My First Million - #195 - A Discussion on Sam & Shaan's Recent Investments

Episode Date: June 30, 2021

Sam (@TheSamParr) and Shaan (@ShaanVP) provide a sneak peak into their portfolio on this episode, breaking down recent investments they've both made. For each deal they discussed the company, why they invested, why it can be good, and why it might not work. If you like this episode, Tweet Sam or Shaan if you want to see more of them. --------- * Want to be featured in a future episode? Drop your question/comment/criticism/love here: https://www.mfmpod.com/p/hotline/ * Support the pod by spreading the word, become a referrer here: https://refer.fm/million * Have you joined our private Facebook group yet? Go to https://www.facebook.com/groups/ourfirstmillion and join thousands of other entrepreneurs and founders scheming up ideas. --------- Show notes: * (1:21) Intro * (2:40) AbstractOps (https://www.abstractops.com/) * (11:00) Jar (https://www.myjar.app/) * (21:01) Ruumr (https://www.ruumr.com/) * (30:50) 1Build (https://www.1build.com/) * (38:55) ConvertKit (https://convertkit.com/) * (45:00) World's Fair Co (https://worldsfairco.com/) * (52:35) Praxis (https://www.praxissociety.com/)

Props to this guy for doing this. I got to give him credit. I'm more into this that you are. I kind of love that a guy's dreaming like this. I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On a road, let's travel, never looking back. So we just did this other intro.

Mike's got screwed up. We're going to do it again. We could say what we said even faster, though. We're talking about the stuff that we're, the startups that we're investing in. I actually put it into a format. So, like, the name of the deal, why each of us did it, why it can be great. But I also want to say why it can suck, why it will fail. This is like the disclaimer here.

We have a stake in everything that we're going to be talking about. I frankly don't care if people use it or not. I mean, this is more so entertainment. I have a feeling some people will use it. And also, this isn't like investment advice. A lot of these companies are very likely going to go out of business because that's just how startup investing works. Yeah, and you couldn't invest in them if you wanted to, most likely.

The good outcome of this would be, A, you hear about some cool startups that are doing interesting things, and it just gets your wheels turning about like, oh, shit, I never even thought about that. That's exciting. And then the other is you get a taste of what it's like to invest in deals and how an angel investor thinks about investing in early state startups. All right. I always want to say really quick, I don't want people to know, I'll say for me, I'm not necessarily, I'm not saying I'm good at this. but I'm just kind of doing it publicly.

So people are watching me like get in shape publicly. I've probably done 30 deals. But anyway, you want to, all right, let me go first because I have this deal that I have to make an introduction to you because they specifically ask for you. It's the top one. It's called abstract ops. And I need to know if you want to join this or not. I actually, I just emailed the guy today because I was like, shit. When I saw you write this, I was like, oh, shit, I forgot to reply to that guy.

Did I introduce you? You told me about it. And I was like, I forgot to ask about it. So I emailed. Yeah, I offered you him or him. Somehow, you're already in the know. And he said he wants to talk to you. So I know this guy.

There's two guys. I don't know the second one. The first one, his name is Adam Spector. He's one of the founders. I think he's the C-O. I've known him since 2014 or 15 maybe. I've been in a book club with them. There's four of us.

We have a book club. And I invested in the seed round. I didn't have much money at the time. But I think I invested either $1,000 or $2,000. I don't remember. But I got pro rata. So what that basically means is when they were going to raise again, I got to invest again. And that's how I find out about this.

Adam's amazing. I ended up investing around $400,000. And I got to preface this saying that I do my own money that comes straight out of my checking account. And then I also have this thing called Hampton v.C.com. So HamptonVC.com. Or is it dot com or dot co? And you can, it's where I use Angelus where I invest is HamptonVC.com. It's where I invest like my own money.

And then if someone wants to join, they can. So in this deal, I did both my own and Hampton's money. and we invested about $400,000. Basically... So explain what it is. What's most abstract ops? So have you... If you're like, know what you're talking about a little bit,

you would say it's like NetSuite for startups. If you don't know what that is, which a lot of people don't know what that is, it basically... So when you start a company, there's all... I don't actually know if you had to do this because you actually had people earlier on,

but when I started my company, there's a lot of stuff that I would always forget to do because I'm just an absent-minded person. So for example, if you have employees in different states to file taxes into each state or even just to register in each state. And it's not like a huge penalty. It's like a $100 penalty if you don't do it correctly and you get a notice. But it's important to do it all right. Otherwise it adds up. Or another example is like certain HR practices and certain back-end practices like onboarding contractors in a very particular

type of way, getting them to assign like an intellectual property release. There's just a thousand in different things. And abstract ops is software that helps you. That basically adds in what all those things are and its workflow so you can see which tasks need to get done. Does that make sense? It's a little bit fluffy, but does that make sense? That's a little bit fluffy, but I recommend people actually go to their landing page,

not because that has anything to do with the investment, but it's such a good landing page. So what you see if you go there. So I'll just going to point out a couple of brilliant things. I'm going to use this in my power writing course because this is an example of an amazing landing page for a fairly boring business that would normally have a cookie cutter, very boring stock photo type of website. And so it says, stop running from your back office tasks, which is basically like they had a million ways they could explain their business.

Like, we make it easy to handle your back office tasks or to handle HR legal and HR legal and finance ops. And so stop running from it. I think it's great. It shows me this person understands like how founders are, which is like we put the shit as far as we possibly can because it's a pain in the ass and we just don't want to think about it. And then it has this stick figure running away from a tornado, like a little hand-drawn tornado, and I love it.

