My First Million - #99 - Creating the WeWork for Warehouses

Episode Date: August 7, 2020

Sam Parr (@theSamParr) and Shaan Puri (@ShaanVP) are back together on the podcast to kick around some interesting ideas. In today’s episode Sam gives Shaan the rundown on his episode with Ryan Begelman (3:20), Shaan thinks through his life story and how to pitch yourself like a product (10:30), Shaan and Sam talk about WeWork for warehouses (17:50), how to build and structure VC funds on a small scale (27:05), how do you gear unconventional products towards women (39:20), Sam and Shaan ponder if theres's potential for a women-centric, alpha environment in the workplace (49:50). This episode is presented by Tempo! Check them out at tempo.fit and use code "TempoHustle" for $100 off. Joined our private FB group yet? It's a page where people share each others million dollar ideas or what they're already working on: https://www.facebook.com/groups/ourfirstmillion.  See acast.com/privacy for privacy and opt-out information.

All right, we're live. We're good. Yo, you're in Utah. Yeah, I am, I'm in, uh, salt, not, what's the other place? Park City. I'm in Park City. Nice. How's it been so far? Your great adventure has begun. Um, it's okay. I definitely want to just be in my home, but it's okay. Dude, you're like two days in. It's okay. Yeah, it's good. Like, it hasn't hurt productivity, but I could see how it could.

Meaning what? Why would it hurt? Because you're trying to dunk? We should talk about that in a second. Okay, so I don't want to make this too much about me, but I'm going to, because that was kind of cool. This place I'm saying had a basketball court and I posted on Twitter dunking. Shockingly close, right? Very close. Shock. If you had told me, hey, can Sam almost dunk? I don't mean like, what are you talking about? No. No, Sam can't almost dunk. But you can almost dunk. You're like very, very close, which was extremely,

surprising to me. I don't think it's a matter of jumping height that it's preventing me anymore. I think it's a matter of maybe. I think I'm a little chubby. I could lose if I lost 10 pounds, I'd get it. But it's a just a strict, like I'm not coordinated enough. Like the way that I'm doing it. Right. All the limbs have to move in sequence. Like I, uh, like I'm like running and just stopping and using two feet and just like right. No, it's cool. You should go to Sam's Twitter and watch him almost dunk. I was, I was really shocked. I've gotten that close to dunking when I was, I think, I was super close to dunking and then I like blew out my knee the next like two months later. And then I've never been even remotely close since then.

And it's not because of the knee. It's just I never like got fit again in that same way to be able to potentially do it. If you did it at 19, work a little hard. I mean, work hard and try to do it. Like when I was 20 and 19, I could like, I couldn't like put it in between my legs, but I could like go up and like do all types of weird shit. So you could dunk before. Yeah, and no one believed me.

Like no one who knows me now believe me. And so I'm like, fuck, I'm going to do it just to show you guys. Amazing. Okay, so that's going good. So yesterday, what happened? You had a little emergency? You had a bail last minute? Kind of, yeah.

So that was yesterday. That was two days ago. Yeah, I got a whole bunch of crazy stuff going on in the work world. And then like, Sonia yesterday was having like crazy ass cramps. And then I'm like, oh, shit. Okay, I got to like learn how to take. care of this baby because right now we have like a you know a two-party system it's like I know how to do my role she knows how to do her role and I'm definitely like the Steve Kerr and she's like the Michael

Jordan of baby care and so when Michael Jordan gets the flu you're like oh shit and now I got to score and I don't know how to score I haven't tried I haven't done this all year and so um there's some moments like that just pop up throughout the week and it's always during like you know some other work thing that I'm like okay work's not important I got to learn how to be a dad hold on that's all right well uh we're happy to have you back i did a little bit of the heavy lifting without you and i didn't like it i missed you for sure we heard it was good though the editor was like this is an a episode and i was like wait a is a possible without me oh shit okay well it didn't feel like an a when i was recording it it was not as fun but i will tell you want to do a recap on him well i didn't get to

listen to it yet so i have it cute up okay yeah give it to me okay so check this out so i met this guy either in trends or on twitter i met him somehow only two weeks ago go and we just would shoot the shit in the phone. It was like online dating. Like calls? You started calling each other? Yeah. Oh, wow.

So this guy, but I had kind of known of him a little bit, but he started, his name's Ryan, Ryan Beagleman. He started BizNow Media, which is a newsletter business. And I definitely was inspired. I knew a lot about him and a lot about their company. And so I kind of knew him. I didn't know him. I knew of him.

And he called me and we became buddies. and I was like, yeah, you know, I started my company inspired by you guys and he was, whatever. And so he also started Summit Series. And Summit Series, he got mad at me a little bit because I kind of described it in a disrespectful way, but it's an event. But these guys are wild and they would rent a cruise ship and it's like a lot of young tech folks. And then they eventually were like, you know, what if we like, let's not, I don't want

the party to end. Let's buy a location to do this. Right. And these guys were like, it was like four of them were the main guys or maybe five, but I think for and they go, what if we convinced a whole bunch, at this point, they probably had 5,000 attendees across all their events, like over the lifetime over four years. And they go, what if we convinced like 50 of these people to help us buy a mountain? Because someone had come to them, a friend of a friend and be like, hey, there's this mountain in Utah and they're like going bankrupt

or they, it's like a, they won out. And they go, okay, well, let's each, let's convince 50 people to give us a million dollars each. And what? And what? And what? And, well, it was just like a plot of land that was like dirt. Like there was nothing there. And what if we like convince them somehow to like buy into this? And they did. And they got like a mountain. Yeah.

Successful people like read Hastings and like all these like tycoon folks. And they didn't know anything. They were 28, 29, I think 26, something like that. They knew nothing. It was very impulsive. It sounds like. And they go, let's convince these people to give us money. So people wired them money.

