My First Million - #53 - Nicotine Gum, Dating Apps For The Elderly & Tax on Vested Shares

Episode Date: March 3, 2020

Sam (@thesamparr) and Shaan (@shaanvp) talk ideas, news, trends and businesses. Sign up for our Run The World conference: https://organizer.runtheworld.today/invitation/313. We've partnered once again with the online business broker Quiet Light Brokerage, they want to give you guys a FREE 25-point checklist to see how sellable your online business is. To receive this free guide, visit quietlightbrokerage.com/myfirstmillion. oin our private FB group if you haven't already: www.facebook.com/groups/ourfirstmillion. It's free to join yet provides so much value through meeting other hyperactive business people and having discussions around the type of stuff discussed in the podcast. Topics for today: Bernie Sanders proposed tax on vested shares (2:17), Biggest regrets in structuring companies (9:08), Internet conferences like Run The World (14:25), Book clubs (19:12), Copy masters and publishing giants like Agora (26:34), Online services for older people (32:13), Which single digit unicorn will become the next $100B behemoth? (37:53), Turnkey bathroom renovations (47:38) and Sam's angel investment in Nicotine Gum is working (49:10)  See acast.com/privacy for privacy and opt-out information.

What up? What's going on? Did we ask people to subscribe and unsubscribe? Did that work? I don't think it worked. We got a bunch of videos of people doing it. Thank you for doing it. In my opinion, that experiment doesn't like, it doesn't move the needle too much.

I don't know if that technique is a big technique. The podcast keeps growing organically, but we didn't see a spike because we asked people to do it. Let's answer all their questions. Do you want to answer them today? I think next Thursday because I didn't have them. I got a lot of all. Yeah, the problem, and I apologize to people who send me things on Instagram. I don't check that ever.

Oh, yeah, I didn't even look there. You know, there's two inboxes on Instagram? Yeah, Facebook always does that with their shit. So I didn't know that that was even a thing, and I had all these nice people sending me reviews and stuff. You find it like a year later. Yeah, and I didn't even know that. So apologies. I listened back to one of the episodes, which is the most uber uncomfortable thing you can do.

I've not listened to one ever. Yeah, and I don't blame you. I listen back and, you know, you were saying you're very self-conscious now because we do the video. And that's how I am about the audio because I listen to it. And I'm like, what the fuck is wrong with me? Why am I talking this fast? Why am I breathing like that? No, I think you have a got, you got actually have a great voice.

I think you have good cadence. And someone at one of the meetups asked me, he goes, do you guys cut out silence? And I was like, on the audio we do. You do? Ishawn does that, yeah. Oh, I thought we didn't. And he was like, you guys are talking so fast. Yeah, so he cuts out om's oz, or big repetitions.

Like if I say the same thing, two different ways for no reason. and then I think he cuts a little bit of the gap between us when he doesn't like it. He's like a perfectious... I told him not to do it because it takes him like six hours to do every time. He's like, it makes a difference. And I was like, I don't know if this shit makes a difference. I got compliments from it. Okay, all right.

Well, he's going to justify it now. That's crazy. I just thought we were talking fast. No, people like the... We do talk fast, but it's the in-between where he speeds it up and then he cuts out any, like, extraneous bullshit. People like it. You know, I also got tons of compliments from Stu a few episodes back.

People liked him. People like Stu. Yeah. High approval rating. People like... He doesn't have to drop out of the presidential race like everybody else. All right, what do we got today? Speaking of presidential, did you want to talk about Bernie?

Is that what your first thing up here? I have a thing up there, but I didn't research enough, but I'll talk about it just quickly. So a bunch of people on Twitter were freaking out because Bernie's proposing this tax on vested shares that you haven't actually cashed in yet. Okay. And tech people were like, oh, okay, there goes the startup scene. Like, you know, if you're going to... I think it's crazy. I think it's crazy.

I'm going to tax people on vested shares that they haven't actually received the prop, like this company's not liquid. And so there are some nuances like it's written here. It's tax on non-qualified stock options of at least 100,000. You know, if you have over 100,000 in stock options that are vested and your employees making at least 130K.

So it's not everybody. And it's not all types of things. So it's not RSUs, I believe. Okay. So I'm not an expert in this stuff at all. I'm not an expert in politics. I know what I believe, but I don't know the technical.

detail. Well, let's agree to talk out of our ass for two minutes. I'm not going to talk about that, actually, but here's what I am going to talk about is starting a company and how it worked with us. And this will a lot, because I do know that a lot of people think, like, oh, the rich are doing this. They don't understand things. So when we started the hustle, I saved up $25,000 to start it. With that $25,000, I made $60,000 in profit in six weeks, which is pretty good. And the first year in business was roughly $380,000 in revenue and most of it was profit because I paid myself. I think we were in LLC. I withdrew $2,000 a month in salary. Salary. And that's why I paid my bills. My rent was cheap, very cheap, hundreds of hundreds of dollars a month. And I lived off $1,200.

Beyond that. Beyond that. I was very, I lived very, very, very frugally. And then we decided to raise a little bit of money. I raised, I think, $300,000 from people at a $3.5 million valuation. And you had to change from being an LLC at this point, right? Yep. Change to become an S-C-Corp, I think. It was an S-Corp? Probably a C-Corp. I don't remember. See, I'm not an expert in this. Yeah. You want to be a C-Corp if you're going to take investment. That's just like, you don't have to study all the differences between them, but if you're going to take like traditional investment, they're going to want you to be a C-Corp. So we converted. It costs five grand to do that. At this point, we probably had half a million dollars in the,

$300,000 in the bank count. I don't remember. Between $300 and $500,000 by the end of our first year. And we raised money at a $3.5 million valuation. And then once we started doing stock options and stuff like that, we signed up to Karta and they gave us a, what's it called the 409A? Yep.

Where we got... So that 409A just values your company at some numbers. So you guys had revenue, so they probably took some standard multiple of revenue. Yeah, so they valued us. And you want it to be low at this stage. Yeah, so they valued us in the millions of dollars of range. I don't remember. It could have been three and a half.

