few weeks ago and, you know, somebody's gonna know a lot more about this because I'm like. When you're just reading the Forbes article, you you you're you're not really getting much info, but I I the premise, I understand the premise. So what this guy's doing is he's trying to revitalize the passenger train system of America. So you have something like Amtrak. Amtrak has been like a money pit, like, I don't know, fifty billion dollars of government money has gone into Amtrak. Amtrak has never turned a profit. Uh, the closest they ever got was twenty nineteen. I think they were like thirty million operating loss. That was the closest they ever got to a profit. And also the user experience is not very great, right? Like Amtrak is kind of cool and kind of this nostalgic kind of interesting way, but it's not like great. It's not amazing.

• 14:37Shaan Puri?

  And so what this guy realized was he was like, A, it's a shame we don't have like an awesome passenger train system here in the US to get to get from place to place. He goes, B, Amtrak is actually profitable on certain legs. It's just that they operate all these other legs because they're non-for-profit. They're not profit. And so um it's their other legs that are causing them uh to be unprofitable. But if you just look at their their best routes and like, he's like, you know, look at this one route from New York down to Washington or whatever. It's actually extremely profitable because a lot of people want to go on that corridor. And so he's identified all. So he started this thing called Brightline. And so he he's he's got this train system that goes from, you know, South Florida to Central Florida.

• 15:20Shaan Puri?

  He wants to do from LA to Vegas in eighty-five minutes. And, and so, you know, these are, these are high-traffic routes and he wants to build a for-profit train company. So recently, Richard Branson took a minority stake, so they just rebranded to Virgin Trains USA. But I love this idea for two reasons. One, I love the quote that he had in the article, which was, "The biggest ideas solve obvious problems." And, and I think that's, that in many ways, that's true. There's obviously tons of counterexamples, but I think it's one way to brainstorm ideas, is to say, "What are the ideas that are so obvious, so in our face, so baked into the way we live, that we kind of just accept them at face value? We're not even trying to change them anymore." Hey guys, I want to take a second to answer one of the most common questions I get, which is, "Hey, I got this great idea."

• 16:05Shaan Puri?

  Or, "Hey, my company's doing really well, and I just need a developer. I need somebody who knows how to code, so that I can either bring this idea to life, or I can grow faster." And, you know, I've been there before. I've dabbled in the no-code tools, trying to make it work. Sometimes that works, most of the time it's not good enough. Tried to learn programming myself, that was a waste of time. And, you know, I've looked at overseas platforms to say, "Hey, can I find an affordable developer?" You know, I can't afford somebody here in the States, in California, paying some Silicon Valley prices. But maybe I can afford a developer in the Philippines, or in Eastern Europe. And the big challenge has always been finding somebody who's actually like, good, like they're vetted. Like, I never know if somebody's gonna just take my money and run, if they're actually a good developer, or a bad developer. And how do I know? If I knew how to code, I could judge their stuff, but I don't know how to code.

• 16:49Shaan Puri?

  So what, what I really like about this week's sponsor, lemon.io, is that they have a vetted marketplace of remote developers from Eastern Europe. So I know the founder pretty well, his name's Alex. And what they do is they filter, and they test, and they basically have a reputation system of any developer that they have on their roster. So you know, if you go to lemon.io, you're getting a developer who is actually good, is good quality, is gonna get the job done. And so, what, the way it works is you go, you type what you need, "Hey, I want to build this app," or, "I need to add an extra-fund and developer to my team, and I don't want to hire." Within 24 hours, they'll match you with the right developer. If it's not the right developer, you just tell them, and they'll switch it, you know, basically for free, it's a replacement guarantee.

• 17:29Shaan Puri?

  And they're actually cheaper than the other outsourcing platforms. So you know, you get one big savings when you just go outside the US or outside of Europe and you you get somebody in kind of in either Eastern Europe or in Philippines, Southeast Asia. You know, you know, you save money there, but lemon.io is actually half the price of the other platforms that try to do this. And so it's stupidly effective. I would just kind of take advantage of this as long as they they can offer these rates. It's pretty amazing. And Alex basically told me that for any My First Million listener, they will offer a 15% discount on the first six weeks of work that you have done. So if you want that done, if you want a developer who is vetted, who can build your projects, go to lemon.io/mfm. Again, that's lemon.io/mfm, like My First Million.

• 18:14Shaan Puri?

  All right. Enjoy. Back to this week's episode. Cities is an example of this, like, oh, this is how a city works. These are the rules. This is how cities laid out. Well, it's like, well, what if you change that? What if people were sick and tired of that and you could start a new one? Elon, I think, did this great with, obviously with Tesla, right? Like electrifying cars. Or the boring company, which was like, hey, dude, traffic sucks. Like, why don't we just have underground, high-speed tunnels? And so I think there's a set of ideas like this that are big, big problems that are so obvious that actually people have stopped tackling them, or the rate of innovation is very low compared to how big the size of the prize is. And that's how I think about this train system. What do you think about this?

• 18:53Sam Parr?

  Uh, I am, you're getting me all hot and bothered. I love this. I'm, I'm, I'm looking up, um, so, um, I'm familiar with Virgin Trains. I'm looking them up. If you go to companieshouse.gov.uk, you can actually look at and see what they're.

• 19:08Shaan Puri?

  They've been operating in the UK for a long time because Branson did this, you know, basically Branson was like, okay, the government runs the trains. That, that probably means that they suck. We can take over and we can run it here. So this is Virgin Trains USA, which is now the like USA version of that, that he's, that he's trying to do, but he's just invested into Wed Edens's project as a minority investor.

• 19:29Sam Parr?

  I think this is awesome. Um, so I've actually considered doing this. There's a train, I think it's Amtrak. Do they call it the Zephyr Route? I think they call it like, there's like a route that you can take where you take an Amtrak from California, I think to New York. And it takes a long time, like five or 10 days, like takes a while, but it, it's like $200. It's really cheap.

• 19:48Shaan Puri?

  Chicago to the Bay Area and it goes via Omaha, Denver, Salt Lake City and Reno.

• 19:53Sam Parr?

  Yeah, so it sounds awesome. Um, it's pretty cheap and affordable.

• 19:58Sam Parr?

  Amtrak, wow. Amtrak is something that I remember as a kid, we used to take it every once in a while.

• 20:03Shaan Puri?

  Right.

• 20:04Sam Parr?

