The 2 businesses AI can never make obsolete

Unsexy business ideas database: https://clickhubspot.com/fpko Episode 879: Shaan Puri ( https://x.com/ShaanVP ) and Sam Parr ( https://x.com/theSamParr ) talk about businesses that non-technical people can still win at in the age of AI. — Show Notes: (0:00) NADA (3:59) White Coat Investor (5:03) BNI (8:35) MODA (11:12) Finding/Nurturing Whales (15:50) Triumph (21:43) Private Photo Vault — Links: • NADA - https://www.nada.org • White Coat Investor - https://www.whitecoatinvestor.com/ • BNI - https://www.bni.com/ • MODA - https://www.modacommunities.com/ • Triumph Labs - https://www.triumphlabs.com/rips • Collector Crypt - https://collectorcrypt.com/ • Private Photo Vault - https://privatephotovault.com/ — Check Out Sam's Stuff: • Hampton (joinhampton.com): My community for founders. Average member does $25m/year. Many of the guests are members. Get after it...apply: http://joinhampton.com/mfm — Check Out Shaan's Stuff: • Shaan's weekly email - https://www.shaanpuri.com • Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents. • Mercury - Shaan uses Mercury across all of his companies. you can too: http://mercury.com/ Mercury is a fintech company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column, N. A., Members FDIC • I run all my newsletters on Beehiiv and you should too + we're giving away $10k to our favorite newsletter, check it out: beehiiv.com/mfm-challenge My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano /

• 0:00Speaker 00

  All right, Sean, I'm gonna make the case that if you're not an AI person, which I'm not, there's still a lot of money to be made by building businesses that will grow with AI, and they won't actually be AI. And what are those businesses? Communities. So here's two different communities I want to show you that crush it.

• 0:22Speaker 00

  Okay, I want to talk about two businesses that I think are AI-proof, and they fascinate me. Hard F on that, on that fascinate.

• 0:29Speaker 01

  That's a P H, almost.

• 0:32Speaker 00

  All right, let me give you the first one. So I was talking to a friend. One of my buddies has a company that is selling to auto dealers, and he's been telling me all about the auto dealer, like, industry. And they're kind of like, as you'd expect, cowboys a little bit. Like, they're like, think of like, an auto dealer, Midwestern guy wearing loafers and like, baggy jeans, and he like, probably makes $5 million a year, but he's like, you know, kind of got hillbilly energy a little bit. And so I enjoy hearing these stories.

• 0:56Speaker 01

  Not only can I see his face, I can see his crack also, just in my mind's eye.

• 1:00Speaker 00

  Yeah, yeah, like, have you, have you seen that picture of the guy in the airlines, where he's like, sitting down with both hands on his, on his big jeans, and he's got this fat Rolex, and he's kind of fat and overweight? And it says, like, you know this guy's about to win the negotiation. That's like, sort of how I think about them. But let me tell you about this, like, interesting company. It's called NADA 20.

• 1:19Speaker 01

  NADA 20 Group. Learn from the best, your peers, supported by world-class 20 group consultants and NADA, driving you to your dealership's success. Okay?

• 1:27Speaker 00

  Yeah, horrible marketing, just absolutely horrible marketing. Okay, so NADA, I think it stands for National Automotive Dealer Association. It's a big association for auto dealers, and they do this thing called NADA 20 Groups. And it started, I believe, in the 70s, to where if you are an auto dealer, you want to grow your business and get better. And so what they do is you apply to join, and you pay something like six or eight grand a year to get in. And then they put you in groups of 24, and the groups are non-competitive, meaning people who aren't in your region, and you fly to the same city three times once a year. And it's very simple. It's the most simple peer group ever. All you do is you bring a P and L statement of your business, of your dealership,

• 2:09Speaker 00

  and you sit down with 20 others, and you go line for line, and you explain your profit and loss statement, and other people can look at you and be like, oh, you're killing it. I'm gonna copy that. Or, you suck. Have you thought about doing this? And eventually, they have started letting in founders of HVAC companies, people who own like, marinas or boat repair shops. And the whole premise is very simple, just share their P and L. If I had to guess, it probably does like, 13 to 15 million dollars a year in revenue, because they kind of say what the member dues are, and they say what the price is. But as you saw, when you go to the website, looks horrible, it's horribly marketed. And I think if I'm listening to this, and I'm not like, an AI nerd, I would do one of two things.