It could have been six. I don't remember the number. Whenever these types of businesses are, that's what they value. And you want it to be low because that's what your share prices. That's what your stock options are going to be if you're an employee. You want to get in at the sort of low valuation. So when it sells at a high valuation, you get this sort of increase in value. But if the 409A comes back high, then you're not going to get, you know,

as much of a lift on your share price. And so at this point, our 409A is many tens of millions, which is nice. That's cool. We have a valuable business. But when we started, it was single digit millions, which was still a lot. I was 24 at the time. I said I started with $25,000 and I was taking $2,000 a month.

I was not saving any money. Right. Okay. I'm not complaining because it worked out. But so on paper, I was a millionaire, multiple millionaire. If I had to pay, I think, I forget what this, I don't want to act like I know I'm talking about. Let's say if I had to pay 20% in taxes on that multiple millions of dollars, you wouldn't have had money.

I literally wouldn't have had any money to do it. Right. Even if I wanted to withdraw money from our business account, I would have had to lay people off. Right. So when people say certain people are hoarding money or something like that, a lot of times it's not true. And I have a lot of founder friends that have businesses that are on paper worth hundreds of millions of dollars. And they have tens of thousands of dollars saved. And the bank account, yeah.

They're not liquid. Yeah, I think people need to. And this also happens if you're an employee, you leave a company. You usually have what they call an exercise window, which might be 30 days, 60 days, 90 days. I think the normal is 90 days. So that gives you three months to come up with the money to buy your options or you lose them. And a lot of people don't have that money because, like, You know, they leave one company, it's a startup, and now their shares are worth 80 grand or 180 grand.

And they need to go, they want to go do a different job. And now they need to come up with 80 or 180 grand to buy out their options. That's not still a guarantee that that money's coming back. And often people don't have that money sitting in the bank, so they'll forfeit their options, which is a true bummer. Some companies are being cool about it, Pinterest, a couple others I don't remember, maybe Stripe. They increase their exercise window to seven years or six years. That's crazy. So they're like, look, we know this practice.

a little bit crazy. It's hard to come up with that cash and you worked here. You earned your shares. So we're not going to try to take those back. You have the longer window because we might be private for longer, which is kind of a cool trend. So my W2 company should do that. My W2 income. So at this point, I make money in eight or ten different ways. I got loads of things that just, it just has added up over time. And that's great. And I still pay myself a salary. I pay myself, um, not that much. I'm not the highest paid person here. Yeah. And I, um, I, um, But my W-2 salary, we're going to be four years old. I've been working on this as a project since 2014.

We're going to be four years old officially in April. Oh, next month. My W-2 salary in year one, I think was $24,000. Year two, maybe $36. And then year three, then I started going higher. Right, because the business was established at that point. But my W-2 income historically has been low, quite low. And so when I saw this, and I saw...

people getting mad at rich people, I'm like, I bet people thought I was rich, but I wasn't. You know what I mean? Yeah. And you wouldn't have qualified for this because it says you have to be making at least 130K, but if I had to pay 30% tax on my stock now, it would be painful. Fucking hard. Yeah, you'd be in a really tough spot. So, you know, Bernie, I like Bernie, but this is a little bit crazy. This will really screw up the way the startup's ecosystem works, but it can also adapt.

I'm not even going to take a stand-up. think it's crazy or not. I just am giving a perspective of my business. And I think I now, I think I have a lot more cash than even most people who have companies that are huge. What's your biggest regret in the way you set up or organized or structured the company? I wish I wouldn't have raised money and I would have just owned it all. And why's that? Because I would be greedier and richer. You didn't end up needing that capital. It's hard to say because it worked. It worked. if I wanted to start fresh again I would have been able to do it

I can start now What about advice? A lot of people think Oh this person's so successful Right you raise money from a bunch of cool Smart successful people Either in media or not in media Yeah so that was helpful

Was that truly like so did you get your sort of values worth On the advice component Yes Because I'm not sure that That typically plays out that way But I think you did It works Okay so look

Our network is so fucking powerful Me and you Our network is so powerful I have, I think, 35 investors, ranging from Tim Ferriss, the founders of nerd wallet, which is, who knows what that's worth, billions of dollars, the founder of the chive, founders of Bleacher Report, who else? Just look it up. A lot of people. And I text them. I just text them.

I'll say, you get a lot out of them, and I'll tell you two things that you do that gets a lot. First, your investor updates, which you send, you used to send more frequently. Now I send them quarterly, but before I, for. Monthly, right? 36 months. I sent up every single month. Every single month. And it was so well organized. It was basically like, hey, here's all the key metrics. You don't beat around the bush. It's like, this is how much cash we got in the bank. This is how much we made this month.

This is how much the email list grew. This is how much our open rate was. Boom. That's number one. Number two. And what was your second sort of section? The way that I set up, I was like, numbers. I go, here's the numbers. There's no interpretation. All right. All right. Let's get into it. Numbers. Boom. Okay. Then I go. And then I do things that are going well. Things are not going well. I need your help. Yes or no. Yeah. It was great.

And you sent that to, so you did the work to keep them engaged and stay top of mind. Do not underestimate this if you're doing your business. If there's people who are willing to help you out, you've got to find a way to stay top of mind. And part of it is you share frequent updates. And there's a very good sign if you're an investor. If you're one of your companies, stop sending their updates for a bit, that company is about to die or they're on their way to dying. And they go into a shell. And Paul Graham has this great post, which is just like, um,

As an investor, when you see that, you know it's time to go check in. And as a founder, ironically, that's when you need the help the most. So don't go quiet when you need to help the most. That's when you need to be talking and asking. And maybe you actually won't die if you can keep that going. What other mistakes have we made? So I always regretted the – I think that the normal way that people give out equity is a little too founder greedy.

So I wish I had given more equity to my team. and so like, you know, basically I wish I had just negotiated it better between what do I get, what do the investors get, and what does my team get? I think it was imbalanced. I think some of what the investors got, the team should have got, some of what I had, the team should have got. Because really, like, the people who are there as person four, five, six, really, they're taking just as much risk as you are in a way. Like they were there when it wasn't obvious that this was going to work. And so for the All-Stars, I wish I had given more. And next time, my next company, I'll do just that.

I will make sure the core four, core five people. I'll make sure it's not like, like typically in a company. How big with the pool be? So I don't know exactly what the pool will be, but let's say let's go what's typical. So typical company, two co-founders, you start 50-50. You're going to raise some money. They might end up taking 25 to 30 percent of the company, depending on how it goes. Let's call it 25%.

