My First Million - #60 - YC Demo Day Startups #2, Importing Foreign Innovations & Collaborative Copywriting

Episode Date: March 30, 2020

Sam (@thesamparr) and Shaan (@shaanvp) today go over more YC batch companies! Sign up to the new Trends report that Sam mentioned at https://trends.co. Today's topics: Sam might have corona virus (5:46), is YC better this year going digital? (10:15), Smile Direct Club for Latin America (14:56), Education in India (17:56), EzeWholesale - Marketplace for Used Phones (23:28), Offerup and LetGo Merger (28:13), Build a Plane - Project Management for Construction (30:03), Strippers leaving their jobs to become delivery drivers (34:24), Ditto - Collaborative copywriting tool (38:12), Shaan's marketing intern challenge (46:14), Ugly food delivery services (48:49), Automating collections using Upflow (52:52), Teiv - Adblock for in-store TV's (58:31)  See acast.com/privacy for privacy and opt-out information.

All right, everyone. We have Jordan Harbinger on, and I'm going to tell you why. So we get a lot of, a lot of people asking us questions on how to do different things that we talk about in the podcast. And that's great. And we do the same thing, Sean and I. And one of the folks we turn to on a regular basis, I'm texting them all the time, is Jordan Harbinger. So Jordan, he's had podcasts for 13 years now. He's been in the top 100 for almost that entire time. And he's got a great pod called the Jordan Harbinger show where he talks about social engineering. In particular, he teaches Navy SEALs how to do social engineering. social engineering. He teaches intelligence agencies, special operations. It's incredibly fascinating. He dives deep with his guests to learn how they think, why they think, and it's really, really, really fascinating. And it's something that I've been listening to for years. But he has one episode that's incredibly fascinating to me. And that's about the guy from Catch Me If You Can't. Frank Abagnale. Is that his name, Jordan? Yeah, Frank Abagnale. He's a fascinating character. He came on the show, and we spent a long time talking about the psychology behind how he was able to trick so many people. So to refresh people,

memory, he posed as an airline pilot, which is kind of terrifying, a doctor and an attorney. All of these are pretty specialized. You know, look, if you were just pretending to know how to stock shelves at a grocery store, like that is something where somebody who does that for a living could probably catch you, but a normal person might not have any idea. Now, when you're pretending to be a doctor, the stakes are pretty high, man. You know, law kind of trickier to pass the bar exam, that kind of thing. So the airline pilot, of course, is that really takes the cake.

He did this all in his 20s, and we spent a ton of time on the Jordan Harbinger show discussing and dissecting the concepts behind why people believed him. These same concepts work even now. He's told us that it's actually easier now for fraud, scams, con men to operate than it was back then. Because you'd think, oh, now we have computers, we can verify everything. Back then, they didn't have that. The communication took longer. Now, though, people trust the machines too much so you can trick people and you can trick machines. Things just got even more complicated.

And that's what he does now is teaches law enforcement, FBI, and citizens like you and I how to avoid common scams and fraud, all of course while dissecting the psychology behind it. So I loved this episode as one of my favorites. I remember watching this movie years ago and then I immediately read the book and I was fascinated. I'm a schemer. And I like building businesses and just like... what I call scheming. I like doing things. And whenever you see someone doing something like this, I mean, they romanticized it and made it sound like it was kind of cool to go and become a pilot. And so he got

to use it a little bit for evil. But what are some techniques and tactics and strategies that he used to persuade people that you think people now should capitalize on? So something that he used that I actually, to a certain degree, also used in my 20s is the element of fear. And now, look, I don't mean you're scaring people and pulling guns on them and making them freak out. But for example, I used to talk my way into concerts before I could afford to go to them. And the way that I did that was I would show up and say, hey, I am from this magazine, from this German website or whatever. And people would say, like, well, I don't have anything on that.

I have no reservation for you. And I would say, oh, well, that's okay. I, what's your name? Giuliana? Okay, I just want to make sure, because I'm going to go home, go back to my hotel and get some rest. but I don't want to get in trouble from my editor. So I'm just going to be like, yeah,

Juliana didn't have my reservation on her sheet. And she'd go, uh, hold on a second, because nobody wants their name pinned to a failure in a business. So she'd go get her manager. I'd give him the same spiel. And then the guy would go, you know, he's doing the calculation in his head, right? He's going, either I don't let this person in and possibly the owner gets mad at me

because this media guy came from Germany and was supposed to be doing this thing and it didn't happen. Or I just let him in. and it's no skin off my nose. So they can do the calculation in their head. Now, an amateur person will try to explain and force you to do that calculation by explaining it to you and being explicit.

If you can get people to think it's their idea and that's how they solve the problem, then that's the security hole, right? It's kind of like sales, except for you're trying to unsell them on a certain idea and then you get them to push the issue forward. Now, that's simplification, but that's essentially what he did

in many ways in order to pose as a doctor or lawyer and an airline pilot, he learned jargon so that he sounded more believable, and we can find we can do the same thing. If you know how to talk in the language of the target, you are going to have a huge advantage in terms of being believed. A lot of military people find this. You'll see that you'll see that military people can find who's posing as an intelligence agent or special operator by the words that they use. So if you can master that vernacular, you go automatically behind the circle of trust, right? They start believing you because you talk, walk, act, speak like them. That's dangerous mental fallacy to fall into. God, that's so fascinating. I'm just, I'm sitting here, just lick at my chops at how I want

apply this. I really appreciate you coming on. So there's no money being exchanged here. We're promoting this because Jordan is an amazing guy who has helped us grow this podcast, but also I've been listening to him for years. And so this isn't, Don't take this lightly. We love this guy. Jordan, how can people find you? Yeah, you can find me anywhere you get your podcast. Just search for the Jordan Harbinger Show.

Or you can Google the Jordan Harbinger Show or go to Jordan Harbinger.com. I appreciate, man. This is awesome. Thank you. Sam, do you have the coronavirus? I was not able to get tested, but it appears so based off of just symptoms. Oh, no. According to my doctor, so who the fuck knows.

But you were saying so far kind of mild. Today's a little worse. Today for sure. Okay, so you know how everyone says it's like not that bad or bad? That's hard to quantify. So the way that I've been quantifying it is, would I stay home from work today if this was last June? Right.

And yesterday was the first day that I would have stayed home. And just barely today, for sure, I would stay home from work. I see. So, no, it's not that bad. But dude, shortness of breath is scary because, like, it's not bad, right? Like, I can breathe perfectly fine. But it definitely is like, oh, my God, what happens if this gets any worse? Right.