• 2:48Speaker 01

  By the way, the NADA guy was so excited that he's getting featured on the podcast today. Out of nowhere, his friend sent him this clip, he's listening, and then he just gets the, "Looks horrible, ugly, terrible."

• 2:59Speaker 00

  Well, I think it's like, I think it's a good nonprofit. It's either an association or a nonprofit.

• 3:04Speaker 01

  Okay, okay.

• 3:05Speaker 00

  And I would do one of two things.

• 3:06Speaker 01

  With all due respect.

• 3:09Speaker 00

  Yeah.

• 3:10Speaker 01

  No offense, but here's the next five minutes of insults.

• 3:13Speaker 00

  Yes, as long as you say that, you can say anything. I would either copy this and just do it a little bit better and run ads, because I don't think these guys are ever gonna run ads.

• 3:21Speaker 01

  Dog, it says for 100 years they've been running.

• 3:24Speaker 00

  Yeah, that's why it's interesting. They could last forever.

• 3:29Speaker 00

  I think that you could do this. Do you remember how you had this thing called Club LTV? It was like, a community for e-comm owners?

• 3:35Speaker 01

  Yeah.

• 3:36Speaker 00

  I wouldn't, I mean, you could do e-comm, but I would do something a little bit less competitive. It's like dentist practices, lawyers, whatever, is like, boring, where like, the average person makes a million dollars a year, or like, in take-home income. Whatever is one of these boring things, where it's just someone in South Dakota, who is just a normal guy, millionaire next door type of energy.

• 3:55Speaker 01

  Yeah.

• 3:55Speaker 00

  And I would create one of these, and I think it would be a great, great, great business that could last for decades.

• 4:01Speaker 01

  This is like, like, White Coat Investors is kind of like this in the doctor space, right?

• 4:06Speaker 00

  I love White Coat Investors. Do you want to explain what that is?

• 4:09Speaker 01

  Yeah, it's basically like, it's a community of doctors, maybe dentists also, but I think it's mostly doctors. But it's for them to talk about more of like, their finance side of their life. It's not about sharing, you know, the latest and greatest research, and how they're applying it in their practice or anything like that. It's more so like, hey, I'm thinking about buying a rental property, and, you know, the cap rate is this. Like, what do you guys think? And, you know, there's a lot of that going on. They do media, there's Facebook groups, there's like, it's been going for a long time.

• 4:38Speaker 00

  It started as a blog.

• 4:39Speaker 01

  Yeah, it's a successful business, and there's many, there's actually a few others in the doctor space. I think like, I think I might have talked about this on the podcast before. I think there's a pretty big opportunity to just do that. But new age model, because media has changed a lot, right? Like, what blogging was, well, today, there's a whole new set of media tools, and a whole new set of doctors and dentists that you could reach and build like, a 2.0 version of those. But basically, every profession kind of has these. There's even another one. You might know the name of it more than me, but there's a version of this that's not for the same job. Have you seen this one? It's like, local chapters in cities.

• 5:13Speaker 00

  BMI. Wait.

• 5:14Speaker 01

  No.

• 5:15Speaker 00

  Body Mass Index, B and I.

• 5:17Speaker 01

  Something, or is it, what is it?

• 5:19Speaker 00

  B and I, Buyer Network. By the way, they were just acquired, and I heard rumors it was in the billion-dollar-plus number.

• 5:25Speaker 01

  And so explain what they do. So they bring together folks with different jobs. So you'll get like, the local accountant with the HVAC guy with whatever, and it's like, a, it's kind of like, hey, we're all local business owners, we have some shared problems, but we also have shared opportunity, which is we can share leads with each other. Oh, you're, you could be my guy, I refer people to when it's landscaping, and I'll refer you people when it's about, you know, whatever, legal services.

• 5:48Speaker 00

  Yeah, basically, and I used to go to the YMCA, and I would see them have their B and I meeting. And there'd be like, 30 people in the room, and everyone has to go through and say some type of like, lead.

• 5:59Speaker 01

  So they would meet at the YMCA. Where do they meet? Like, in the yoga room? Like, what do they do?

• 6:03Speaker 00

  Yeah.

• 6:04Speaker 01

  YMCA is not a coworking space. You're right, like, what's going on?

• 6:07Speaker 00

  Yeah, they just like, figured it out, but that, because it's like, a community-based thing. And so it'd be like, a Realtor with a garage door service, with a lawyer, with a landscape business. So things that are non-competitive, and they share leads. And they just go in a room, and you have to like, say like, this person just moved here, we're doing the garage doors, you know, who wants that? And they just sold, I think they have 800,000 members, and it costs low-digit thousands of dollars a year to join. I hung out with the CEO of it, really nice lady from Texas, and they just got acquired.