And so, you know, as the founders, you've diluted down, you're at, I don't know, my math's bad. But let's say you're both at, what is that? 30 something, 35% each now. And so, you know, that's where you're at. And then your team, the option pool, they typically say is like 10 to 15% is your sort of option pool. Yeah. So the first few employees might have like, you know, the key person might get like one to three percent. And then everybody else is below that, is below 1% essentially.

And I just think that's like a pretty hard skew. So I would try to get multiple people in the sort of one to, one. to four percent range. I would try to have like my core, my core team all be in the over one percent range for sure. And whether that means I take the haircut or investors take the haircut, that's what I would do if it's a tech company. This is very different if you're not a high growth tech company. Would you start it in San Francisco again though? I'd start it wherever I live. And so if I'm if I wanted to live here, yeah, I'd start it here. If I wanted to live somewhere else, I'd started somewhere else. Now you can start it definitely anywhere. So it's just about your preferences.

I, if I was going to start again, another thing that I would do is I would go and get a job somewhere and just make, like when I started, I hadn't, I didn't, I was always self-employed mostly. I wish I would have worked somewhere maybe for a little while. Before you did it or you mean as a do something as a side hustle? Before. Oh, you just get the experience. Yeah, I think it would have been nice and to save money. That's interesting. I wouldn't have thought you'd say that. I think it would be helpful to understand how things were. I think if you did it for three months, you'd be like, okay. I'm done. It would have been nice to stack some money away. Yeah, that's fair.

But hey, it all worked out. You want to talk about some stuff? Yeah, let's talk about some ideas. Okay, let's take a quick break. And let me ask you a quick question. When did Noah build the ark after the rain? After the flood? No, before the rain.

So as an entrepreneur, Quiet Light Brokers wants to remind you to prepare before you want to sell your business. You don't just sell it right when you want to. you plan your exit for six figures, seven figures, or eight figures. Quietlight Brokerage is a group of trusted advisors that can help you not just survive the tides, but exit on your own terms for the price you want at the time you want to the buyer that you want. As you chart your way towards an exit, you got to first start by understanding the value of your business. If you want to see a 25 point checklist to see how well your business scores across the four pillars that they have seen drive value for all the sales that they've seen in their portfolio,

You can find that checklist at quietlightbrokerage.com slash my first million. That's quietlightbrokerage.com slash my first million. Check out the free assessment, see how your business scores. If you want, you can get a free consultation for your business as well, but no pressure, no gimmicks, no sales pitches. You know, Quiet Light is an entrepreneur-led organization. The founders have built and sold businesses, bought businesses before themselves. They're not just, you know, sort of quick fly-by-the-night brokers.

and they advise you to use the best data to help business owners like you reach your financial goals. So grab the free guide. It's over at quietlightbrokerage.com slash my first million. Support the pod. Go check them out. Run the world. I'll start there. Cool.

Perfect timing. Perfect timing. So these guys have been working on this obviously before this to, I think female founders. And what this is is it's a digital conference. So especially with coronavirus and you've had major, major conferences shutting down. So Facebook's F8 conference, done. Sales law canceled. I believe GDC is done.

I predict South by Southwest, but this episode will air in a couple of days. I bet you they're going to cancel. Yeah, so tons of these conferences are closing. And this is a great experiment because I've always wondered why aren't there more digital conferences? Now, we built a product called Blab that was sort of like this. People used it this way, a bunch of podcasters through a conference on our platform. And I just thought, hey, this is cool because you could be remote. You can be anywhere in the world.

You can attend this thing. And what does the conference have? It has speakers. Cool. You can stream that online. No problem. It has like exhibitors. Cool.

You could do that online if you want to do. And it has the networking. And that's a little bit harder to do online. But you could do that as well. It's missing the biggest component though. Which is what? Serendipity. Yeah.

You have to engineer that serendipity into the product. That's the biggest part. So these guys claim that they sort of have recreated all of that. I don't know. I haven't used to yet. But the cool thing is we're now going to find out because with all these conferences canceling, Run the World is taking advantage and they're going to all the conferences

as they're saying Hey, host it on our platform We make this really easy for you They have a cool model where basically It's no money in They just take 25% of the ticket sales Whose computer is up here? Can you Google Run the World?

Yeah, pull it up And so they've raised a bunch of money from Andrews and Horowitz this week They announced it And it's funny Henry just Googled to Run the World And the Beyonce song came up Which is hilarious

My friend had a company called Little Things, which is the... Is that another song? It's what's the boy band with Harry Styles? Oh, it's a... What are they called? Five. Something like that. That's right.

You could talk, Alan. Yeah, run the world today. Run the world. Today is the URL. So live events worldwide. Anyways, I think this is cool, and we're going to find out if this is, like, they've been dealt the best hand for their product right now, and we'll see if they can pull this off. That's interesting.

Do you think that the... Like, I think we should do one of these for the listeners. Like, just like you do the New York meetup, I think we should just take this for a test drive. I think we should just do an impromptu one and hang out with people, let everyone meet each other. I'm down. Okay, if we had to make predictions, if this is going to work,

I would say the safe bet. The safe bet's always no. The safe bet's always no. Okay, but if you had $100 million, would you invest $2 million into this business? I don't know who these people are, and I haven't played with the product. So that's the caveat.

Let's say I met the people and I played with the product and I felt like they did the thing you said, which is it wasn't just a live stream of content or a chat room. Like there was some way to engineer the serendipity of the networking in a conference or the discovery of new products. Right. Like so if I felt like they did something different besides just a teleconference like live stream, then I would buy it. But I got to feel the magic. That's a stock photo. So there's a, Henry's pulling up a photo right now of a mug that says hustle. We use that photo.

That's from Splash that. He was like, yeah, he thought that they stole it. Henry was writing up a cease and desist during the podcast. That's great. Okay. Run the World. Internet conferences. Hmm.

You're in or out. I am going to say 51% in. Okay. All right. We'll take it. So here's all we'll do. By the time this airs, I'm going to have set up the Run the World Conference. The link to it is going to be in the show notes.

