My First Million - #73 - On-Demand Appliance Technicians, Credible Authority Businesses & Homesick Food Delivery

Episode Date: May 8, 2020

Sam (@thesamparr) and Shaan (@shaanvp) shoot the shit about Airbnb's layoffs (3:21), Sam's carnivore diet & Goldbelly.com (5:52), Lambda school for technicians (14:07), Credible authority businesses like Gartner and HBR (24:31), Is buying youtube channels really a good business? (35:22) and the art of storytelling (43:41).  See acast.com/privacy for privacy and opt-out information.

All right, we got a friend of the show here, Jordan Harbinger. He's one of the guys who's been advising us on how to build this podcast because his podcast is way more successful than ours and has been around. He's been doing podcasting for like 12 and a half years, which, Jordan, that's got to be as long as podcasting has existed, right? Yeah, I think podcasts have been around for like 14 years or 15 and I've been around for 13 of those. So, yeah, when I started, there was no way, there were no iPhones. So you couldn't get podcasts on your phone. You had to use an iPod to play them. Yeah, straight to cassette. That's how long this guy's been doing it. So Jordan, you know, I like your show. I've been binging it while in quarantine because, you know, what else am I going to do besides try to learn something new or improve myself in some way? And I got to say, I like it because you do the, you know, the interview style show where you go deep with a guest. I think, you know, I was listening to the one with Tony Hawk, which was pretty awesome. And I got to say, I like that you don't do the kind of surface level, you know, just, you know, pitty patting around.

with the questions or trying to do, you know, inspirational fluff where you're just saying, go, you can do this. So with that episode with Tony Hawk, what was that like? Because Tony Hawk's an icon. How is it, you know, interviewing Tony Hawk? It was great. He's a really interesting guy, really open and fun. And he told some pretty funny stories.

One, which was very apropos of what's going on right now is one day he walked into his agent or some sort of marketing team that he'd hired. He walked into their office. This is like at the height of video games where he's making, I don't know, well, I'm 50 million bucks off these skating games and these brands. And he goes in and he says, look, I got this backpack that was made pretty shoddily, and it's got my name and face on it. I don't want any more stuff like that.

And as the agent market or whatever is sort of nodding his head and understanding, Tony goes, wait, what's that on your shelf? And it was a roll of toilet paper with Tony Hawk's name, face, and logo on it. And he goes, what the hell is that? And the guy goes, oh, yeah, anything we put your name and face on does so. well, we were joking that we could put your face on toilet paper and we'd still be able to sell it. And he fired them on the spot because it was clear that they didn't value his brand, which I thought was a funny story. He's got a ton of stuff like that that he talked about on the show.

That is epic. You know, I actually met Tony Hawk. We went on a trip to Africa, a charity trip together. And believe it or not, we were halfway up up a mountain in Ethiopia where, you know, it's a like, this is a mountain village. And somebody saw him there and they were like, Tony Hawk. You know, that's probably the only English word they said, us all day. They identified Tony Hawk on a mountain in Ethiopia. That's how famous that guy is. So that's an amazing guest to have on the show. Imagine being that famous that you get recognized in the middle of countries where like nobody speaks to your language and they maybe don't even have skateboards. Yeah, we were there trying to give people clean water. They didn't even have

water, but they knew Tony Hawk. That's how that's how famous I got. Amazing. Awesome. Well, if you want to hear more from Jordan, we're going to be having him on more and more. He's a friend of the house. And you should listen to his show. It's one of the podcast that I would recommend. If you like Tim Ferriss's stuff. If you like our stuff, you're going to like his stuff. And so go check out the Jordan Harbour and get your show on iTunes, Spotify, wherever you get your podcast. You'll find them there. Layoffs happened yesterday at Airbnb. My wife works there. She was not laid off. Still suck. What did she say about it? I mean, I'll say this because it's not like she's like showing me this stuff, but we live in a small house. So when she talks, when her company talks to her, I definitely

hear some of it, even though we're in different rooms. And I think Brian handled it wonderfully. I read the letter he put out and it was great. And I think a couple weeks ago, we kind of capped on somebody who had done an announcement that we didn't think was great. And I thought this was an example of one that was pretty great. I also liked that. In a previous meeting, Brian referenced that letter. Oh, did he? Okay.

Nice. What did he say? I don't remember exactly. But he was like, yeah, you know, it's good that he was able to do that. I don't remember. I don't even want to, I don't even want to be quoted because I don't remember exactly. But I think that he complimented it, but he handled things. Brian handled things differently.

I think he did great, you know? He, he was crying. The other day we interviewed Sophia Amorosa. I think that I will speak for both of us because I think it's true that we both really liked her. Yeah, I tweeted this today. I usually actually hate having guests. I prefer if it's just me and you shooting the shit. I think a guest kind of changes the dynamic, the flow a lot.

But guests are good for growth, so we book them. And also, I actually like the conversation with the guest. It's just I don't think the podcast has the same zip to it. Exactly. But she was great. And she was great for what sounds like the stupidest reason. which was she was just really honest and just like said what it is and didn't try to make it sound better than it is and didn't make his own worse than it is didn't make it more dramatic was just like here's what happened here's how much money you know we got offered we turned it down for this reason I kind of regret it I guess I kind of learned from it but you know she even said an urban retailer try to buy them right yeah exactly I was like okay so urban outfitters is there any other I don't know if that's like if I have my brain's too literal or what but I just thought she was really candid and we've had guys We've run, I would say, two or three episodes with people that we literally just didn't publish because we were like, this person came on.

They weren't real. They didn't share real stories, real numbers. They kind of stayed on the surface and it's kind of a, not an infomercial, but like it definitely was too guarded. And so we just didn't run the episode. We just have it in the vault. And this was the opposite of that. Yeah, she did great. I really liked her.