• 6:38Speaker 01

  So are you gonna do just Hampton for every vertical? Or are you just keeping Hampton as what it is? You're saying, you know, that's not the move for you? But, but basically, there is some version of peer group for, for most professions, where people have enough disposable income, and, you know, you get the dynamics right, where either it's, they can share because it's fundamentally not competitive, or you match people, like you said, from other geographies, where it's not gonna be competitive.

• 7:01Speaker 00

  So the reason why I've been learning about investing is because I think that over the next handful of years, no time soon are we gonna do this, but I think that what we'll eventually do is buy other communities, because I think we know how to operate them well. And I think that the way, like, my goal is to build a multi-hundred-million, or, sorry, multi-billion-dollar company. And I think that we can get there by owning a variety of communities.

• 7:20Speaker 01

  Was that a Freudian ambition slip right there? Being like, my goal is to lose five pounds. No, no, 50 pounds, 50 pounds, you know what I mean?

• 7:28Speaker 00

  Well, hundreds of millions a year in profit.

• 7:30Speaker 01

  Steve Jobs didn't get on stage and say, 100 songs in your pocket. No, he said 1,000, Sam. You can't do that. Can't mess that up.

• 7:37Speaker 00

  We, we want to do, when I say hundreds of millions, that's the profit, and billions is the revenue.

• 7:42Speaker 01

  Gotcha.

• 7:43Speaker 00

  And so we do say, like, we think we could do like, hundreds of millions of profit. Is that a classic slip? But, because there's a few businesses in our space, and like, the threshold of like, you're killing it, is you cross nine figures a year in free cash flow. And so, yes, I think that there's a bunch of these businesses that can be combined and be awesome. And so I'm interested in it. Do you want to hear another one?

• 8:03Speaker 01

  Yeah. Same industry or a different, different?

• 8:06Speaker 00

  Totally different. Okay, so type this in.

• 8:09Speaker 01

  Hey, I want to tell you about something pretty cool. We have a database of all of the business ideas that have been discussed on this podcast. So hundreds of episodes, the team at HubSpot went through, they pulled out all the simple, relatable, interesting, profitable ideas that we have brainstormed, and they're all available for download for free. Just click the link in the description below. Thank you to our friends at HubSpot for sponsoring this podcast and putting together this free resource for you guys. Back to the show.

• 8:34Speaker 00

  So it's called Moda Communities. So the story is basically this. There's this guy, well, tell me what you see first.

• 8:41Speaker 01

  Buy Right, Sell Better. Moda runs 23 Facebook communities, where a bunch of people buy, sell watches, cars, gold, and jewelry.

• 8:49Speaker 00

  So I was talking to this guy, he's based out of Sioux Falls. Is that North Dakota or South Dakota?

• 8:54Speaker 01

  I'm gonna plead the fifth on that question. Not, not strong on my Dakotas.

• 8:57Speaker 00

  Yeah, I'm sorry, guys. South Dakota, Sioux Falls, South Dakota, okay? And he, in 2018, he was like, buying a watch or selling a watch. He was doing both. And he thought, I don't really have a good place to do this. And so he created a Facebook group of buyers and sellers of watches, basically like, a community of watch enthusiasts. And at this point, he has grown it to where he told me, I messaged him and asked him, he has over a dozen full-time employees, and they have 600,000 members across like, 20 or 25 different communities. They have communities for watches, and they have it broken down into watches under 10 grand, watches above 10 grand. And then there's also a community for like, the super fans, which is above like, 100,000, I believe. Then he has groups for collectible cars, he has groups for...

• 9:43Speaker 00

  Gold and a bunch of stuff. And in order to get in, it's all trust-based, meaning you have to talk with him if you're a dealer and you have to like do like a vetting interview. And then another person in the community has to vet you. And then you pay one to five to $10,000 a year in order to be a dealer on there. And then you could list the watches that you have for sale and people love it. And what's interesting is I think that they probably do somewhere between five and $10 million a year in revenue.

• 10:10Speaker 01

  How do they make money? You pay to be a member or you?

• 10:12Speaker 00

  A dealer pays to be a member.

• 10:14Speaker 01

  Okay, because they're accessing this buyer pool of super enthusiasts.