  And it was like something like, like, poor people would take, like, I would take it, uh, when, it's like what you do when you don't have any money. It's like, it was almost, almost like a Greyhound.

• 20:12Shaan Puri?

  Right.

• 20:13Sam Parr?

  Uh, and it's so cool. I, I, I'm really into this.

• 20:18Shaan Puri?

  But, but another place is like Europe. I know in India, I've done this a whole bunch. You go on the trains there. It's awesome. It's like a hotel on wheels. You know what I mean? Like, it's so fun to go on. You get your cool little cabin and the food tr- trolleys come by and you're looking out the window and it's like a, a nice ride and you can go to sleep. You can sleep overnight on it. And I know in Europe, it's the same way. And I just don't, I never hear anyone doing that in the US. I'm sure people are doing it, but I, I, I don't think it's a big part of the travel culture here. And how cool would it be if they made it happen?

• 20:46Sam Parr?

  So how's it going with this guy? I'm just looking him up as you talk. Like, he's making a lot of press, because this is a really romantic idea.

• 20:52Shaan Puri?

  It's a romantic idea, exactly. And he's doing a good job because he needs the press because, uh, so the, the, the catch with this is like, oh, you need $5 billion to build out this track. And it's like, uh, okay, well, where the hell am I going to $5 billion? And so the, the reality is that a lot of this money comes from public financing. It's a combination of public and private. And so one of the reasons to get so much press is because it really helps you raise the money, raise money and get access to capital that is in the public domain. That's sort of like, uh, like he has this tax-free bond that he released, you know, for Florida. So they put, he floats out this tax-free bond, he raises a billion dollars or 1.5 billion dollars on it. And, you know, this is like free money. Um, and so it's in the same way that sort of, you know, Elon will go and announce a car and everybody puts down a hundred bucks.

• 21:36Shaan Puri?

  And he gets like a, you know, $5 billion loan, ta- you know, interest-free loan from customers, essentially. And so there's an art to the, the, the trick of this business is really the financing, uh, being good about the financing. And there's, the jury's out whether they'll be able to pull this off, or if they'll just get buried under debt.

• 21:52Sam Parr?

  So it looks like in 2017, they said in the first half of the year, they had about $10 million in sales and they had 400,000 riders. Virgin Trains projected by 2019, its ridership in South Florida would top 2.3 million riders a year. And revenue would eclipse $112 million in revenue. And, um, wow. So there's demand there. Wow, this is crazy. So over a million. Wow, this is pretty crazy.

• 22:20Shaan Puri?

  And so

• 22:21Sam Parr?

  This is cool.

• 22:21Shaan Puri?

  The cool thing about this is, I think, the most ambitious projects, the projects that are sort of frighteningly ambitious are awesome for talent. You can be, you can become a talent magnet if you're Elon and you're saying, hey, look, we're gonna build hyperspeed tunnels under LA to kill traffic. You can attract capital because people want to get involved with big audacious ideas that sound fun and sexy. You can get free capital because, like, right now, one of the big reasons people hate on Tesla is because a lot of their, you know, they were subsidized heavily by the government. Now, some would argue, hey dude, it's good that the government subsidizes, it's the, you know, decarbonization of planet Earth through electrification and blah, blah, blah. There's an argument for that that says they should get access to this.

• 23:05Shaan Puri?

  And other people are saying, hey, you know, why is, why is the government footing the bill for this private company? But my point is, these big audacious ideas attract the best capital, the best talent, and sort of the best press because they make for the best stories. And so, in some ways, these sound like they're harder than other ideas. But in other ways, they're actually less hard because there's less competition and you get all these rewards for being so ambitious and audacious.

• 23:32Sam Parr?

  I'm so into this. This is incredibly attractive to me. What's interesting, what I've learned as I've gotten older and seen people succeed is there are sometimes, there's these ideas that appear as the one thing, but it takes an entirely different expertise to do. So for example, this guy Wes, is that his name? Wed Edens. He is from Fortress, which their expertise is all about raising money from rich people and rich organizations like governments or families or whatever. And then his job is allocating that money. He's just a, like, to, to kind of be disrespectful to him, he's a spreadsheet monkey, right?

• 24:10Shaan Puri?

  Right.

• 24:11Sam Parr?

  Where he's like, well, if I change this by a little bit, and that's totally simplifying what this person does, and I understand that. But you think like, well, when I think of a train, I think of like a Richard Branson type where he's got to create this like amazing like

• 24:23Shaan Puri?

  Experience with the purple lights inside. It's like, nope, doesn't matter. It's all about how are you going to financially engineer the funding of this, of this infrastructure?

• 24:32Sam Parr?

  Yeah, and when you think about a business, you think I have to know something that other people don't know and or I have to be good. I have a skill set that other people don't have. And what's interesting and a little bit discouraging to me personally is when I see these things, I'm like, man, this isn't about having a good vision for a train. This is about being able to creatively finance something, which means coming up with interesting schemes and documents and strategies, not building a brand. I mean, it is also building a brand that people love, but it's the hard part is the admin stuff and the strategy around it. But that's kind of neat, too. It's just different.

• 25:09Shaan Puri?

  Yeah, yeah, I think it's really important to know what business are you really in? So for example, Peter Thiel talks about this with universities. Universities are not in the education business. They you can't beat Harvard by offering a better curriculum. Go try, right? Like, nobody would even care if you had, even if, even if it was proven, even if every expert on earth said this is a better curriculum than Harvard's curriculum. You would not touch Harvard's status and any student would pick Harvard. Why? Because what business are they really in? They're in the credentialing business. They're in the insurance business of, hey, this is insurance policy for your kid. If you get a degree, you're going to have a job.

• 25:47Shaan Puri?

  They're in the sort of like, you know, social, you know, either babysitting or social, social development business of like helping you grow up and, you know, become an adult. And so you got to know what business you're really in. And I made this mistake a lot. I remember starting a dating, we were building a dating app during the ideal lab phase. And we thought we had this great idea for a dating app and it was all about dating. And we were like, look, this is the problem with dating apps is a way better user experience. And we might have even been right. But what I realized six months in was, oh, dating apps are really in the business of local customer acquisition. You have to, in a small geography, within a 20 mile radius, you need to acquire a whole bunch of males and a whole bunch of females. And success is not about what your dating app experience is like and the features of your app.