And they bought this mountain. And then they've over the past eight years have been selling plots of land. but it's still not complete yet. It sounds like there's a long ways to go, but they built roads, they built fire hydrants, like things you don't think about. They built.

It was literally a plattled dirt. They didn't even know, like, I don't think they fully understood zoning laws. I don't think they fully understood, like, I don't think they frankly understood anything, but they had a dream. Yeah. What's cool is they took the,

okay, rich people kind of want a vacation home in Utah. Like that, that kind of makes sense. Like, okay, it's kind of up in the mountain. I could have a vacation home out there. But in this case, they merge two things. It's like, what if there was also this kind of entrepreneurial village and it was your vacation home, would you be willing to pay kind of up front for that dream? And like, yes, they were.

They were willing to do that. And I think that they like, they had to do. So like it sounds like they had a lot of like they're these rich guys. And I mean, I imagine they're rich now. But at the time, he was like, you know, we didn't have a lot. Like, we didn't have anything really. And so it was really cool to hear how he bootstrapped. this like resort, I guess, or a town. I don't know what you want to call it. And it was great. And

they would tell stories about, I don't like. So are you there? Is that where you are? So he, this guy, he's married, Ryan's married, but his wife was gone. And he had the 6,000 square foot home that he was renting. And he goes, you know, if you and Sarah want to stay here, I have two levels so we could still like be safe, come and stay here. So I stayed there for three nights and he took and we drove around. He did a driving tour of the mountain. And then I have already had a Airbnb booked. And so I just went to Airbnb on Monday or Tuesday. And so is the the place that they bought all that land? Is that now like kind of developed? Is it happening? Is it happening? Or is it still like, no, we, nobody lives here yet? Some people live there. There's a lot of work to go. They have roads. They rented out for like

races and 5Ks and they have events there still. I don't know if you've ever been to events, but there, but some of our friends have like they have buildings. I think they have like 40 homes that are completed and you can live in. Our friend Xavier did the boss move. He saw what they were doing. And he was like, okay, this is a genius of them. And B, I don't want to pay the premium to like buy this plot on Powder Mountain. So he just bought his own little vacation house like a little further down the mountain, like right below where they were. Because he's like, dude, these guys are going to put in like $50 million to like making

this whole area amazing. So he just bought his own little house at like, you know, half the price or whatever right next to their plot of land. It's pretty amazing. And Sean, let me show you why it's amazing. The listeners can't see this. Look at what I'm looking at my window right now. Hurry up, hurry up, hurry up.

I hope I can get it. There's straight up a deer just eating plants like four feet away from Sam outside the window right now. Did you just see that? Yeah, that's incredible. You see that deer? Yeah, the deer was amazing. Sounds like Utah's dope.

I really like this story. So I know you did the whole podcast with him, so we shouldn't talk too much about it. But I just got to say my two sense is this is one of the like, you know, on my respect meter, what those guys did at Summit Series is super high up because they had no name, no background, no nothing. And then they created Summit Series, which is great, bringing people together. And then they elevated the vision like 20X where most people would have been extremely satisfied and it's kind of stopped at like, hey, this is cool. Like whatever, you know, Bill Clinton comes to our, you know, Summit Series events and chills on the hot tub on this, you know, at our event.

But then they were like, no, let's buy the mountain, create a village, raise $50 million, let's build roads. Like, that's kind of, it's ballsy in a way that I really respect. And I'm sure there's people who are much smarter and much more accomplished, but, you know,

you are what you admire and I really admire what they're doing. I agree. And frankly, the verdict's still out, I think, if this is going to work. Yeah, it can totally flop.

And I would still respect it just as much because I respect the attempt. The attempt is so unique that, you know, I got to say that that's kind of amazing. Most people would not have done that. Yeah, like, but with COVID and just the powers that be, like, it seems like it's going to work, but just they didn't say this, but from my understanding, I'm like, this definitely could still fail,

but it's pretty, it's pretty baller. Right. So it's amazing. And how'd Pomp go? So Sean was on Pomp at Pomp on Twitter. I don't know what his real name is even. Anthony Pompiliano, I think, is his name. Is that good?

yeah it was a lot of fun so i i prepped so i normally don't do any prep for pretty much anything in life and i like okay that's a good way to get good at winging it but i was like every morning when i wake up i you know asked myself i'm like okay what's the one thing i'm going to do today that if i just crush that one thing then today was a success and like even if i fuck up everything else or i have to do everything else it won't matter this one will carry my whole day to be a success. So I look at my calendar, usually I'm like, oh, okay, I have this meeting or I got to make this pitch or whatever. And I usually decide my thing. And so when I woke up, I was like, the podcast. I'm going to crush the podcast. And so I was like, all right, well, what do I do?

I got like two hours here. And so I did something kind of unusual. I basically sent him a email beforehand because I was like, this guy doesn't really know me. Like he's heard the podcast a few times, seeing each other on Twitter, but like, he doesn't know me. He's just booking people for his podcast that he think will help is, you know, that his listeners want to listen to. and just like we do many times. And so I sent him the letter that I wish I got from a guest, which I was like, hey, I'm pumped, you know, here we go. Here's some things that will help you, you know, make this a good show.

And I was like, you know, first, like my name, here's how you pronounce it. Because that's always a thing. It's like, here's what your listeners need to know about me kind of in a nutshell. It's like, I'm the guy who blank. And I like did my blankety blank and filled it in. And I was like, here's like five kind of controversial. things that I believe and I'm happy to talk about any of these. Here's, you know, three or four kind of amazing stories that I've, you know,

crazy things that I've done in my life. And if you want to talk about any of those, I can kind of go into any of those. And, you know, here's my kind of mission on, you know, why I'm even going on your podcast is because I like to spread the word about X. And, you know, cool, let's do this. And so the podcast was awesome, I think because of that, that prep. And I would say the reason I share this is because, A, in general, I think you can do that for whatever your version of whatever's whatever's your thing you're trying to crush in your life.