And then the first like subheadline is, I started a company to do a bunch of back office work. Literally, no founder ever, right? And it's like I just get that I love that they have personality. I think what that does is it makes it way easier. It shows me that whoever's behind this knows marketing and they're going to have a much easier time recruiting customers and users because they're taking the average mundane things and they're turning them into little sales moments where I start to love this brand. And I think Slack did this extremely well. If you open up Slack, there's like 10 little delightful details that make you

kind of like Slack, even though it's a pretty boring like work chat tool. And so that was something that stood out to me right away. So I'll explain why I made the decision to invest. The first is I know the founder. His name is Adam and he had previously sold a company to Twitter. I don't know if it was incredibly successful, but I don't care. To me, it's like, all right. It's in what we call the sweet spot. You know, you did just enough that I don't think you're an idiot, but you didn't get rich enough where I'm worried that you're going to be, you know, some lazy want-to-be Steve Jobs visionary type for your next thing. It's like you're, you're hungrier than you were the first time and you're smarter than you were the first time, too. Yeah. And so that's one of the

reasons why. The second reason is the product. I know, like, frankly, I think they're still figuring out the product. They have close to seven figures in recurring revenue, but I think they're still even figuring out the product, which frankly is a reason why I shouldn't have invested. They're still kind of tinkering exactly what it's going to become. But I do know that when it comes to the back office of startups, this was something that I failed at for years. I struggled so hard to make sure I filed my taxes in Washington because we had one guy who was working more than 40 hours a week there. It was just like a nightmare and it stressed me out. And when I was selling my company. There was so much stuff that was like loose paperwork. The things that make me worried,

though, is that Xenafits, Gusto, or the thousand of other companies that they can just, because it's hard to get, once you start using gusto or some payroll provider, getting out of that is a pain in the ass. So if these companies are smart, which some of them are, but they're still big, slow companies, then they're going to do a good job of ripping abstract apps off and offering these features as a add-on. But I think that could be said for a lot of different companies. Also, because it's this like huge, it's kind of vague now because it's not a very narrow product, because it's like huge idea, I get nervous that they're not going to be able

sell this to customers. But they've done a pretty good job of getting some of like the cooler, hipper companies already as beta customers. So it's incredibly interesting to me. What about you? So I kind of agree. So I guess like the one thing for me is it's not super clear. Like even on their website,

they have a bunch of these like little examples. So it says, if you're a CEO, we handle and automate your HR, legal ops, finance, so you don't have to. And then I like it. Oh, it says, be scrappy, not sloppy, which is definitely a distinction I've failed that many, many times, falling into sloppy, but calling it scrappy as my cover. But they have a bunch of like use cases, like pay legal invoice, send equity grant to advisor, set up health insurance, compose investor update.

And so I'm not sure how one platform can either do all those things or is it just a to-do list so that you actually do this. I don't actually know the product well enough because I haven't used it, but I would say that's one challenge is. It seems like it's trying to do a whole bunch of things, which means it's either a very generic horizontal tool or it's a complicated tool.

Which one is it? I think it's going to be a complicated tool at first. That said, I think that a company like a NetSuite, which is like a, you know QuickBooks. Yeah. NetSuite is like that, but plus a lot more. And what I've noticed is that,

particularly being at HubSpot, Once I can get, you can be a good enough salesman and get someone to start buying your shit, it's incredibly easy just to start selling them more and building more stuff on top of that. And I'm hoping that's what we can do with AppShackOps. And one of the kind of question marks here is, is this automated or are there just humans in the back end that are like helping do all this stuff? A little bit of both, currently, currently a little bit of both. I think that's the question is, can they get it to be more software than humans so that it scales better? Are you going to invest?

We'll see. I want to actually use the product because I'm guilty of this, like I said. So like I have a company that, you know, basically my personal company that like back office is kind of sloppy is kind of a mess like our quickbooks. Like I don't want to open any of those tabs. Like I don't want to open Gusto. I don't want to open quick books. It's like something I like choose to avoid. I'd rather like I'd rather put it off until shit breaks.

And then it's, I know it's too late. But like fuck. I just, I hate thinking about this stuff. I only want to think about growth if I can. And so I actually think I would be a potential user for this. And so I'm going to use it and I'm going to see, is this magical for me or not? And that'll be the make or break for investing, which is always the best. If you can be, if you are the customer, it's way easier to invest than things that you're

guessing about. Tell me about one that you're excited about. All right. I'm going to tell you about one called JAR. So I think I emailed you this deal because I think you should do it. But what is it? So JAR is, you know that app, Acorns? It's like kind of a big fintech app.

Didn't they go public? I don't know if they, I think they're like spacking or something like that. They're like over a billion dollar valuation. And what Acoons, the genius there was like, you would buy something and they would just be like, hey, do you want to like, do you want to, it would just tell you up front. Do you want to be a saver? Okay, you want to be a saver. Great.

Well, here's why we can make it easy for you. You don't have to think too much. When you buy Starbucks and your bill is, you know, 323, let's just round up to four. And we'll just round up the savings and we'll just deposit that. And oh, look, over time, if we just keep rounding up, you'll save. That's how it started at least. And it was a pretty clever idea. People like that.

And so what these guys are doing is they're taking the Acorns model and tweaking a little bit, but they're doing it in India. And so here's what I like about it. Most apps, when you want to go invest, it's like you download some fintech app and then you got to link your account, so you got to deposit money. And then it's like, great, what do you want to invest in? Or how do you want to set this up?

Do you want to do a mutual fund? Do you want to do an index fund? What do you want to do? And it's like, shit, I need knowledge now. And then it's like, hey, by the way, you can't just start investing right away. Like, we have to verify your identity. So like scan your driver's license,

hold it up to the screen, you know, with a nude photo and whatever else, right? There's like all these steps that go into just getting started with any investing app because that's the law. And what these guys figured out is a, Did this used to be called Spenny? No. Are you sure?

Yeah, I think they're, I don't remember Spenny. They didn't mention that at least. It's called their URL was like changejar.com. And so what they were doing is they were like, look, the average person in India is, this was like their story. They were like, I got my job when I was 21, like most people, but I didn't start saving anything or investing until I was 30. And when I was 30, it was like, oh, shit, I want to, like, buy a house sometime and, like, I want to get married.

And, like, oh, I really should start doing adult stuff. And so he's like, that lost decade between 20 and 30 is, like, a huge difference in your net results if you had started saving earlier. Like, everybody's seen these compound savings charts where if you start at 21 versus 31, you know, you end up with millions of dollars more because you've been able to, like, save for an extra decade. And even in small amounts. And so what they said was, how do we solve?

that problem. How do we get you to start investing at 21 instead of 31? And what they did was, we're going to simplify the shit out of this. We're going to simplify it where in 45 seconds, you can have your first investment done. I said, well, how do you do that? And they said, well, here's the thing. In India, everybody believes in gold. And I know this because my family in India has like gold shops. They like sell jewelry and whatnot. And gold is like the thing. If you ask a mom there about stocks, they can't tell you a single thing. It's not even a big, stocks is not like a big thing there, but everybody has like a gold set of jewelry as their like safety net. That's crazy to man.