• 26:33Shaan Puri?

  It's about how well you can get enough males and females within a 20 mile radius over and over and over again. Do you, do you have the acquisition chops to do that?

• 26:41Sam Parr?

  Same with gaming. People are like, I love video game. I love games. It's like, well, cool, but just so you know, like. You are an, you have to, you're in the advertising business, though.

• 26:51Shaan Puri?

  And a beautifully designed product or a really novel product helps, right? Because Tinder was, was really novel and fun. And so they acquired more customers because it was fun to talk about. It was buzzworthy. It was controversial in some ways to just swipe on people's faces. Oh, how, how shallow is this generation, whatever? So the product design definitely helps. And also, if it's sticky, if it's actually a really great product or a really great game, cool, that gives you more budget to acquire customers for. Because you know, you keep them around for longer and you're going to make more money off them. But like, you gotta know what business you're in and you gotta know what the table stakes of success are. If you're a game, the table stakes of success are customer acquisition. Same with dating. For this train thing, it's about finance, you know, the, the financing of massive infrastructure.

• 27:33Shaan Puri?

  And that's the business you're in, not the cool seats and entertainment system and the headrest, you know?

• 27:39Sam Parr?

  Have you seen the movie Founder by, uh, it's about McDonald's?

• 27:42Shaan Puri?

  I have, yeah.

• 27:44Sam Parr?

  He goes, I don't think you know. So basically there's a scene where this business guy, I don't know who he is. Some sales guy comes in and talks to Ray Kroc, the founder of McDonald's. And he goes, tell me how your business operation works. Well, I do this, I flip the burgers and we hire, we release, we, we lease the restaurant to the person, yada, yada, yada. And the guy goes, wait a minute, I don't think you understand what business you're in. And Ray Kroc goes, what are you talking about? I, I sell cheeseburgers. He goes, no, no, no, you're not in the hamburger business. You're in the real estate business. And then he like, his mind switches and then he goes, oh my God, you're right. The hamburgers simply get people to come to real estate and I own all the real estate. That's the move. And so it's like that one packaging switch changed everything.

• 28:23Shaan Puri?

  And by the way, sometimes you hear the opposite. And this happens a lot in the startup world. It's like you roll your eyes, somebody's, they're, they're, they're in some shitty business. And then they try to not be in there. They were actually a tech company. It's like, no, you're not, you're a media company. You just happen to use technology or whatever, right? Like, people love to say that they're not in a shitty business and that they're in this great business. Um, and it just with as much or more frequency than people who happen to be in a great business and don't even realize it yet. And so you gotta be wary for, that's why I said, you gotta know what business you're really in. And so you can't just make up that you're in the real estate business when you're fucking not. You're in this other business and you just have to like, you have to see the truth for what it is. Cause lying to yourself doesn't really, doesn't really work.

• 29:04Sam Parr?

  Sometimes it does. I mean, sometimes they're...

• 29:07Shaan Puri?

  What's an example of where it does?

• 29:08Sam Parr?

  Well, like, we work out a way with it for a little while. Like, you could say, like, well, it kinda, it fell flat, but they... It could have gone either way, maybe.

• 29:17Shaan Puri?

  Yeah, if it fell flat, I would count that as. Eventually, the truth catches up with you, right?

• 29:21Sam Parr?

  Or like, this new company, Lemonade, that went public. It's a... They're like, wanna get valued as a tech company, but it's like, well, you're insurance. You're still just like an insurance business. Like, people are like, um... Or like, I know that there was criticisms around Flexport. So Flexport is this huge company in Silicon Valley that everyone says is the greatest thing ever. And the guy who runs it is awesome, and it totally might be the greatest thing ever. And what they do is, you order, uh, like, um, a whole bunch of stuff from China, and you've gotta ship that to America. They help you track your shipment if you're a business. So you, like, can trap your... Track your shipping container and help with licensing or, um, customs and all this, whatever. Anyway, they're like, "We're this revolutionary thing." And I've read a bunch of comments in the trades, in like, the shipping trades. And they're like, "Uh, just so you guys know, we've been doing this forever."

• 30:07Shaan Puri?

  Right.

• 30:07Sam Parr?

  Like, "We have all this technology already." Like, these guys are just... What they're doing is just no different than what we're doing. But Flexport has been like, "We're doing it new." And I don't know the... I don't know the truth, but I do know that...

• 30:18Shaan Puri?

  I know the truth now. I've used other freight forwarders, and now I've used Flexport. Flexport's fucking awesome, and so much better than the others. It is so much better than the others.

• 30:26Sam Parr?

  Well, there's a little bit of the answer.

• 30:28Shaan Puri?

  I vouch for it personally as a customer that...

• 30:31Sam Parr?

  From a customer.

• 30:33Sam Parr?

  But these are the things that all the other people are saying. They're like, in the comment section. So I only know what the commenters are saying. They're like, "Uh, we've been doing this, just so you know."

• 30:41Shaan Puri?

  It's true. They didn't invent the industry, but, uh, yeah. It's so annoying that like, hey, like, for example, somebody's gonna be like, "Oh, charter cities? Trains? You know, these other guys have been doing this." Or, you know, "People have tried this for a long time." It's like, "Yeah, I know, right? I said something about SPACs on Twitter. I was like, 'Hey, I wanna talk to somebody who really is super knowledgeable about SPACs,'" which are these special purpose acquisition companies. And I said, "I feel like there's a growing trend towards this. I wanna know, you know, why would I invest in one? Why wouldn't I invest in one? Um, and, you know, how game-changing is this trend?" And um, some, you know, ninety percent of the comments are great and helpful and inform me. And then ten percent are like, dude, SPAC's are nothing new. Been around for a long time. Nothing new happening here. It's like, people are so excited to be like, nothing new here, that they miss that there's actually new things.

• 31:26Shaan Puri?

  I'm not saying the whole fucking thing is new. I'm saying, maybe it's just more common now. Maybe it's-

• 31:33Sam Parr?

  What's a SPAC? Uh, I hear, I see people talking about it and I don't entirely understand what it is.

• 31:37Shaan Puri?

  Example, so, uh, Chamath Palihapitiya created a SPAC. What it is, it's a blank check acquisition company. He raises like, let's say, five billion dollars, two billion dollars, something like that. I think he raised one or two.

• 31:49Sam Parr?

  From private institutions or public?

• 31:52Shaan Puri?