• 10:18Speaker 00

  A dealer pays to post there. And in order to post there, you have to do a vet check. And I think it's awesome, A, because Facebook communities, Facebook groups have built this guy a huge business. And this can be applied to so many different ways of of selling stuff on the internet. And I think that when when it comes to moats, Peter Lovell's been talking about like, what moats are going to go away with AI. And previously, technology was a moat. That's not a moat anymore. And I think communities, networks and marketplaces are still a really good moat. And this is a really interesting business that this guy started on Facebook groups.

• 10:57Speaker 01

  Yeah, this is fascinating. I mean, it's always dangerous to build a business on Facebook groups, just because you, you know, the platform, Facebook platform has changed so many times where you lose reach or you lose, you know, the ability to add new members, you know, things like that, like they change the rules quite often. But at the same time, you get the benefits of plugging into such a huge network, right? So kind of give it and take it away. But I really like this idea of aggregating super enthusiasts whales whales drive just a shocking amount of the economy. If you've ever like been on the inside of any of these businesses that are especially a collector's business, but even not a collector's business, like a mobile game, right? You might see like Candy Crush or something, and it's got like millions and millions and millions of players, but the bulk of the revenue, 80, 90% of the

• 11:42Speaker 01

  revenue will come from just a tiny sliver of those players who are spending thousands of dollars a year each and make up for all the free players, the players who will play $2.99 to remove ads, that type of thing. And so whales, whether it's in video games, it's Pokemon card collecting, you know, any kind of marketplace, like when we were at, when I was at Twitch, same thing, you know, Twitch has these whales and the whales go through and they have subscriptions to tons of channels. They they'll go in, they'll just make it rain like the club. I don't know if you've ever seen this, but one of the best features they launched at Twitch was not a very fancy feature, but it was called gifting subs. So you could, you could basically say, like, go into someone's channel and from the chat, you could give away 200 subscriptions. So that'd be like $1,000, right?

• 12:24Speaker 01

  Your $5 a month subscriptions, you're giving away 200 to random people in the chat. And everyone thinks you're the man. And it's literally like buying a bottle at the club. And then, you know, the streamer shouts you out, you would get this whole thing. And it dramatically drove like, you know, revenue up per channel because it just turns out that the whales were ready to spend more. You just needed to give them new ways to spend. And this is true with like, pretty much all luxury products, but but also a lot of gambling products, where there's certain people at a certain level of, you know, addiction and, you know, disposable income that makes for an incredibly lucrative customer.

• 13:01Speaker 00

  That's awesome. How much did that sub cost?

• 13:04Speaker 01

  Well, like, I think the average, like, five bucks or six bucks a month.

• 13:07Speaker 00

  Have you ever worked with a gaming company? Because I know that you were around those guys.

• 13:13Speaker 01

  What do you mean? I didn't work for one, but you know,

• 13:15Speaker 00

  Work with, like, did you have like insight? Like, what percent of people drive the bulk of revenue?

• 13:22Speaker 01

  Candy Crush has 82 million monthly actives and all the revenue comes from 4% of the players. So 96% of the players are just kind of the cost of doing business, just the cost of finding those whales. And so like, for example, you know, my co-founder at Bebo, Furcon, he was the CTO of AppLovin. AppLovin is the biggest advertising network for mobile games. So he saw under the hood, basically, you know, these games are paying to acquire players. So he knows how much they make off the player, he knows how much they pay for the player, and he knows what types of targeting gets them to spend more. And really, what you want is essentially a whale. You want somebody who spends a bunch of money in Candy Crush, because they're highly likely to spend a bunch of money in Block Blast. It's the same player and Farmville and all those things. So if you, you know, I talked to the guys

• 14:03Speaker 01

  who started Farmville and, you know, the guys who make the big kind of like Candy Crush style games. And they would explain to me the game economy and how it works and sources and sinks and hard currencies and soft currencies and how you nurture the whales and like all this. It's a total science, right? Like, it's literally like talking to a slot machine operator. When you talk to them, it's like, but but there's no rules. It's not like a slot machine where Vegas says, you must have this kind of 89% payout rate. It doesn't matter. In mobile gaming, you set the payout rate to be whatever you want it to be. And there's a trade off of churn and growth versus, you know, frustrating the player versus whatever. There's actually a very interesting guy who he basically looks at the source code of various apps. And we'll be like, here's how Tinder's matching algorithm works.

• 14:46Speaker 00

  Oh, I love that kid.