And I was, that's scary. I've been following a bunch of people who are, like, pretty fit. Like, there's one guy who's an Olympic athlete. And there's, I think he's a swimmer or runner, Australian swimmer or runner. He has it. And he's like, yeah. So, yeah, mate, this is tough. And he's like, you know, shortness of breath.

and it's impossible to train like this. And, you know, he's talking about it. And then somebody, like, retweeted it. And they were like, this guy's an Olympic athlete, by the way. And he was basically like, yeah, this gets tough. And then there's the guy, another guy I follow who's a healthy guy. He was The Bachelor. His name's Colton.

And he got it. And he's like a, you know, pretty jacked guy. He was an NFL player for a bit. And he's like, when he does his little Instagram post to, like, update his fans about, how he's doing. I'm like, what's saying? It's bad. Yeah, he's like, you look at him.

He looks raggedy as hell. Like, he is not, he is getting knocked out by this thing. And it's been like a week plus. And he's doing just at-home treatment. And he's like, quarantined in a room. His, you know, girlfriend and their family, they just deliver meals to the door. He kind of opens the door, drags it in. I haven't left the home in about a week.

Like, on Saturday, I went for a walk. But besides that, or since Saturday, I haven't gone on a walk. I haven't left the house at all. Wow. You know what's crazy? So do you know how like you hear like T.I. and Martha Stewart and Dr. Dre all served house arrest. And their house arrest are definitely different because their homes are massive.

Right. That has like a bowling alley in it. But house arrest would suck still now that I realize. I'm like it wouldn't be that cool. Right. It is still a little bit of an arrest. Yeah. It's crazy.

Okay. Well, I hope your symptoms are mild. I hope it's just actually the cold because... I think it's fine. We'll see. I mean, whatever. It's all the same, right? Right.

All right. Well, the show must go on. So what do we want to talk about today? So first, you guys released this, like, book thing. What is that? I saw that yesterday. It's just to get more sales to trends. It's to get people in the door, and it's incredibly effective.

What we did was we put together all of our, the best talks from Puzzlecon. And we transcribed them. And when I first started, did the company. Do you remember this book called The Founders at Work by Jessica Livingston? Yeah, I love that book. That book, like, changed my freaking life. And it's not even a, I mean, it's a book technically, but it's like, she didn't do any, like, work other than what you and I do every week. Right. And she just transcribed her interviews. And so I was like, let's do that. And so, uh, it's pretty cool. Yeah, I downloaded it and I started to skim through it.

I was reading the Pandora guys one and so that's good. Okay, where do people get it? If they're listening to this, they want that. Good question. I want to see. We just posted it. We just posted it Tuesday. So let me see if it even ranks on Google. We'll put a link to it in the description if you want to read this thing. Is it free or you have to become a trend? It's a dollar. It's a dollar. Everyone's like, what's the catch? I'm like, well, it's a dollar and then you're going to be automatically subscribed to trends. But you have two weeks to cancel. So get value or sign up and try it. And if you don't like it, then just cancel and you're only out of dollar. Right. So if you go to trends.com, you'll see it at the top, like a link. Okay.

But it's not even ranking for Google yet. And hopefully we can link to it in here. Okay, cool. We'll do that. That's fun. That's exciting. I'm glad you guys did that. Yeah, it's great.

The cold email lecture one was even better. I mean, people love that shit. Yeah. Okay, cool. So we did a bunch of the YC companies last week, or not last week, a couple days ago. Tuesday. reaction was good, people wanted more, we only did five or six of them that time. The way I'm thinking about this is like I listened to a couple of sports podcasts,

like the Bill Simmons podcast, and every year around like the NFL draft, it's like there's these special sort of annual events that you do like these deep dives for. And to me, that's kind of what the YC demo day is. It's like I could see us doing this as a recurring thing in the podcast where it's like, oh, that's our version of the NFL draft. You see all these hot prospects and you're scouting them and you're checking them out and you're using them to sort of see what are the, you know, what are the smartest people working on?

Where do they see the opportunities? And then what do we think about those? What did your friends say? Because I talked to Jack and a couple of other guys about this and they go, I think the some of them are like, I think the batch was pretty weak. And I totally disagree. I think there's a bunch of amazing things. So people who have been going to YC Demo Day for years, this is like their favorite

thing to say. It's like, oh, yeah, YC batch this year is weak. And, like, you know, I don't know to what extent that's true versus just a cool thing to say. You sound cool by saying it. I'm always skeptical of those. Jack's not the type to do that, though. So he wasn't, he was not like totally negative, but he was basically like, oh, it's okay. So what I heard from what I heard the sentiment I got from people who've been going to Demo Day for a while is, you know, in the past it was like the glory days.

And there was less competition on the investor side. and the companies were better and higher quality, and there was fewer of them, so you could go deeper with them. One of the problems now is, like, for example, demo day has become something where they get up on stage, they talk for, I think, one minute. They do a one-minute presentation,

and then it's like, if you're interested, you know, come talk to me, and then there's a line of investors already wanting to talk to that person from the one-minute pitch. And it's so competitive. Half the deals are done before demo day, just because people swoop in beforehand, and then the other half get done, you know,

very shortly afterwards. So a lot of smart people are like, dude, this is a frenzy that is not smart. Now this year, they don't even do the one-minute pitch. It's just a slide. One slide and two paragraphs, and then you decide to talk to them more or not. And I think that's great, to be honest. If I was an operator, which I am, like, I see these and I'm like, oh, my God. For the founders, it's fantastic.

Well, I'm like, I should do that. And even for the investors, I actually think this one's better because it's digital. So it's like you say, it's like Tinder. You basically, when you see the listing, you say, yes, I'm interested, no, I'm not. And if you say yes, then they get a request that says, this person wants to talk to you, and then they can say yes, and then it matches. And so I think that's actually better this year because it's digital. I think people are going to take time to have conversations, whereas when it's sort of

a live event, you, it's, again, it's just like a meat market. You're just sort of, it's like, you know, the old Wall Street trading floor, people are just standing up and yelling shit, it's a little bit faster-paced and people don't feel like they're able to make thorough decisions. And what's in, well, I think what we, I don't know if we told us to people, I don't know, we might have to blink this out. We won't name names, but people can't see what you and I see. So we're reading off like a private list.

And I don't think we're breaking any of the rules. I mean, it's not like, it's not like fucking legal. Yeah, I don't think so. TechCrunch has reported on all these companies now. And also, there's some companies that say off the record or we just won't talk about this. No problem. You want can I Wait yesterday I was pretty hopped up on Dayquil the other day

Did we talk about uh did we talk about this So here's a theme that I noticed We talked about last time about how there's like X of India So right now I see bill.com of India Right This thing for Latin America Flexport for Africa

Yeah Okay so we saw that a lot We saw that a lot and I like You said the India thing last time I went back and looked, there's like 28 companies in the batch that are Indian startups. Like the Indian, we took over the spelling bee and now we're taking over YC. That's what's going on. So at first I was like, I don't know if I like that.