  From, uh, from institutional investors. Um, that pump, that company is, is a public company. So it's a publicly listed entity that does nothing except for acquire companies.

• 32:03Sam Parr?

  But he acqui- but he gets the money from private people?

• 32:07Shaan Puri?

  I believe initially he gets it from private and then it's publicly listed and then there's public shareholders as well. So you can buy into his SPAC.

• 32:12Sam Parr?

  Okay.

• 32:14Shaan Puri?

  Then it searches for a great private company that wants to fast track to IPO. So instead of doing the roadshow and all that, the SPAC says, look, I can just acquire a minority stake or a majority stake, depends. Uh, but I could, let's say I can acquire forty percent of this company and, um, you'll be public tomorrow. And the SPAC will be renamed as what you are, and then you'll be liquid and I'll take a, a fee, you know, sort of like an alternative to, uh, the IPO process. It is an alternative to IPO process. So Chamath's company acquired Virgin Galactic. And that, it took Virgin Galactic public. And so they rebranded the SPAC as whatever. I forgot what the ticker is, but it's like space or something like that. Um, and so now, now-

• 32:58Sam Parr?

  Do they have any revenue?

• 33:00Shaan Puri?

  The SPAC is no revenue. No, it's just a holding company waiting to go buy a company. So now-

• 33:05Sam Parr?

  Virgin Galactic, does, like, I'm looking up-

• 33:07Shaan Puri?

  Virgin Galactic ha- has revenue because they have bookings for like pre-bought, pre-bought bookings for stuff. And I, I don't know if they do other kind of like industrial work to take satellites up or what, but- So, so the other one is Bill Ackman. So Bill Ackman, the guy who runs Pershing Square. You know, famous kind of investor, you know, up and down history, but very well known. He does great on TV. So, so people love him. He's the one who had that giant, kind of like, it wasn't exactly a short, but he had basically the equivalent of a short bet right before coronavirus hit and he made 2.6 billion dollars in a month off that bet. So it was like one of the greatest sort of investments of all time. And so Bill Ackman has created the largest SPAC.

• 33:51Shaan Puri?

  So he's created a $5 billion SPAC and what he says, he goes, it's like a unicorn mating dance. He goes, we're a unicorn because we raised $5 billion. We, we have that money in our bank. And we're just looking for a unicorn to mate with, a private company who is really special, really defensible, has awesome revenues, long-term, about everything you would want in a company, right? Long-term defensibility, rapid growth, is the winner of its category. And is a private company and we will try to buy 30% of that company. So like, for example, they could go and try to buy $5 billion worth of Airbnb, for example, and take Airbnb public. And in doing so, one of the values is it's kind of like a Sequoia investing in your company. They would be signaling to the market that this is the, we could, we analyzed, he said, there's 127 eligible companies, we believe this year

• 34:37Shaan Puri?

  that we could mate with, that are these private companies that satisfy these criteria. And we're going to find one and we're going to go hard on it. And when we find that one, it's a huge signal to the market that this is the company to, to, to buy.

• 34:52Sam Parr?

  When I hear this, I think to myself, this is stupid. This is a scam. And then I'm like, no, it's not a scam. This is awesome. They're winning. I mean, maybe some people think it's a scam, but it's like pretty cool. And I'm like down on myself that I'm not smart enough to entirely understand it.

• 35:08Shaan Puri?

  Well, I didn't understand it fully either, and I am sure my description here has some holes, but this is why I tweeted about it, and this is why I'm gonna bring a friend on to talk about Spex, because he knows a lot about it.

• 35:17Sam Parr?

  But my brain immediately goes to like, A, how on earth are these people smart enough to come up with these plans? B, how are they so bold to think that this is actually gonna work?

• 35:28Shaan Puri?

  But dude, people think of you that way. They're like, when I hear Sam talk about these, bring some of these ideas, or talk about media, or talk about whatever, growth, and you know how easy it is to make money, people are like, how is Sam so smart? I only understand, you know, 30% of the gibberish he's saying. How is he so bold that he just, you know, creates the hustle, then buys this conference, and creates this media brand, and creates trends, and then invests in his friends' companies, and blah, blah, blah? Like, people think you're very bold, too, and it's just the same exact thing, but in a different field. So it's not even at a different level, I don't think, personally. I just think it's a different field, and it's like a new language. Like, when you don't know the language, you feel kinda dumb, because you're not understanding-

• 36:08Sam Parr?

  Yeah, I feel dumb.

• 36:09Shaan Puri?

  -all the terms, but like, that's okay. You've now known about it for one hour, versus like, you know, the shit you know, you've figured out over 10 years, and these guys have just done their 10 years on this.

• 36:21Sam Parr?

  So I, uh, I'm gonna bring this back to history, because I'm a history fan, I'm on a kick, and I know not everyone likes it, but I'll make it quick. So I'm reading about Jay Gould. Do you know who Jay Gould is?

• 36:29Shaan Puri?

  Nope.

• 36:30Sam Parr?

  So he's, he was one of the, if you look at like, who are the richest people ever, he's like in the top 10 or 30. He was alive in the 1850s, all the way up, he maybe died in 1890. He was like, he ran around with Vanderbilt and all these guys, and what he did was, he found some loophole where this idea of watering down stock, and so what he did was, he bought in to the Erie Railroad, and he somehow bought in to the point where he didn't put up any money. Then, what he did was, he went down on like a Monday to the government in DC, like to some officials, and he convinced them to change this law over three days, that allowed him to issue new stock on a publicly traded company, but he didn't have to tell anyone. Somehow he got away with this. And so he issued all

• 37:15Sam Parr?

  this new stock, and according to Vanderbilt, bought- Five million dollars worth of the stock, which back then five million dollars times 20, that's about what it's equivalent to now. And he took all the profits and then sold that like anyway, he just like made profits from thin air and it's kind of it's definitely shady and sleazy, but he got really rich doing it. And what you're describing is like what I just read about last night with Jay Gould. I'm like these guys who find these weird loopholes. Part of me hates them because they're just like not creating true value for the world. Part of me is like, well, I gotta, I got, you gotta like appreciate the hustle. And you gotta respect the, the player who's just playing in the game.

• 37:46Shaan Puri?

  Right.

• 37:46Sam Parr?

  And it's just, I'm so fascinated by all these people like, uh, what's his name Chamath?