And like if we ever have to flee, we're just going to grab the gold and we're going to run. And like this literally happened in India where there's like a where Pakistan and India split up. So people literally did have to flee. So it's like kind of baked in that way. And so they're like, we only offer one asset. It's gold. Everybody already believes in it and they want it. The second thing is your first up to a certain weight of gold, you don't have to do all the financial

compliance that you have to do for like stocks or real estate or other like larger investments or different asset classes. So they're like, there's this loophole where basically we can get you to start saving right away. You don't have to verify your ID and you don't have to like link your accounts and do all this other stuff. So I love that like the simplicity that was in their go to market because I was like, oh, people will actually do that. If I can in 45 seconds get saving, great. And then once I reach this threshold where I've bought a certain weight of gold, then it asks you to put your way more. information in. But by then, I'm kind of pot committed because I already have my, I already have

wealth here, even a small amount. I'll like protect that versus a normal app. You just bounce before you even put the first dollar in. Was this your own money that you invested or the fund's money? Well, I put my own money into the fund, but then all my investments have to go through the fund unless the founder itself won't let the fund invest. Because that's like a like an angelous rule. Well, that's the rule I set when I started the fund because I didn't want to have a, a conflict of interest where I'm doing the good deals in my own money and I'm doing the borderline deals and the funds money. No, I wanted it to be clean so that, hey, every deal I do, I just do it through this one vehicle. How much do you invest? So I put in 150K and it's got a

$12 million valuation and a 20% discount. And so I put it in 150K. They're raising about a million bucks. They already have good traction. So like, you know, what do you look for? You like the team, you like the product and then you got to like the traction in the market size. And so market size I like because I think this micro savings thing can add up really big in India. There's just so many people. And so like their average user after I think like two or three months has saved $300 already in the app, US dollars. And so that's like pretty significant for a very early like just putting micropayment after micropayment in of just rounding up your expenses or just automating and saying every day I want to put in 50 rupees,

which is like, you know, whatever, a dollar or less than a dollar. And so it's like, every day I want to put in 50 rupees because my goal is to save up enough where I can pay for my wedding in five years. And so it kind of like sets the goal. And then it says, great, you should put in 75 a day. And you say yes. And then India also has this crazy thing. I don't know if you've heard of UPI.

No. So basically the country, like you know how like in the States you have like every bank just kind of has their own clunky software and there's different payment that, you know, you can use Stripe for payments. And there's no like, there's no country level payments rails. And so in India, the government came in and was like, yo, in the next year, everybody has to move to this new payment standard. It's the universal payments, whatever, infrastructure or something like that. And this will just make it so that anybody who's taking payments, you just build on top of these rails.

And we're going to modernize payments in India through this. And so they did that big change. And so that's changed the game. That's why there's a lot of innovation in India right now because this UPI thing was like a pretty major breakthrough. And the second thing is they just released this feature called auto pay, which is basically like a recur. auto investment. And so these guys are using that new feature of UPI. So I just think the like why now makes a lot of sense for for this. And I like the hack that they have around just buying gold so that you reduce all the friction of getting somebody started. Do you, so are you

totally okay with investing in India? Like, because I don't, I've only invested in American-based companies. I've had Australia. I've had all over Europe. And I'm like, for some reason that Gat freaks me out a little. It, yeah, it kind of does to me too. but I've been investing in India. And so when I invest in India, there is definitely like some trepidation. So that's why it could fail. I just wrote India, question mark, question mark, question mark,

like easy for me to be fooled, right? Like these guys could be well-known scammers in India that I don't know, right? These guys could be, I mean, they weren't, right? They went through YC, I think. So, you know, actually, I don't know if they went to YC, but I know other companies I invest in know these guys. And they went, their competitor went to YC, which is your second point why they could fail.

there's a lot of people in the space. Exactly. So fintech is just super hot worldwide right now. There's like every day there's a new credit card, a new debit card, a new neobank that's popping up. And then there's bigger players that are trying to modernize. And so I think the one way they could fail is that there's probably like between 10 and 50 legit competitors to this in India that are not doing directly this, but they can

add this as a feature or they could pivot into this or they could like recognize the clever things that these guys are doing and implement them. So I think that's the, those are the two, which is like, Like, there's a bunch of competitors in fintech right now for every idea. And the second thing is, India is always a little bit of a question mark. And it's very easy for shit to look good in India because, you know, cost of customer acquisitions is always super cheap. It's like, oh, man, you're getting users for 80 cents.

That's awesome. But like the reality is not all these Indian companies can be great. So I got to like, my own filter for India is off because I come at it with a U.S. point of view. Having said all that, the two Indian investments I've done so far are probably two of my investments. And so I'm going to keep betting there because I think that the country is like, it's in a sweet spot where there's just a lot of innovation. There's just going to be a lot of winners out of this batch. And I just need to bet on enough of them that, okay, even if I get fooled by one or two or I didn't understand the market landscape, I get into enough winners is my goal.

Also, because I'm Indian, I kind of have this advantage where a lot of people in India follow me through this podcast or through Twitter. And so I am able to get into like any deal. Like these guys, when they were reaching out, they're like, we asked only for two inches. You and Naval. And I was like, okay, bro, you have one of us in the wrong league there. But the reality is that's kind of an opportunity for me. I agree. If I build my brand bigger there, I can get into any deal I want there.

I agree. I think it's why like Bruno Mars is like the most watched person on YouTube. It's because when you see, because in the, we're seeing from, the Philippines, wherever he's from, if you see someone who you recognize in America, who's crushing and kicking ass, everyone rallies around that person from the outside country to like, oh, he's one of us. Fuck Mani Paco in the Philippines. He's like the president there, and he's just because he's like a famous boxer here,

they just want to go all out for their guy. Yeah, or Bjork and Iceland. So you're like the, you're the, you're the, you're the, Mani, absolutely of India. I'm saying, if I keep betting, then I have a path to do that. But if I'm never investing there, then I can't build that. Like, it takes a stack of reasons why you should be, like, known and respected in a place.

And I think one of the reasons why you could be known and respected is having invested in some winners. but I got to plant those seeds now. All right. Can I tell you one I'm really excited about? And I wasn't excited at first. And then I started using it. And I'm like, oh, I'm in.