Not the country thing, but like we're just going to, we're this business, but of that region. Right. And I think I've changed my opinion. I think it's cool because white commenters supposed to be all about innovation and shit. And it's not exactly innovative to say you're going to be the Smile Direct Club of Latin America. But I still think it's cool. And that's one I want to bring up. Did we talk about that last?

We didn't talk about that one, no. Did you read that? I didn't look into it, but yeah, we could talk about it. Okay, so what was it called? They don't, how do I do a search on here? But anyway, Moons, okay, and they just say, Smile Direct Club for Latin America. And here's why I like this.

In one of their decks, they go, Smile Direct Club became a billion-dollar company in five years. We're going to do it in four. and I looked up the people behind it and the people behind it previously worked at Rocket Internet which is notorious for cloning companies and scaling them in different industries or cloning like Amazon but for Thailand or something

and I love I mean there's pros and cons to that but it definitely creates some value and the fact that they said that at Ycomander I think is like I just think they're ballsy and I love these guys Yeah, so there's a bunch of these, gusto for Africa, acorns for India, cameo for India, flexport for Africa, Smile Direct Club for Latam, right? Like, this is a, you know, it's not like a groundbreaking idea, but it really does stand out when you look at the list. I want to do the opposite.

I want someone to tell me what's cool in India that's not in America. So I'm doing that. So I'm basically putting together a report of the coolest companies in India that don't have analogs here. Like, for example, there's this company called Biju. Have you ever heard of Bejou? B-Y-J-U. B-Y-J-U? Yeah, this guy basically started off as a teacher, and he would teach, like, essentially test prep.

Oh, you freaking love this. I think I've told you about this before. But basically... Well, yeah, you say that's your dream. Yeah, this guy, he started off as a small teacher in a town, basically, and was doing test prep, and then sort of got bigger and bigger and bigger people wanted to learn from him, to the point where he was selling out stadiums of people coming to watch him teach math. And that was...

When I saw the picture of the stadium, I thought, This is remarkable. Then he turned it into an online learning platform, basically a video-based teaching platform, sort of like Khan Academy, but for profit, and it's an $8 billion company now. And this guy, Bidu, is sort of one of the youngest billionaires in India.

He's a teacher turned billionaire, which is very rare. And, you know, cool product, cool company. And there's actually a company in this YC batch that's the former first instructor of Bidu. He's like, I was the face of Bidu, because he was in all the videos. And he left. to start his own thing. He's like, you know, here's the dirty secret about BG's thing. It has very

low retention. Great at making money, great at getting people to sign up. But less than 15% of people stick with the course as it goes along. We're doing this other way and we're going to win. And they're in this batch as well. So that's interesting. So I would love to ask you questions about that. First, I want to tell you that I'm looking at their Wikipedia. It says they do, they're worth $8 billion. They do $80 million in U.S. dollars in sales. And then it says they only have five employees. Yeah, that's wrong. And also they do more, they do more revenue recently.

They were over $100 million, I think, the last, like, I read something where they were doing over $100 million. But that would be amazing. Why is this big in India, but not America? Is it because Indians love math and science? Yeah, so the education is like, you know, God in India. Like, you can be dirt poor in a village, but you'll do anything to educate your kids.

And, you know, even the Indian people in America, you probably have noticed are like, you know, their parents are pretty strict about education. You've got to get good grades, all that stuff. And so Indians are willing to pay anything for education, and they don't really pay anything for anything else. So, you know, entertainment is usually lower on the list, although Bollywood does well, but like on a per capita basis where are you going to spend your money, education is sort of number one for Indians.

So that's the first part. Second part is they have such a huge population. So you can take a really small amount of money from such a huge number of people and built a very big company. That's the second part. How much bigger is India than America in population? What? Three times? Yes, four times, I think. I think it's over one billion. And U.S. is at 300 million, I believe. So it'd be like about four times. And of course, not all those people have smartphones.

Not all those people have money, but like, you know, India has like sort of the largest growing middle class. So that's some of the reason why this works is because people are willing to pay for education. And there's so many people that if you take a home. a few bucks from each and everybody's willing to pay for this because it's education, that adds up. But, you know, $8 billion is sort of out, it is outpacing their revenue growth, right? So I think the part of it is the story of what this becomes and their sort of defensibility. That's probably why they're valued so much higher than their value than their revenue would suggest.

Do you think that that can be popular in America? I think so. Like, I think Khan Academy is fairly popular and it's mostly in America. No money, though. It's just, yeah, it's a nonprofit and they don't pour money into growth like these guys do. I'm sure these guys are aggressively trying to grow and using their payback to sort of fund more growth. But yeah, I do think like something like this can work here. But, you know, we'll see.

There might be other reasons why it doesn't. There's a whole bunch of other companies. I basically found these five guys on Twitter who are like in the Indian startup scene that are actually really smart. And once I started following them, I started seeing awesome companies all the time. and I'm trying to put together essentially the Mary Meeker Internet Trends report that she does every year for like global Internet trends. I'm doing that just of India. State of the Union, Indian startup scene, here's what you need to know

because a lot of people in America want to know, but are not going to do the research to figure out what's going on in the Indian tech scene. And I think I can distill it down. I am writing that down and probably going to steal that. That is a great idea. Okay, great. What did you call? That was cool.

Like a trends report. of Mary Meeker for different countries. Yeah, Mary Meeker for India, basically. Can I tell you why I think that's a great idea? Is because have I told you about Kevin Ryan? No. Maybe he's in charge of that media company, right? So Kevin Ryan was the 20th employee at DoubleClick,

and Double Click ended up becoming AdSense or AdWords, and Google bought it for $3 or $4 billion. Very successful. And then, so he was the CEO. He was the 20th employee. and CEO. So he was successful in that regard. Then with his earnings, he told me that he made $20 million personally. With his earnings, he went and started this thing called Silicon Alley Group. And Silicon Alley Group created MongoDB, which is now a publicly traded company in the billions

of dollars. They created Business Insider. They created Zola, which is big. And they created about four other things. And one of the things that they did was they created Gilt, Gilt Group, which is like flash deals for women's clothing. And the reason he started it was he said, because I called email them and asked them all these questions. It became friends with them. And he told me that he was walking down the street in Paris and saw a long line outside of a women's store.

And he asked a woman, like, what is this thing? And they go, well, they do these deals every day only for an hour at noon. And so they're starting to do them online, but they still do them in person. And he goes, oh, cool, I'm going to do that in America. And that's how guilt started. Nice. Yeah, so you're basically saying import the sort of the behaviors and innovations you see in foreign markets back into the U.S. not just right now U.S. is an exporter of innovation and you're saying we can also become an importer of innovation.

Yeah, I mean, look, you did it and you kind of, or you try to do it with sushi trains. Yeah, yeah, yeah, when we did their sushi thing, yeah. Like in Australia, that was like common and in the U.S. never saw it. And I don't think it still has caught on, but you did the same thing. Well, we tried. You definitely tried, and it was a good swing. I think it was a great swing. In case you're curious, I just looked at up while we were talking.