I followed up with her and just said, thank you. And I don't do that a lot. I should do that with guess, but I don't. Yeah, we should do it all the time, but we didn't. I have it I have a written down. I'm sending one out today. Also, thank Eric because, yeah, it was good. Anyways, let's talk about a bunch of ideas.

I have some cool ideas to bring up. Can I tell you something that I've done, though, since Saturday? And I didn't mean to do this, but I was like a day in. And I was like, let's just try this. Since Saturday, the only calories I've consumed, other than a little bit of almond milk in my coffee has been meat. Oh, you're going carnivore? No, I'm not like going carnivore. I was just like, you know.

You happen to do it. It just like, it worked out that way. And I was like, let's just pursue this thread. And I've already lost weight. So what are you doing? What's breakfast? I don't typically eat breakfast. My first meal is typically at noon.

Today I had hot wings. So just baked chicken wings with Frank's Red Hot, which I guess that is a calorie. But I thought Frank's baby was. But it was just chicken wings. Yesterday I ate a lot of ribbi and I ate ground beef and chicken. And then are you planning to keep this up or what? I don't know. So like I'm eating healthy because I challenge this guy to a race.

So I got to lose weight in order to get fit. And I have a planned cheat day on May 17th. And I've already ordered all my food that I'm going to eat on that cheat day. And so I won't keep it up until then. I order from Goldbelly, which is the coolest thing I've found in a long time. Have you heard of gold belly? I've never heard of that until you talked about it. You tweeted about or something.

And I was like, that's a good name. What is this? And then it's like pies? What the hell is it? Yeah. So this is business talk. So I'll bring this up. So what Goldbelly does is it's goldbelly.com.

I think it's goldbelly with one L, which I think is stupid. But what they do is, so let's say, Sean, you're from, well, you're not really from anywhere because you've been all over the place. But let's say you grew up in, um, I grew up in Texas. I spent a lot of time in Texas. You grew up in, let's say, Dallas. And there was this one bakery that you love there. And they sell, I don't know what a Texas dessert is, but let's say it's a bunel cake or I don't know, some Texas thing. And, um, you can only get it in Texas, which is the case, which a lot of mom and pop places.

And you want to, you call them and you're like, hey, can I order like this one thing you guys have? It's like a pain in the ass. Well, they're just a store that helps facilitate that. So Lou Malinati's is a famous place in Chicago for pizza. I ordered a pizza from there. There's a bunch of pie and donut and cake places in New York, and there's bagel places that I ordered from. And then there's some places in St. Louis where I'm from that is just, you don't see that anywhere else. And so it's just like a, it gives these places.

So they mail it in some way that kind of like preserves it. And it's a, like, if you ordered a pizza from Chicago. So the restaurant mails it. The restaurant mails it. What happens when you get a pizza from Chicago? It's in a gold belly box. It's in a gold belly box and it has ice in it. That's all it is.

Which ships really well typically. So they just freeze it ahead of time. So I ordered a deep dish pizza from Lumalanotti's. It was pre-frozen and then they threw an ice pack on top of it. And I'll probably get here in a three or four days. That's amazing. Okay. I actually like this.

Is it doing well? Is it a small thing? Yeah. So the guy who started, his name is Jason. I forget his name. But they went through White Combinator. Previously, he was the CEO of Deliver.com. So he has a history in the restaurant business.

They raised close to $30 million. And Joe Ariel is his name. Their office was up the street from my house. I live in a residential neighborhood, and they had a house that they lived out of it. And they went to Y Combinator. And I have to imagine they're booming right now. They're booming so much so that the pizzas all have delayed delivery due to high demand. And so the delivery.

And the delivery charge is... Interesting. The delivery charge is very hefty. It wasn't cheap. Ordering two pizzas was like $80. Right, but they know they're playing on the sort of nostalgia, the like special moment type of thing. Like if I gave somebody, if I gave my wife like her favorite thing from her hometown, it's like an amazing gift. It's so thoughtful.

And food is like, you know, the universal gift. So a couple things. So yes, they raised $33 million. It's gold belly with two L's. So normal belly. Normal belly. It was gold belly with one L's before. Ah, okay.

Got the second L. Good. Okay. So this is kind of cool. So this could be a thing. So like I grew up, you said all over the place. One of the things that happened was in high school, I moved to Beijing, right? So I finished high school in China. And then I hopped around. I lived in Indonesia. I lived in Australia. And one thing that happens is you, if you're kind of an American living over there, you're called an expat, an ex-patriot. And so expats, like, you start to have these expat cravings for just like simple things that you

just can't find in Beijing. It's like, oh, dude, what I would give to have a box of Reese's puff cereal right now. And you'll pay like $22 for that box of Rees Pub Serial, and there are stores there that just do this. They just import the, like, your favorite snacks from America, and they just sell them at, like, a 5x upcharge. And then other people, they're sort of this sort of, like, drug, you know, can't, drug donkey or whatever thing where it's like, okay, you fill up a suitcase with this one rare item that people want, and you bring it back when you go for a trip. And so I could see this, you know, this gold-belly thing, it sounds kind of, when you first started describing it, it sounded kind of stupid. And now I'm pretty

No, it's not stupid. One of the reasons why it's not stupid is if you go to the website, they've done a wonderful job of creating the brand. So they make it seem fun, but also they have so many photos and they tell the story of the brand. And they do a really good job. And two other examples of people who do this wonderfully of telling the stories of the products. The first is Huckberry. So the business of Huckberry, it's basically a huge email list of one to two million guys. And what they do is they find really cool clothes and they tell the story behind it. So, for example, they had a duffel bag that was made from a, the founder was an army guy who used to skydive. And the duffel bags were made out of old parachutes because apparently that's like an interesting material.