• 37:51Shaan Puri?

  Chamath, yeah.

• 37:52Sam Parr?

  Chamath and Bill Ackman, who are bold enough to come up with these like ludicrous ideas that a simpleton like me is like. I don't understand. So what widget are you selling and how are you making a profit? It's just so fascinating to people who are bold like this.

• 38:06Shaan Puri?

  It is exciting and it is bold. I don't think, I wouldn't say they invented it because again, it's been happening, but.

• 38:11Sam Parr?

  Who are who?

• 38:12Shaan Puri?

  It's different to do it at different scale. Yeah. It's different to do like most people in their industry, like Chamath is from the tech world, right? Like. No, no venture capitalist was doing this. He did it. It's sort of like, I, I really respect Chris Saka because. What he did when he was like, you know, wrote an angel investment check of 25K into Twitter. And was not like super wealthy, like he needed that 25K to like come back.

• 38:34Sam Parr?

  Yeah. Give the full stories. So Chris Saka is now this billionaire guy who's. Relatively young in his 40s.

• 38:40Shaan Puri?

  Seen him on Shark Tank, you know, whatever.

• 38:42Sam Parr?

  He wears like a western shirt. He's probably worth two or three or more billions.

• 38:47Shaan Puri?

  Right.

• 38:48Sam Parr?

  And he worked at Google for a long time and he didn't have that much money. Probably had like. One or $200,000 to his name, which is a lot, but.

• 38:55Shaan Puri?

  His story's crazy. So he, before he goes to Google, he, um, and you know, I'm telling this story second hand. We should just get him on. He, he, he's a cool guy. So. He starts, he goes to law school, doesn't attend class, starts day trading in the stock market during the stock dot com boom. Do you know this whole story?

• 39:12Sam Parr?

  Yeah.

• 39:12Shaan Puri?

  I'll tell, I'll tell the short version of it. All right. Starts day trading, runs up like a small amount of money, like let's call it $20,000. Into, into basically like a million bucks and. He's, oh, oh, you know, so he's making these, he's doing day trading. He took some money from family and friends to, to kind of lever up even more. And so, uh, stock market crashes and he swings from, you know, up a million or two billion bucks to down four million dollars. He owes four million dollars and he's a law school student who's like got zero to his name and comes from a kind of a low to middle class family. And he's like, oh shit, like what the fuck? And, you know, conventional wisdom is like declare bankruptcy, sort of get away. And I, I'm not entirely clear why he didn't just do that.

• 39:55Shaan Puri?

  I don't know if it was pride or if it's, it wouldn't have actually worked. Uh, I don't know the details, but what he, the way he tells it's sort of like, you know, no, I, I pulled up my bootstraps and I, I decided to solve this problem. So he does two things. First, he negotiates the total amount down to two million dollars of what he owes. And then he sets about for the next few years to pay this off. And he starts off by doing, he, he's in Silicon Valley. He, uh, starts off by just doing like, uh, legal work on the side on Craigslist. Like, hey, I'm a lo-, I'm, I'm a lawyer. Like I can, uh, do your, you know, startup documents and shit like that.

• 40:26Sam Parr?

  Like small deals, like hundreds of dollars.

• 40:28Shaan Puri?

  Yeah, hundreds of dollars a time. He's just hustling at night and then he's going to meetups and he's like, um, so he, he, he, to get, he, he, to famously sort of get some, uh, credibility. He creates this name, this business card called like the Carlisle Group or something like that.

• 40:42Sam Parr?

  Yeah, or like Saka, Saka and Brothers or something.

• 40:45Shaan Puri?

  Yeah, it was, it was the something group is like the, the Clydesdale Group or some Carlisle or something like that. So he starts and people would be like, oh, yeah, I've heard about you guys. You guys do good work. And so he starts, you know, like consulting under that banner and making thousands of dollars, but like, you know, it's two million dollar hill to climb. So then he gets a job at Google, uh, pre-IPO, kind of like hustles his way around Google, ends up working on some cool projects at Google. Like when they were buying all these data centers around the country under secret shell company, shell company names. Cause they didn't want Microsoft to realize how fast that Google was actually growing, but they needed the data centers. And so he gets to the point where Google IPOs, he makes, you know, a million or two bucks. He ends up paying off his, his loans that he owed. He gets back to net worth zero.

• 41:28Shaan Puri?

  And he's like, you know, no better feeling in the world than when I had net worth zero. And so then he takes a little bit of the money that he has left over from his job at Google and decides to angel invest in an ex-Google employee friend, Ev Williams, who's starting this thing called Odeo or Twitter or whatever. So anyways, he ends up as an angel investor in Twitter. He.

• 41:49Sam Parr?

  I think he gave him, I think he in a, I read, he's like, I had like seventy five thousand dollars.

• 41:53Shaan Puri?

  He put twenty five in.

• 41:54Sam Parr?

  And I gave Twitter twenty five thousand.

• 41:56Shaan Puri?

  Right. And so, you know, he, he, and I love this because he's like, most angel investors, they're already made it. And so their money doesn't, doesn't matter to them. He's like, I needed this money to, to work. So he starts working for the company in a way too. So he's like hustling, making introductions, trying to get celebrities to use Twitter. He's, you know, helping them with their fundraising deck. He's trying to get his twenty five K to grow into something. And so, uh, and, and in some ways was too hands on. The company sort of was kicking him out of the office like, dude, you don't work here. Um, and this happened to him with many companies with Twitter, with Uber, uh, where he sort of overstepped a little bit. But along the way, he realizes that the, the world has mispriced Twitter. They don't get it. He believes in it. He thinks Twitter is going to be a huge thing.

• 42:38Shaan Puri?

  People are writing Twitter off as this goofy little hundred forty characters SMS toy where you talk about what you're eating for lunch. So he's like trying to convince people to, to invest in Twitter and is having a little bit of a hard time. So he's like, F it. I'm going to raise my own fund and just invest in Twitter. And so he starts creating these SPVs, special purpose vehicles, which really just means it's a fund just for one deal. It's not like an ongoing investment fund where we trust you, Chris Saka, to invest in twenty five companies. It's like, hey, I have access to this Twitter deal. Let's buy some Twitter stock. I need to raise money to buy Twitter stock. And he was just buying secondary. He's buying any, you know, employee wants to leave, they want to pay for their wedding? Cool. Chris Saka will buy your stock. And so he accumulated by the time the IPO happens, he accumulated, I think, the second largest or the first largest.