• 14:48Speaker 01

  But I don't know exactly how he's getting the code, like, the code's not public for some of these. So there's something a little bit, my understanding is either off or he's a little bit off. I don't know exactly what's going on. But he's explaining like, you know, for example, in these games, if you're a player who's paid before, but you haven't paid in 30 days, it'll optimize you to have this like, run of success, and then you'll hit a wall. And that wall will be so frustrating for you. But it's optimized to get you to, you know, click the button to pay again, right? This is like, when people say the greatest minds of our generation are sitting inside these companies trying to figure out how to get people to click ads. Like, you know, this is kind of what they're talking about. It's like, some of the smartest engineers and builders in the world and designers spend their life trying to figure out how to get people to, you know, put a little more, put

• 15:32Speaker 01

  a few more coins in the slot machine. Sad in a way, but also just from a pure business point of view, it is fascinating.

• 15:38Speaker 00

  I was just looking at when I DM'd the guy who ran this community business. It's the same thing whales funded. He goes, virtually everything we do is for free. And the top 1% or even the top 0.001% pay to keep everything running.

• 15:51Speaker 01

  Hey, let's take a quick break. You know that feeling when strategy is done, the brief is written, everyone's aligned, and you realize someone still has to sit down and actually create all the content? That someone is usually you, and it's due tomorrow. Well, the Breeze assistant from HubSpot can help. It works right inside HubSpot. You can draft a campaign copy, blog posts, emails, all in your brand voice, all using your actual customer data. So you don't create just content, you create content that converts. Check out hubspot.com, the agentic customer platform for growing businesses. There's a huge trend growing right now. Have you seen this trend around ripping?

• 16:25Speaker 00

  No.

• 16:26Speaker 01

  It's like going to a store, you would buy a pack of Pokemon cards, and you would open the pack, you would hope to find a holographic Charizard inside, because that's going to be really valuable, right? That's the kind of the brick and mortar way of doing this. Well, these guys just reduced friction. So, you know, the Ev Williams quote of, you want to build a billion dollar business, just find a universal desire, ideally one that's been around for a while, and remove friction. Well, this behavior already existed amongst collectors. And what these apps have done is make it where you open the app, there's a pack on the screen, you tap it to open the pack, you open it up, you didn't get anything, maybe you got some junk. So let's say you paid 50 bucks for the pack, then it'll say, you want to sell back the pack for 43 bucks right now? You're like, yeah, give me 543 bucks, because I didn't get what I wanted. Let me buy again. This

• 17:11Speaker 01

  app has done a billion dollars in revenue in like, the, you know, last, like, last year. And so there's like, I mean, just an app you've never heard of, an app you've never heard of that's doing a billion dollars.

• 17:22Speaker 00

  How does revenue calculated? Because that's not, would that be considered as a marketplace? So would that be like real revenue?

• 17:29Speaker 01

  It's a bit of a mix. So it is like GMV in that that they're spending to buy the cards. And obviously, the cards have a cost, you have to fill the cards.

• 17:36Speaker 00

  They're reselling it.

• 17:38Speaker 01

  But the genius of the thing was the buyback. The buyback changed everything. And so the trick with the buyback is, people want, they want the treasure hunt, right? They're looking for the treasure. And what they realize is, if I spend 50 bucks and I get nothing, I feel like I'm out 50 bucks. But if I get $43 back, I'm kind of just like, I just got 43 bucks to store credit. Should I buy another pack for 50? Yeah, it's only seven bucks more. Let's go again. Let me give me another shot. And for the company, what they did was they booked, so they got 40, 50 bucks of revenue, they give 43 back, seven is free. They never had to sell you to give you the card. They just put the card right back in the deck, it's shuffled, they'll sell that same card again to somebody else. So imagine...

• 18:17Speaker 00

  The guy who started it was a quant at Citadel in Bridgewater.

• 18:22Speaker 01

  Yeah, no, no surprise. But there's a bunch of these dudes like Logan Paul launched his own called Rip It. This is like a mega, mega, like, you know, fad right now. Collector's Crypt, what he did was he, he kind of was, I think they might've been the first, but definitely they benefited from this, uh, what they call the vending machine, uh, thing where they buy it back. They were doing something like 50 grand a month and now it's 25 million a month now.

• 18:46Speaker 00

  How did you hear about this?