And they told the story about this and they just blast it out in the email and they just take a cut of the revenue. And it's like a bootstrap company that does probably $20 or $30 million a year in sales. And so telling the story behind what you're selling is really important. And the second people who do it is Airbnb. They do a really good job of telling, of helping craft the story. Okay, I like this. So I've never seen Huckberry either. So, okay, so here's what I would do.

If I'm listening to this and I'm an entrepreneur and I got some time on my hands right now, you know, there's a version of this that is, you know, like Tim Ferriss and these other guys, they are kind of like connoisseurs of products like, you know, Kevin Rose. It's like, oh, you know, what coffee mug do you or what coffee blender do you use? It's like, oh, I use this one. It's made of macha wood and it does this other thing and it's so special and you can only get this in Puerto Rico or whatever. And so there's all these products where people care about sort of the best

of the most well-made is how you define best here and so you know whether it's wallets headphones it's this type of stuff you find on like mass drop or whatever um but if i was somebody i would build a brand i would build an email list around what is the absolute best of x product and maybe it's something that you can only find in a local geography like you know um that's what kind of gold billy's doing it's like the best pizzas oh you want shake shack but you live in you know Arizona and shake shack's not in arizona here it literally i can see it on the website It's $49 to get Shake Shack delivered to you in Arizona. And so if you can tell the story of how crazy good this thing is, how people go nuts for this thing and how it's the most well-made, well-crafted pocket knife or whatever those items are, I think you could get a lot of people to impulse buy and be like, yeah, I want one.

If you could just, your email list is just telling the story. I do that constantly. I buy stuff. I go to Wirecutter on a daily basis and I'll buy interesting things. Like, I love gadgets. So I bought a power washer from wirecuts. I don't really need one, but I bought one because it just looks like a nifty, cool gadget. Wirecutter has a long article on the best aluminum foil.

I bought it just to try it. And so there's a few other, but I think it's called. I bet you Albreu knows. But all the YouTubers, they get asked the same question, which is what equipment and microphone and camera you're using. And so at the bottom, they have a link to like my kit. And you click it and you go to like Casey Nicet's equipment kick. And if people buy that stuff, they get an affiliate fee.

And so I think that those business bottles are fantastic. Yeah, there's something cool here. I like this. And I think Goldbelly is one of those sneaky good ideas, I'm going to say. It's sort of Airbnb-esque in a way where it's like tapping into this thing that people want that sounds a little unusual. It's like, how many people really want to do that? How many people really want to stay in a stranger's home rather than a hotel? And it's sort of like that. It's like, how many people really want to order the best bagel from New York? And it's like, you'd be surprised is the answer. Yeah, I think that it's a pretty good idea with amazing execution. I'm very into Gold Belly. I just discovered them. the past month and I think that had I discovered them prior I would have loved to have invested right okay cool what what are some other ideas you got you want one or you want me to throw one at you you do one and then I got another one okay so here's a company that I am interested in investing in I've been talking to the founder of a company called Nana maybe I shouldn't even say this because I kind of want to invest before I say it but whatever let's put it out there um so the company called

Nana I discovered it because my dryer broke at home and you know I got in that's that shitty shitty state where you run the dryer three times to dry one load and it's like oh fuck what's happening This is not how it's supposed to be, but I don't know how to fix a dryer. And like, my wife's looking at me like, are you a man or not? And it's like, no, no, we already know. I'm not. I can't fix this dryer. And so then I'm like, okay, cool, where am I going to look in the manual?

God damn it, that's going to suck. And so what Nana does is they solve this problem of appliance repair. But the way they're doing it is very interesting. So there's this extreme shortage of technicians who can repair appliances. There's more appliances that need repairing than there are technicians available. Technicians tend to be older. They're aging out of the workforce. and young people are not really going into that profession, even though you can make a lot of money.

So the backstory here is the founder of this company, he's kind of like a small-time hustler entrepreneur. He like had a clothes, like a jeans store in Israel and a mall. And then he had this other little thing that he was doing there. He was kind of hustling and making it work. So he built a couple small businesses. When he was in America, he needed to pay off his student loan. So he was like, all right, how do I pay off like 200 grand in the next like 18 months? And what he did was he saw his friend was repairing appliances and was making like 20K a month.

And he's like, whoa, okay. How do I learn how to do that? And so he started learning how to repair appliances. He started doing it. And he ended up building a little, like a one-man service company that he hired up a couple other technicians under him. And he was doing like $2 million a year in revenue. He paid off all his loans.

And he built a company overall over the kind of two, three years, it did about $5 million in revenue on his apparel company. Wow. So then he was like, all right, I'm going to build. And what he's built is basically Lambda school for technicians. So you can say, okay, I want to make this much money. I want to, you know, you pick your own hours, but you can make good money if you're a technician, but you don't know anything. And so he's like, cool, I can train you in one month

to repair one appliance. And then in the next month, I can teach you a second appliance. And you know, within a few months, you'll have all the appliances. But the whole time, you can actually start working. After one month, you can pretty much start working and start making money repairing, let's say, dishwashers or fridges or whatever. And so on one hand, he's training up a technician workforce. So it's a trade school for technicians. And on the other side, he's partnering with the manufacturers of these appliances who get the customer complaint that says, hey, my thing's broken. And these companies are looking to dispatch a local repairman to go fix it. They don't want to run that local repair fleet themselves. So they used to use Sears. Sears had like,

I don't know, tens of thousands or hundreds of thousands of technicians in their workforce, but Sears has kind of gone downhill. So he's trying to be the like best option for getting every lead when somebody needs a repair. It's like, cool, we're like Uber. You tell us where the repair is. Our guys do a good job. You push a button. They get dispatched. And so I really like this company. I'm trying to invest. And I just love the concept in general. Okay, I like that. I don't know the economics out of it, but I do know ICraft. You know, ICraft?