• 43:24Shaan Puri?

  Ownership stake in Twitter. I think he owned like eight to ten percent or something. Uh, of, of Twitter stock by the time it IPO'd and that became like a billion dollar plus stake in Twitter. And along the way he did, you know, also invested in Uber, Instagram. I forgot whatever else. It was like, it's the greatest early stage, uh, fund ever created because he had, um, he had Kickstarter in there. He had a. Like MongoDB or something like that. He had a whole bunch of winners, a billion dollar winners out of this tiny little seed stage fund. So to the point where like it can't be replicated again. Even he couldn't do it ever again, but you know, really hustling.

• 44:01Sam Parr?

  So it it it can be replicated again. So I'll tell you, I've know this guy named, well, I'm friends of a friends with this guy. And they have this thing called GigaFund. If you go to gigafund.com, you can see it. What I'm gonna say is all public, so I'm not like revealing anything, but from the looks of it, they only invest. They have this fund and they only invest in Elon Musk. So they basically put, they're one of the early monies into SpaceX. And I believe they're raising money just to invest into SpaceX. And and it looks like on their portfolio, it says SpaceX and then it says the boring company.

• 44:37Shaan Puri?

  Right.

• 44:39Sam Parr?

  And so that's like all they're doing is like those, it looks like those two companies. And that's the horse they're picking. They're like, we think that SpaceX is going to be like the greatest thing ever. And we're just gonna raise money and so they like.

• 44:51Shaan Puri?

  So Luke, Luke is ex-founder's fund.

• 44:54Sam Parr?

  Well, he also, Luke is one of the co-founders of PayPal. So these aren't just like noobs.

• 44:58Shaan Puri?

  Yeah.

• 44:58Sam Parr?

  They're they're a big deal. But and this actually says it on TechCrunch. According to the Axios story, GigaFund will initially only focus on raising capital for SpaceX.

• 45:09Sam Parr?

  So they just found a company they like and somehow they got in with Elon. Well, they got in with them because they work with them. And all the money is for SpaceX. And that's kind of fun. That's kind of a funny thing.

• 45:23Shaan Puri?

  Yeah, incredible. Okay. So by the way, so so lowercase capital. So here's what they invested in. Uber, Docker, Optimizely, StyleSeat, Instagram, Twitter. Let's see what else. I mean, those are all massive. So it looks like it's so a good VC fund, like a great like return would be like a five X return of the fund. So you five X, if you invest in their fund, they five extra money over the like sort of seven to 10 years. Sequoias like kind of top funds might be like nine to 10x. So this one returned over 225x. So like, you know, you put in a hundred K, you got 22 million dollars.

• 45:58Sam Parr?

  I like that.

• 46:00Shaan Puri?

  It's kind of incredible. So.

• 46:01Sam Parr?

  Lance Armstrong, um, we had him on the podcast and I think before or after the podcast, he, he was an investor in Chris Saka's fund. And he said that he gave him a hundred thousand dollars and that saved his family from all, he's like, when I went through all my lawsuits, I like, it was almost going broke and that saved, uh, he's like that, that pulled me through.

• 46:18Shaan Puri?

  Okay. Uh, business ideas. So I saw Josh Constantine, the kind of ex TechCrunch guy, I saw him tweet this out. I thought it was a good prompt for startups. This is what he said specifically. There's 50 million creators across like YouTube, Twitch, Instagram, whatever, people whose job is to be a content creator. 50 million creators now. This is the fastest and largest growing small business. What do they need? And I think this is a great prompt for startup ideas. So I wanted to quickly brainstorm what, what comes to mind here. So, so I'll, I'll start with one while you, while you.

• 46:52Sam Parr?

  I have the, and I have the thread up.

• 46:53Shaan Puri?

  While you think about it, you know, for example, uh, e-commerce has been on the rise. And one problem for any e-commerce startup was like, okay, you need capital for inventory or to run ads. You don't really want to raise from traditional investors because A, your e-commerce thing might not be like, it might not fit a vent, fit a venture scale return. It might not be a billion dollar company, but it could be a awesome e-commerce company doing 30 million a year. And the second thing is you don't want to give up equity just for this, just to buy Facebook ads and buy inventory with that. You really want some kind of debt. And so ClearBank stepped up and basically created a bank for e-commerce. Because traditional banks like the Wells Fargos and Chases of the world, they didn't really understand how to

• 47:35Shaan Puri?

  assess credit for an e-commerce company. Whereas ClearBank was like, look, you connect your Shopify and I'm going to look at your last six months of sales data and I know if this is, um, I know, I, I know how, how likely you are to pay back your loan. And the traditional banks didn't know what the fuck, you know, that would even mean. I could, I could print them out my Facebook ad history and my Shopify history. And they would never know what to do with it. And so ClearBank came in and was a bank for e-commerce. And so similarly, I think you could have sort of a clear bank for creators. So, and I, I think there's a, a Y C company that's doing this. What, what else comes to mind? What would you do to serve this?

• 48:09Sam Parr?

  This is, I mean, this is, this is a hard, definitely a hard question.

• 48:14Sam Parr?

  The boring one is that surely some smart people have figured this out is, I mean, health, what do these people do for healthcare, I wonder?

• 48:23Shaan Puri?

  Yeah, that's where my brain goes to. Like, what are all the boring but super lucrative businesses like healthcare, insurance, lending, and try to build those?

• 48:31Sam Parr?

  Abrau, are you, are you a freelancer at your company or are you full time?

• 48:35Speaker 02

  Freelancer now. I used to be full time.

• 48:37Sam Parr?

  What do you do for healthcare?

• 48:39Speaker 02

  Right now, I technically don't even have healthcare. So I left like six months ago. I, I just took a bet like, hey, hopefully I don't get in the next few months. So I started doing something else.

• 48:50Sam Parr?

  So that works when you're 26 or 27 or whatever. But I wonder, that's what I, that's immediately where I went to. I'm like, what are you? Good, what, yeah, healthcare is immediately where I go.

• 49:01Speaker 02

  So you're not on your parents anymore after 26. So yeah, that's like a big thing for people starting companies as well. You can't leave because you don't have health insurance.

• 49:08Sam Parr?