But when I was doing it, I was like, well, what am I going to say? Like, if it's like, if you think about yourself as like a product and you need to like quickly explain yourself to the customer and they're going to be like, okay, I get it. I get what this is and I either decide if I like it or don't. I was like, how am I going to, what's my angle? And like, you know, so I kind of went through this little exercise that's in some ways pretty fucking cheesy, which is like kind of like a personal branding exercise where it's like, okay, well, what's the one thing that people should know about me. What's the core? What do I stand for? What makes me than anybody else? Why, why should you listen to me on this podcast? And so I went through this

exercise and I came up with kind of what I thought mine was. And so I'm curious, like, do you ever think about that or do you feel like you have kind of a personal brand and do you like, I don't know, do you like work on it? Like what do you, what's your angle, you know, if somebody should be like, all right, who's Sam? Sam's the guy who does, Sam's the guy who is X. And that's why you should listen. I don't think I work on it. but I think I probably should, but no, I don't. I think, I don't know. I think maybe my reputation is like people kind of consider me like a Southern person.

And I'm like, that's not really true, but whatever, I won't correct you. And maybe they consider me a loose canon, which may or may not be true. But besides that, I don't know if I think about it at all. So like you did an appearance on Jason Callicanus podcast, which I think is a bigger, it's a bigger podcast than ours, has been around for 10 years or something like that. and I thought you crushed it. You came out the gate hot. You had a whole bunch of interesting stories, information.

You kind of were a straight talker, and I thought that was really good. And I would say that's kind of like part of the appeal. But when he, you know, I think for you, your thing is like, I'm the owner of the hustle. The hustle is a, you know, a media company that, you know, we tell the news and we do this thing called trends and we have, you know, million plus subscribers and we make, you know, tens of millions of dollars or whatever. I think that's kind of like your, that's who I am. And then the reason people like you is probably the like straight talker has interesting stories to tell and, um, no bullshit kind of guy. So, you know, that's, that's kind of, I think that works for you.

But when I did it the other day, I sort of was, it became very obvious to me. Man, if I really sharpened this up, it could be a lot better. Like my story could be a lot better. And I think I'd meet more interesting people. I think you're in an, you're, you're at a slight turning point with your, who you are, right? Like you're, you had a thing. You don't have that thing anymore and you're somewhere else.

Right. And without, I mean, I'm not actually, it's not like I'm breaking news, but chances are you're probably going to move on and do more things one day. Right. Which I don't, by the way, to the listeners, I have no idea if that's true. I'm just making this. No inside info. Just, just by here.

Yeah. Yeah. And I also think that you valued yourself as like a startup or go big guy. but now you're obsessed with these like smaller things and that's a transition for you. But one thing that's remained constant is you're this framework. You're like this wisdom. This doesn't, this is a good thing. You're like this wisdom guru and this framework guru that inspires people.

And that has remained consistent. So I would kind of lean into that if I were you. Right. Yeah. So I, the two angles that I came up with were I was like, I think, I was like either I should, I should kind of explain myself as. It's kind of like an idea machine because, you know, I ran an idea lab for five years, built like 20 different products ideas out of that, raised $15 million plus.

So that's like, you know, I ran an idea lab. And then we have this podcast, which is all about shooting the shit and brainstorming ideas. And then I invest in like other people's ideas. And, you know, so that's just like who I am is what I'm interested in is what I talk about. That's one angle. And then the other one was I was like, okay, you know, like I'm also super into frameworks more than anybody else I know. Yeah.

It's the way I think. And I was like, you know, there's, I said this on the podcast. I was kind of like, you know, I would try to like want to be, you know, my goal could be like to be like the framework done, but you know, frameworks are so nerdy. You can't be a done if you're into frameworks. And so, you know, it's one of those two, I think is is the most like true. And then I've done a bunch of shit that that sometimes fits into that sometimes it doesn't. But anyways, I thought it was a fun experience to like go through that process of like, cool, if I was going to distill my. myself down in the way that you got to like, you know, be simple and understandable and like

interesting to a whole new audience of people. How would I do it? And that was a fun experience. All right. Today's episode is brought to you by Tempo. Tempo.com. Fit is the website. I actually use this. I've used this for a few months now. And it's this machine that has a touchscreen and this 3D sensor. And what it does is they give you weights. So like 115 pounds in weights. And it's for strength training. So what it is is it measure. your body and it sees how much weight you're lifting. It sees how many reps you're doing and how much effort you're putting in, what your heart rate is. It's pretty amazing. And then you have a coach on screen walking you through what to lift, how many to lift, what workouts to do, whether you want to do a

20 minute, 10 minute, 50 minute workout. It's pretty amazing. But the best part is the leaderboard. The other stuff, all the features that they have, that's cool. But I'm obsessed with the leaderboard because it measures how many reps you're doing and how much volume you're doing and you can compete with other people who have take it the same class. So it's made me want to work harder, lift more weight, or have more endurance. It's just pretty freaking fun. And the whole point of working hard is to have money so you can spend it on stuff that will make you live longer. And this product, tempo, tempo, it checks that box for me. So they're our sponsor today. If you use the code tempo hustle, you'll get $100 off. So tempo.com. Fit is the URL. And tempo hustle, one word, you'll get $100 off. So check it out.