It was a little bit similar where what they, so. Explain what they did. So what ICRAC does is if you broke your iPhone 8, it's, you take it to the store and it's typically pretty expensive, $350 to fix the screen for some phone. And what ICRAC did was, well, regardless of which phone you break, an I tech will come to your home and fix it for you. Now, these businesses are actually a little bit sneaky. And I want to, maybe you could tell me about Nana is typically the way they work is they're a little bit more of an e-com or marketplace than you think.

So the name of the secret to their business and ones like it is getting loads and loads of I-Tex. And then on the other side, getting loads and loads of leads. So they just have to go out and buy advertising, rank on Google for repair my iPhone. And then someone comes into their system. They go, all right, I need an iPhone. And then their technology dispatch, or I need iPhone fix. dispatches that lead to any ITEC in the neighborhood or in the area. And they also have to make sure that this ITEC is like clean and nice and reliable and things

like that and train. And the way they make money typically is they take a small cut of the fee, which is pretty small enough that it's almost like their, it's like lead gen. And then they sell the ITX all of their screens and repair tool. And so is Nana kind of like that? No. So basically they, so it's similar in some ways, but I think the economics are a little different. end up with like a 20 to 25% margin per job. So like average job will be like, I don't know,

200 bucks. The technician will make about half of that. There's a parts cost and then there's what they take, right? So like let's call it round numbers just to sort of, I can't give away exacts, but let's say a job is about 200 bucks. Half of that will go to the technician, 25% will go to the parts, cost, and then 25% is left over for them to take at the end, 20, 25%. And so they don't charge the technicians. They're not trying to make money. In fact, they're going the other way, which is they're trying to hand technicians sort of a career in a box. It's like, hey, do you want to be making 80 grand a year, 150 grand a year, whatever it is, repairing these things? Like, watch, you download this app, and it's like Uber.

It's like, a job will get dispatched to you. You can choose to take it or not. And you wear this brand and this brand means that you are a trusted technician. And it's like a franchise model, basically, for these, like, freelance technicians. So I like that. I think it's awesome. Let's talk about reasons why this would suck. Yes.

The first reason why it would suck is. So the reason why I think home joy and cleaning services are really hard. And a lot of them went out of business and a lot of them are only okay businesses is because for two reasons. Well, yeah, two reasons. The first is when you have a cleaner who comes in and out, often they're just shit. Like a cleaner is good after you get to know them for a handful of tries and they understand the difference between each person's clothes or they understand where everything goes. And so the second reason is also a matter of trust. You really want to trust them.

And you can't always trust that with home joy. I mean, you get a little bit of like, well, they represent the brand. I know the brand will reimburse me. And then the third reason is if I find someone who's really good, I say, hey, fuck this platform. Just come to my house every two weeks and I'll just pay you. Yes. And so those are the three reasons why I think this would not work.

But this is different, right? Because this is not repeat. You don't have a broken appliance every two weeks where you're going to like disintermediate the platform and say, hey, let's just do this direct, right? So this is a very infrequent thing you do. The other thing is that they're not acquiring customers directly. So they're not like Homejoy or Cherry, which was a car washing company, which is basically spending a ton of money trying to get a customer and then trying to make back the money. What these guys are doing is they're getting free customer leads because they are solving a problem for the B2B vendor.

Their B2B partners, which is like, you know, the maker of the washing machine. The maker of the washing machine has the lead. They're just going to decide who do we dispatch this lead to. And if these guys can prove that we are faster and we do the job and your customers will stop calling you saying the thing is broken, then they will become the preferred partner. And so they're proving right now where they're getting, they're becoming the preferred partner for a whole bunch of these different vendors. That's like the unproven part. But it's much better than if they were trying to just generically market on Facebook or Google and say, hey, Sam, if you ever have an appliance to prepare you's NANNA, like, hopefully I'm putting my ad here while you have this problem, which would be really, really hard to do. And so instead is like, no, I actually disagree.

I don't think that would be hard to do at all. And I think that's actually a great thing to do because when you search locksmith or broken. Search is different, right? Search makes sense. I'm talking about just Facebook ads or whatever words. Oh, no, no, no. You need, what's the difference in advertising, contextual and, I forget, but you need search. You need search. Search where there's intent. I needed my, I need my fridge fixed, right? That's different than just I'm scrolling on Facebook and somebody says, we fix fridges. Why do they raise money? A business like that could be profitable, pretty fast. So the reason why, this is, I think, the real challenge, which is they have to get

all these different it's a it's a local type of business so you have to build up supply density of technicians and demand in every single city for this to work and so that's why they're going to need money because they're going to have to bridge this gap where there's a you know the vendors aren't going to give them leads if they don't have technicians the technicians aren't going to come on board if there's no jobs to do and so they have to figure out how they're going to bootstrap Atlanta and then peach tree Georgia and then this other suburb of Georgia and right like city by city they're going to have to build up supply and demand like uber did basically and um and So I think that's the main challenge and that's why they're going to need money to be able to do it.

But if I was going to say, why did it fail? It's because damn, solving that local supply demand thing is not easy. It's like dating apps have this problem too. If I download a dating app and I have nobody nearby to match with, I delete this dating app and I move on. And the dating apps that win aren't ones that make you a better dater. They're ones that figure out how to get a bunch of guys and girls in one city on the app at the same time. I like this, though. I like people who are hustlers like this guy, a good fine.