• 18:48Speaker 01

  I was at a dinner and somebody was talking about Triumph doing a billion dollars in revenue. Now, for an app to do a billion dollars in revenue is extremely rare, especially an app I've never heard of. You know what I mean? Like Snapchat does what, like four billion, something like, you know, like this is like the size of the social apps that you can count on your, you know, on two hands that you've, we've all heard of household names. And so I was like, how is this app I've never heard of doing this in a year? And then when I heard, oh, they're basically doing the gotcha mechanic. So have you ever heard of gotcha games?

• 19:20Speaker 00

  No, but

• 19:21Speaker 01

  And it's not gotcha like, gotcha, but it kind of is. It's gotcha, G A C H A. It's a Japanese term.

• 19:29Speaker 00

  Oh.

• 19:30Speaker 01

  So basically what they would do is they had these kind of mystery unboxings. So you would buy like a mystery ball, you would unbox it, you would get something and then you would kind of go again and you try again. And it's a sort of like toy form of gambling. And gotcha got so popular in Japan that they had to ban it. I think it's like outlawed by law at this point. Now, American games started to steal this. So if you've ever played like Overwatch or different things like that, they would have loot boxes, same thing. You open up a box, you might get the rare skin, you might get the common skin, but it's very easy to, very addictive to just put in some credits into the machine and start opening up a bunch of packs. And FIFA started doing this, a bunch of people started doing this, all these games started copying this gotcha mechanic. Well, the mobile games have figured this out even more. And the thing with the collectors is they attached real money to the other side because

• 20:15Speaker 01

  if you happen to get a real thing, it's not like getting a skin in Overwatch where it's this purely aesthetic, like you kind of know that some part of your brain that this is somewhat stupid, right? There's no real value to it. But when you do it with collecting and you say, well, I could get this rare card that's worth, you know, like, I, like the top Pikachu card will sell for like $15 million, right? Like they, these cards can be worth a lot. And so they attach the kind of gambling mechanic of I might make money to the very addictive gotcha behavior. And so that's like the, you know, the underlying psychology that's worked in many, many different form factors, toys do this now all the time, LOL surprise doll, right? What is it? It's a, you know, all of the squishies that are super popular right now.

• 20:58Speaker 01

  I don't know if you've, I don't know if your kids are old enough to be in the squishy craze.

• 21:01Speaker 00

  No, but my wife is.

• 21:03Speaker 01

  The dumplings and the squishies and the mystery boxes, like my daughter just loves to open these dumplings, right? And like you know, tries to get a rare dumpling, right? It's like this crazy thing, but it's the mystery ball mechanic that gets you to spend way more. I actually have a friend who's in the toy business and showing me the data of before, when they're in Walmart or Target, they were just selling where you pick what you want. And, um, like here's a shelf, here's all the different things, you could pick what you want. And then they just took the same things and put it in a mystery box and it was 7X the revenue. And literally like with, which sounds like the opposite, right? Like, well, the consumer gets less choice, they might get something crappy. And I heard him on the phone, he was talking to one of the major IP holders in the world.

• 21:46Speaker 00

  Wait, this guy just called you while he was negotiating?

• 21:48Speaker 01

  I was hanging out with him, he's like, just join, they're just like, just listen in, like sit right next to me, it's fine, like no problem, they don't know who you are, it's, they'll just assume you work with me. And, um, he's talking to them and they were like, yeah, well, like our customers really like choice. And he puts up on the screen, he's like, yeah, I know, like everybody thinks they like choice, but here's what the data shows across category one, two, three, four, five, like over and over again, this overperforms, this, this kind of gotcha mystery box mechanic. Today's podcast is brought to you by my friends at Mercury. Uh, they make the world's best banking product. I think you know this already, I use Mercury for all of my businesses. So I think I have like maybe seven or eight businesses, we use Mercury as our business banking across all of them. And now they actually just launched a personal banking account. So I have my personal account there, I moved off of Wells Fargo and Chase. I'm just all in on Mercury. Why?

• 22:33Speaker 01

  Uh, I like products that are easy to use. I like products that get me and the problems that I have. So like very easy to make a joint account with my wife, very easy to spin up virtual cards, uh, one click and I get savings yield. It just has all the stuff that I need in one place. So if you're looking for the best banking product on the market, it's definitely Mercury. I will fist fight anybody who disagrees with me on that. Go to mercury.com slash personal and learn more. Mercury is a fintech, not an FDIC insured bank. Banking services provided through Choice Financial Group and Callum N A, members FDIC.

• 23:04Speaker 00

  Kind of give you one quick app update before we move on from apps. Do you remember about three years ago, you and I, maybe you brought it up, I don't remember, talked about this thing called private photo vault? It's basically where you hide photos. It's like, to put bluntly, it's like where people hide like nude photos on their phone and you have to like lock it.