I use it. If you look at me up on Twitter, you'll see I'm always filming videos where I'm talking to that company, say I'm trying to crush their employees on the leaderboard because I actually love this thing and I use it all the time. So check it out. Let's go through some ideas. So I saw this idea on Twitter that I thought was pretty interesting. We work for warehouses. So this guy, Jay, tweeted about this. And I would say his last name, but it's like a crazy Indian last name that I actually don't know how to pronounce. But he's a good, good follow on Twitter. I'll pull his thing up. But But basically he was saying like, look, in e-commerce, you sort of have this, you have two kind of options as your main options.

Option one is you own your own warehouse. You basically lease a space or buy a space. You put in all the equipment. You have to hire staff to run it. You have to figure out, you buy the software to run your warehouse, all that stuff. And what most people do is not that. Most people do a 3PL, which is a third-party logistics company. Basically, you just send them your inventory and then they charge you per order that they pick

pack and ship. And so that's how most people do it. But like the problem of the 3PL is that it's their staff not yours. So they don't actually really care about your customer experience. They don't really know your product very well. They make mistakes. They go slow. They charge quite a bit per order. That can like really hurt your margins. And so Jay was basically saying like, why isn't there a we work for warehouses where it's like you that they have the space. They have the building and then they have, let's say, the, like, kind of, in a we work, it would be like the desks and chairs and meeting rooms and conference tables and whiteboards in a warehouse that'd be like, you know, the shelves and the forklift and whatever else. But you actually rent your subsection of it and

you run it. You operate it with your own staff. And so they, and so you don't get charged per per order that you're doing stuff. And this is not like the newest concept. Like obviously there, you can go rent parts of warehouses, but nobody's built like a brand and a bunch of different real estate where you can go do this and make it made it really turnkey. So I thought that was a dope idea. And then I saw some people who were trying to do it. This thing called saltbox seems like the closest bet. But they have like one location in, I don't know, Pittsburgh or Florida or something like that. And so it seems like there's more opportunity to do this. I'm doing research as you're speaking. So nothing's salt box. Okay. So on that thread, they say that saltbox,

space fill and dark store. Do something similar. And I'm trying to look them up. And there is such little information about them. So it's really hard to understand anything. But there is, okay, so what you were describing earlier is called shipmunk. Do you know what they? I mean, they are a company in that.

They're a 3PL. Yeah. And I don't know if this is crazy profitable, but I do know it's very expensive for a customer. And according to just a quick Google search, they do something like $84 million in revenue. And I don't know how that revenue, if that's like, I don't know anything about this. That's not like GMV. That's like their revenue.

And then they have their people cost and then they have their leases. And so like I wouldn't be surprised if, you know, they're doing $15 million a year or or something like that. Wow. Okay. So it seems like a good business. Forbes, which they quoted the founder in Forbes 30 and 30. So I think that would be reputable.

Shipmunk made $4 million in sales in 2016, expects to do $10 million in 17. So yeah, I don't know where they're at. I don't know how big they are, but I know that they, like they, I talked to them yesterday, actually, and they said that they invested $10 million into automation for their warehouses this year. So if they're investing $10 million, they're, they're not at $4 million in sales anymore. So definitely way above that. So it's an, that's an interesting idea. One of our friends bought, or is renting a warehouse in Vegas.

some of these warehouses are so cheap that you have to imagine that there is significant margin there. Like it's something, is it, is it, I think it's as cheap or cheaper than a dollar per square foot. Yeah. So you can get a 20,000 square foot warehouse in Vegas like near the strip, um, or kind of near, um, for 20 grand. And so I imagine if you, you get like a hundred thousand square feet, I bet for like $60,000 or less. And I don't, and, I've been into one of these 20,000 square foot warehouses. They are so big. I'm like, there is so much opportunity here just off that arbitrage.

That's an interesting idea. So what would you do? I don't know if I would do anything here because I think it's not the, it's not the most attractive opportunity. But I think if you're at e-commerce shop, I can definitely see the appeal of why you would want to have more control and lower cost than a 3PL, but less headache than like building and leasing your own thing

and being on the hook for the whole thing. the flexibility like a we work. We work shoved in in between office space, you know, like renting your own office space and like having no office space, they came in somewhere in between. So I could definitely see that there should be something like this from a customer's point of view.

I don't know how great of a business it would be, but I think you could do this and I think you could layer on a 3PL service on top of it. So you could, you know, you have the space and then you just offer somebody either we can fulfill for you or you can fulfill yourself if you want to do it this way. But I just think there's a lot of opportunity in this, this whole,

the whole e-commerce logistics space is just insanely big. Returns is insanely big. Warehousing and fulfillment is insanely big. And because just a huge portion of retail has moved to e-commerce. Like there's this like hockey stick curve of how much, how much retail spending is now happening, you know, over the internet. And it's the, if you're an infrastructure company,

you're going to get a piece of that pie. And it's not going to be one company dominates because there's like a physical component to the whole thing. So it's not like a Facebook or something where the software just scales instantly and one company takes all. It's going to be market by market, building by building.

