My First Million - AI Santa and Four Other Simple Business Ideas (+ Vice Goes Bankrupt!)

Episode Date: May 4, 2023

Episode 451: Shaan Puri (@ShaanVP) and Sam Parr (@TheSamParr) talk about business ideas that solve problems, deep fake Santa and the rise and fall of Vice media. Want to see more MFM? Subscribe to the MFM YouTube channel here. Check Out Sam's Stuff: * Hampton * Ideation Bootcamp * Copy That Check Out Shaan's Stuff: * Power Writing Course * Daily Newsletter ----- Links: * Vice * OMG Facts * Nonlinear * TrueMed * Play Street Museum * 260 Sample Sale * Kingsford Charcoal * Hostshare * Kindred * MoneySuperMarket * Replit * TrueMed * Do you love MFM and want to see Sam and Shaan's smiling faces? Subscribe to our Youtube channel. ------ Show Notes: (00:55) - Play Street Museum (06:32) - 260 Sample Sale (13:05) - Host Share (21:15) - AI Santa (25:18) - Vice media (43:45) - OMG Facts and Emerson Spartz ------ Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. ----- Additional episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto * #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

This is such a good idea. By the way, this is a phenomenal idea. This is a 10 out of 10 opportunity. Dude, he pitched me to invest. Why have I not invested in this? I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off on the road.

What's up? We got a banger. We got a doozy. We got a two-man trio here. And it's just me and Sam. No guest today. Sam, what's up? Nothing. I've liked having guests, actually. Normally, I hate it.

Lately, I've enjoyed it. What's the difference? We should do more. I like the people we've chatted with. It's been better. Yeah, not like those other crusty guests in the past. I have got a meaty topic. It looks like, I don't know if you have meaty ones, but you have four good ones, but they're smaller. Is that right? All right. I'm going to tell you about a business that I think is kind of interesting. Ben, Ben put this on my radar. Yesterday, he goes, he goes, dude, your sister should open.

a Play Street, a Play Street. I was like, what the hell's a Play Street? So I look it up. Have you ever heard of this thing? Play Street Museum? Probably not. You don't have little kids, but basically imagine like a good for you version of Chuck E cheese. Let's start with that as the analogy.

So like Chuckie cheese is, you know, it's like, I heard this tweet that was like, come eat rat pizza at my child casino. Dude, my parents used to say I always thought the chuck of cheese near my house had burnt down, but they just would say, no, it burnt down, we can't go anymore. I drove by there when I got a license and it wasn't burnt down. I just thought I had burned down.

That was their excuse. They said it burnt down. 16 years old, you're just slamming the drive, the driving wheel, just like, God damn it. It's video. It's like one of those facts. Your parents tell you when you're five and you just believe it to be true. Totally.

You know, I think I told you my father one time said, real men don't drink with straws, but he was referring to like a jack and coat. So like for years, I was like, oh, we don't, we're not a lot of drink from straws. It's like the chucky cheese. The chucky cheese on Chippewa burnt down. You know, it's not there anymore. The Chucky cheese on what? Chippewa.

That was the street, Chippewa. Too good. All right. So this thing, Play Street. is basically you go there. It's a nice, clean play. It's like a dream playroom for your kids. So it's like they got a giant train set.

They have some learning games. They got like, you know, the floors all. It's like child safe. And you basically pay 15 bucks. Beautifully done. And you get to play for an hour and a half or something like that. And so Ben goes, yeah, I've been going to this place. And I see that basically the one near me at least, he goes, I think they're doing 50 grand

a month. Like a 50 grand a month. That's kind of a lot. And he goes, yeah, he goes, they basically, they have. And I forgot the exact numbers, but it's like seven sessions a day. It's $15 each. And you have 25 kids, I think, in the thing at once. And he goes, they're basically 75% full in these sessions.

You kind of do the math. You're like, all right, that gets you kind of like to 40K. Plus you can host your kids' birthday parties there in the nights and weekends. And so some people do that. He's like, I think they're probably, you know, an extra 8 to 10K of sort of event revenue per month. And then if you look at the cost, you know, you got your rent. It's probably like, you know, 5K. And you have your staff, your teacher,

you're sort of like your supervisors or whatever that are like overseeing the play space and like resetting it, recleaning it in between sessions. I think I'm pretty sure this thing is like netting something like 30K a month in profit, maybe 25K a month in profit. And they have tons of these locations. Yeah. So it turns out they're franchising or something like that.