And we'll figure it out. So go in the show notes right now if you're listening to this. and get a ticket to attend our conference and we'll try this out. And then we'll let everyone decide. Is this cool or is this like one of those ideas that sounds good in theory, but it misses the magic and never works. Henry, go to goaddy.com real quick. Pick a URL and we'll send them to that URL as well. I mean, I hate going to the show notes.

Okay. Either way. I mean, we could just put it on our My First Million podcast.com. My First Million.com. My First Million Podcast.com. Okay. My First Million Podcast.com. It will be a conference.

Do you want to charge for it? Yeah, yeah. Tickets will be whatever. I don't know. We'll pick a number. Okay. We'll make it cheap. 20 bucks.

20 bucks. And what it will be is, what will it be? We'll invite our friends. So we'll invite some of the people that we think are the most interesting. We'll do a talk on, hey, how do we build, you know, we'll do the things you do in a conference, right? So a couple speakers, up fireside chat, and then networking where people can meet each other. Okay.

And we'll limit it to 100 people? Yeah. Okay. 100 people, some amount of money, My First Million Podcast.com. Yeah, we'll try it out. All right, sweet. What else we got on the agenda?

Oh, I have one. Scroll down. You want to talk about some book club stuff? Yeah. When I moved to San Francisco, I started a book club called the Anti-MBA, and I did it because I didn't go to an elite Ivy League school, but I was always envious of those people

because when I moved here, I didn't know a single soul, and I felt I always like stereotypes of people as like tall, beautiful white teeth with peasant, Patagonias and they had like lovely networks. That's what you saw all around you. Yeah, just like these like rich white people who that's how I like, right. That's how I imagined it. And it kind of was that.

And I was always envious of that. So what I did was I create a book club meeting where we would meet every week and we would read one book a month and I would convince an expert. How did you convince people to join this? Where did you throw it up? You know how I do. I'm just a cold email guy. I just learned how to call the email people.

And I did it online. So each week we would have 30 people show up. and I probably had an email list of 5,000 people who would. So this was not in person. This was all online. 30 people in person, Siva. Yeah. A lot of my best friends, I met this way.

30 people. My friend had an office and you let me use it. And we would just meet up. And I would read a week ahead of time and just make notes and lead discussion. And sometimes we would have an expert. Okay. And then I would send show notes or meeting notes to the list. And people loved it.

I made close to no money off. of it or I don't think I made any money off it. I just did it for fun. And it was very successful. And a lot of people said that we should make it a thing. I think it's a stupid. I thought it was a stupid idea. But book clubs are actually kind of interesting. So there's this business called Book of the Month Club. It was started in the, I believe it was started in the 1930s. At this point, it was owned by Bertelsman, which is a large publisher, a multi-billion dollar publisher. And then recently a private individual bought it for single-digit millions of dollars. In the 40, in the 40sman. 50s and 60s, this was massive. I mean, it was millions of people paid for it. So it was quite a

large business, hundreds of millions of dollars, probably in the 60s and 70s. It's gone away once Amazon came around. A guy bought it a couple years ago, and it's quite large still. And what they do is score down a little bit more than $2.000. 90 million users? What the hell? No, that's good reads. Oh, that's good reads. And so Book of the Month Club now has 100,000 active paying customers. Wow. Which means they're in the revenue range of 10 to 15 million a year in recurring revenue. And the founder said in an interview, he wants his goal is to grow 5x a year. Five X a year.

Nice. For the next year, not consistently. I don't know if that's, I think that's bogus. But Book of the Month is kind of an interesting thing. I suspect, I've always thought that it would not work. Now my opinion has changed. So Goodreads has 100 million users. There's this thing called the Wattpad.

Have you heard a Wattpad? I've heard of it, yeah. Wattpad, a lot of people don't know about it. Wattpad, it's owned by a guy in Canada, and they have 400 employees. It's a multiple $100 million year business, I believe. It's a book club for, it's not a book club, it's more. You write on it. You write original stories on it.

Yeah, but their category is middle America romance novels. So if you're a 40-year-old woman, you probably have heard a Watt-pad. You're saying that's the most popular category. Yeah, but it's pretty much all they do. Oh, really? Okay. It's basically for women who, it's like, Men do video porn. Romance novels says woman porn.

I mean, that's basically what it is. And so, it's huge business. And now I'm quite bullish now on these book clubs. Yeah, Reese Witherspoon has a book club. My wife uses it. My sister. So many people, have you heard of this? No.

I haven't heard of that one. It's called Sunshine, some fucking thing. Oprah had hers, but hers wasn't on paid membership. But this is really smart. Like what you're describing, I'm like, oh, this is good. And I think you've got to have, probably not got to have, but it's advantageous here to have a brand like a Reese Wither student or whoever, Jennifer Aniston or Gwereyne or whoever, or like The Hustle could do a book club, you could do a book club.

Like I think that you have to have a bit of cachet to organize people around to get the energy going, that initial energy you need. So here's one angle. You buy the rights for the book, which is expensive. Yeah, why would you do that? Well, because I think the margins in books are quite small. I've talked to Tim Ferriss about this. He told me that he earned.

he didn't say that he didn't tell me this but he told me I mean I think that he does about a million a month in revenue off his podcast and he told me that he this is what he did tell me he has made 10 times more money off the podcast than all of his books combined right so I don't think people get paid a lot of money for books so the margins are so it might be a cheap asset you're saying yeah I think it's quite cheap so I would want up my goal would be to buy the rights to the book and make it popular you know who have you heard of um there's this company that um um owns the company that owns proactive. It's called I know what you're talking about. It's the skincare. It's a direct marketing company. The guy who owns it, it's a quite large business.

He got his start because he bought the rights to think and grow rich. Oh, really? And he helped make it popular again. Oh, wow. Through infomercials. So that's what I would do is I would want to buy the rights to all the books.