What do you think it would take to make it so every ecom site could have Amazon Prime? Yeah, that's what they're trying to do, right? So that's what 3PLs try to do. And so if you break it down, what is Amazon Prime? I'm really offered. It offers free two-day shipping and then offers kind of the hassle-free

sort of return policy, right? And, you know, if you talk to Shipmunk, they're like, we ship within 24 hours. Now, it doesn't mean it arrives within, you know, 24-48 hours because you're still depending on USPS or UPS or, you know, DHS or something to deliver it. But Amazon does the same. They deliver some of their own. They have some of their own trucks and then they like have hijacked the entire U.S. Postal Service to be like an Amazon fulfillment warehouse. So I don't think there's that big of a difference between e-commerce today and Amazon on the on the fulfillment side. And on the return side, you know, that takes capital because you got to be willing to eat losses and deal with fraud. There's this guy and I'm trying to find

it. He emailed me and he said, he goes, I'm a VC. I listen to your guys' podcast and I like trans and all, whatever. And I only invest in trucking like logistics. specifically trucking. And I'm trying to find his email. And he's like, I just invested in this company that is trying to give every small mom and pop place a two-day shipping. That's my goal. And it's pretty interesting. And I mean, obviously that's interesting. That makes total sense. I have no idea what it would take to pull off. But it's pretty cool. And I like, what you're suggesting is almost a logistics space in the logistics space and shipping space. I think that like if I was starting from scratch, I think I would for sure go into the trucking or um, logistics space because I do think

that that is probably the biggest market in America. And I don't think it's going to go away. Yeah, I don't know about that part. I don't know if it's the biggest in America because that's whatever that could be many things, but it is definitely big enough. It's definitely humongous. And, um, yeah, there's a lot that can be done there. But there's also, you know, what's the angle, right? Like there's a whole bunch of people trying to do driverless trucks, and they're all kind of failing. And it'll take time for that to ever come to fruition. And then there's people trying to, like I just invested in this drone company that just does, you know, drone deliveries. Not for consumers.

It's not like, you know, you buy something on Amazon, a drone brings it to you. This is like somebody in remote Africa, you know, on an oil well, they need a replacement part. And so then they use these high-speed drones that can carry a hundred pound part to that. location and those people will pay like, you know, thousands of dollars for that delivery because it's so remote and they need it for their, they need it for their operations. They're losing money every day that the machine is down. And so, and this company's, you know, phenomenal. They're, you know, doing tons of revenue and big opportunity. And that's just in like one kind of niche space where they're doing medical supplies and mechanical supply deliveries in like, you know, Africa right now.

That's interesting. Was it a high evaluation? Yeah, it's a more proven company. So I just got in because my friend, my friend did the seed round and participated in the A. And now they're raising their B. And it's like at a $250 million plus valuation. But it's like way more derrised. Like the drone works. They have customers.

They have big contracts. So, you know, it's just a question of how big will it be? So I, I want to talk about this. So related, I will preface this by saying, I really don't know anything about venture capital. I have a lot of friends who are investors. I do some small deals. I'm pretty much a nube when it comes to VC. So I might sound like a moron,

but you seem like you kind of know what you're talking about whenever we discuss it. There was this funny thing floating around where people, and I don't know if this is just circle jerk Twitter, but where people were like the next big thing is going to be like these young people with big followings who have venture capital firms. You know what I'm talking about?

Yeah, I think I know what you're talking about. So it's not young people with big followers. They're basically talking about solo solo capitalists. Is this what you're talking about? Yeah. Yeah, I know what you're talking about. Yes. And a guy who I like, and maybe I'll tease him because he's funny, but I actually really like him a lot.

I don't know him well, but what he stands for as cool is Sahil. The guy. Yeah. So he started this company called Gumroad. And Gumroad, I started using it 2012 or like right when it came out. It's pretty amazing. It's like the easiest way to sell a PDF. And he raised a bunch of money.

And I don't know what happened, but he's just said, oh, fuck this. Like you investors suck. and he fired all of his employees and he's still running the company like a loan and he talked about it. He basically, they couldn't live up to the growth expectations of it. I was like, okay, this company's either going to die because we have all these people and we're not growing fast enough to raise more money or I get rid of all these people and I don't raise money, but I get it to like profitability and I kind of run this like a business instead of like a venture back to company.

And then for the last several years, he kind of, so he was like humiliated, laid people off, you know, went back to his investors, kind of told them what the deal. was went down to like I think just him working on it and now there's a small team working on it and like kind of rebooted the business while it was still mid-flight and so today he announced that he has a five million dollar VC fund yes and this is totally a circle jerk bubble like I love that you're saying this by the way because I'm going to raise one of these exact same funds next week well we well I was going to say we are in that circle jerk so I can hate on it because I am in it. And honestly, it might work. Yeah. So, so, okay, the idea, so what's actually

happening. So what they're saying is, so you've had, you know, angel investors or people investing their own money, kind of 25K checks at a time. And then you had VC funds, which are like using other people's money. They can raise, you know, somewhere between 10 million bucks to billion dollars in their fund and they're like professional investors. And the in between those two is being filled out more and more and more every year. So there were small VC funds, like kind of seed funds, micro funds, microvCs. There's all these different terms people use. Anyways, the more like, interesting part of this is just that there are now individuals, like we had Daniel Gross on the podcast. They're now individuals who have a good reputation. Founders love them. Founders talk to them,

so they see a bunch of deals. And now they're like, you know what? Like instead of just making the intro to the VC, why don't I just be the VC? Like, instead of investing 25K of my own, money, why don't I invest $2.50K every time? And I'll raise my own little fund. And I'm not going to operate it like a, I'm not going to be a professional investor full time where this is, you know, I have like an assistant and we have an office and all the stuff. Like I'm going to keep doing whatever I do that's getting my name out there, right, building my company or building my community or running my podcast or whatever it is. But now I'm going to get, you know, four or five million bucks behind me. And I'm going to deploy that across 20 companies and like, let's see what happens. And so

there's a handful of people doing this. And Israel, hit or miss. Like I know almost all these people doing it. I wouldn't invest in half of them. And then I did invest in, like, Ryan Hoover does this. So Ryan Hoover has the weekend fund, which is, you know, he has a full-time gig at product hunt, but obviously he sees a shit ton of deals because he's super well-known and he built product hunt and he's at Angel's, all that good stuff. And so I know this guy, I know he's smart. I know he sees a bunch of deals earlier than most people. And so I became an LP in his fun because for me, I wanted to do it just to learn. So I realized pretty early on that I can learn a lot about investing if I can see the deals and I can see the thought process. So the first way

I did that was I went on Angelist and I joined every smart person's syndicate I could find because I realized with a syndicate, you don't commit any money. You say I'm, I could invest 50K, but I might not. And you got every single deal memo. So for years, you know, like five years, I've just been reading all the deal memos of these guys and I invested in a couple of the companies, but most of them I'm just, oh, this is how they think about things. This is the quality of the deals. This is how much traction these companies have.