Khan Academy, because it's nonprofit, all their financials are available, and they do like $80 million in sales. Yeah, so actually on par with BGU. And does it say real quick where you're at, how many students they have, that active, like active learners or anything? It does. So if you go to Khan Academy Annual Report.org, you can see all the information. Okay, I'm going to check that afterwards. And I'm going to do a report on them because I'm an education nerd. And so I'm going to bring them to the table for the next podcast.

All right. So let's go back into the YC companies. Let's just trade off. You do one that you find interesting? I'll do one that I find interesting. Go for it. I did Smile Direct Club for Latin America. Your turn.

Okay, my turn. All right. So I'm going to do this one. I don't know exactly how you say it. Ease wholesale or easy wholesale. Love it. easy wholesale. I love that you bring that up.

Really interesting company. So basically the premise is it's a marketplace for buying and selling used smartphones. And I'll tell you some of their stats. I haven't sort of verified how real these are. But they say that use smartphone sales are $46 billion a year annual market. They say that $230 million smartphones are sold per year. Wow. See if that checks out.

So what they did is they made a marketplace where you could, if you have phones and you're a wholesaler, you can basically. say, hey, I'm, either I'm looking to buy or looking to sell, and they made it like a stock market. You basically put a bid up. You say, I'd like to buy this iPhone. And if somebody has it, they can fill your order and they can basically, like, they can close your transaction out, your ticket out. Or you can say, I'm selling 100 of these specific Android phones, and somebody can say, I'll buy 10 of those. And so they made it easy.

They said that most of this used to happen through Facebook groups, WhatsApp, sort of the underground, you know, just using social tools. Yeah. There wasn't a marketplace that was focused on this. And so they have 400,000 in GMV so far. Now, GMV, you know, you can assume maybe they're making, you know, in the tens of thousands of dollars themselves. So GMV gross merchandise. Volume. Volume.

Okay. So basically how much is total sold through their market. So if a cell phone sells for $1,000, that's $1,000 of GMV, their cut might be 5%, 10% of that. But this is a, because the smartphone, if the smartphone, if the used, smartphone marketplace is this big, and they have some stats about how fast it's growing. They say that use smartphone sales is growing faster than new smartphone sales per year, because Apple is trying to make the old model irrelevant so quickly. And sure, some people do upgrade, but there's all these other phones still out there that are still very good phones.

I can afford new phones. Up until my most recent phone, all of them have been used. And the best part about these guys is, so I believe that they were booted. I'm not 100% sure. But they, so they've gotten to this point. They themselves were former buyers and traders of cell phones, and they had sold prior to this just as brokers, $8 million over the cell phones and then decided to create a sort of technology marketplace out of this. So if you think about it, market, love it. Style of business, marketplace, love it.

So I love that they're going for use smartphones. I love that they're doing a marketplace. I love that they came from a background where they actually did this manually before and were sort of prolific. brokers. A plus plus love this, love this company here on the YC list. Okay, I like it. Let me play devil's advocate here, which is, okay, so I looked up a few. Okay, so first of all, I think that this is a lot harder than people think.

The reason why I think it's a lot harder is I think it's incredibly competitive with a lot of people who are already very established. So I think getting distribution and getting eyeballs on their product is going to be prohibitively expensive, maybe. Right. I also think that, so there's a company called Swapa. Do you know Swapa? No, but I see your note here.

Okay, here's why this is interesting. I've actually used it before, but I didn't, but what's interesting is I posted or I have a thread that I found of the guy who's, so Swapa is the same thing, but slightly different. I don't know how it's slightly different, but it's the same, it's a, you buy use cell phones. What's interesting is that in 2011, the guy who started Swapa posted on Hacker News and he said, hey, I'm launching this thing on the side. Here's what it does. And so you can actually go and see how he started it.

And I don't know how big it is right now, but it comes up number one when you Google buy you cell phones. So I would imagine it does, I bet you it does $50 million in sales at least because I'm comparing it to the person that's number two, which is Gazelle, which is a big company. But anyway, swap bootstrapped. And so if I, if I, if I, was a greedy, if I was these ease guys, how do you say it, easy? If I was, if I was these ease guys

and I, easy or what did you say? Let's go with easy. If I was easy, I would be greedy and want to raise very little money, like less than a million dollars and just see how I can just make this really profitable. But, yeah, they say launch three months ago, 400K GMV monthly, an 8% margin, profitable and growing a 20% month over month. Of course, easy to be profitable when you have two people and you're not taking salaries. But nonetheless, I think this could be a profitable business because of the sort of take rate.

And here's why I don't know if I would raise money if I was these guys. Did you see what happened two days ago? Do you know this offer up and let go? I know about them. Was something bad happen? Offer up and let go combined. Oh, interesting.

They merged. And who was the sort of bigger parent? Was it Offer Up? Yep. Offer Up was the bigger parent. And they raised an additional $120 million to make this all work. And so that's not a good sign. And they have a pretty cool story.

I don't know if you guys told it or where I read this, but Offer Up has a pretty cool story where it sort of started, I believe, I might butcher this, might be thinking of something else. But I believe it was they're in Canada and people have these buy-sell trade groups on Facebook and they saw this behavior of Facebook, you know, sort of local used goods selling happening and then they started, they built off the back of that of these Facebook groups for buying used stuff and they built offer up off that community of people. So I, okay, I dig that.

They also raised like $500 million. And they haven't hit terminal velocity. I mean, they're not like, they're not a place. player yet compared to eBay and Craigslist. So I would say if I was these guys, if I was ease, easy or ease, I would be very happy to start and own that. If I was an investor, which I am, and I just came across these guys, I think I would invest a small amount of money because I think I can make money off of it. But I don't know if I would raise venture capital, like a significant amount. Yeah, I think they still need to prove a lot. Yeah, for sure. But I think it's

a good investment. I like him. All right, let's go to the next one. Okay, let's do, um, uh, build a plane. Love this. If these, this is a, uh, this could potentially could be a 10 billion dollar company, I think. Um, okay, tell me why. Okay, so build a plane. So what, so what they do is they look at, uh, it's boring. Let me see. I'll try to read the exact description, but what they do is they, it's project management for construction. So, uh, let's find it, build a plane. But here's why I think it's cool. First of all, I was just going to read their description so people have more context.