  Yeah. So that's immediately Sean where I go. I don't know what else. I mean, it's a good question. It's a, it is a pretty crazy stat. What I want to know is all these people, so like Substack is filling this void. They're giving something for creators.

• 49:20Shaan Puri?

  Yep.

• 49:20Sam Parr?

  Um, it's my opinion that a lot of these people on Substack, um, are gonna fizzle out in about a year when they're realizing, fuck, I gotta do this shit like every fucking day.

• 49:31Shaan Puri?

  Most of it, I'm not saying there's 50 million successful creators. I'm saying there's 50 million people trying to live the dream of become the next, whatever on YouTube, on Twitch, on Substack, on podcasting, whatever, you know?

• 49:45Sam Parr?

  I always, I love thinking of the tools that they need to actually get their job done. Two of my favorite ones, ones, they're both obvious. Figma, I like, when I see that, I'm like, oh my God, someone totally should have thought about this. Like, I'm shocked that that's so late. And then another like one that's actually crazy simple is Canva. Do you know Canva?

• 50:03Shaan Puri?

  Yeah, yeah, yeah.

• 50:04Sam Parr?

  I love Canva. I use that all the time. And I'm like, I can't believe this didn't exist beforehand. This is such a like blatantly obvious need.

• 50:12Shaan Puri?

  Right.

• 50:12Sam Parr?

  And it's like, not like a, it doesn't appear to be complicated.

• 50:16Shaan Puri?

  Yeah, the, the other, the version of that that I think needs to exist is in the video editing space. So, um, YouTube doesn't have like the tool of YouTube to let you edit your videos. So people use, you know, something between, iMovie, the like kind of Final Cut Pro, or if you're on Windows, there's like, I forgot the like name of that awful software. There's like Sony Vega. There's like all kinds of shit like that. And that's still the best today, and those were built pre YouTube even existing as a thing. And so like, even if you just took that as the premise, like, hey, I'm gonna build the video editing software. That that's best for video for for YouTubers. And I build it with YouTube in mind, YouTube is the output. Um, and I'm gonna build in all the things that everyone has to do for YouTube anyways.

• 51:00Shaan Puri?

  I think that's a service you could charge for in a Figma style. Figma style tool because there's enough people and the existing tools. You know, I think you pay for Final Cut, I think you pay for for some of these things. The existing tools I think you pay for, so. It's not a fun project to build because it's so like technical, but. I think there's a there's a Figma type product there as well, but I I would go for financial services or healthcare or something like that for the creator. For the for the set of creators.

• 51:25Sam Parr?

  When these people, when you were starting your business, you have a a thing that you're tinkering with a project. How did you file your LLC?

• 51:33Shaan Puri?

  Stripe Atlas.

• 51:34Sam Parr?

  Was that good?

• 51:36Shaan Puri?

  It's a bit slow and I think it's a bit more expensive than it should be, but it's really easy. So, yeah, I did. I've done it. I've done three Stripe Atlas companies because. It's just the most convenient way to do it.

• 51:47Sam Parr?

  Hmm, I'm not sure. This is a great question that you actually need to like. I need to like, think about, but it is incredibly interesting. I don't know. I feel I kind of feel like a little bit of a bum because I can't think of anything, but. It is a great question. One thing I've learned from you is asking interesting questions actually changes how you think.

• 52:05Shaan Puri?

  Yeah, yeah, forget the answer. I'd take a great question over a great answer any day because a great question can yield. Many, many interesting answers to to explore. Okay, here's here's another topic that I think is interesting. Cool company, uh, cool company I just saw today, Daybreak Health. So it's a company that launched today. What these guys are doing is pretty simple. It's a mental. A mental health uh, and therapy app for teens.

• 52:32Shaan Puri?

  So, you know, anxiety, depression and other sort of, I don't even know how you would describe it. I don't know if it's called mental health conditions or what. But I know for sure anxiety and depression are sort of the two big ones that they're trying to tackle. Extremely prevalent amongst teens. I think like reported is like 20% or 30% of teens experience it. That's reported. So like, you know, let's say 40, 50% is the real number. Um, 80% never get any help for it. And there's a stigma around it. And there's like all these like complications. And so these guys have kind of a telemedicine solution. So anyways, I think this is a good idea.

• 53:06Sam Parr?

  Yeah, I mean, put this on the list of things that is that that it's it's obviously going to be, it's obviously going to be successful. Uh, how successful? I don't know.

• 53:14Shaan Puri?

  Right. Um, the thing that I think will happen, the thing, the trend that I think, I think will happen is I've now seen that companies are willing to pay as a benefit for meditation apps. So Calm has a bunch of partnership, corporate enterprise partnerships that are like crushing it. There's another one called Ginger that's for mental health that companies are paying for, especially during COVID. I know a lot of companies adopted it, but I think mental health is just this huge surging trend and topic that eventually companies will need to provide solutions for their employees for this. And it it will become a total faux pas to not have this as part of what you offer your, your employees.

• 53:54Shaan Puri?

  And I think the same thing will happen with schools. I think because of teen suicides and teen sort of mental health issues, school districts and schools will offer this as a free counselor, essentially a digital counselor for students. And I think, I think it'll get subsidized by either the federal government, by the states, or in some other way. I, I am, I am fairly confident that over time, this will become part of what's offered, just what's offered as a health, uh, solution for, for schools.

• 54:24Sam Parr?

  It's $365 a month, which comes out to be about $4,600 a year. It's quite expensive. But that's how much this shit costs. Do you go to therapy?

• 54:33Shaan Puri?

  I don't.

• 54:35Sam Parr?

  Uh, I have for a long time. I'm not right now, but it like normally it's where I go and I don't think it's like a yuppie place. I think it's just like par for the course. It's $250 or no, 150, either 150 or 250 dollars a session.

• 54:48Shaan Puri?

  Yeah. Yeah. You gotta have money for it. And you know, there, right now, these guys charge about half of what a, what a in-person counselor would be. And they said that, you know, they're able to do that because the person doesn't need to have an office. The therapist doesn't need to have an office. And secondly, there's like a geographic arbitrage. The therapists live in low-cost areas and then they serve clients in, in sort of all over, all around the world. So you get this like, you know, i- i- if you're in New York City, you have to pay New York City prices. But right now, with this digital thing, with this telemedicine thing, you know, your person might be in Arizona, serving you in, in New York or whatever.

• 55:23Sam Parr?