I don't know if these numbers are true, by the way. This is like complete guesswork on my side. But I wouldn't be surprised. My sister owns some preschool. in San Francisco, and the numbers are somewhat similar. Now, that's different. They pay a lot more but for regular schooling. But it's interesting to me that these play spaces can do so well.

And it's like, it's weatherproof. It's like, you know, I know with me, like we go to Target three times a week. You might ask yourself, Sean, what do you need from Target so much? Don't you know you can order online? And what I tell you is, this is daycare for me. Sean goes to target so much that in his home, you have this like target, like a target checkout play set and a target like grocery cart that you said

you had to like find because it was like a collector's edition or like it was all sold out everywhere. Right? Mom go crazy for this thing. You had to like buy it on eBay and do a big mark. Yeah, exactly. These target mini grocery carts kids love them because they're used to see. The kids like to do anything they've seen their parents doing. So the whole mini grocery checkout plus target cart is like in high demand.

So I go there often and I do it because you've got to kill time. It's like how do I kill 90 minutes? And ideally, I would do something that's like enriching to them. Worst case scenario, we just go to Starbucks or Target or whatever. And this would be better. I would gladly pay 15 bucks for my kids to be able to go play in a place that's not a park, which is like weather dependent. So I think these are really cool ideas.

I think this Play Street thing is a cool idea. And I could see this, you know, this franchise doing like, you know, decently well. Probably not the best franchise in the world, but I think it could do decently well. Where are the locations? They're like Texas. There's like none in California, none in New York. It's like a bunch of like. But what are they?

It's like a, it's like a blank commercial space. So like you don't need any food stuff. So you just say, you know, it's like just a blank like retail space. Huh. Yeah. I mean, their branding is pretty pretty good. It's kind of like how escape rooms work. Escape rooms work because they require no specific real estate.

They can operate in a very small footprint. And they take two staff to run all day. And so escape rooms actually are like fairly good franchise businesses or they were for a period of time. Now, unlike an escape room, which is kind of like you don't know if escape rooms are a fad or if they're going to be popular three years from now, these you kind of know are going to be popular because every parent's got this problem. All right, let me tell you about another thing like this. Another problem you haven't really thought about.

There's a business called 260 sample sale. You've heard of this? No. Let me Google it. It's like kind of a cool New York thing. So what they do is any e-commerce or fashion brand has a ton of photo samples or product samples that they get from their manufacturer. They use them in their photo shoots to create the pictures on the website or for

advertisements or marketing or whatever. And then those don't live in the warehouse. Like they live where the photographer is or where their office is. And you just end up piling up boxes and boxes and boxes of photo samples over time. Because let's say most fashion brands or apparel brands have thousands of skews. For each skew, you had a sample made before you had the production one made. But you didn't just have one sample made. You have each of the sizes made because you needed it for the photo shoot to be able to show the range or be able to cast different types of models.

And so what ends up happening is you get a ton of these samples over the years that you can't really, it's like not worth your time to get rid of. And so this business popped up again, like, you know, the markets are like, you know, water. And water's going to just float everywhere there's an empty crevice. And there's an empty crevice in this market here for getting rid of these samples. So what they do is 260 samples. So send us your shit brand. And we will host a pop up where we're going to sell you along with a bunch of other brands, all out of great markets. So we have high quality brands at a markdown because these are samples.

So you're not like training your customer that like, you know, hey, this is like T.J. Max discount or something like that. It's a good story. These are samples that you're going to get for for less. And they'll like, they'll just give the brand a commission back. They'll say, you know, every time we sell something of yours, you get a small commission. It's better than nothing. It takes it out of your space.

How'd you, how'd you find this? It's totally out of your, out of your, dude, they're only based in LA, Miami, New York. And the pictures are like smoking hot women. And then like it looks like a picture of like a huge line out of a warehouse in Soho. So hot women and waiting? None of those things. I don't do it. You know your boy doesn't do it.

Yeah. So. Yeah. None of this checks your box. Yeah. Your boy's so married and so in the house that I did not go to this. You're right. But I'm in the e-commerce world.