Okay. So the name is bad. And they're going to change it. They're going to change the name, I think. It's called, the name's really bad. It's called rumor. So I'm actually highlighting it. You can see the memo that I wrote for.

When you say it, the name's fine. When you spell it, you know, it sounds like you've got cotton in your mouth or something like that. So I've talked about Bring a Trailer. Bring a trailer is this website that originally started as like a car where they would show off cool. cars that were on sale from around the web. They eventually launched their own auction platform, but they just did a really good job

of editorializing it, making being like a community so you can buy classic or even newer cars that fit a certain demographic. Rumor is doing that for houses. And by the way, if you want to invest, Sean, let me know. I wouldn't have been interested in this except for the bring it. You've educated me on how bring a trailer is a great business and we've looked into different auctions through the podcast. So now when I look at this, I see it differently than like, oh, just another home buying website.

Okay. I don't really, how are you different than open door? It'll be cool because look at some of the example auctions and then click comments and read the comments. That's kind of like why it's neat. How do I go to an auction? I don't even know if those are fake auctions or what. The founder bought a bunch of homes just to put onto that site for auctions. Right.

And so go to the website. He bought a bunch of homes to see the marketplace. I think he like owns like 20. He's like a property owner. Like he owns, he's like a landlord. So let's just explain it. So I'm on rumor. It's R-U-U-M-R.com right now.

They might change the name. So I go, Washington looks to be the only market that's open. So I'm there right now. And I'm just looking at this for the first time. So I see that there's this house in Washington. There's a bunch of pictures. And it's on sale for $103,000. And it says that there's 13 hours left, presumably, in this auction.

And then there's some details about it, like all the normal house details. And then I can log in. I can make an offer. And then I see people who are making offers. But then I see people who are also commenting like, is the electric heating system baseboard or something else? And then you see replies from like, I assume either the owner or the agent, like answering questions in the chat here. Well, people are bidding 100,000, 101,000, 102,000. And it's currently at 103,000 is the auction.

It's eBay for houses. Yeah, but it's a little bit different than eBay. It's a little bit different. But yeah, that is. But the reason it's one of the reasons why I think this can exist is, let's say you're buying a house. for half a million dollars and they do like a first and final offer process where everyone submits their offer on a Friday. If you're bidding half a million dollars for a house and you see that the winning bid was 505, you're like, well, fuck, if you guys would have told me, I would

have bet 510 and you would have made more money and I would have got what I wanted. And so it's kind of trying to solve for that. But let me explain to you why I think this could be cool. So first, the founder was pretty interesting. He's a military guy. So I like military folks. He also started Stay Alfred. You know, Stay Alfred? By the way, we should highlight the groups that we are inherently biased to invest in. Mormons, military guys, Russians. Yes. Jews.

What else we got? Israeli Jews is what we said. Right. You know, who else? Immigrants. I'm always partial to immigrants. Any immigrant, anybody who's lived in the U.S. illegally, you know, for a period of time, anybody who is, you know, single parent, I'm in, you did, you already did the hardest thing

of your life. McKinsey? Oh, McKinsey. No, that's a, that's a no for me. The other ones that I guess are, I'm always like, I lean in. I'm a little bit interested. It's like, oh, how did you, what were you doing like when you were younger? And it's like, well, I was like, you know, flipping cars or I was flipping shoes on eBay or I kind of don't want to say because I was like this affiliate marketer for these like shady dating sites.

You don't understand. That's like. Shady internet stuff. I like. Yeah, shady internet arbitrage. So this guy started stay Alfred, which was like a, you know, Sonder. It's like a competitor to Sonder. where they would like rent out entire buildings

and then sub-lease them for work travel, got to $100 million in revenue, raised $60 million, crashed and burned and went out of business. And you know what? That's awesome. I love that. So that's initially why I was interested.

I told them I loved Brigg and trailer and he goes, oh, great. Their co-founder works here. And so does three other team. Brigger trailer sold the rumors like half a million dollars. And since 2000... Half a billion. Sorry, half a billion.

Since 2012, I remember in 2012, I remember in 2012, I was playing around with real estate stuff online, and I thought homes should be bought and sold online, just like we buy and sell clothing. And a lot of people, with rumor, you can actually still go and see the house at an open home, like at an open house. But in my mind, I still think that in 10, 20, 30 years,

it will be normal, actually, to buy a house site on scene, even though a lot of people don't think that. Now, I think that will be the case. And check this out. So why would I, okay, so let's say, I'm a seller. So why would I sell here when I feel like, okay, I'm going to have this 13-hour auction. I don't know what's going to happen.

Do I have to take the offers or do I can just reject all? Yeah, you can have a reserve. Okay, great. And then is it because I think I'm going to get a higher price or because I save money through the fees? Or what's the reason I choose this over like traditional listings? Yeah, the higher price. That's the goal. Higher price by creating like a like a-

Do they take the same fee as like a normal 5% of whatever agent fees? They take less because the problem with real estate is the agents are still like integral. Like they're still very important to the industry. If you cut the agents out, then like the agents are like, oh, fuck you guys. I'm going to bad mouth you. I'm going to make sure no one ever uses them. So they actually get the agent in on the deal. And they just like make the agent's job a little bit better and a little bit easier.

Right. And so we'll see if it works. But let me explain two things. First is we invested along. And the reason why I was intrigued is all of stay Alfred's competitors, this guy's whole company, all the CEOs all invested in this company. And I was like, that's kind of an interesting signal. If your competitors respect you, like, I'll bet on your next thing.

That means something. And they were all real estate guys. So this is still related to that business business. So I was like, that's intriguing. Second, so I invested. And then I get a call. Jordan calls me, the guy who's starting this. He goes, Adam Newman just put $2 million in.

I was like, fucking A. Got it. Like, I think that's pretty good. I think that's a good side. Why is that a good sign? Because some people would think that's a bad side. No, no, no, no. First of all, like, I'm not saying what Adam did is great.

I frankly don't even know the entire story. But I'm pretty... He's the founder of WeWork who was like, kind of like, whatever, did a bunch of shit and ended up walking away. Kind of like drove the company into a weird spot and was accused of a lot of things. And then he walked away, you know, pretty wealthy as part of his agreement to leave. And my thing is Adam Newman, regardless, let's say he did a lot of bad stuff. Let's say he was unethical. Let's say all that's true.