• 23:24Speaker 01

  So I think this was one of my drunk ideas, right? Hiding it behind a calculator.

• 23:28Speaker 00

  We talked, either you brought it up and I said, this is a thing, or somehow it got brought up. Well, look at the reviews, do you see how many ratings it has? A million. So it has a million.

• 23:40Speaker 01

  Reviews?

• 23:41Speaker 00

  So it's called private photo vault. Also, it says like dash pick safe, like a safe for pictures. And, uh, I met the founder, he came to a Hamfit event and, uh, I started talking to him and I was like, he's like, yeah, you guys talked to me, talked about me like three or four years ago. And I was like, how's it going? And I can't, this is going to be like such a tease, I'm sorry, I can't reveal the numbers, but he told me the numbers and how many people work there. It's a behemoth.

• 24:11Speaker 01

  This, this private picture sending thing?

• 24:13Speaker 00

  Yes, yes, it's, it's not a picture sending thing. It's, all it is, is storage. It just stores photos that you can delete off your photo roll and keep in this photo vault.

• 24:24Speaker 01

  Right.

• 24:25Speaker 00

  And

• 24:25Speaker 01

  So why do people want that?

• 24:27Speaker 00

  For nudes.

• 24:28Speaker 01

  But they're not sending them.

• 24:30Speaker 00

  If you are sent to them and you want to store them. All right, do I have to walk this guy through this?

• 24:34Speaker 01

  I'm just trying to understand the mechanism here. You receive one, you save it here, you delete it off your photo roll, that's it? Or you're taking it, saving it here?

• 24:42Speaker 00

  The first one, the first one. It's all it is, is a place on your phone.

• 24:47Speaker 01

  I've never received a nude.

• 24:51Speaker 01

  I'm unfamiliar with your game.

• 24:54Speaker 01

  I've always been curious, always wanted to.

• 24:56Speaker 00

  Yeah, you always wanted to participate.

• 24:59Speaker 00

  I don't think it's ever going to happen unless I've got a rash.

• 25:04Speaker 00

  But, uh, this app has and is doing over in revenue and has been doing it that for a long time.

• 25:12Speaker 01

  That's impressive. Are they also Eastern Europe? I feel like these are all Eastern Europe.

• 25:15Speaker 00

  Just a guy, just a nice guy, just, just

• 25:18Speaker 01

  I'm proud to be an American, if that's an American doing that. This is normally the, the work of, you know, somebody in, in Czech Republic or something.

• 25:27Speaker 00

  Nope, just a guy, just a nice guy. He does live in Vegas, but he's a nerd. So he was raised there, he didn't move there.

• 25:33Speaker 01

  By the way, the collect crypt thing that I was talking about, uh, just pulled up the data, they do a hundred million a month right now. And this is like, uh, it's like a blockchain thing. So you can see like the actual fees that have run into it out of this thing.

• 25:45Speaker 00

  Do you think the, um, are the crypto guys, like, are you, you know, you, you're formerly known as, but you still are a little bit?

• 25:51Speaker 01

  Folk.

• 25:52Speaker 00

  Are you, are you people like the, are you guys like emo now? Like you're so pissed off at AI for taking your

• 25:57Speaker 01

  No, we're AI guys now. What are you talking about?

• 26:00Speaker 00

  It's the same guy, you transitioned? You guys are trans?

• 26:04Speaker 01

  Seamless transition to becoming an AI guy, don't worry.

• 26:08Speaker 00

  I would have thought that you would have been like, shut up.

• 26:11Speaker 01

  The only people left that are like true crypto only are the incredibly smart, high conviction diehards who deserve to get rich. And the idiots who still think like the Vietnam war is still happening and nobody told them like, hey man, we all moved to AIs, we're gone, it's over. You know, we, we can move on now, there's a new thing that to be excited about. So there's like the idiots and the geniuses that are still there.

• 26:33Speaker 00

  Are the meetups like empty now?

• 26:35Speaker 01

  I don't know, I, I honestly, you know, I don't go to meetups, so I can't say for certain, but, um, there's a lot of talk right now that, that, uh, you know, AI hacking slash quantum is going to like basically break the encryption protocols. And so that's kind of scary because you know, for Bitcoin, you know, it's like Bitcoin started with like a hundred risks and is down to kind of like just a couple left. You know, if, uh, if Satoshi woke up and started moving the coins or we, or you know, or the actual encryption gets hacked, you know, it'll cause like extreme panic. Like Binance got hacked for $5 billion last week.