It was just amazing insights as an entrepreneur or potential investor. But for the funds, so that's for syndicates. But the more, you know, the better the investor, the less you'll do syndicate. So Ryan's is not a syndicate. It's a fund. So if I wanted to see those deals and I wanted to be a part of kind of his portfolio, then I needed to put some money.

in. And so... Have you seen any returns? No, because it's like a year old or two years old or something like that. So, you know, it takes like seven years to return. So that was the thing. I was like, should I put a lot of money into this or little? And so I went and asked my friends who are LPs in funds like Andrews and Horowitz or, you know, a whole bunch of different famous, you know, like SV Angel founders fund, whatever. And I asked them, I said, is this a good way to make money?

And they go, basically the answer I got was, you know, if it's just purely for returns, I wouldn't do either angel investing or being an LP in these funds. You know, you can make money. You would expect to make good money. But if you take that capital and you deploy it into a business you own or into, you know, the stock market and you keep it liquid or real estate and you have, you know, a different sort of return profile, you can do better. But they said, you know, the reason I said, so why the hell do you do this? And they go, oh, I do it because, A, I like innovation. and by being an LP, I get to see all their stuff.

So it's a huge learning advantage, which in the end makes a lot more money for me at the end. And so, yeah, I make some money on the returns itself, but then I also get to learn throughout the whole process because I'm on the inside of these deals. And so that's why I was like, okay, so I took that strategy. So I went lightweight. So I became an LP and three or four different funds. But I lowered my dollar amount in each because I wanted to start by saying, okay, let me

see what this is like. Do I get a bunch of information by being on the inside? And are you actually going to raise your own thing? Yeah. So next week, hopefully. So I talked to the angelist guys because I thought about this for a while. And I never did it because the problem with raising a fund is raising a fund. You have to go and solicit and go and be like, hey, I need to go raise $5 million.

I always thought like, okay, cool, I can do that if I ever have a spare, you know, three to six months. But I never had that three to six month gap where I could just focus on going and raising $5 to $10 million. And so I didn't do it. And along the way, I've just been investing my own money as an angel investor, basically 25 to 50K checks at a time. And I've been enjoying it. But what Angelus came out was a thing called the rolling fund. And the key with the rolling fund is you don't have to raise all the money up front.

So I can open up so that my idea is next week, I'm talking to Angelus guys who run this because it's kind of like invite only at the moment. But let's say, let's just pretend a week from now they green like my account and I can open it up. So at that point, I can basically say, hey, anybody who wants to basically invest in deals that I see, you can give me a check. That check can be as little as 5K per quarter, or it can be as much as you want. You can give me a million bucks. Doesn't matter. And you can either come in today and you'll, I'm going to start investing in companies I see, but like I don't have to go raise five, 10 million bucks up front. I can raise it over time. So it's more, it's more as you go thing. And for the investor,

it's also easier because you don't have to give me, you know, $100,000 or $250,000 all up front. You could be like, cool, this is great. I'll invest, you know, 10K per quarter. I'll commit, you know, whatever, 40K a year. And it's a less, less heavy commitment on their side too. So I really like this thing they innovated with. So that's why I'm going to do it now. And how do you, how will you earn from that? Well, I earn money when the investments are make money, right? So you can take like a management fee or whatever, like whatever, like two percent or something like that. But that's not really going to, amount to much. But it's basically, hey, I'm going to go invest in a bunch of great companies.

I'm going to be able to buy bigger stakes now. So today, when I go invest 25K into a company, like I invested in this one company that I love. It's a background checks company. And they're doing awesome. Like, ever since I invested, they're doing better and better. And I'm really excited about them. But I own so little because I invested 25K into it. I wish I had invested 250K into it. But for me, financially, that would have been too risky to be deploying 250K per random startup investment. do. So I make money basically when these deals exit. So like as these companies get acquired or go public, then I earn my carry on the deal. So first the investors get their money back. And then we split the return. And the typical carry is I would get 20% of the profits after they get their money

back and they get 80% of the profits. And how do you think, and you explain this to me one time. So let's say that you do have a $50 million fund. How does that, I don't even know how you make money off that. As the investor. Yeah. So you take 2% a year as your management. fee. So 2% of 50 million is what? Million bucks. So you're going to take a million bucks per year for like eight years. You're going to take off the table if you raised a $50 million fund. Now that's going to you. It's going to the fund administration, legal cost as well as any partners or associates you have to do diligence. Right. So like that ends up being like let's call it 500K in salary for the for the investor. I don't know. That's rough math. That's so like I just I understand that.

like, that seems too good to be true. Yeah, it's a rigged game for sure. But, you know, the reason they're able to do that is because, you know, people are willing to give them their money. Why are people willing to give them their money? Because most people today don't have access into technology companies. And it's pretty clear that technology companies dominate the landscape. Like, you just go look at the most valuable companies in the world.

They're all technology companies now. If you want high growth, right? If you want to invest your money, you want to invest into high growth, ideally. High growth typically is coming now nowadays from technology. And so you have people that like they own their own house, they have their 401k, they have some stocks. maybe they have a rental property, but they have zero exposure to tech. And the worst thing they could do is be like, cool, I'm going to become an angel investor. I don't know the first thing about how to structure these deals.