So we're a powerful dashboard for construction companies. We give them visibility and control of project finances, change management, documents, compliance, and communication, blah, blah, blah. They built a different company that got acquired for $80 million prior to this. And they say, Bill Plan is solving the core issues of being the centerpiece of projects, empowering full automation, blah, blah, blah. Okay, whatever. Basically, they're saying that they're saying that controlling construction costs

and making them more efficient represents a sort of a $10 billion opportunity globally. Here's some of our features. Here's our product. Check it out. So when you're building a 300 unit apartment building and you want to see how much everything costs, you want to see RFPs for your vendors,

and you want to know what your cash flow leave, what your cash output is. Simple, right? Yeah, I think this is one of those where if you win, you're in such a big space that your prize is humongous. Hard for two reasons. Hard to get any sort of blue-collar project industry to adopt software is always a challenge. When you do it, it looks like, oh, yeah, obviously they used to be using paper and pen, or they used to just use clipboards and, you know, whatever.

and now it looks obvious in retrospect, but then there's also so many cases where it's like, yeah, we just, our thing is better, it would have saved them time and money, they just didn't put it in their workflow. So that's one piece. On the other side, I think there's a lot of competition.

I know there's like several companies that are, you know, every year there's like 15 companies that try to do project management software for construction. And the question is, what do these guys know that the others don't? Or what is their unique angle? That didn't come through for me in this pitch. It did not come through.

through to me either, but just because the market is so big, if I was these guys, this is one of the few companies where I'd be like, get as much cash as you can right out the gate and just throw it at the wall and go big or go bankrupt. Okay. I'm not sure why. Why do you advocate for that? Because it just... What do you think the cash does for them?

Why do they need so much cash? I would hire just a math... Okay, so there's a few ways that you can grow. You can grow through content marketing. You can grow through word of mouth, which happens way less than people. think you can grow through like network effects like Facebook you can grow through paid advertising which is really easy if your product is cheap and then sales or you can grow through hiring a sales team I love products that are priced in such a way where you

can afford to hire a sales team you cannot afford to hire a sales team if your product is probably less than 10 grand a year and so what I would do is I would create a fat office in Dallas a huge office in like Charlotte and then maybe an office in the early like Nashville and Dallas and then like maybe New York and I would just recruit all the salespeople from older competitors and wrap my office in like the startupy bullshit and go for it. That's what I like it. And I think what you, the other part I heard that you didn't say explicitly is just even though this pitch didn't have everything, it had enough where you're like, I need to know more.

I want to know more. So sometimes, you know, there's better pitches on this site right now, but there's not better markets. And so, like, for example, there's this one that's about, like, a rewards program for gamers. I hate this idea. I hate the market that they're in. It's super hard to make it work. And even if they have a great pitch, even if they have traction right now, it's a stay away for me. And so whereas construction tech, it's a come closer.

Let's learn a little bit more. Right. Let's get some coffee. It's like building like freaking driverless cars right now. It's like, uh, you'll probably fail, but if you make it work, it's like the greatest thing ever. And another example is homebound. Do you know homebound? Not well.

Okay. It's launched by atomic. Atomic labs or I don't know what they call themselves. Atomic. It's like a startup. I don't know. They just launched companies. They've launched Tims and they've launched a few others.

Hymns is the most. They're like Monkey Inferno, which I used to run, like a studio that creates companies. Yeah, they launched one called Homebound and they're doing this, but only for people who are building single family homes. And it's got some traction. I got another company for you. You ready? Please tell me it's the strippers on demand. No, but that one's good. We should actually talked about that. So there's this cool story. This is not a YC startup, although maybe it should have been. Cool story where basically in Portland, you know, right now with coronavirus, everybody's getting deliveries, right? And so I have a friend.

brand who runs a company called Farmstead, and they do grocery delivery. They've been doing this for, you know, two years now, and they've, all the, all Farmstead does is they deliver, you know, your staple foods, milk, eggs, bread, stuff you need repeatedly, and you don't need, you know, going to the grocery store every time you run out of milk kind of sucks. So they just deliver to your door. And so they're like a, a version of Instacart that's just focused on the staples. Okay. Now, and also, you know, quote a key difference, Instacart goes to the grocery store and buys stuff and marks it up. These guys, are the grocery store. So they just have a, they buy wholesale and they sell retail so they don't

market up. They actually get good prices. Okay. Good startup. They are exploding 20x 30x over subscribed on demand right now because everybody is ordering food in because of coronavirus, right? So everyone's getting to try this like delivery thing. They're sort of forced to do delivery for the first time. And what's it called again? And those guys are called farmstead. Oh, not farm theory. Okay, farmstead. Yeah, this is my buddy's company. He listens to the podcast sometimes. So shout if he's listening. Cool name. Love the name.

Yeah, great name, great brand. It looks good and the product is good. So I actually like it a lot. Now, one problem that they're having and that every delivery company is having right now is that they're short on drivers. They're short on delivery people. They have too much demand and not enough ability to fulfill. So this company in Portland started hiring out-of-work people from the coronavirus.

Now, what industry has been affected by this? Strip clubs. Nobody's going to strip clubs right now during coronavirus. So they hired the strippers to do delivery And so they got a bunch of PR from this What's it called? I got to find out which company it was I don't know if it was DoorDash or whatever

I don't even know if the company really did this Or the strippers just started signing up for this It's like oh we got to make money So what are we going to do? I guess we should become delivering people right now For the interim I see it I see it

Do you know which company it is that they're delivering for? Does it say? He jokingly calls it boober eats So it all started as a joke with Lucky Devil Lounge, one of his clubs. And no one was coming in. And they go, we need to do like Uber for weed delivery or luber for sex lube delivery. And I was like, let's do boober, which is Toplis girl picks you up and takes you to a strip club. And so anyway, that's the joke is that it's, I don't think it's real.

But it did get PR. Yeah, it did get PR. I think, I did read that they were, like, the gig workers are basically shifting from one to another, right? If you can't, if the demand has gone down in this area, it's gone up in delivery, and then more people are becoming delivery drivers. And so, anyways, I thought that was interesting. There's another one. It's called Meals for four-inch heels.

Meals and six-inch heels. Well, I don't know if it's smart to create your own delivery company, but I think if you're a stripper and you're out of work right now, you know, girls got to eat got to do something bring up another YC one let's see what else you got okay so Ditto I think you'll like this one so Ditto's tagline is it's a tool for teams to manage copy from

design to production so copy something we've talked about I also I always define copy because I remember when I first moved to San Francisco and got a job in tech and then somebody asked me can you give me some copy and I didn't know what the hell they were talking about I thought maybe they said coffee maybe I had to go make a copy of something I didn't know what copyrighting meant

so copyrighting is just like the word on a website, the words on your product. It's a very vague word. Yeah, so anyways, what these guys did was they said, all these tools like Figma, Photoshop, whatever. We have Google Docs, spreadsheets. So we have all these collaborative, well-made SaaS tools that help us collaborate on design, or on engineering,

or on modeling in Excel. And so why is it there a tool that helps teams collaborate on their copy? And so they basically built a tool that says, you know, their pitch, which I think you would agree with, is copy is the most under-leverage aspect of product building. It has a higher ROI and is easier to change than almost any other part of your product and can drive sales faster with better copy, which I agree with. And what they're saying is that teams don't have a great way right now to collaborate on your copy. And so they built a tool that lets you sort of point and click and make suggestions of what the copy could be or should be or look at what it was before, that sort of thing. on the product. The product's not super clear exactly what it is, but I like the premise.