I got my own e-commerce brand. Plus I know and talk to a lot of other e-commerce people. And I know about this problem. And so I heard about this solution. And I think it's very clever. I think it is a smart thing to do. I also think these guys are not that well known. And they're only doing it in certain area, certain locations and whatever.

I think this could be done many times over. I think like an aspiring fissler could do this by vertical. So you could go get a bunch of health and wellness and fitness brands or beauty brands. And be like, hey, beauty brands, send us your products. And we're going to, we'll have a stations where you can demo them. and sample them and then buy them. So I think you could do this for other verticals. I think you can just do this in other places.

Like, hey, if these guys are doing New York and L.A., I think their locations are like Beverly Hills and Brooklyn or something, do this in Texas. Do this in different parts of the country. I think you can have a, you know, it's like your own little farmer's market. It's your own flea market that you get to stock and run. But you don't have to do it as a full-time job. So you can do it every quarter or twice a year or something like that.

and still have it be successful. So I thought this was a cool. Have you heard, do you know Kingsford charcoal? You've seen it. It's like the most popular charcoal. Do you know how that was created? I think it's a byproduct of something else, right? What was it a byproduct of?

Wood? Ford. Oh, Ford. So Ford, when Ford was making cars, they had to like, you know, have all these furnaces making metal. And they took like the leftover char and they're like, what should we do this? And so they pushed it together and compact it really tight. And that's how charcoal came to be.

and that's like a byproduct business. And I love buyproduct stuff. You know, it's kind of like it's tangentially, it's kissing cousins with like the sharing economy. I love that stuff. I love buyproduct stuff. And this is one of those that's awesome. This is actually quite cool.

Their website is really challenging to use, which is, I think, actually a good sign. Because I can't tell, like, apparently they do sell stuff online. But it's mostly, but one thing I do hate, whenever I go to New York, dude, seeing people wait in line to buy like supreme clothing. Like just put the gun in my mouth, man.

Like I'm never doing that. I'm not doing that. I'm not going to wait in line and spend my valuable time to purchase a $1,000 like thing that should cost. The only thing worse than that is bottle service at a club. It's like the guys who are paying, you know, $7,000 for a table and paying $1,000 per bottle that they could literally walk across the street by for $40.

it's literally the chunk tax. It's like, oh, you're a chump. Come to this line. Please, please, please. Come right ahead. Come right ahead. You walk through the chump line. I'm not a man of God, but when Jesus made like the list of seven deadly sins,

the example of debauchery and gluttony was people waiting in line for five hours to go to a Supreme store. I mean, like, whenever I see that stuff, I'm like, this is the worst form of consumerism. I cannot stand this. So they have these pictures here and it turns me off. Amen. I would maybe buy this online, but I'd stand in line. I'm not standing in line with a bunch of these people to buy this stuff.

I can't stand now. Whenever I see that, it makes me want to like throw away everything and go live in the worst. Here's an idea you're going to like more. Host Share. So got a DM from a guy named Michael Fisk, and he shows me this thing called hostshare. dot co. And he goes, here's the, here's the situation. You have a short-term rental, right?

A property. Yeah. Shout it out so people can go stay at Marathon Ranch.com. Marathon Ranch. Marathon Ranch, is it dot com? Yeah. Or dot co. I don't know.

Yeah, dot com, marathon ranch. Sam comes by, has dinner with you, gives you massage. It's fantastic. So you don't have 100% occupancy, right? You have some nights that are unused. Is that correct? A 60% occupancy rate is, is a profitable money.

So you got, let's say 40% that's unused nights. What you're doing with those nights? This is the sharing economy, bro. What's you doing with those nights? Well, Michael Fisk has an answer for you. His answer is, trade your unused nights with other hosts who have unused nights. You stay for free there. They stay for free at your place.

And I think this is a really smart idea. I don't know how many hosts, let's Google this, how many hosts on Airbnb? I don't know how many properties they have or how many hosts. four million. Okay, so you have a market of four million hosts that you could make a inter-host like network, basically, where you say, hey, if you're a host, you get to travel for free. So you get to, I don't know how they make things equal. So like, if your property is way more dope than somebody else's, I don't know how you make that trade thing. Okay, how do you normalize the values across properties? We calculate how many shared nights you would be staying in

in exchange for 21, in exchange for the 21 days of travel per year. The formula is established so higher, higher value properties share less nights, lower value properties share more nights. So for instance, if your average night is $500, you'll share approximately 15 nights of the year. Whereas if you're $100, you've got to share 45 nights in a year, take to the same minimum. That's great. So what's your property per night right now?