And there's another company called Mentor Box that does this. And Ty Lopez is one of the owners. So it's incredibly scammie. I mean, like you said, sign up for like $20 and then it rolls into like a $400 a month thing it's like fucking stupid um but book clubs are super interesting to me so would you do this uh like if you were going to do this now how would you attack it what would you do so you'd buy the rights of the you'd buy the rights of which books if i wanted to bootstrap it no you can't how would you do it

so what i would do is i would look at what vinyl me please vinyl me please is my friend's business it's a uh probably a couple million bucks a month subscription thing so what you do is you give them $50 a month and they send you a vinyl once a month. And so I would do that but for a particular type of category. So what I would do is I would create a Facebook group and I would say it's $30 or $50 a month. And we're going to read one book a month. I'm going to get one expert to come and talk about the book each week or each month. We're going to do it in a Facebook group and I'm going to send you notes about the whole book.

And what category do you think you choose? Would you do the romance novel or would you do business or would you do self-help? Well, just because I have such a networking business that I could just crush it around the bat. But romance novels, I know this from experience because I've invested in these types of things. Romance novels have the highest liquidity, as in people consume them the most. Right. So I would- They're like voracious readers.

Five times the number of books read. Romance category is probably one of the most, it's probably the most popular category on Kindle. Yeah. I bet you it is. So, okay. Me personally, I would start here. But if I even slightly was interested in romance novels, I would. And I like what this guy did, uh, buying.

the rights to the Book of the Month club for, you know, a popular asset that's sort of decayed over the last 30 years and see if you can revitalize it on the cheap. I think these are interesting businesses. There's so many books that I love that are written in the 60s and 70s, and you try to buy them on Amazon and they're hundreds of dollars because they've just been forgotten and they don't reprint them. Right. I just tried to buy a book the other day for that someone mentioned it on Twitter and it was $900. What book? It was, so I just tweeted about Agora that's the scummy company. which we can talk about if we want, but it was all about copywriting. It was 900 bucks. Wow.

Okay. Yeah, let's talk about Agora. Okay. You want to hear about Agora? Okay. So, Agora is what? It's a B2B paid newsletter company. Yeah. Henry, go to- Has absurd revenue. Go to my Twitter account. Okay, so here's another interesting company. I know this because I'm in this world and it's directly related to us. Yeah, just the Sampar. Yeah, whatever. That's fine. Okay. So Agora, a crazy interesting background. So, Agora was started by this guy named Bill Bonner in the 1970s. He was a publisher. He had a magazine about money and investing and things like that.

And then he decided to start changing how he did his marketing. And he created a newsletter that became quite popular. At this point, you'll see it. It's the most popular one. No, up higher. At this point, they make, it's rumored to be, one and a half to $2 billion a year. And the way that they do this, there it is, they own 20 to 40 different newsletter publishers. And what they do is, is they buy a ton of traffic to their funnels, their marketing funnels, and right off the bat, they'll sell you a $50 product. Right. And once you buy that $50 product, they now have a large database and email list of qualified buyers who are interested in a particular topic. And they typically lose money on this first purchase. So let's say that they have a book,

that's 50 bucks, they'll spend up to $200 to acquire you, meaning they'll buy a ton of ads and they'll lose money on you. But they'll make it up because they call it a back end. On the back end, they sell you a $2,000 paid newsletter. And this company in particular, they even sell supplements and shit. Now, some people think that they, some people love them. And when you own 20 or 40 different brands, you're going to have some legitimately great products. Right.

So what's their best product? Um, money mappress.com or yeah, money map press. So this is for hedge funds, for financial traders? No. Um, yes, some financial traders. Their, their typical audience is white men between 50 and 70 who, who, who are conservative and believe in like the government's going to come and like, take your money. Um, I mean, that, it goes like, so I sign up some of their funnels and there was shit like,

if you go to bright bar.com, you'll see an ad that says like Nancy Pelosi's coming for your money and things like that. And you sign up. That takes you through one of the Agora funnels. Uh-huh. And it's a $5 book. And then, yeah, and then you'll go through these funnels. Now, let's just get rid of the whole unethical part because you can learn from everyone.

Who cares if it's unethical or ethical? It's fascinating regardless and you can learn from it. What they're experts at is copyrighting. And everyone in Silicon Valley, not everyone, but you get the point. It's all about design. It's got to look good. It's got to be aesthetic. Their websites are a blank page with text.

Right. not just text, but like fucking 5,000 words and a buy now button at the very bottom. It's crazy. That's fascinating. That is fascinating. And I think you're, you know, that Peter Thiel quote where it's like, what's something you believe to be true that few would agree with you on? Yeah.

I feel like, you know, you might have many, but one of them would be copyrighting over design any day. Copywriting over design 100% any day. Most people, I remember when I learned the word copywriting, because I was like, what is everyone talk? What does copy? Why does everyone just keep saying this? And like, I literally was at work and people were like, hey, can you give me some copy?

I was like, coffee? She just asked me to go get a coffee for her? Like, I had no idea what the fuck she was talking about. And then I sort of learned, oh, copy means text that's going to go on the website. And then through you, I realized, hey, wait a minute, the text that's on your website is essentially your salesman and sales gives you the money.

I should probably learn how to do this. And then I went deep on it. It's the most important skill you can learn Because I've spent years learning it, if you just give me a blank web page, I will make money until I die. I will always have a job because I can do that. Now, what I could do is do really unethical shit and scam a lot of people really easily. But if you know how to copyright, you know how to persuade via the written word? Yeah, I would say persuasion is the most important skill, whether it's through the written word verbally, you know, I don't know if there's some other variation.

Yeah, but copyrighting is just the form in which you learn it. Now, the way that I describe it is if you're a good copywriter, you understand what motivates people. And if you understand what motivates people, you can create products that they'll want. That will appeal to people. Yeah. And then if you are, that is, that's the, when you do copywriting, you just learn what motivates people. And then you just happen to use the written word to communicate. Yeah.

When you mentioned the boron letters and then I just went deep on that, that was like my foray into this. So we'll do a whole section on. Did you read the copyright? Yes. And then I started like doing all the things. it because I got obsessed. So the boron letters, if anyone's curious, Gary Halbert is his name. He's dead now.

He died of a hard to have. It's actually kind of hard to find. It's hard to find. But there's one link, and if you get to it, it's like chapter one, two, three, and it gets to 19 or whatever. It's this copywriter who's one of the best copywriters of all time. And what he would do is he was such a good copywriter that he kind of turned into a crook.