I'm not saying it is, but let's just for argument's sake say it is. he's still built something huge and amazing in a very short amount of time and has access to all types of stuff and sees all types of stuff. So I think if he's interested, it's a good thing. And then why can they fail? I think if they execute this poorly,

it's going to be bad. I also think that, like, oh, I put, it could be if they raise too much money. I actually don't think that's going to be the case. I think they have to actually, this companies have to raise a ton, a ton, a ton of money. What can make this fail? I don't know. Maybe if Zillow offers this.

Well, also, I think it's a new behavior. And any time you're betting on a new behavior, that's like the risk of it failing is that maybe people won't want to buy the house sight unseen or maybe people won't want to sell the house in this way, they want their handheld through a traditional process because it's the biggest asset in their life and they don't want to risk it. And traditionally, you can buy this. You can go. This is not entirely site unseen.

But yeah, it's a new behavior. There's a lot of new stuff about it. But my thing was like when I was doing the math, I'm like, you don't need that much. volume to build something quite large. And once you have the home on there, you can upsell like property assessment or what's it called inspections. I think you can upsell a lot. I just thought it was interesting.

Yeah, you could be closing. So one thing that's good here is you don't want all your bets to be logical, clear, good ideas because that means your risk profile wasn't right with startup investment. You need a few ideas that, you know, sound like they're going to fail when you invest in them and then either they fail and you're like, yeah, well, duh, or you end up looking like a genius six years later, seven years later because that non-obvious contrarian idea turned out to be something people actually wanted to do, turned out to be a new behavior people were willing to do. And so I think it's good to have, this was the one note I told my team who like helps me

with investing. I said, I don't think we're taking weird enough bets. I don't think we're taking wild enough bets because that's where the big outsized crazy returns are going to be. as in things that are non-obvious today, you know, like low valuation, not everybody wants to invest in them, the sort of thing. Do you, did you do SACE? Yes. Does that interest you to talk about or no? We've kind of talked about them before.

I want to do another one. All right. I want to do one. Okay, you'll kind of, I think you'll like this one. I think you'll want in on this one, although it might be too late. So it's called One Build. So what One Build is is, here's the problem, as the guy describes. So I meet the guy.

How'd you meet him? Ben or Zach found him, and then they really liked him, and they were like, hey, you really got to talk to this guy. So I said, okay, great, let's do it. And I forgot, I don't know how they found him. I think he was like in some licey batch or something like that. So basically, I talked to this guy, and he's like, yeah, I was working at cloud kitchens. The startup started by Travis Klanick.

He's like, I was one of the first 20 people there. And my job was like, you know, they wanted to go build out all these cloud kitchens, all these kitchens around the world and they were like, all right, you know, we want to build this $10 million project. We want to build this $20 million project. And he's like, I'm a data guy. Like my background is like data science. And they were like, look, we need you to like be intelligent about how we're going to like plan out these builds. We're trying to spend this much this year. It's a big number. So like help us out with the data side of building out. So he's like, all right, no problem. How hard can it be? And he goes into it. And he's like, okay, great.

So we have this, let's say, we're doing this deal and we're trying to build out this kitchen in Seattle and the estimate is like 10 million, but like it could be plus or minus like four or five million. And that's a pretty big difference. Like if it's 15, it's different than 10, which is different than six. So like which one is it? And the guys were like, well, like it depends. Like it depends on what? He's like, it depends on the cost of construction. And he's like, okay, well, what does that depend on? And it all comes down to like one of the biggest variables is material costs. So there are many ways that your construction costs can go out of whack. Like, if you don't get the permits in time, it gets delayed.

labor errors, but one big one is materials. And so what he was like, he's like, okay, well, how hard can that be? Like, let's just figure out the material cost and let's just speck it out. And they're like, no, no, no, it doesn't work like that. Like here's the spec. Here's the plan, like a construction plan. And now to cost this, you either need to hire a cost estimator. And what they do and what you would do if you wanted to do this yourself is there's this

book that gets printed once a year, which is like the, this is like the blue book of like all materials cost. Like, if you want a three-foot piece of lumber, it's going to cost you this much. But, like, as anybody's seen, especially during COVID, like, material costs, like, lumber has, like, had huge amounts of variants. I don't know if you've seen this, but, like, yeah, yeah, yeah. Like, you know, a truck carrying lumber is like, like, right now, it's like a truck carrying bricks of gold. It's like, if you rob that truck, you would have, like, so much value right now because lumber was so expensive. And so he's like, the problem is that there's no real-time data.

And, like, he said, so that's what I decided to leave and go build is basically. an API that will give you real-time material pricing for construction. So all you do is you upload what your construction plan is. And then it basically gives you an accurate real-time cost of it. And if that's changing over time, you'll see how it's changing week by week, day by day. And companies who are building, I don't know any of the companies, but companies who are building construction, companies who work in the construction business, who are designing stuff, they will use one build software to integrate with their software. So it says in real time, how much this is costing? Exactly. So basically you upload the construction plan. Yeah, they're selling

straight to the company. They're selling to the builder and to cost estimators who do this as their job. It's like, hey, here's a way to do your job faster. But I think over time, my sense is that over time it eliminates the need for cost estimators as a profession. But I think, you know, the main thing is if you're a contractor, whether you're, if you're building your own project, you want to know what are my real costs going to be and you want to know how those change over time. And then, oh, if we swap this out for this, how does that change our pricing? And then the other thing is, let's say you're a contractor, you had to go bid for a job. If you bid too high, if you put the cost too high, you may not get the job, right?

Because that's your sales pitches. Hey, I'll build it for 12. And if 12 is too high of a number, they're going to give it to some other guy who bid eight. But if the guy who bid eight is underestimating it and it actually costs him 10, he, he has to eat that loss. And so bidding for jobs and accurately bidding for a job is basically like a huge part of the sales process of construction. All right.

So what do I like? I like that this problem seems real. I talked to a few people in real estate and they were like, yeah, of course, this is like, this is a huge problem. You know, just the material cost for construction is twice the amount annually of all of e-commerce. So it's like humongous market. It's a multi-trillion dollar plus market of just the construction. of just material construction costs.