I think it's interesting. Okay, but let's talk about this. The people, okay, the people who started it, one of the women, oh, they're young. But, okay, as I said they came from venture capital. They were like interns at VC. So I was going to say, while they're really young, their first jobs before this were interns. Good for them. So I believe their claim, we think copy will be the new visual design.

I think that's true. I think design got super important over the last 10 years. And now every company just sort of knows that, hey, design is super important. Usability, UI, UI, UX is super important. And nobody talks about copy. It's not the fucking new version of that. It always has been. It just people just are silly.

It's not in vogue in tech companies. Yeah. Like, I'm at a tech company of 2,000 people. I don't think I've heard the word copy once. I don't think anybody has a strategy to make our emails better or the text on our website better. But this isn't going to, this won't do that though. This is like saying Figma is going to make your website look better. Yeah, that's true.

You know, the tool, I think if you make it easier to do, people do do it more. But right now the problem is people aren't aware or sort of considering this as something they need to be focused on. So, yeah, they need to educate the markets of the market of the importance of copy first and then I'm having an easy tool. I think it's cool. I think it looks great. There's one red flag that I have, which is their. like the pricing it's $12 a person a month. Right.

It's going to be hard to build something big when it's so cheap. You really need a lot, a lot, a lot of people. Right. I mean, they'll need a, you know, a million users at that rate. They're not a million, but, you know, a lot. Maybe a, well, yeah, a million users to be like really large. So I think their pricing is silly, but they might be able to figure it out. Great idea.

I like the idea, but it's not there yet. But I think that if you wanted to bet on them, it's an interesting bet. So here's something interesting. Have you ever read this blog post by Stuart Butterfield called We Don't Sell Saddles here? Yeah. Yeah. And that's old. It's old.

So Stuart Butterfield is the founder of Slack. And before they launched Slack, he wrote this memo to the team. And he released it later. And what he said was, he wrote this blog, goes, it's great. If you're a founder, you should go read this. I'll summarize it very shortly. So we don't sell saddles here. What does that mean?

So he talks about, let's assume you were a saddle company. You make saddles and you sell them. And so you could make saddles, sell them to existing horseback riders, and basically try to tell them why their old saddle that they use is not great and how they should be using your saddle. And that's tough because, A, you've got to get people to switch. And B, there's just not that many people. who are horseback riders today.

And he goes, you know, the better approach in the reason he says, we don't sell saddles here, even though we're a saddle company, is that what we need to do is sell the joy of horseback riding. If we can make people want a horseback ride, we can tell them how about how awesome it is to ride horses, how it's fun, how it's great exercise, how it feels great to have the wind blowing in your hair, then they'll want to do it. And when they do it, they'll be like, oh, shit, I need a saddle. And it's like, don't worry, we got you.

And he basically says, this is the Lulu Lemon approach. So Lulu Lemon didn't go to a very small at the time yoga industry and say, hey, you should be buying $100, you know, yoga pants. What they did was they helped spread the joy of the sort of the lifestyle, of a yoga lifestyle. They got more people to want to do it. That's why they offer yoga classes in their store. Like who does that? They want people to be in that lifestyle. And then once you're in the lifestyle, it's like, do you want the best?

Because we do have the best materials. And so this is just a general strategy. If you're operating in a niche, sometimes you have to actually sell the lifestyle of being in that niche more than your product to the existing people in the niche. I love that. And a lot of times, not a lot of times, every once in a while, those marketing things and those selling the lifestyle actually becomes bigger than the original thing. So, for example, this is an example where one has become bigger, but it's become its own thing. You know Michelin Star Restaurants? Okay, yeah.

You heard of Michelin Star Restaurants. It's like the standard of what is good and what is it. Fine dining. Well, you know, Michelin tires created that. And they did it because they created a guide on which restaurant. Michelin has been around since this car started. It was around even before that. They made rubber for all types of things.

And then cars got popular and it was, you guys need to get out and travel the world. And you need to see all these amazing things. And look at all these restaurants. This one, we rate this one, one star. You should go see it. But this one's four star. You have to go see it.

And if you do happen to go see it, make sure that you use our tires. How are you going to get there? You better drive. If you're going to drive, you better have tires. Right. And that's how Michelin Star, Michelin Stars got started. And there's a whole bunch of examples like that where these marketing schemes have become their own thing.

So anyway, what's it called again? Ditto. So Ditto, I think they're going to have to do that. I think they're going to have to not sell saddles. I think they're going to have to sell horseback, right? Okay, so these people who are starting are pretty young. Let's see if they're, like, aggressive enough to do this. And I, maybe they might be able to.

But selling copy is really easy. Like, if I, if I, like, I could just go to you. I could say, like, look, you give me a blank piece of paper. And because I have this skill set, I'm an ATM. Like, do you know what I mean? You're like, like, if just, or like, there's like this, there's this very famous copywriting. story of this very of this copywriter who sees a guy who is a homeless guy who's holding a sign and he

says I'm blind please help me um and he goes and the copywriter goes up to the guy he goes hey let me help you out here and he just writes it's beautiful outside comma and then it fills in and I'm blind please help and the whole point is like dude if you just add two or three words it changes everything. Right. And so these people, ditto, their ad campaigns could be really good. So yeah, good point. I'm on board. Can I tell a quick story about, and we're totally off the YC train for a second. That's right. This is a fun thing I just remember when you told that story. So my very first company, we had no money. We were funding the whole thing off prize money. So I would be going out like a, like a busker pitching at a startup competition is trying to win them. And every time we won,

we got more money to keep going. And I don't know why we didn't just pitch investors, but like it was working, so we just kept doing it. So we didn't have a lot of money to hire anybody, but we realized, hey, we were right next to the University of Boulder, and we could get a bunch of interns. But then the question was, how do we pick which interns? How do we know who's good? So I was like, all right, we're going to design a test, a case. And so the case we gave them was, and so we wanted a marketing intern. And I said, hey, you know, near the university, there's a homeless population. And they, you know, let's say today they all earn on average 50 bucks a day. Let's say that's what they're making today. So your challenge to show me your

marketing skills, your savvy, your instincts, I want you to come back and I want you to basically pitch me a plan. The idea was for them to actually go do it, but we never ended up having them actually go do it. But we said come up with a plan of how you would earn the most money in a given week. So what would you, where would you stand? So this was about like understanding locations, foot traffic, which is like essential for restaurants. So, where would you pick that you were going to go? What would you write on your sign? How would your image look?