And so he would write these sales letters to buy, like, encyclopedias or and buy, like, fucking anything, just shit. So the boron letters are, the way it starts, it's like he's writing to his son. He's in jail. He's in jail writing to his son and he doesn't start off by being like here's how you copyright. He's just writing to his son and it's one by one and each one's a teaser. Every sentence teases the next sentence and every letter teases the next letter and then by the time you get 20 deep, you're like this guy's a master. It is awesome. So read that. All right, what do you got, Sean? A couple others. Okay, so here's an idea. So I was talking to my cousin and so we were

talking about like one of my cousins, he's young, he goes on dates, uses the apps, boom, and boom. And then like our aunts and uncles are always like, oh my God, look at him. He's just swiping left and right. He goes on dates. It's like really foreign concept to them. And so that was one data point. Okay.

Just kind of noticed, wow, my aunts and uncles, they really don't get it when it comes to this online dating thing. Data point two, I'm watching the debate. And it was, I watched so much shit online that when I watch traditional TV, first of all, it's so slow. And secondly, I start to see the commercials. And I'm like, oh, this is what's being advertised to mainstream. Extreme America. Like cars and drugs. It's very fascinating.

So like Noom was on there, which is like the diet like nutrition plan thing. They do really, really well. No.O.M. We should break them down later. They advertise. But the other one was some, it was this gray-haired woman comes on the screen and she's like, oh, online dating. Where do I start? And then it's like, well, open up your browser type www.w.

And then end up your URL. It's like, and then start clicking around. Like that was literally, that was the ad was like, how do I even get started? Here's how you get started online dating. I don't remember the name. Oh, come on. It wasn't like a match or, you know, I had never heard of it before. So I started thinking and I was like, you know, there's so many people that are sort of in my sort of extended family and whatnot that are divorced and they're alone.

And so I was thinking about them. I was like, you know, it'd be great if they found someone. But the reality is they don't do a lot of online dating because it's so scary and foreign. And it's not the online part that's scary. It's the expectation that you then need to go meet somebody. And so like, let's take my uncle, for example. My uncle's, I don't know, 65 years old. He is divorced.

He gets lonely. His kids are all grown up. Everyone left the house. And, you know, he doesn't want to actually, like, it'd be great if he met somebody who was awesome and they could just, like, be companions for the rest of their life. But he's sort of like, dude, I don't want to get out there. Like, last time I went out of a date was 40 years ago. Like, I think I'm just out of the game.

It's easier to be lonely than it is to put yourself out there. So, anyway, long preamble for the idea. The idea is a service that's for older people. Let's make it just 50 and up as a rule. And it's called just talking. And the expectation is you're going to go on here with other people who are like you or are sort of single, might be alone, looking for companionship, but it's just talking. You can't meet.

It's not their real names. It's nothing. It's just somebody you could log onto the computer and just talk to either through audio or text. And you could talk to them continuously or you could switch and pick somebody else and talk to them. But it's just companionship as a service. And it's not dating. You're not going to start going out with this person.

and you're not trying to get remarried. You're just getting the reps in. You just don't want to be lonely at home anymore. And honestly, you can have a virtual relationship, you know, through this. And it's because I was also watching Love is Blind. So good. And I was like, dude, somebody should make an app that's just this now off the back of this show. Such a good idea.

And so anyways, these are sort of some ideas. Let's learn about it by I love it. I love it. That's a winner. What I would do is I would go and do research on the sex hotlines that you sue exist that probably don't exist anymore. Right. And I would want to learn how they worked.

I bet they crushed. So I'll shout out some like tangentially related. So sex hotline related but obviously. Master P. You saw one for sex. That killed it. Then there's one, a startup out here in San Francisco called Papa.

Have you heard of this? Papa. Yeah. No. Papa is grandkids as a service. So it's just young people that you, that will just come over to your grandparents house and just do stuff for them. And like talk to them but like also do their laundry and like take out that trash.

I don't know if they're doing well or not. They just launched. They raised a bunch of money. And because there's this huge aging population of the best. baby boomers. And so there's this wealth of opportunities that are for this, the largest generation of people ever in America is now getting old. And I forgot this woman was calling it the, the gray new world. And, you know, for gray hair. And so she's like, you know, the gray new world opens up all these possibilities. So one is Papa, which is grandkids of as a service. One is

honor because, uh, I know honor. There's a huge shortage of caretakers for for the elderly. And so honor is a on-demand caretaker platform that, you know, is dispatching. But you're getting off track here. Are you going with caring for old people or helping people get laid? I'm talking about just talking. That's my idea. But I was just tangentially saying there's some other businesses that are trying to help this same population. What do they do? Never heard of that? No. Jack invested in it and he says it's going well. It's called Relationshiphero, Relationshiphero.com and they teach you how to do online dating. Oh, okay. Just coaching for online dating.

Can you go to Relationship Hero? That's how it started as. It might be a little bit different. This would be for younger people though Or be for whoever I think it could be I think if you did just talking and you ran a bunch of Facebook ads You could get a lot of people to pay To be a part of a community of people

Where they can have these Online relationships I love it Expectation is you do not go offline I think it's great You know why I think it's great Is because the way The way that you're positioning it

Is as a marketplace Those are notoriously hard to make But once you have them they're great Yeah The reason why I like this is you can kind of fake it at first. Yeah. So you can just hire people.

You can have some operators. Yeah. That are providing that companion. I think it's a great idea. You could cede the marketplace with the operators. Yeah. I think it's awesome. We talked about only fans.

Yeah. That's trending today on Twitter. Is it? Yeah, worldwide. Because of what? Some shit must have gone down. I didn't get the joke. I clicked on it and tried to understand it.

And I didn't get it. One out of three Twitter trends. Yeah. It was a top only fans, which we talked about. Only fans, great business. but I love just talking. I think that's a great idea. Thank you. Thank you very much.

No, I think that's a winner. All right, I have a question for you now. So before last week, I think maybe it was when I was with Stu, but I shared this anecdote or this sort of advice, which was if you're offered a seat on a rocket ship, you know, don't ask which seat, just sit out and buckle up. And this is just career advice, which is if you're not going to start your own company. You got a flag for it.

Did I? Yeah. Oh, I thought people loved it. What do you mean? Well, what was the criticism? a nice size audience, not everyone's going to be happy. But what was the criticism based on? It wasn't even controversial.