And smart guy, I like their approach. I think they're kind of like the leader in that space. It doesn't seem like they have a ton of competition. Like I don't think, like what I was saying before about savings app, microsaving apps or credit cards, it's like there's 100 of those startups right now. I don't think there's 100 of this startup. And then they already have some traction, right? They have seven figures of ARR already booked.

And so I invested in this thing in their Series A. And I think there's also a big idea that I like, which is after you cost it for them, after you say, oh, here's your estimated cost for this, you could also just add a buy button down the road and then be like, cool, purchase all those supplies and actually build a marketplace where suppliers can sell the supplies through their thing because the person's already at the, they already have their invoice basically ready to buy. This is amazing. The thing you can fail, right?

So why would I hesitate? First, the valuation was higher. So it was like at over $50 million valuation. So I put in 100K. I don't own a big piece of this, but I want it in rather than being on the outside. And then the second thing is, I think construction is a pretty old school industry.

It's all pen and paper. That trillion dollars of material purchasing is all done just through pen and paper offline right now. And so bringing it online can be a brutally hard thing to do. I'm looking at Mo MetaProp. I'm seeing who all invested in these folks. I think maybe I know some of these people. Who's leading this series A?

You know, I don't actually know. I don't remember off of my head. Wow. This is sick. This is great. I think there's a cool one. If they're still raising, I would talk to them in a heartbeat. My fear about this, like if I had to like say what the downsides are, is can you easily replicate this?

Like, can. I don't think so because what they're doing is not just the, it's not just the app that says, great, you know, upload your thing and get your cost. It's like, where does that data even live? So this is like, you know that company climate corporation that basically, like what they did was they basically organized all the agriculture weather data. Sold for billions. Sold it for billions.

And basically what they offered like, you know, hey, farmers, like here's all, you know, farmers and others. It's basically like we took this unstructured offline data and we made it structured and online. So for example, they're first taking all of the material, all of the materials and they're turning them into skews. Like if you've ever done e-commerce, a skew is just like, you know, if you're at a grocery store, a Hershey's chocolate.

bar, that's one skew. And then a Twix bar will be another skew. And the large Twix bar is another skew. So basically, they took every thing you can buy in construction. And they're turning them all into skews first. So first, that's the first step. Then they have to get the price feeds. Okay, how are we going to get real-time price data on all these things when prices vary from supplier to supplier, vendor to vendor? And so then they have to do that. And then they have to turn that whole thing into an API that like can be queried easily and get accurate price data. And so I think that's the real innovation here is being the one to organize and collect all that data. Then after that, really, anybody can build an app that just asks them, hey, what's the price of lumber right now in Tucson, Arizona for this size of this type of lumber?

And they should get back an answer. And then if that changes in three months, they should get that change notification that the price is increasing. That's sick. I'm into this. I'm looking at all this now. I'm taking down notes. I think this is amazing. I'm into this one a lot.

You want to do one more you like? Yeah. Okay, here's a boring one. Wait, let me look. Let's do a boring one. Okay, so I actually included this email in here because I wanted to show it. And I blacked out a couple things, so don't read those things. But this one's like boring.

It's not a seed investment. But I just wanted people to see how this worked. Yeah. So my friend Nathan Barry, Nathan Barry, Nathan Barry started this company called Convert Kit. You know Convert Kit? I'm a user. Yeah, I pay them $1,000 a year.

I love Convert Kit. If you Google Convert Kit revenue, you can see all. all their metrics, all their numbers. It's amazing. Nathan is, you know, he's young. He's like 28 maybe. But he like comes off way older. He owns, I think, almost the entire company.

So ConvertKit is like a MailChimp competitor, but slightly different. It's hard to explain unless you're an email marketing nerd. But it's just like MailChimp. It's just like HubSpot. It's just like a lot of these companies. But you're particularly, I believe, towards bloggers. And he has grown the company very steady for a bunch of years. And he asked me if I wanted to buy some secondary at a seven-actored.

multiple. So their revenue is $28 million, and he's raising at 7X that. What's that? I don't even know. $300 million. $200 million. I invested. I thought I invested $50,000 of my own money. And the reason why, I would do that in a heartbeat. Yeah. Well, you want to? Yeah, I do want to. That's great. It's like no brain. All right. I'll make an intro. Hold on. Let me write this. I know the guy, but yeah, I didn't know. I would be doing it. So I get credit. So he owes me one. So the way that it worked was, he goes, Nathan emailed me about a week ago. He goes, funny story. After you and I talked on how secondary liquidity works on my podcast, I guess I could say his name.

Darmesh heard the episode. Darmesh is the founder of HubSpot, who's going to be on in a few days, heard the podcast, and he reached out saying if you could buy X worth of shares directly from our shareholders. After surveying former and current teammates who holds stock options, we're putting together a secondary round at seven times ARR. And we're looking to raise $2.5 million in total with 2.04. So 2 million already committed. ARR is 28 million. Net revenue is 27.3 million,

which is up 34%. Revenue churn, 3.8%. Customers, 36,000. Profit this year, 11%, 12% profit. He sent me that email and I just said, here's what I replied. I go, how will I get liquidity?

He goes, I'm either going to keep buying more companies and then I'll go public or I'm going to do more offerings in the future to sell. And I go, great, in, 50,000. Right. Yeah. And so here's my thinking. My thinking is, I put-

Super safe, right? Like the odds of this going south are under sub-5% easily. And so this is my safe bet. So to me, this is not, so the way that I'm doing my net worth is one percentage of the vast majority, let's say 95% is in index funds. Boring. 5% is going to be in angel investing. And this, this is considered private equity, I guess.

But it's not angel investing to me. But it's more of the boring stuff. This goes in your boring stuff budget? Yes, but it's not quite boring. Like, I can't sell it overnight. But I know Nathan, he's trustworthy, he's ethical, he's amazing. I've been asking to invest in him since he started the company. Right.

So I put 50 grand of my own money in this. And this is going to come straight from, this is coming out of like the boring pool. What do you think about this? You like this? I like it a lot. Yeah, I think that this is a really defensible, stable company. There's a lot of people that are super interested in email software. There's like bigger companies. And then there's like the substacks of the world that are trying to do things.

But I've used all their products. ConvertKit is the best product out there of this batch. Once you're hooked on it, it's hard to stop paying. In fact, I told my team, I was like, hey, guys, our ConvertKit bill is like two to three grand a year. Like, we should just, isn't there like a free thing that will just let us do all this? I feel like email software is everywhere. And then sure enough, they go kick the tires of a bunch of different things.