The best part is that he did it himself as a repair guy for two years or whatever. That's like where you're like, okay, you're not just the typical sort of like opportunist who's like, oh, I researched this market. And I saw there's lots of appliances in the world. Did you say he? And did you say he's Israeli? I believe he's Israeli. Yeah, I could be wrong. I have a whole bunch of Israeli.

In Tennessee, I was friends with, I ran around. I dated a girl who was friends with all these Israelis. So all my friends ended up becoming like a bunch of Israeli guys. And they all were locksmiths. Like they all had like side hustles as locksmiths. And I was like, this guy's name was Ram. I was like, Ram, what is this locksmith? He goes, dude, I make like half a million dollars a year as a locksmith.

Because I like, I learned how to rank on Google. And anytime I get a lead, I just sent it to my friends. And a lot of my friends came here from Israel. And I just said, hey, come. I'll give you like a $25 an dollar job. And they come here and like, you know, they rely on me. So they all work hard. And anyway, this whole, this is part.

And he told me. He was like, this is part of Israeli cultures, this industry. And it's super interesting. I think I was told this before, but I'll say it again, because I love this thing. I read this thing once, which was like, I want to look up, there's a tool tip for hiring. It's like, let's say you wanted to hire a locksmith. You don't want to hire the best locksmith, the guy who's best at fixing your lock. You want to hire the guy who's named his company, AAA locksmith.

Why? Because he's thinking about in the yellow pages, how do I be the first listing for locksmith? It's like A A A locksmith. It's like that's the person you want to hire, which is somebody who's good enough in unlocking the doors, but is actually thinking through how to grow and how to get business and customers and not just a locksmith who's spending all their time getting better at repairing locks and not thinking about how they're going to get customers. I always say I'm trying to hire triple a locksmiths and nobody knows what the fuck I'm talking about. All right. All right. What else you got? Just fucking rank.

Okay. A few weeks ago, we talked about JD Power. Do you remember that? Briefly. Not really, actually. That's okay. I said briefly as if I did, but I totally didn't. Okay, I'm going to talk about a similar business. Okay, and I've talked to you about them.

Do you know what Gartner is? No, I heard the name, but I couldn't explain their business to you. Okay, so I just subscribe to this guy's subscription. It's really good. I'm going to give him a shout out. It's called Scuddle Blurb, and he's just this dork like I am, and he just talks about interesting companies, but he does incredible breakdowns. And he had this one in Gartner, and I've known a lot about Gartner,

because I think our company can almost become something a little bit similar, but not quite, but it's in the similar ballpark. So Gardner, before the Corona, it was worth about $40 billion, I think, or $20 billion. Whatever it's worth now, it was worth double that. And so it's a big company, like $3 billion a year in sales. I read the biography of the guy who started it. He's interesting. Hold on.

What does Gardner do? What does Gardner do? What do they sell? Yeah, I'm going to explain. And so, okay, and so the way in which people explain it, it does not make sense. But let's dive deep and it will make sense. So what they do is they research a variety of IT tools. So like what's the best tool for HR stuff?

What's the best marketing tool? What's the best sales CRM? What's the best finance tool? And if you're a big company, you pay them a subscription fee ranging from $20,000 a year to $200,000 a year. And in exchange, you get access to a database of research that examines this, as well as a consultant who you can call and they can answer your questions. Now, that sounds like a stupid thing, right? Like, why would you need that? Like, why can't you just pick?

And that's weird. And in a way, it is weird. But the reason why they're so successful is for three reasons, okay? The first reason is that people say they want, like if you, so there's a 100,000 companies in America that have an IT budget north of 10 million a year. And so they have to research in order to make sure they're like spending their money effectively. And so they want Gartner's research. And apparently their researchers are really good, but they're not that good.

Now, the second reason why it works. And now, this is what's interesting. And this is the angle I want to get at in a second, which is they buy it because, any executive or IT person who's making a decision on their, like, which, like, they're going to buy, like, you know, 5,000 laptops. They say, well, Gardner said we should use this one just so they don't get fired. Because the execs trust Gardner. And so they only do it.

Not only, but one of the biggest reasons they do it is so just to cover their ass. So like, well, I don't, don't blame me, Gardner. And then the third reason why, and this is where shit gets also really interesting, it's because they're sales force. They have this training where they, where you get hired and they, take you away for like a few weeks, they throw you in a hotel and they indoctrinate you on how to sell and you sell through their process. And then at the bottom, they find like the 20% of people who they just don't think you're going to make it and they just fire them right

away. And so they create like a fraternity or sorority of like a hazing process of salespeople. And a lot of analysts think the reason this company is any good is because their sales culture is so phenomenal. And I find that to be incredibly interesting because that is not what most people would thing. But having like a pretty good research department, but it's not significantly better than all the other competitors, but a super good sales team is what made this company work out well. And that is interesting. And so when you hear this and you're like, okay, you said, I think we could do something like this. Do you actually think about that? Like, okay, what is the modern day version of this? Or how do we, well, what would be our version of this? Well, yeah, so here's a few examples, which is Harvard Business Review. Do you know Harvard

Business Review? Yeah, I'm pretty familiar with them. Harvard Business Review makes $300 million a year in sales. And it's like half profit. Harvard Business Review, like the publisher, makes more revenue than Harvard Business School tuition. Yeah, if you want to see, all the annual reports are online. So it's great to go look at Harvard's Business School reports and the business review as well, HBR. And they make money through subscriptions.