$700. $700. So you're going to basically, what they'll say is, hey, make your thing open for 12 days out of the year, and then in exchange, you get 21 days free booking in this network. Would you take that deal? Yeah, in fact, I do. So go to live, live kindred.com. So it's kindred, K-I-N-D-R-E-D, and then live. Live-K-R-E-D-E-D-E-D. So I use this service. So my dream situation is I want to find like another couple that has like similar style or like once as I do. It lives in New York, and they want to be in Austin and we could just swap.

And I've not found a good solution for that. But there's this thing called live, Kindred, that I have used, where someone will stay at my home when I'm not there. And then I get credits for the marketplace. And then, like, I'm going to go to Tau's New Mexico. Like, I have like eight credits because someone stayed at my house for eight nights. And I know that. So I'm going to go and stay somewhere else for free.

And it's actually pretty cool. I wish that it was just like a direct swap. So I could do six months here. we could just swap six months for six months. But I've been using services like these. I actually think that I don't think, I'm not bold enough to say like this is the future, but I think that like,

you know, there are a lot of people like me who do split time. Dude, finding a place for those split, like when you split time, it's really challenging. I'm always looking for a good solution. Yeah,

that's good. I didn't know that something like this exists. So with this, do you... It's hard. And I think they raised money, by the way, from Andreza. Yeah, you give up your space.

Is that right? So you put your space in the network, but you still have to pay or it's free? There's some type of service fee. Frankly, I don't think it's a good business. I don't understand how they make money. Because what I signed up for, I was like, I'm getting a lot of value.

I'm not spending a lot of value. I don't know how you guys are doing this. You're getting that VC subsidy right now. You're getting that Andrewston-Horowitz value exchange. Yeah, so we're trying to use our credits quickly because I think, I don't know if they're going to stay business or not because I don't I don't understand how it works but it is awesome if it's awesome if it does work that's hilarious so yeah I like these types of businesses where we're or that's solved this

problem is host share popular I think it's brand new I think the guy just created it yeah if you can pull it off it's pretty amazing it's a smart model I think it's hard to pull off because like I don't understand how host share makes money I think they have to charge a flat membership so I think they have to basically say it's $500 or $1,000 a year to be in the network. And you only pay if you use more than five nights or something like that, make it a fair trade. And, you know, I think basically then they're trying to get a subscription, right? So they're trying to say, can I get 50,000 people to pay us $1,000 a year on this subscription? There's a few things like that. I forget what the big one is called, but there's things like for luxury rental.

where I'm almost certain that they just partnered with hotels where you pay like five grand a year. Do you know what I'm talking about? It's called Avanta. Yeah, I don't know the name of it, but I know what you're talking about. It's like you get access to this, like you know from boutique hotels.

Yeah, and I've looked into them. When I originally saw it, I didn't have enough money. Like I wasn't in the spot that I could do it. And so I've been looking for things like this. I actually, I really like these businesses. There's one, there's this company called the nerd wallet of England. I forget what it was called. It's called a money market swap.

Oh, yeah, yeah. there's a guy named Simon who started it. And so basically he started like the nerd wall. He started a blog that compared like mortgage rates and things like that. And then if you bought one or got a mortgage through him, you got affiliate fee. I think it's called super money market is what it's called. It's publicly traded in England.

Anyway, the guy sold all of his shares after he took a public 20 years later. And he now owns this thing called like Simon's Resorts. And so it's this rich guy who went and bought like 50 resorts or 50 like really nice homes around the world. And I actually don't know. They frame it up like this is his personal stuff. you can just use it when he's not there. But it's actually pretty cool.

And so I love these types of things because I think they're just neat to like buy all this shit and share it with everyone. I think it's really cool. Yeah, I like that. Can I tell you about a little random experiment I'm going to do? So I want to make for this Christmas season a deep fake Santa. So basically you're going to be able to come on the site and pay $35 and you, and you type in your message.