They're like, ah, we can switch. We can get it cheaper, but we're going to give up X, Y, and Z. It's like, well, X, Y, and Z all seem like the important things. I don't want to give those up. And so, so I think he's built a very steady business that, you know, today I think ConvertKit could sell for more than $200 million. I think if you wanted to sell this business today, he could probably sell it for somewhere like 30 to 40% higher than that. That's bad. That'd be my guess. And it's just going to keep growing,

I think, 25 to 35% a year. And there's a world. I can see Nathan being the type of guy. And a lot of people say this, but I actually believe if he told me this is what he wanted to do, he was like, I think I'll run it for 25 years and try to grow at 25% every single year through buying different companies. I'd be like, oh, okay, cool. I believe you in. Right. I believe you're going to try that. And I believe you're capable of that. And we see pretty much every major, like, creator economy deal. And they're all just like, I think you're sick of creator economy at this point. I'm very sick of it.

There's just so many creator tools and creator economy startups. And honestly, most of them are not very good. It's like there's more funding in the creator economy startups than there is like actual revenue in the creator economy right now. So there's like this, there's like this, I don't know, overhype in that space. But this is an actual, this is a real business in the creator economy, right? This is like independent creators use this as their like back end for sending emails to their audience, bloggers and newsletter folks. And I think that there's a lot of room to run.

Like the thing I would do if I was him is I would figure out I would go into the ClickFunnels market. I think ClickFunnels is a bigger company. I think ClickFunnels is over $100 million a year. Yeah, but they're turning to shit. They're trying to shit. But, you know, I think as a upsell, I think there's a lot of people who use ConvertKit that also create landing pages and try to like sell stuff. And I think that ClickFunnels is actually one of the better products for doing that, even though it's real janky. It's very effective at actually converting people.

And I think that that's the way I would go with this as a route to getting bigger. But yeah, I think there's a pretty safe bet. Well, I already made an introduction. Nathan, it's in your inbox. Awesome. You want to do one more? Yeah, let's do one more. Okay, I have a crazy one.

Yeah, I have a crazy one. Actually, can we talk about that other crazy one that you were telling me about? Let's do that one. Okay, so, Cam, his name's Cam. I had this guy reach out to me because he was a volunteer at HustleCon years ago. And I've always stayed in touch with him. I love Cam. He's a nice guy.

And I thought he would always go places. He emailed me like a week ago or five weeks ago, like maybe a month ago. And he's like, I got this idea. I'm going to build a world fair. And I, you and me, Sean, are way different. Immediately I said, nope, nope, I'm out. Like, I was never even entertaining this. Explain, because I didn't even really know.

what the World Fair is. So explain what that even means. I'm going to build the World Fair. Because it's like, I'm just not imaginative or smart enough to understand these things. You go ahead. So, and actually, if you can link me the memo in here, because I think it'll be, it'll be useful to talk about. But basically what I understand is, the World Fair is an event that happens, has happened

like, you know, 70 years ago and then 20 years before that or whatever. It's sort of like the Olympics. It's basically this world scale event. And in the same way that, you know, the Olympics, you know, the Olympics. Every four years it happens and it goes into some country and it like, you know, some city, it like takes over the whole city and it brings like tons and tons, millions and millions of tourists. And so, you know, the previous world fairs. So here's the previous world fairs.

So Seville, 1992, had 42 million attendees. Shanghai 2010 had 73 million. And Milan in 2015 had 23 million attendees. So basically this guy's trying to throw an event with 50 million attendees. And so that's like the, that's the premise is, hey, I'm going to build this event and it's going to have 50 million people attend. And I think I can make billions of dollars. He estimates, you know, over $5 billion per fare that he'll generate in some combination of tickets plus additional spend when you're there, as well as like, you know, the virtual live stream media rights to the thing. And forget about the fact that like, you know, the like, the like, the.

the city itself gets like this huge amount of economic activity when you get 50 million people coming to town that generates a lot of economic activity for the city. So his idea is basically go city to city and say, hey, do you want this like jumpstart of economic activity? Host the world, like put up, put your city up and put funding up and put resources up. Let me host a world fair here. So. And it's like Disney World on crack.

I told Cameron this earlier today. And so he's a listener. So I want to let him know, I love this guy. And I think he's very competent. I just think this idea, I think it's stupid, particularly for like a VC-funded thing. I have hosted, like, we're calling this a World's Fair Venture thing. This is a conference.

This is a trade show. Can conferences and trade shows make money? Yeah, they can. But like, to start Coachella, Coachella makes $100 million a year. And they've been around for like 30 years now or Lalaplusa, 20 years. Like, this is. Oh, my God.

The degree of difficulty on this is, like at an insane level, I would say. An insane level. So that's the reason not to invest. The reason to invest is also that the degree of difficulty is insane and the person behind this is insane. And it's going to compete against nobody. And it's sort of this like-

What do you mean against nobody? There's tons of these. Like this is a web summit did something like this. Dude, do you want to compete against the Olympics? What happened to the Olympics last year? Yeah, that's the thing. Who is competing against Olympics? Nobody.

It's like when Elon goes and competes against NASA. It's like nobody else is competing against NASA. There's a Commonwealth games. There's world championships in different sports. There's all types of stuff. Nobody, entrepreneurial. Nobody who's trying to do it for capitalism, basically. Nobody's trying to make a profit.

There was one person, Ted Turner. He launched the Commonwealth, what did Ted Turner launch? The Goodwill games. Yeah. I mean, did that work? Did that not work? What do you know about that? I don't know if it made profit, but I know that it was a thing.

He invented it because he needed a programming. for TV stations. Yeah, I believe it was called the Goodwill Games. Anyway, no, I mean, like, do they work? Yeah, they don't not work. It's kind of like, does the American pageant work? Like, well, it kind of probably makes money. It's like an annuity.

It kind of works like every year for 40 years and it does only okay. So is your, okay, what's your criticism? Is your criticism that he's not going to be able to do it at the scale or that even if you do it at the scale, it's not going to make that much money? It will never, ever, ever happen at that. scale. I'm just saying that like, look, like, and this is me saying someone betting my own money. Like, I'm not willing to bet my money that it will. I'm willing to bet my money that Cam will do many amazing things. I just think it's like literally like, this is like against physics.