What would you, what would be your sort of your, your look? And why do you believe that that would be the most effective way to get money? And this was our sort of test as a little bit like not,

not politically correct, but there was one girl who had a, who had a, she had a good solution where she was like, I don't remember all the details, but it was like, oh, I'm going to go to this area

because this type of person is, she was like, first I wanted to figure out who is the type that donates. And so she's like, first I would observe which type of person. I'd spend the first day just observing which type of person donates. And I was like, that's smart. Understand the customer first before you implement your plan.

And then she was like, okay. And then after that, I'm going to, you know, I would target where that person's commute is. I would be there. And then I would have a positive message because I believe that the positive messages will sell better than the sort of the negative messages. And I would try to tug at people's heartstrings. So I'd go for emotion and not logic on, on why it can help, but that, you know, I'm struggling and I'm a mother or whatever it is.

And, like, that's why people are doing it. So, yeah, and it just proves how important copy is. And copy is not words. Copy is understanding how people think and communicating it effectively. And it just so happens. It often is used with words. Right. And speaking of copy, farm theory, that is an example of copy.

So you have farm theory on here, which is selling ugly produce to restaurants in India. Yes. a YC thing? It's a YC company, yes. Okay. So it's in India. And that's a company in America. And what's it called? It's in India. So it's no, no, it's in India. So it's no. We do that. Oh, there is also one here. Yeah, yeah, yeah. There's like a farm to table box. I think that's the ugly produce thing in America. I forgot what it's called. Me too. I just Googled it. Imperfect food. So yeah, imperfect food. So I'll give you the stats on these guys. So they're doing 22,000 a month of MRR. They say 40% profit margins.

They say they're growing 65% week on week, which doesn't mean anything because it's YC. But they're on track to get to a million dollars ARR in the coming months. What they're doing is interesting. They're taking, farming is huge in India. So they're saying, okay, there's tons of farming, there's tons of produce produced. There's tons that's not going to get sold because it looks ugly.

It's not good for consumer retail. But we can buy that stuff for cheap because it's just waste otherwise. We can sell it to restaurants who don't care about the aesthetic look of the, you know, they're not picking like a consumer does in the grocery store where they pick a, you know, the best looking one out of a barrel. The restaurants don't care. They're chopping it up, processing it turning into food if they can get lower food costs fantastic. And so they're looking at, you know, right now it's $720 a month just for the restaurants in Bangalore, which is a part of India. And they believe it's a big market. They claim a $500 million market just in

Bangalore just through the restaurants that are there. Sounds a little high to me, but the The value prop makes sense. The restaurant saves about 30% by buying ugly produce. The farm gets some revenue out of something that would otherwise be no revenue. And they take their cut in the middle. I like it. What do you think? I like it now, but let me –

I'm always being like the negative guy. I like it. But let me tell you, okay, I'm a subscriber to imperfect produce. First of all, it's not imperfect. Like, this is a schick of the – farm theory of them selling like things that are ugly. So what are you saying? They look normal.

You're saying. Yeah. It looks normal. I mean, it doesn't look like it. It's a wonderful marketing scheme, but it's, it's so like, it's just normal shit, right?

Because I'm guessing you would not sign up for something that just says, here's vegetable delivery. Correct. Yes. It's like saying there's a famous copywriter named Joe Sugarman. He wrote this great ad for a new cast, is it called a Cassio, a Casio watch?

And he's like, we use space age aluminum with quartz movement. And fucking every watch has that same aluminum. And quartz movement is used in nearly every single watch. He just explained it in a great way. And so this is the same thing with these guys. And it's a schick that works. It's like Guinness putting a ping pong ball in their beer. I don't know about that.

What is that? Guinness beer, if you buy it in the can, there's a ping pong ball in it because apparently that ping pong ball has a little bit of nitric oxide, some type of like gas in there that keeps it super fizzy. I see. Okay. And when they released that ball, it like went up big time. I love it.

Yeah, so this is great marketing. I'm into it. I don't know anything about India, so it's hard for me to say that. But I do know that I just Googled it. Imperfect Produce. They have 200,000 subscribers. What do you pay per month roughly? It's a weekly bill.

I think I was paying $200 a month. Wow. That's kind of incredible. Yeah, big market. So, yeah, I think it would depend on how talented these entrepreneurs are, but you definitely can build something significantly significant here. Right. Okay, give me one that you like, and then I'll be the bad guy saying wed's bad.

Did we talk about upflow? Let's talk about upflow. Okay. I didn't know this until I started my business collections for collecting your cash flow was actually really hard. My father-in-law

has a moving business and he's like yeah it's a pain in the butt to collect the money with my business we make let's say eight figures a year and collecting the money I used to have a team of two full-time people whose job it was to collect the money but then I found an outsourced

service to help me with it and a lot of companies that even if you're small let's say you only do a million dollars a month in sales you need someone full time just to collect that money and that person could be a 70,000 a year salary person it's expensive and so there's a lot of services that I've recently found but there's not that many that help you collect money and upflow is upflow built software where um they like you can track who owes you money based off your quickbooks and you can like constant sent email reminders to those people. Now, the service that I use,

it's literally a person who does it. And it's incredibly effective. And I pay $500 a month for it, I think. And it's like easy. Like I would totally, I would totally, like that's the last business expense I'm going to cut because it's so effective. So I like Upflow for that reason.

So let me ask you a question. When you saw this, did you send this to your finance team? but like let's use this? Yeah, I signed up for an account. And what was the reaction? You know, what is the, let's call it the friction in adopting something like this? Because you definitely have a workflow already.

Yeah, so that was the friction. I said, Edy, this new, Sean just showed me this new company. It's at YC. I signed up. It looks neat. If you have any problems with our current vendor, give these guys a look. Yeah, and so the friction is that we, she said, she goes, yeah, our people work really, really well. So I don't want to disrupt it.

I said, yeah, don't worry about it. But if I was starting again from scratch, I would maybe use these guys. Now, the problem, you could be, you could play devil's advocate. No, no, no, go for it. The problem is, is that the company that I use is like an old school company, and they have like men and women in their 40s and 50s who are like in Missouri who are like pinging these people. And that works.

It's low tech and it's super effective. The problem that I would see with these guys is if they try to get too techy into Silicon Valley, it could not work. What they could do is just hire like 200 people in Missouri to just do this manually, and that could be super effective. So if they try to get cute with the tech, then it could not work. And what do you, when you use the human solution, what do they take? What's their...

I pay them $500 a month. Okay, so they don't take anything on the actual collected thing. No, but I bet you if there might be a scale. Right. I can tell you what I use. I think it's called axiom. XIM. Okay, let's check them.