And then they also sell like millions of case studies a year. And why do you buy a Harvard Business Review case study? Well, just because it says the name Harvard on it. So it's real, that's, the moat is building a brand that people like just try. trust and know. And so that's kind of hard, but that's definitely doable if you have the right skill set. But the second thing is once you get entrenched into your sales force gets entrenched, which a lot of people who are building stuff, they don't know this because they think to themselves, if I just have the best product I'm going to win, that's not true. And so when I think about this,

I'm like, well, I want to have the best product, but also like, how do I just like build this massive sales culture? And so what I want to know to you, Sean, is, first of all, what are other things in which people need to cite someone else so they don't get fired? Because that's like an interesting human cycle like that's like an interesting psychological trick to exploit but then how do you feel about this whole sales thing because you read about people like I have no idea if this is true but let's just say like Elon Musk he's like no fuck salespeople which I think might be true they don't hire salespeople and like that's like sexy and like romantic

but do you okay so let's talk about the first one so the first thing is the the learning as an entrepreneur which is a lot of people buy your shit not because you have the best product they buy this like what is the job to be done of Gardner like you're saying it is to inform, yes, for sure. I am going to get some information from this, but really it's because when I present my proposal that we're going to spend $8 million this year on XYZ, I need that to not be me, Sean saying that we should spend $8 million. I need that to be saying, Sean thinks that we should take the Gardner recommended path and do this. So it is CYA, cover your ass. So I do think there's that. Now, this is just a general, and I see this with a

whole bunch of different research things, right? So like, there's a whole bunch of market research things that right now at my company, when somebody says, hey, we want to go after this opportunity and they present their research. And, you know, the source cited is super important. Now, we pay a lot for these research reports, thousands of dollars. Who? So it'll be like, like, for example, in the ESports world, New Zoo, is a niche one that really talks about gaming and they talk about esports a lot. And so you see New Zoo all the time. Forget about the fact that New Zoo, if you just go back and read their report from four years ago, they're like, oh, e-sports will be at X billions of And then this year, now four years later, it's a smaller number than they predicted.

Like, the prediction now for four years from now is smaller than it was four years ago about today. So, like, they're wrong a lot that we should not take their word as like, you know, any good here. But, you know, because they're predicting and humans are shitty at predicting. But I see that. I see it on the like kind of like market market data. So we need data about like smartphone penetration in a country, the wireless, you know, what is the wireless speeds? What is the disposable income in this country? Should we go into this country or not?

All these things, there's not us like Googling, like we have to get to some like Deloitte paper that we pay $3,000 for or some subscription we have that gives us this data that we can say, look, I'm not the one estimating these numbers. That's them and they're a big brand. And so I think that McKinsey is another brand like Harvard. I think if Google or Amazon wanted to get into this business and say, hey, these are Google case studies. They could compete with Harvard. But I think as an individual person, I've looked at this because I was like, dude, I could write better case studies for business schools. than Harvard Business Review. I know it. I've bought their case studies and I know what I could do, but I'm like, it doesn't matter because they're not trying to buy the best case studies.

They're trying to buy Harvard's case studies because that is better for their business school brand. So I hear you on that. I hear you on that. And that, you say in a way to persuade people not to do this. Or you persuade yourself. I totally get it. Yeah. I come from the other end, which is, wow, that's like their moat. So it might take me a little while to do it. But once I do it, man, I'll make money for 100 years. Yeah, I think that's true. Like, you want to be in a defensible business. And unfortunately, defensible businesses are pretty hard to overtake. So it's like the barrier to entry is the same reason you want to enter in the first place.

Now, I do think if you can find an angle, like you go after a niche that they're not aware of, that's cool. Right. Like, I've thought about doing this, which is instead of doing case studies on existing sort of legacy industries and businesses, I know that these incumbents are really shit at the cutting edge. And so I'm like, I could make the school of the future. and we talk about cryptocurrency, and we talk about a whole bunch of stuff that Harvard Business Review is not going to talk about for four years. And so you could become the thought leader or the stamp, the sort of credible authority in that news space. Like, you guys could do it with D to C or trends or whatever, right? Like that 2 PM guy, right?

Well, that's what we're doing with trends. This is what we're doing with trends. So this is why it interests me. But what space would you do? I think I would do. So, like, you went on Pomp's podcast, and I think he's been trying to do this with cryptocurrency. Now, he's trying to do it towards consumers. But I think you could sell knowledge about this to existing financial institutions at a very, very high price.

I think you could just be scraping data about the current, you know, the 2020 cryptocurrency Bitcoin landscape. And I think you could sell that for thousands of dollars to all the consulting firms, all the financial institutions. And you could get to single digit millions in revenue pretty quickly there. Then you add a conference and then you kind of go from there. And so I think that's one where I would go towards a niche that the existing big brands don't cover because it's not their area of expertise. and also it's small today. And so they're still covering all the big spaces like agriculture or whatever else. Okay.

And what do you think about having a... I personally, when I started my company, I was like, I don't want this to be a sales organization. I hate salespeople. I want to only be around like nerds, not like alpha, loud, obnoxious. And now you've 1-80. No. You love having a sales team, is what I mean.

I like the results. And our salespeople are, our salespeople are, in fact, the most fun. Like, they're just like gregarious fun to be around. like their job is to be likable. But I think if you have a sales driven organization, it isn't always... Yeah, I don't think so either. I also think you got to be... So my take on that sales thing is every business is selling. It's just a question of, are you selling with salesmen? Are you selling with digital ads? Are you selling with... Like, Elon is clearly one of the greatest salesmen of all time. And then he talks about how they don't employ salespeople, blah, blah, blah. That's part of his

sales pitch is that our product is so good. We don't need salespeople. And, you know, he does his sales through Twitter and through video presentations, like on stage and all different types of things where they, you always got to sell. It's just a question of what's the vehicle. I think you should just choose the tool that fits your product, right? So like, if you have a high priced enterprise product, then you should have a fleet of enterprise salespeople. That's not always the case.