  So this isn't like a new thing, like there's, Talkspace has been there and they claim, Talkspace is, um, they're, uh, according to the articles, they're preparing for an IPO.

• 55:32Shaan Puri?

  Right.

• 55:33Sam Parr?

  It's just online therapy. They say they have five thousand therapists on its platform and one million users.

• 55:39Shaan Puri?

  Wow, I didn't realize it prepared for IPO. I, I know Talkspace, there's seven cups of tea or some shit like that. Uh, this one I know just targets teens. I don't know if the other guys like specifically brand themselves that way, but that's sort of.

• 55:49Sam Parr?

  You know who Talkspace's, um, spokesperson is, right? I think it's, is it them or is that BetterHelp? Is Mike Phelps, Michael Phelps?

• 55:56Shaan Puri?

  Oh, right, right, right. Yeah, yeah, yeah, that's right. Cause he, he kinda went through a dark period too.

• 56:00Sam Parr?

  It's BetterHelp, I think, is Mike Phelps's thing. So these are big things. Um, I would wonder what the churn is for a customer. I think on the surface, I'm like, oh, they never churn. But then I'm like, I bet you they do actually a lot.

• 56:12Shaan Puri?

  Yeah, it's sort of, sort of like a dating app where in some ways, the churn is a good thing. Like if you churn off a dating app, maybe just because you found somebody and you're not on a dating app anymore. It could be that if you churn off of a, a therapy app, you, you feel like you don't need the therapy anymore because you've sort of turned the corner. Although I'm not sure if that's how it works. Maybe it's ongoing, it's, it's an ongoing practice, never ends.

• 56:32Sam Parr?

  This is fascinating. BetterHelp claims to have like seventy or eighty million dollars in revenue.

• 56:37Shaan Puri?

  Yeah, so, so I'm not saying these guys are gonna be the leader. I just like that they're focused on teens and I think that my, I, I also. You know, the the the unproven part is will will this become baked in as a perk for as a service available to students that's funded by somebody else?

• 56:51Sam Parr?

  Have you studied Gen Z at all? Like, um, I went to, I sound like an old man. I went to conferences and they had discussions on Gen Z and like the stats were that there. To me, it was shockingly depressed.

• 57:03Shaan Puri?

  Right.

• 57:04Sam Parr?

  Shockingly. And good for this business. They're super open minded. So like, like when I was a kid, if you said you went to therapy, like, I mean, to be crude, someone be like, what are you gay? Like, uh, like, you know what I mean? Like, you go to therapy, like, what are you like, fucking gay? Like, that's what people would say, right? When you're 12 years old, like.

• 57:22Shaan Puri?

  Yeah, exactly. Like 20 years ago.

• 57:24Sam Parr?

  Um, now I don't think that that's even close to a thing. Like, I don't even think anyone would like, you know, I don't think they would say that shit to you.

• 57:31Shaan Puri?

  Yeah, now it's like a status symbol in Silicon Valley. It's like, if you're not going to therapy, like, oh, it's like not, you don't go to the gym? Interesting.

• 57:39Sam Parr?

  Well, like when we were a kid, like, that's what you say. You're like, dude, don't be gay. Like, that's what they say. And I I was talking to some nephews and I was like, do you guys ever like call each other gay? They're like, well, if they're, if someone's gay, I'm like, yeah, but like you make fun of someone and call someone gay. They're like, you mean, because they like are homosexual? I'm like, yeah. They're like, why would we ever do that? And I was like, nice. You guys are different.

• 57:58Shaan Puri?

  I remember the first time, uh, yeah, when I was 10, 12, that was like just part of the slang. I remember the first time I said it and somebody was like, hey, that's not, that's not cool. Um, it was a, it was, um, it was, I was, I don't know if I've ever told you this, when I was in middle school, I was in a movie. I was in two movies, actually. And they're like these small, like, kind of like Indian American movies. They're like in English, but they're like all Indian cast. They're about Indian, Indian stories or whatever. Um, so the guy, Kal Penn, who ended up being, uh, you know, Harold and Kumar, he's Kumar. Uh, so he was my older brother in the movies. And so.

• 58:31Sam Parr?

  No way.

• 58:32Shaan Puri?

  And so we were hanging out and I was like, oh, my God, that's so gay. And again, I'm a 12 year old kid. And he was like, he's like, you know, that that's not cool to say that. Like, um, you shouldn't, you shouldn't say that. Here's why. But while he started telling me. And I just remember being like, what is this guy talking about? Like, everybody says this. And he was like, you know, from LA. I'm living in Texas at the time. So like, it took like a decade for the message to get from New York and LA where people probably realized early on, like this is, hey, this is kind of messed up. To like, get to Texas where I was at. Cause I remember literally, it was 10 years, I remember there was one isolated incident. And then it's like eight more years I said it. And then finally I was like, oh, oh yeah, okay, all right. Uh, yeah, my bad. Sorry about that. Didn't realize what I was doing.

• 59:15Sam Parr?

  Yeah, I, that's what I had the, I had that feeling when I, when I was talking to like our nephews. I was like, so you guys don't ever say that? I'm like, that's crazy. You're so open minded and like, help, like kinda, kinda healthy and, and, and more mature. So I definitely learned that. I'm like, wait, you don't, so like you won't make fun of him for, like, why would you ever, like, what's wrong with being gay? I'm like, yeah, you're right. But that's just not how we, that's just, we would say that word.

• 59:40Shaan Puri?

  Right. It's, it's actually funny because it's not only that saying, calling something gay, when what you're really trying to say is that's weird, that's stupid, that's lame or something, whatever. It's not only that that phrase is like, revealed to be really dumb and hurtful and all that stuff. But all the activities that you were talking about as gay also became totally normal mainstream, healthy, good behaviors. It's like, oh,

• 1:00:04Sam Parr?

  Yeah, like meditating and yoga.

• 1:00:06Shaan Puri?

  Yoga, like being a vegetarian or vegan. It's like,

• 1:00:10Sam Parr?

  Like, what are you, a gay monk?

• 1:00:11Shaan Puri?

  Right, like, like sharing your feelings. It's like, well, having a good friendship.

• 1:00:14Sam Parr?

  Yeah, I am a gay, gay monk. That's awesome.

• 1:00:20Sam Parr?

  I guess we'll end there.

• 1:00:21Shaan Puri?

  Yeah, we should end the podcast on this. Cool.