Just stuff like titles. It was just comments, like people saying titles are important. How much you get paid is more important, things like that. That's crazy. Disagree. Hard disagree. Okay, so anyways, the question was, sort of that led to a different question, which is, what are the rocket chips of today? And so somebody, by the way, took that idea and made a rocket chip newsletter for jobs

or whatever. But beyond that, I was just sort of thinking, just my thought. experiment. What companies that today are worth one to five billion do I believe will be multi-hundred billion. So what's just as a way of phrasing it, simpler, what $5 billion company today could become a $500 billion company in the future? I say this because we have friends who bought Facebook secondary stock back in 2006 and 2007 when Facebook was valued at over a billion dollars. And today Facebook's like whatever, a $500 billion company. And that, you know, It was clear it wasn't going to zero.

It was clear it was a thing. And the question, but you could have invested then and got a phenomenal return. And I have several friends who did. I had a friend Alex, oh, no, sorry, Josh Buckley, who's a good guy, founder. British guy? Yeah, he's a British guy. And so he was telling me, we were just hanging out one day. He's like, yeah, I'm buying secondary stock of Stripe as much as I can get.

And I was like, oh, like, what do you mean? Like, I'm not doing that. Why are you doing that? I should do that. And he was like, yeah, I just think Stripe's a great company and there's secondary stock available and I'm just buying it. I'm like, well, what's the valuation? It's already like a $2 billion company. He's like, yeah, but it's like, Stripe's going to be big.

He's like, I think Stripe's going to be huge. So I'm just buying up secondary. And now, so Stripes valued now at like $20 billion. So he took essentially like a no risk bet in my opinion and 10xed his money on a private company that was, it was already a unicorn but wasn't yet on the stock market. It wasn't doing like 10% a year. You know, that's a 10x appreciation. So, long story short, what companies do you think have that potential that are in the single-digit billions today or less that that you think could be a Facebook, Google, Amazon of our generation? So a few years ago, I answered this question, and I thought it was Atlassian, and I went in on that, and it worked.

Okay. Tell me about that. What do you mean it worked? Back then it was... Can you just look? Go ahead, Henry. Look, go to Atlassian stock. We're busy today. I invested in Atlassian stock I mean it's not like I like Yeah Atlassian It's spelled with an AT

AT There it is Yeah and then go to all time I bought at last Max on the far right I bought it when it went public So what did it go up by It's like a 3X already

So I 3X my money So I bought it Lassian because I read their annual report And I was like oh these guys are great Right so their market caps now 35 billion Yeah so I bought it right when it went out So that worked out well. What do you think can get to the over $100 billion?

It's very hard to get over $100 billion. How many companies are worth over $100 billion? Like 50? Very few. Especially if you think about tech companies. So some of the tech companies that made it, Amazon made it, Google made it,

Microsoft made it, Facebook made it. Uber did not quite make it yet, but it's getting there. Tesla made it. Like I think I invested in Tesla when it was at about this number five, five to $8 billion.

Oh, really? And now it's almost $100 billion. And so like that's a big lift of a company that it's out there. It's not a seed-sade startup you're taking a bet on. It's a company that's out there. And the other way to take the bet on it, even if you're not an investor, is to go work at one of these companies, right?

So, like, Airbnb was a good candidate. Now it's value too high to qualify for this. Airbnb is like at, I don't know, $35 billion or something like that. We'll see what happens with this. But it's not in a single digit billions anymore. But when we moved to San Francisco, we could have done that, right? When I moved to San Francisco, I had a job offered Airbnb when it was worth a billion. One billion.

Maybe less. I don't know. There was only, no, it was less. It was just 12. Right. So let's just say it was at a billion, which it wasn't, but let's say it was. Yeah, I would have made $10 million. I don't know. It's 35X. So even if you had just gotten a sort of standard stock package, which was like over four years, you're going to get 200 grand. Yeah, I would have made $5 or $10 million. Yeah, that's insane. And I got fired before I even showed up to work. So some other candidates that I put up here, Flexport, I think, is a candidate.

Maybe. Oh, you got some inside Intel? That sounded like a juicy maybe. Well, Ryan told me he thinks it's going to be massive or it's going to go bankrupt, which is like how you're going to be when you're... Yeah, that's how you're going to be. That's how you got. So some other...

This was harder than I thought. I also tweeted this out. So the most popular answers I got was Airtable and Carta, and I pretty much disagree with both of those. I don't know. And I asked, these are smart people replying. And I was like, Carta? Why Carta?

We should get Carta to sponsor this, by the way. Yeah, why are they not sponsored this podcast? I don't know. You guys need a sponsor. And I'm going to... I don't think. give a fuck of people's sponsor. I'm going to tell you the truth. Karta, it's the best option out there, but it still needs a lot to improve. Right. I use it. I give you guys five grand a year. I'm happy

that I give you the money, but it can improve. Yeah. So air table, air table, it would have to basically replace Excel in the corporate world for it to do this. Otherwise, it will not be a $100 billion company. How about Gusto? Gusto is a good one. So I think there's a lot that are in the sort of either HR tech, just you need to be in huge spaces. I like gusto and Rippling. Yeah, Gusto, Rippling, I think I mean, $100 billion is a high bar, but yeah. So other ones that I put up here So Stripe, but it's past this point.

So Coinbase only if Bitcoin actually becomes Like if Bitcoin actually is the thing, it becomes the global reserve currency, then the largest Bitcoin sort of company, the large Bitcoin brand would be, I think. Yeah, it just has, can it become Bank of America? Can it become Wells Fargo?

Yeah. But I think Bitcoin has to become that relevant for Coinbase to be the bank of money. I buy that. Open Door is another one just because residential real estate is so big. So if they actually have a working model, they could become a $100 billion company. I don't buy that.

Because what? Because Zillow and Trilly aren't that huge. They don't do what these guys do, though. Zillow and Trulia, they sell leads to brokers. They're now trying to copy Open Door. So now they offer what Open Door offers. But Open Door is literally buying and selling the houses. They're flipping houses at scale, which is pretty crazy.