So Atlassian claims they have no salespeople. Sure. You can try to be the outlier, but I'm saying like if you're trying and all these companies do switch, right? So like Slack and whatnot, I believe now as they're trying to go get multi-million dollar contracts with companies. Most of their revenue comes from. Right. It comes from direct sales, human salespeople going out and doing things. And this is a fact, by the way. This is in their filing, which is most of their revenue is driven by a handful of account. And so I think like, you know, depending on what your

product is and the price point of it, that dictates. If you have such a low price point item, you just can't afford salespeople. And so you got to get creative and be like, okay, I'm going to sell through content marketing. I'm going to sell through digital ads. I'm going to sell through these other methods. But you're always selling one way or another. So we, where this podcast is going to be relatively short. You want to talk about, oh, well, okay, so last week we were talking about YouTube channels. Did we bring this on the podcast or this was on Twitter somebody was talking about? I don't remember. It all is one world to me, but you, someone brought up is buying a YouTube channel a good idea. I think in most cases, it is a absolutely horrible idea and you should

never do it. Now, I was part of a friend bought a website. that was a content site that got a fair bit of traffic. And it came with a YouTube channel that had maybe 2 million subscribers. And so I went and took a screenshot of the revenue. And so the revenue starting in January of 2019 to December 31st, 2019, your estimated revenue is $242,000. And that is with 80 million views. Right.

And so. Let me say that again. 80 million views translated into 240 grand. Yes. So to me, the answer is, that sucks. And I would not want to do that. And it's definitely declining. What the person was saying was, hey, you guys had Andrew Wilkinson.

He rolls up internet companies. Hey, why don't you roll up YouTube channels that monetize well? You could buy a whole bunch of them, niche ones, and own them. And that's fantastic. And I was like, this is a horrible idea. YouTube videos are often very dependent on talent, like a personality. And when you buy them out, you sort of take them out of the game. The second thing is YouTube videos are very dependent on the platform, the algorithm, and the search, the way that the YouTube search works.

And that can change on a dime. And when it does, you're thinking, and our friend actually has a YouTube channel that's like this, that it was doing X, and now it's doing, you know, X divided by five overnight because the Algo changed. And there's nothing you could do about it. Now, it is valuable in the case of like you're Nick Bear and you are like a, or you're Sophia, which she doesn't have a YouTube channel, but like her Instagram. page is probably the same thing where I bet she could just pocket a quarter of a million dollars a year just off the occasional ad on her Instagram but the real value is her saying I am the CEO of whatever company I'm the CEO of here's my product check it out buy it yeah that that is valuable YouTube channels can be valuable I'm saying buying other people's YouTube channels I think is a

poor way to buy your way into cash flow if you're going to buy your way into cash flow by a you know an apartment building that's that's spinning off cash or buy a business that's not dependent on a personality, it's a piece of software that just runs. That's what I would do if I wanted to buy cash a loan. Now, I'm going to make a point that disregards everything we just said, which is the company Group 9 Media, which owns Thrillis, Ben Lears, the CEO, he bought Seeker. And Seeker, I became friends with the guys who run it. It was ran by five to ten guys in the dog patch here at San Francisco, and they would make educational videos on a variety of things. And they bought it. And they bought it for a couple million bucks. So that is an example of

the YouTube channel that is not. So I was going to bring up a similar one. But which is... Those people I think are stupid. They still shouldn't have bought it. So I had a friend. Unless the price was... Unless the price...

So we've talked about my friend on the podcast before, Steve Bartlett. So Steve was a young guy. He came in, I think it was kind of like an intern, basically. But he was, you know, I've hired him when he was 20 years old. He wanted to come work with us. I worked with him for a bit. Honestly, he was kind of a shit employee, but he's turned out to be a great entrepreneur and built a company that's now, you know, sort of someone like gone public in Europe or

something weird. But he's built, you know, he's built a fortune of tens of millions of dollars for himself. And, um, and what the way he got started was by buying Twitter and Instagram accounts that were not owned by a personality influencer, but by a theme account. Like, I love food or whatever. They have, I think, love food. It's got like six million or seven million Instagram followers. And they bought that account. And he was figuring, he figured out pretty early, wow, the people who run these accounts with a million, million followers, it's an 18 year old kid and I can offer him a thousand bucks and I can get the account.

And he's just, you know, doing affiliate links for protein powder. But if I aggregate all these, I can go sell this to Spotify as a great way to reach the masses. And I can control these. They're not based off of a person's face and a personality. They're based off of, you know, Harry Potter memes or whatever. And I can just hire, you know, a whole bunch of fungible people to keep posting on those accounts. That was a smart business plan that it did have some platform risk, but the cost was so low. And the personality risk was also zero.

And that was a pretty genius way of going about it. I'm definitely a little bit allergic to schemes like that because I don't want to hate on him for doing that because it seems like it worked to him. I personally think I would never tell someone to do that though because I think that is short-term money that can go away in a heartbeat. Now, some people definitely pull it off, but I'm allergic to that shit where I'd rather not have stress about like going away. But I think you're wrong about that in that in that he was spending so little on it. He was making his, if you're making your money back in one month, then there's no risk. it can go away and you still, like, you still will end up ahead. So it's all about what's the payback period on the thing?

Is it a high-priced item? These were so low-priced that he was making his money back so quickly. He's just free-rolling from there. And so that... I'm not disagreeing with the result. It worked out wonderfully for him. I don't know. It seems like it did.