You could say, hey, wish my daughter, Jessica. Merry Christmas, tell her great job with the soccer thing and be nice to her brother. Big sports fan, huh? Great legs and soccer. You'll be able to type in that message and then it'll basically create a video that's Santa saying this to you. So what I'm going to do is I'm going to try this thing that Replit has. So Replit has this new thing where you could basically buy developer cycles. Have you seen this?

this? No, but tell me about it. So let's say you need something built. You can basically just go and buy, you can put up a bounty. So you're like, all right, I want somebody to build me this deep fake Santa. It's got to do A, B, and C. And you put up a bounty, put up the dollars, and then people will just build it for you. And you basically have an award. So it's kind of like a, like 99 design for code. Yeah, exactly. And you do it in their currency, which is called cycle. And so they kind of help you estimate, like roughly how many cycles should this be for this to work out. But I haven't used it yet. I really want to try this bounty thing.

I think it's great because... So you're going to pull in Emerson. You're going to be this smart guy who just does a money grab. No, I'm going to bring... I'm going to pull Justin Mares. I'm going to bring the joy of a Christmas, of belief, really, of the belief in magic to millions of kids around the world this Christmas. What are you doing for the children this year, Sam? Is that your, you're going to do the Justin Bear's pitch?

Like, so we had a problem. We wanted to bring joy to children. And we thought, what better way to do that than a $50 cartoon? In a world full of war and divisiveness, joy is all we have left. It is what they called the last refuge. And people say that magic is magic, but the magic is getting people to believe the magic. And how do you get people to believe using deep fake technology? And that's what we.

And deep sound. How do you get people to believe in you lie? We're going to create a fake cartoon about a fake person. We're going to charge real money, and it's going to be a fantastic result. Are you really going to do this? Because I really want to try this bounty thing. I want to play with this. I think this could be called.

What's the URL going to be? I think it's going to be called Santa's Real. Dot org. Give it a dot org. Yeah. Let's make all of our businesses.org just so we can like... Just so we can be better than other people. Yeah.

For a long time, I wanted to make my businesses. Dot net. So people would think that I've been around for a long time. But your personal website has to be a dot net. And then your business should be a dot org. Yeah, but dot org is way better. I'm going to do a dot org. That's way better than that stupid ass XYZ crypto bullshit.

I want a dot org. Is that one? what they are or like .a io if you have a dot iio i'm not in deal i want a dot org we are a for-profit dot org it's fantastic is that what dot org means it's a non-profit i think so i think you have to be a non-profit for to get a dot org but who makes that decision is there like a governing body i think you have to like present your ein for your 5013c or something like that i have no idea i've never done this to be clear i've always been firmly in the dot com camp but i'm ready to uh i made my nut And I'm ready to go and get my dot org on for the rest of my life.

That's like on stage, Andrew, or backstage, we were like, so what are you doing? And he used the P word. I know. Philanthropy. He slandered us with the philanthropy. Yeah. It's like, dude, if you don't say that word around me. Don't say philanthropy.

Don't flex with me, bro. And so now instead of philanthropy, it's dot o' works. You know, I'm... A. Wilkinson.org. Go ahead and email me there. Today I want to talk about Vice. Vice.com. The reason I'm talking about them is because they are about to declare bankruptcy.

Right. Cue the Michael Scott clip where he just walks out and declares bankruptcy. I was thinking about that. I love that clip. Now, yeah, I agree. Most every joke I said on this podcast, I've stolen from that show. So the reason I want to talk about them is not because of Vice, but because of the story of the founder, Shane Smith.

And if you're under the age of 26, Vice probably means nothing to you. They've actually very quickly lost relevancy. But to give you some background of what Vice is. So Vice originally was like a punk rock magazines based out of Montreal. So it was three Canadian guys, and one of those guys being Gavin McKee. You know who Gavin McKinnis is?

No, who's that? Have you heard of Proud Boys? Proud Boys? Like the political thing? Yeah, he started proud boys, which a lot of people don't realize. And so it was like these three like kind of like punk rocker guys and Gavin McKinnis being one of them, Shane Smith, who I'm going to talk about today, was the other one. And basically the way it started was they got like a grant from the government where they

were able to launch this magazine and that's how it started. It started out as a skateboarding punk rock magazine and they would write a, these amazing articles where it was like Vice's guide to drugs and they would write all these stories about drugs they would use the N-word all the time they would like they were like wow it's kind of like you know how like some

you probably don't know about this but like in the punk rock community they like sometimes will like talk about Nazis and talk about like use racist language but they do as like a shock factor because it's like I want to be in your face that type of thing that's what Vice was all about I don't remember I don't know if you remember like the old school covers of these magazines

but it would be like a tab of LSD on like Hot Chick's tongue. Do you remember? I've never seen the Vice magazine. I remember reading something. Actually, they called it just zines. Is there a difference to a zine in a magazine? Because that's what I remember.