What else? This was tough. I don't know. That's all I had. But I put this on here. I wasn't going to talk about it initially, but I'm like, I want to bring this up. I want people to tell me what I'm wrong about, well, what companies I should be considering in this. But I think this is a really important question because for me, I'm going to go try

to buy secondary stock in all these companies. Okay, so I don't. And if you're working, you should go work at one of these companies. A hundred billion is, that's impossible. I won't even, I'm not even going to try to predict that because like only like a few hundred people, a few, a few hundred businesses have ever probably done that. I don't know the number, but that's really hard to say. If I had to make a prediction,

I do think that there will be some new search engines. And I also think that some of the new Chrome replacements could be quite large. So Brave is one of them. What's another one? Replacing the browser? Yeah. Anything that are replacing browsers,

I think are kind of cool and could potentially be that big. I think there's going to be a lot of browser. I think if any company nails AR, they will be able to do this. But that's not ways away, I believe. How about a Zeusk? Zooks, the self-driving car company. Yeah.

Yeah. So that was the other, I considered all the self-driving car companies because I'm like, if if one of them becomes a success, a successful self-driving car company, the market leader will be worth over $100 billion. It's just more likely, I believe it's more likely to be Tesla or one of the incumbents. They'll buy one of these companies rather than that company independently going from where it is today, which is $1 billion to $100 billion. How about this?

What companies are public now that? could grow that much. So I was talking to Moise the other day and we were looking at stamps.com. They were crazy undervalued and the next day we were like, let's buy this. The next day we didn't buy in time. It went up 50%. Went up 50%. Yeah, I love that. It was coincidental. Just, I saw an interesting stat. Over the last 10 years, if you had just bought the Fang companies, so Facebook, Amazon, Apple, Google, in the 10 years, it outperformed all VCs, or sorry, it outperformed even the sort of top like expected returns of venture capital

so the public market if you just bought the five most popular tech stocks you did better it was a 24% IRA over 10 years okay well what's public now that could I don't fucking know that's a great question it's that's hard you got to really bet on industries what do you got what about like whoever becomes the leader in sports gambling sports betting

good That's a good. That's a good. Whoever is the number one, whenever that is. And if the legislation keeps opening up. That's a good call. I would do sports betting. I would bet on that industry.

That's a great call. Okay, we ventured off into stock tips, so I want to get back because we don't know shit about the stock market. That's not our promise. Let's tell them something else that we find interesting. What else you got? You want to do one more? I'll mention one of the cool company that's related to stocks, actually, publiccomps.com. So public comps.

Yeah, so I'll go. He's just breaking down S-1s for companies, which, like, a lot of people like to do nowadays, but it's just a good, you don't have to do the research. This guy does the research for you, and he publishes it. I like it. Let's do, let's wrap up with made renovation. You talked about this in one of our very first podcast. Yeah, exactly. So one of our very first ones was like, hey, I saw this ad.

I think this is an awesome idea. What it is, if you don't remember, because you're not a diehard. What it was is it's a turnkey bathroom renovation. So if you want your bath, so the ad was just a dope looking bathroom. And it was like, if you want this bathroom, it's like, five grand. And you don't have to like, because what happens today, you have to hire a contractor, you have to come up with the vision board of what you want to be. You have to choose all these different materials. Then he sources it. And then it turns out. And then it's like that's like that's a one off.

So they have like four designs of bathrooms. You just pick which one you want. You want the old Victorian cool looking one. You want the modern one or you want the middle of, well, the road one. Yeah, I always said I wish barbers for it. And here's the price and you just push the button. Yeah. It's like actually, some barbers do this. You go up on the haircuts. Yeah, I'll take the number three large. you know no problem so that's what these guys are doing for bathrooms i thought that was really smart so it turns out this was not just like some random started this is roger dicky was starting this and he's a he started gigster um he's he's done some cool stuff in silicon valley before so he's not a sort of a joker and um they raised nine million bucks and they came out of stealth and i was like i get myself

a little pat on the back that's a good one that's a good call that's a pretty good call i still think it's a very cool idea and i also think that anybody could compete with them because this will not be win or take all because you have to be doing local renovations in different cities. They announced it this week. Good job. Can I get myself a pat on the back? One of my first angel investments, Lucy. Lucynicotine.com, I think, or I don't even know what the URL is, to be honest.

Explain what it is. People don't know. I don't, but it's huge. It's like replacing Jewel. Yeah, so I invested in all my friends at school. All your what? All my friends at school. All your friends are buying Lucy?

People are, yeah. Oh, fuck yeah. Money of the Bank. Okay. So one of my first ageal investments, I don't remember when this was three years ago. The founder of Soylent, Dave, who's my friend, Dave Renton, Renton, he started this thing. And it was basically a Nicorette. So it's, new age nicotine gum.

And he told me about it. And I was like, all right, well, Dave, you started Soilent, so you're pretty smart. you scaled that thing up. I knew him well. He's a good guy. And it's a big market. It's nicotine. So I'm like, okay, well, I mean, this is.

Retention is going to be good. Yeah, I'm a, I'm a nicotine user. I like the gum. I chew the gum and I like the, you chew the garrette? Yeah, I prefer lozenges. So I'll put them in my mouth. Okay.

And, um. But you don't smoke, so you just do this, just nicotine. I like nicotine. It's, I don't drink and I don't smoke. It's, it's my, that's my vice. And, uh, And it's a monthly subscription. Yeah.

I was like, yeah, of course you'll fucking knock that one off the park. Really smart. And they just raised a lot more money. And so on paper, which is completely useless, on paper, is not going to buy me a house or pay my rent. But the valuation went up significantly. So I got a little... My corner store guy has it at the front by the register.

And I said, okay, whatever's at the front by the register, that's what's selling. That's what this guy knows will make him money. Is it really? I sent Dave a picture. I was like, look at a shit. Henry. Although the guy at the, I asked him,

I said, how well does this? sell. He's like, it's pretty good. It's not Jewel, but it's pretty good. Of course, that's not Jewel. Are the kids are buying Nick, Lucy? Oh, fuck yeah. Money in the bank. Yeah. Pay the taxes on it. Oh, fuck.

Money in the bank. I think that's a 5 or 6x so far. I'm proud that would be a That's a good investment. I like that one. That would be a good ones. I think we're one of the first folks in on that one. fucking A I hope it works

and just for the while it is awesome I it's totally luck so I'm not I can take that much credit but awesome thank you

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