Oh, wait, no, that's not it. Is it? Axum, let's see. Biot Technologies. No. Let's see. They could, maybe, I think it's called

While you look that up, I'm going to tell you. Go ahead. I'm going to tell you what I don't like about this, because I'm just trying to put my hater hat on. In general, I like this idea. But I'll say, I hate the way they're describing it. We're building Venmo for B to B. Yeah, stupid.

I don't think that's what this is. and I think that's confusing. I think what they need to say is we help businesses collect X percent more revenue by automating the collection service. Today, this is what happened. So I think they got cute with this Venmo for B to B, and I don't see that at all unless I'm totally misunderstanding the product. No, I totally agree with you.

It is kind of impressive. They have 160 paying customers in 50K MR. That's pretty damn good for where they're at. To be at 50K MRR this early is actually quite impressive. So they're definitely doing something right. I don't want to hate on it just for hating on its sake. I think they have a good thing going here. I don't know about the competitive landscape, and I hate the way that they're describing it.

I completely agree with you. I think that they're describing it very stupidly. I just sent you the link to the service that I use, AxiM Inc.com. AXIM Inc.com. The tagline is improve cash flow, reduced risk, save money. we manage your accounts receivable. Like very simple. We outsource it so you don't have to worry about it.

And if you click meet the team, the founder, his name is Axum. Or no, sorry, James Mixa. So it's Axum. The name of the company is his last name backwards. And it looks like his son or his husband. Some relative is also working there. And so it's a very like low, key unsophisticated way to go about doing it and it works really well.

Probably doing like 30 million a year. Yeah. And like you could see who's collecting the money. Like they have the names of the people working there. So anyway, I like this business. I just think that if this company, UphLow is run by a bunch of young Silicon Valley guys, they have to be careful to not overthink it and get cute.

Because I think that like they could just do old school ways, but just package it in an interesting way for Brex or for Sean's new startup or for whoever. Right, right, right. Okay, we'll do one more. We're almost out of time. So I'll do this company. I don't know how you say it. Taiv.

It's TAIV. Weird name. Don't know why they chose that name, but whatever. So what these guys are doing is they, you know how every bar or restaurant has TVs and they're playing sports? usually or whatever it is. So what they're saying is, hey, the commercial break, that's a lost opportunity, right? So what they do is they hijack the commercial break on that TV, and they just upsell stuff from your menu.

So, you know, you're watching the game. When the commercial happens, it'll show the wings that they have on the menu and it'll be like $9 for these wings right now. You want it? It's a commercial just locally for your bar or restaurant. I love this idea because I think there's a lot of restaurants out there who are in this scenario, they have, you know, lots of bars, lots of restaurants that have TVs. I think there's a decent market for it.

I like the idea of helping them make money. It's a very simple solution, but the thing is most of these restaurants and bars haven't done anything yet. So, like, there's a lot of low-hanging fruits still available. This is one that I like. It's sort of an ad block for those TVs. What I think might be challenging for them is selling into bars and restaurants. I think that's going to be a slow and painful process for them.

All right. I have a little background information on this. You know, Chive TV? No, what's that? Okay, you know thechive.com? Yep. Okay, thechive.com, the founders, Leo, and I know Leo and John. Leo is one of my investors and someone I look up to. He started the Chive and he, now they have Chive TV. And the way it started was they would get like a lot of funny videos, like America's funny some videos, just like Dad's getting hit in the nuts by their kids swinging a pinata.

baseball bat, like just silly stuff. And in all of Texas, what they did was they would give these bar owners, these little dongles, like these like fire sticks, like an Amazon fire stick, and they uploaded all this programming. And they're just like constantly filling the pipes. And so if you go to the bar, you see just like America's Funniest Home videos in the background and Chive would put their ads in the, in the mix. And they made millions of dollars doing it. And so much so that they eventually spun it off into a different company. And they call it Atmospheric TV and they've just raised $10 million to launch it and Leo was like this is going to be a multi-billion dollar business.

Interesting. So now the verdict's still out if that's going to happen. But Chive TV was huge for the chive. Atmospheric, he says it's going to be the greatest thing ever and he said that what they need to do is just go out and hire the same thing that I described earlier. The amount of salespeople. Yeah, we're just going to hire a ton of salespeople and we're going to do this. And then another bit of background is you and I talk to the folks. at Firefly. I won't put words in your mouth, but I have no problem in saying. I thought that

was a horribly dumb, stupid idea. And this idea is a little bit similar, but I think way better. Right. Yeah. More defensible for sure. Firefly is the company that puts a little ad, little billboard thing on top of an Uber. So an Uber driver can make a little bit more money. That's cool. But this is a little bit different. This is more what I'll call, it's not dependent on the ad market, which I like, you're internally advertising stuff in the restaurant or the bar to get people to have a little higher check size. Yeah, but that's not what they're saying. In their deck, they say, at first they're doing what you're describing. And they go, they said all of our one-year contracts are insanely profitable. But our next phase is to sell ad time at

$25 per CPM. Interesting. Okay. All right. So maybe maybe the in restaurant upsell is not as good as I thought. And that's why they're like already planning to go out of that. And I think that's a good market, but in their numbers, what they're assuming, they're saying they're going to have a $25 CPM. That's going to make us way more money and create this new $32 billion market. And the math is that we have X amount of impressions and we're going to put $25 CPM ads on there. Now, here's the problem, which is their fill rate is not going to be 100%. Right. And it's not even going to be close to 100%.

So that sounds a little ridiculous. Here's the other thing I don't like. So they charge $4,200 per location per year. That's really expensive for a restaurant or bar. They also charge a one-time $1,500 hardware installation. And so I just think that they've added a lot of friction to the adoption of this. I think already it was going to be hard to get people to adopt. That's a high price point and a high one-time installation fee that they're asking people to do.

So I think that seems tough for me. That said, I think that this could be a business that makes $20,000. 30, 40, $50 million a year in sales. This is a great company to own, not a great company to invest. Not a great company if they raise all this money. That's my opinion. Yeah, that makes sense. I like this.

Someone smart once told me, he said, the only thing that you can't screw up in business is your cap table. And so when I look at a lot of these companies, I think that could be good so long as they don't screw up their cap table. Right. Yeah. That is one way to die for the wrong reasons. That's a great way to put it.

Okay, cool. So, okay, we're going to come back and we're going to do more of this. I also think we have Brent Bishore scheduled tomorrow to come in and talk about buying companies, roll-ups, that sort of thing. And so we'll see how that goes. I need to confirm with him that he's still, but his name's Brett B-Shore, Brett Beeshore. He owns something called permanent equity. Yeah, he's smart.

Dude, I love Dave. Yes. I definitely want him on. I've told the story before, but when I bumped into him at the HustleCon afterparty, we did a mini brainstorm right there, and he had, you know, five bangers, you know, five amazing ideas just come off the top of his head. So he's the type that I look for, which is like people who've got more ideas than time. Yeah, let's do it Tuesday.

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