I'm not seeing the best deals. I'm only seeing kind of like whatever comes to me and I have no name brand. I have no access. I have no personal network. And so they're playing, you know, basically against the house. And that would be a bad thing. So what ends up happening is you have people who have made money in either their own business or their job as a doctor or lawyer or whatever it is.

And they can now invest personally in funds like these. So I think that's the way, you know, they're going to invest some small percentage of their total net worth, like five to 10 percent of their money or something like that into a fund that they believe in. And they say, okay, I believe in this person's judgment and their network. And I want to learn about high growth, high tech investing. And I'm going to be getting these deal memos. I'm going to be getting smarter due to it. That's why I would do it if I was then. Well, maybe one day I'll join in.

For bigger funds, they are getting the money from like pension fund, you know, like, you know, the firefighter pension. in New York or teachers, you know, the teachers pension or whatever. This is like institutional capital. That's how the guys who raise like billion dollar funds or hundreds of billion dollars funds, it's not like their uncle who's a doctor who gives them, you know, 250K. It's these huge institutions that are mostly invested in the public markets. And then as a hedge, they take a small percentage of the total like kind of value that they

have and they put it into risky kind of VC investing. Let's talk about female as a differentiator. I have thoughts on that. So you want to, I think you wrote that. You want to talk about what it says? Yeah, I just wrote that because I was like,

dude, there's so many products that if you just said, it's that, but really geared towards women, I think you can make a whole new product just off of that. And so it was inspired actually by something I read in trends. There was a woman in the group who I think had a Facebook group called the solo female traveler network.

Yeah. And I was kind of amazed. Like I forgot the numbers, you know, off top of my head. I don't know if you have it in front of you, but like, I think she was doing like a million dollars plus a year,

basically she builds up this big group of females who love to travel. But when females travel, like they have to think about safety. They have to think about, you know, what are the different activities I'm going to enjoy? And so I think she had the group and then layered on top of that like kind of a tour's business where it's like, cool. When you go to the city, you can pay and go do this awesome kind of female oriented trip or tour. That was my understanding of it at least. And I was like, man, that's a fucking awesome business. Like good for her.

That's great. What else could be done this way? And I started thinking, I said, oh, there's just Bumble, which is a dating app geared towards where women get to kind of do the outreach versus men. And that was like the core differentiator. There's the wing, which is a co-working space for women. There's, I think it's called Circle or something of that. It's like a Mastermind group. It's a YPO for women.

And I just thought, this is an interesting, this is an interesting thread to pull on. What do you think about this? Yeah. So I'm pulling up Circle. What's, I don't know if it's the Circle, Circles, something like that. They're not out. Again, this is a deal I saw the pitch deck for. I don't even know if they're publicly. Oh, yeah. I think is this one Sheel was into. Yeah. Yeah. Okay. So I think about this all the time. And here's what I think it is. It's anytime you, it's best, if you're going to build a,

like, attention or attention getting business or like a brand or something that you need people to kind of build a cult. It's far better to make it an us versus them. And the us needs to be like a downtrodden forgotten minority. So in this case, it's women. So women are like, you know, we're, we're sick and tired of being pushed around. We're sick and tired of this and that. And that's like the easiest schick in order to get big. You know, Trump did this with, uh, even though technically, like everyone says of the silent. What do they say? Are we the silent? majority or whatever? Is that what they say with a silent majority? It's like, well, you're kind of like the louder majority, but whatever. Like, like, it's, or they'll say like, yeah, like, we're like,

we're like, we're the forgotten group. It's like, I mean, you're kind of like. Kind of like. Make up the mass population. Yeah. Or like Fox News always does this. They go, you know, we're sick of mainstream media, but it's like silencing us. Yeah. It's like, aren't you the biggest news program on, on earth? Yeah, it's like you have the biggest. It's like you're bragging about that you have the biggest viewership yet you're like, you're calling. You're, someone else mainstream. And so... I never thought about that. That's hilarious that they do that. That's so funny. They go like, you know, the mainstream media, what to tell you? It's like, dude, you,

you are the main. It's like, people always say, like, you know, we got to stick it to the man. It's like, well, you're the man, bro. So that's kind of, but in terms of like a schick, it's like the best. It works all, it always works. Like in the steps to build a cult, it has, like, there's like a definitive, like, steps. It's like there has to be a clear leader. There has to be some type of rituals around the, the experience. There has to be a bunch of other things. Right of passage. There needs to be a right of passage. That's like what return to these and sororities do. And that's one of the reasons why they bond for life. And one of them also has to be in us versus them. Like either you are with us or you against us. And like you guys

many times it's what you can join, but until you join, you're not on our team. And women is a great category for that. You know, they're not represented enough in a variety of places of business. And so they say, you know, we're going to help each other. We're going to get through this and we're going to bond. And so that's a great. I love that move. I think it is a, I wouldn't, I mean, women, the women differentiator, that is just one of many wonderful examples of what you can do.

Yeah, exactly. It's a, I just wrote female as a differentiator and that's kind of all I had there. What's an example of somewhere that you could do this? Well, you could, you could do lots of different races. I think that like, no, no, no, I'm saying the female thing. Like what's a product category today that is not differentiated in this way that potentially could be where you could gear it towards females in it in a stronger way. So, well, okay, well, this is not female, but do you remember how you can do this for anything? Do you remember how you told me about your friend who was he Muslim, or was he Hindu, where they like generated loans only to.