• 27:10Speaker 00

  Yeah, I saw that it said they're, they're just going to pay it. They're like, we're just going to give you the money back. Well, that's how much money they have that they said.

• 27:15Speaker 01

  He's trying, they have a two, so, so they had a hack in 2018. And after that, it was a smaller, much smaller hack, like maybe, I don't know exactly how much, but nowhere near a billion dollars. And they created a fund called the, the Seifu fund. Well, I don't know what it stands for, safety of funds for users or something like that. And they started taking 10% of all the trading fees that they were collecting and started putting it into this like kind of rainy day fund in case they ever needed it. And that was up to about two billion, which was the 10% of the funds collected by the company since 2018. And this hack was for five billion. And so they need to cover the spread.

• 27:57Speaker 00

  And who got it? Like, uh, no, obviously no one knows, but it was at like one wallet?

• 28:02Speaker 01

  Last thing I read was, uh, North Korea took it and the way they did it was they had a woman who was in a romantic relationship with an engineer and just physically got his laptop.

• 28:12Speaker 00

  Nice.

• 28:13Speaker 01

  And they had, they had two, they had enough in their hot wallet to be able to transfer out like, you know, that amount. And so I think like, you know, a certain amount is, certain amount is gone, a certain amount got frozen, uh, they, they got the other protocols to like freeze it, they don't let them withdraw. But it's like, you know, the thing with crypto is the ethos and the premise of the whole thing is it's like gold bars or dollar bills. Like once you have it in your possession, it's yours.

• 28:39Speaker 00

  But, but it's, it's trackable. So like, it seems like someone who does a heist or, uh, like it's kind of hard to get that into actual money you could spend.

• 28:48Speaker 01

  Yeah, yes and no. So there's all kinds of things, there's these like tornado cash, which lets you kind of like wash the money a little bit. Um, there's, you know, there's like offense and defense, right? So there's like ways that they can split it into a bunch of different wallets, transfer, transfer, transfer, you don't know what's going on. Like there's, one of the things they did is they immediately took the money, put it into like a DeFi protocol. So the way that DeFi works, which is kind of like, DeFi by the way, is awesome. And I think people are completely overlooking this and it's going to come back with the, like the vengeance in the same way that, um, prediction markets were a very like common thing in crypto that people were working on. And lots of money got raised and smart people tried to go build prediction markets back in like, I don't know, 2015, 2016, 2017.

• 29:31Speaker 01

  And it was called like Augur and there was, there's a bunch of prediction markets that are now all dead and you've never heard of them. But then Polly Mark and Cal she broke out, you know, eight years later, doing the exact same thing. I think the same things that happened with DeFi, but what they did with, what you do with DeFi is like, it's like a bank, but you don't, there's no physical bank you need to go to, it's like a permissionless thing. So you put money in, just like you would a bank, and then you could borrow some percentage of that, not like five times more than you have, you can borrow like up to 50% of what you put in as collateral. And if the price of that thing ever dropped, it'll automatically like sell it so that you're like, you know, um, you're, you basically cover your, whatever you borrowed, you can't like, you, you, it can like self sustain that way. So what this hacker did was they put the money and right away, they took the money,

• 30:15Speaker 01

  put it in a protocol and borrowed a stable coin and got the stable coins out and left it. So now even if that money's frozen, you know, cool, take that, you could take my collateral. I got the, I got the stable coins out on my side and I, you know, washed it, you know?

• 30:28Speaker 00

  Dude, we got to interview the guy and figure out if it was worth it.

• 30:31Speaker 01

  The North Korean guy?

• 30:32Speaker 00

  Yeah. What was she like?

• 30:34Speaker 01

  Yeah. Oh, oh, the engineer.

• 30:40Speaker 01

  He needed a pick safe account.

• 30:42Speaker 00

  Yeah. Did not go well. Um, all right, that's it, that's a pod.

• 30:56Speaker 00

  All right, my friends, I have a new podcast for you guys to check out. It's called Content is Profit and it's hosted by Luis and Fonzie Camayo. After years of building content teams and frameworks for companies like Red Bull and Orange Theory Fitness, Luis and Fonzie are on a mission to bridge the gap between content and revenue. In each episode, you're going to hear from top entrepreneurs and creators and you're going to hear them share their secrets and strategies to turn their content into profit. So you can check out Content is Profit wherever you get your podcasts.