I think like, do you know what I mean? So the most most relatable version of this is the summit, right? So the guys who created summit and then they bought the mountain and they're like, you know, doing that. I think that's sort of like the closest. analog that I know and I've personally seen. And it's not a good business. That was not a great business. It was nowhere near, well, okay, why are you saying it's a horrible business? They ran out of money multiple times. It doesn't make a profit.

The event part, or are you talking about the mountain part? The event, both, all. What do you talk about? Ryan will tell you first say it. Ryan made all of his money selling trade shows and ads for a real estate newsletter and trade show business. That was a killer business. Then they invested it in this other thing and it was just okay. Like, would you want to have invested your business? much. Like, I just, this boggles my mind. I have only a few dollars to pick between

X, Y and Z. This, like, doesn't even come up on the, like, I'd rather go all in on Abchak Docs. Just like, give me some boring ass software. That's just going to make money for 50 years. So I agree with you from that point of view. If I'm, if I'm going to invest, I'm not personally going to invest in this. But I think from his point of view, from the guy who's Billyvis's point of view, I don't know, you could be, if you're a lunatic, you can some kind of amazing things. You can really exceed like where others have gone. For example, I know Patty who started a Web Summit. You know him? That's cool. What's he like? Awesome. Awesome guy. Like, you know, should be the whatever of Ireland someday,

Prime Minister, President or whatever they have over there. He's amazing. He's a really amazing guy. But at the same time, if you are trying to build a huge conference, you're going to approach it very differently than trying to create a world fair than trying to create like an Olympics. And so I think it is really not that much harder. I think maybe it's, it's harder, but it's not that much harder than pulling off what Patty did over seven years at Web Summit. The good thing with Web Summit is he was able to iterate. So he was able to start super small. Like, oh, great, I got 100 people to come to Ireland for this conference. And the next year I got 1,000. Next year, I got 10,000. Then I get 100,000. He was able to step it up. Whereas I don't,

I think, with the World Fair thing, there's no, like, tiny World Fair, I don't think. So I'm not sure you know how he's going to possibly do this i yeah uh his two his two phases are phase what host 25 million guests phase two host another 25 million guests i do i don't want to i'm gonna say props to this guy is he like young i hope he's young he he props to this guy for doing this i got to give him credit i'm i'm more into this that you are i kind of love that a guy's dreaming like this i also think it's insane and slightly impossible. I bet you you don't put your money in it.

I will not put my money into it. But I did put my money into something slightly crazy also. I put a very small amount, I put 25K into a, which is like below what I would invest in any other startup into a guy trying to build a startup city. So, but I think that that has better odds of succeeding than this world fair.

Yeah, because you have rent every month. Yeah, well, can I talk about that real quick? I know we're late for the other thing, but basically what this guy is doing? So we've heard about startup cities. Bology came on this podcast. And he kind of said, I think the 2010s were about crypto. And I think the 2020s are going to be about startup cities.

Apology also invested in this. So it's this thing called Praxis. And basically what they did was they created this social network, like kind of like a club in New York, L.A., SF with just a bunch of cool people like founders, people from entertainment, like Hollywood, New York stuff. Circle dirt shit. Yeah, just like, you know, Soho House type shit. And so they host cool parties. So they've just been hosting cool parties. And then basically they were like, awesome.

We have the seed community of dope people. And, you know, a city is basically just like, if you want to create the next Hollywood, right, you need all that aspiring actors, you need the filmmakers, whatever. If you want to create the next Silicon Valley, you need the VCs and the entrepreneurs and the engineers to build stuff. And so this guy's premise is basically like, if you're going to build a new city, you need to have a network effect of dope people who want to be around each other. And so he's been curating this community for a while. and then they're going to the Mediterranean, and they're going to these countries. Like, hey, Croatia, can we get, like, a piece of land that's ours?

Like, give us this land for free. That's beautiful land by the ocean. And let us crumb up with our own financial regulation rule of law. And we're not going to do Croatian law. We're going to do our own law. And, like, just give us total sovereignty. And in exchange, you own a piece of equity in this land. And we're going to bring, like, the best American cool kid talent to this, like,

this startup city basically to come live here. And then basically it's a real estate company that's just building buildings and renting out the office space and all the residences to the cool kids. Theoretically, I'm into this. I would want to know are the people like buttoned up real estate people or are they like people from Burning Man who wear like Coachella hats all the time and, you know, like leather shoes like like leather like pants? I need to know what they look like and what they're about.

If they're buttoned up, maybe this is... You want one above. You want the boating guy who's just going to be out there recruiting the community. And then you need the real estate guy who's like, yeah, yeah, yeah, go do your thing. Let me actually set this thing up so that this works. Right. So, and by the way, on their website for practice, Cameron Weiss from the last company, he started blogging about the world's fair on March 16, 2021.

I leaked it to you. Yeah, he's a member. That's the kind of dreamers you'll get in this community. So I put a small amount of money into it because I'm just really interested to learn. And like this is a wild idea that, you know, I think the portfolio has to have some wild ideas. It cannot just be like things that are easy to understand and easy to like imagine working because I think we'll miss out on the large outlier winners. So, all right, Pimp your, can people still sign up your rolling fund? Yeah.

Go to go to Angel List, just type my name in. And then you can just, you don't even need to email me. You can just subscribe to my Roling Fund and then I'll email you. so you can invest with me. We're doing, we have about $4 million. And four million a year we invest across about 30 startups. And for me, I don't do a rolling fund. I have a syndicate. If you go on to Angelus and type in like, it's called Hampton v.C. because I used to live on a street called Hampton, not because I'm from the Hamptons, but

HamptonVC.com. If you just go there and then just click learn more, you'll get taken straight to the Angelus page and just click Apply. And then whenever I have a deal, you just are notified and you can invest or not invest. It's up to you. And Sam's memos are dope, so you should go subscribe. Well, thank you. By the way, everyone's saying great stuff about power writing. Oh, yeah. They love it.

I'm putting my heart into it. I was too embarrassed if it sucked, so I really, really tried. Well, everyone's saying great things. Sarah's class is going live soon, but they're saying great things about it. All right, we'll talk to you soon. I feel like I can rule the world. I know I could be what I want to. I put my all in it like my days off.

On a road, let's travel, never looking back.