But I just personally would not want to do that because I'm like, dude, if you're going to spend like 10 years of your life doing something, like, make it something kind of cool. Like, it just would be hard for me to, like, love that and I don't think a lot of people would love it. Really? That's crazy to me. I think if I'm 21 years old right now and I was running the sort of, you know, he could push a button and make things trend on the internet all over the place, right? And so I think that's an awesome thing to do for somebody who's, you know, you don't have capital,

you don't have investors, you don't have like any real hard skills, can't code, can't design, can't do any of those things. I thought this was a great sort of entrepreneurial thing to do from age 20 to, I don't know how old is now 27 or something like that. Um, and he, I'm not hating the player here. I'm not hating the player here. I think the game is stupid. But if you got, he got results. I just think that it's kind of like a soulless, uh,

but isn't it the same thing as a media company, right? So like all he was doing was saying, great, I'm going to buy these media properties. This is a brand with an audience that cares about food or fitness or whatever it is. And I'm going to create content that they love and occasionally I'm going to run sponsorships. How is that different than the hustle? Um, on paper. It's not. So you own an email list.

So hustle is better that way, right? Cause you, you instigant, like what happened was a lot of their Twitter accounts. Yeah, I don't know. about that. You can't really get shut down. I think, I can't get shut down. It is a little different, though, from my perspective. It's on paper. It is the exact same thing. It's a little bit different because I actually give a shit, which maybe he does give a shit about his people, his audience. But, um, gotcha. So you love the topic more and the audience as well, the community of people. That would be the difference. Yeah. Like, I love the idea of building a brand that people know and love and trust. So like,

um, which maybe some people do love these brands. But like, let's say like, let's say like, let's say, let's go with news. So let's go with CNN, which is on the left, and Fox is on the right. Like, to their audience, they're like a source of truth, which people can debate all day if that's true or not. But they are. Now, compare that to like fringe, like far left, like news things that are just like clickbait and far right. That's clickbait. It's like, that's the difference. It's like, well, what's the difference between porn and a documentary where there's nudity? Like, you know it when you see it. And so this is like, well, it's both nudity. It's a little different. I also think that like, you know, the way BuzzFeed kind of started with the stupidest of the stupid listicles and quizzes and now does like a bunch of investigative journalism and create a tasty and all these other things. I think you can evolve that.

Like they did this with their stuff too. They used to buy little meme accounts and post stuff all the time to go viral. And over time, they built then a woman's fashion like an a a athleisure brand where they were selling products into that community. They built a news channel that's sort of like an ESPN that's focused on sport, but in a millennial kind of way. and so they ended up upgrading the like, I'll say, level of quality around their things, but it's because they had this asset that could make any of their pages big. And that was like their renewable ass. I agree with that.

I think that's possible. I think that's possible. I just personally don't find it to be incredibly exciting, but I buy. I understand it. Okay, cool. I like when we disagree. It makes for good conversation. All right.

Let's try to squeeze one more, and I got two minutes left. What's one more thing we could talk quickly about? Do you have something in mind? Okay, let's do this one. So what were you to say? Abra, you have some stuff. Elon weird tweets and Okay, let's do this one real quick

So I tweeted this thing out I said, hey, you know, give me a book recommendation What's a book that you read That changed the way you see the world? And I tweeted this out And I got like 500 replies Which was probably like the most

Replied to tweet I've ever had. Everybody gave me like 10 books Which was way too much, right? I can't read that in one lifetime But ironically, so I ended up with a good book recommendation out of this. So I got a list, bought all the books. I started reading one of the books

It's a book called Storyworthy. And I fucking love this book. And nobody, it was only one person who recommended this book out of the whole list of 500 replies. And so Storyworthy is a book by this guy, Matthew Dix. Who's Matthew Dix? He is a teacher, I think in Connecticut. He, um, you know how people do like slam poetry at these like open mic nights or whatever?

So there's a version of that for storytelling called like the moth storytelling competition. You just go to this little bar or whatever on. Yeah, I love the moth. I listen to it all the time. So he is the like 20-time moth champion, storytelling. He's the, he is the Michael Jordan of the moth. The problem is the moth is so small that nobody knows about it. But anyways, this guy is just an...

Dude, the moth's not small. The moth is big. If we're polling our audience, I bet less than 1% know the moth or something. It's like NPR where it's like, it has a large audience, but maybe they're not like 19-year-olds who wear bands. Right. And so I listened to one of this guy's stories. I was like, oh, that was a pretty good story. But I read this book, and this book is awesome because this book breaks down,

the art of storytelling and you will like I already feel like a better storyteller just from reading I've read three-fourths of the book so far and I'm like wow this is one of the most useful books I've read in a long time because I walked away being like oh that's why the stories I love that's why I love them and for the stories that I go to I have my two or three go-to stories that I'm like these stories kill I know I now know why they kill and I know why my other stories don't kill and so I'm like this and you know how to like take advantage and capture people's attention and convince them to do stuff now yeah part It could be used for persuasion, but I don't think that's really, that's definitely not his intent, because he's like a, you know, sixth grade teacher or whatever. I know, but that's the intent of all stories.

It's capture attention to make it feel something. It's to move somebody, you know, emotionally, right? So it's like, it's to get somebody to feel something. Now you can use that to get them to feel excited about your product, or you can get that to make them feel like they'd like you and they want to just hang out with you more or whatever it is, right? And so, I think storytelling is a superpower. This book Storyworthy is fucking legit. You should read it. And next time I'm going to do an example of, like, good story versus bad.

story but I ran out of time today. Awesome. This was a short one. Give us a review. Please. Yeah. We both Sean and I look at the feedback every single day and iterate based on your guys' feedback. So leave us a review. Awesome. We're out. See you.