Yeah, halal financing. Halal, is that, is halal Muslim, Muslim, I don't even remember. So Muslim people, yeah, they, you know, they eat halal meat and this is a halal financing, which means sort of a, blessed and approved by the, you know, religious community and elders, I guess. So I think there's a lot of finance you could do that in. You know, we, we, uh, there's LVest. So LVest, they, they're a financial company for women. Yeah, what's the, what's the female bank? Is there a female bank? If not, there should be a female bank. You could, you absolutely could do a female bank. Elvesse is taking a stab at that and they've raised tens of millions of

dollars. It will likely be some. What are they like a Robin Hood or what, what do they do? Um, I think they're like, so they become a member and get access to investing banking and on demand learning, financial planning, and career coaching. And you know what that sounds like? What? We had her on here. Yeah, yeah. What was it called? A learn vest? Yeah. So, was it learn vest. And my takeaway was that business didn't completely work out. But I can see. But business wasn't, you know, wasn't gangbusters. But yeah. But I think you could still do that. So what else could you do? So the skim did it, uh, wonderfully. Um, they're at least mildly successful. So they did it with news. What else could you do? I mean, I think that like there's, if you

built like a women's only social club, it'll work. It'll be of some type of mild success at least. This guy in our either trends group or podcast group, I forget which group, created this thing where he's doing, he's doing audio books for women. And he said that he's already at 5,000 a month in revenue in the first six weeks. So I think. think that there's a lot of space for that. It's basically like porn for women. I think there's a lot of space for that. What else is interesting? Banking. I don't know. A lot of people do it with, a lot of people do it with content. So the founder of Bleacher Report, his name's Brian. He founded Bleacher Report. Right. And he sold it for a whole lot of money. And six months or a year after

selling that, he launched Bustle. And Bustle is a refinery. 29 competitor. He was like, I want to be like the new Vanity Fair. And he created a women's network of publications. And he did so because, uh, I think it's because he had a not, I imagine he had a non-compete. Or like, don't do, don't do men's sports. This was bustle or something. Right. Right. Right. B-U-S-T-L-E. Right.com. It's probably makes 50 to 100 million in sales. And I, I think what happened is, and I don't, I'm just guessing, I imagine what he saw was that the engagement from women on digital content is significantly best. And I, I think, better. So I've been involved, well, I can say soap hub, the soap opera website that I was involved in a little bit that my friend owned. The engagement on that was mostly all women and it was it dwarfed most. Like the founder of Bleacher Report, not Brian, but a different one looked at the metrics and he goes, oh, well, this is just the best engagement I've ever seen in my life. And so engagement amongst women consumers is typically much higher than men. Yeah. I feel like, yeah.

somebody should just map out all the big categories and like, you know, why is there not a credit card that I know of that is like catering itself to women? And it's something like, you know, like, for example, there's this product that my wife buys is like these little like dolls. And I'm like, there's like these little handmade things by these women in Peru. And basically like the dolls are cute, but she loves that the story is basically that like there's this whole community in Peru that was struggling. These women, they know how to like knitting is like part of the culture there.

and they knit, the hand-knit these dolls. And, you know, yeah, the dolls are a little expensive, but you're basically funding this woman's business as you do so. And, like, why is there not like a credit card that's sort of like that where it's like, okay, cool, you're an American woman in the U.S., you use this credit card and, like, part of your cashback or whatever goes as a micro loan to, you know, a woman in Uganda who's trying to, you know, start her own vegetable stand or whatever it's going to be, right?

Like women empowering women, women, funding women through financial services. I just think that you could go through a bunch of different categories. Like obviously the CPG brands did this, right? Like or the, you know, shampoo, you know, for women. And, you know, each, all the consumer package goods sort of got differentiated pretty early. But it seems like there's still categories like media, like, you know, financial services that are less touched by this.

Yes. But I think that there's, here's what I have found. And we had a, we, someone in our trends group, a woman was like, who, you know, where all the women in here? I want to speak to more women. And all hundreds commented. and they're and they all connected to became friends. And what they were saying is, and I, I agree, well, I'm not in the demographic, but from an

outsider, I agree, which was they were, they were saying like, I hate how women only brands pander to them and like, be like, well, because you're a woman, you like want me to talk like a millennial and you want me to say like cute shit. And they're like, not really. Like we're like, we're alphas as well. And we don't want to be like patronized. And that a lot of brands treat them that way. And I totally understand that. And that was my frustration, with a lot of female only brands or female focused brands, they treat them like they're like, I saw this in your comments on the hustle about the skim. A whole bunch of people, a whole bunch of women were commenting in the hustle like thread being like, oh my God,

don't get me starting on the skim. Like, you don't have to talk to me like I don't understand the first thing about business or like, you know, like don't, don't patronize me. And yeah, Tusha, that's definitely like, let's say, the, the double-edged sword of going down this path is you have to find the sweet spot where you're doing this authentically and you're not babying, you know, any group that you talk that you and I actually think that's where the market is, which is there could be a market. Like for some reason when women products, oftentimes they like lean into that what I don't know what you call it. But there needs to be an opposite where it is women centric, but like alpha. and like they don't call themselves like a girl boss because that is that is quite patronizing I think but do you know what I mean and I don't know how to put my finger on it but I think that they actually could this reminds me of this one there was a quote from this woman who worked at Uber and they were like are you sad Travis is leaving and they're like yeah I'm super sad Uber was the only place that I could work where I could be me and being me was like being pretty alpha and when I worked at

this company that company if I was if I would interrupt someone or if I would do something a man would do they would call me a bitch. But at Uber, like, they didn't tell me to be quiet. They told me to be loud and speak up and say my opinion. And no one called me like a bitch. They just, like, treated me like a woman who was assertive. And anyway, I think that there is actually, there's not enough brands who are leaning into that demographic or psychographic.

And that is quite interesting to me. Yeah, yeah. I think we're not the right ones to do this, but I do think it's an interesting, like, area for somebody to explore. Cool. Good, catching up, dude. Enjoy, enjoy Utah. And then we'll be back with another episode in a few days.