Just the culture. If someone's a zine, it's typically more, it's like a punk rock thing. Whereas if it's a magazine, it could be like GQ. Okay, gotcha. So you've never seen these. But it started out as like hardcore punk rock where they would write articles about doing drugs, having sex, like just rock and roll shit. And that started getting picked up.

And so they started this company in 94, but in 99, they moved to New York. And that was like where things changed. And that's right where like the internet just got started. What looks like you're looking at something funny? I'm looking at the magazine covers and you're saying rock and roll. And I was just thinking about like, this is what cool, like basically like this is what influential people.

It's like musicians are influential people. And they did the stuff. It's like the tongue with the LSD on it. It's like someone just biting a tuft of hair. I don't know why there's a bunch of hair. in someone's mouth. And I was just thinking about pot and roll and how it would be just like someone entering a cold plunge. Someone meditating. It's like, yeah, we're part of that pot and roll. Things have changed. Yeah, we're the famous podcasters. You know what I mean? They're all

just sauna cold, hot cold. Man, is crazy. The temperature variance is insane. Things have changed. Things have changed. Things have changed. Cool has changed. Yeah, the definition of cool has changed, which is actually part of the thing I'm going to discuss. But so the internet starts coming around in the late 90s. They raise a little bit of money, like $2 million. They moved down to New York, and that's where they really get going. So they create the website, vise.com, originally was a magazine. It was a free magazine that they would just hand out and they would make money off ads.

And it would be the three of them writing articles. And they would do something that I used to do all the time where they would have, like, fake authors. So it would be like someone who wasn't real. Just fucking making up stories is really what it was, which is, you know, it was an entertainment magazine. So that's fine. But they start growing and it takes off after a hands off. full of years. And so they kind of created this thing at the time. Now we just know it as like branded content where it was now sometimes people call them advertorials, things like that. But basically

their whole shtick was we're going to make awesome content and we're going to get the eyeballs of millennials, which back then, millennials were like the Gen Z today. It was like the elusive, hard to reach audience. And they said, we're going to reach these millennials and we're going to make the best content. And we're just going to plaster your load. go on there and that's going to be good enough for you. And this is like pre-Facebook. So like performance advertising wasn't really much of a thing. So it was like the way to advertise. And eventually they blow up and the important part of the story isn't exactly that they blew up because they did. But the story is like the antics that they went along and built this

thing with. And so they raised money from Robert Murdoch, who's, you know, the founder of Fox. They raised money from all these amazing people, Viacom. Eventually, they raised money at a $6 billion dollar valuation. Today, they're nothing. But they still make $600 million a year in revenue. And so I want to talk about some of the crazy stuff that the founder did, as well as how their business model works. So have you ever heard of the guy Shane Smith, who was the CEO and kind of the main man? Never. All right. So he had a whole bunch of interesting things that he did. So if you Google Shane Smith, you'll probably see pictures of him. It's a guy who almost looks like a punk rock Santa Claus where he's kind of like a bigger guy and he like you'll see like he's got sleep tattoos

and you'll see him shirtless all the time and smoke it a cigar do you see any pictures like that? Yeah, he looks like he looks a little bit like the guy who's the number two guy in billions. I forget what the guy's name is like not not Axe but his his right hand man. Yeah, yeah, yeah. He looks a lot like that guy if that guy had just like chest tattoos. If he just had like a tattoo around his nipple, that'd be this guy. Dude, so he's just like crazy. And so Vice originally, the way that they became respected,

is they would do all this crazy stuff, but it was him doing it, Shane, the CEO. And so he would go to Liberia during when they're having a civil war, and he would just bring a camera and just get dropped in Liberia and figure it out. In 2013, he traveled to North Korea because he organized a basketball game

between the Harlem Globetrotters and the national team of North Korea. And that was like the big schick. And then eventually, do you remember hearing about Dennis Rodman going to North Korea? That was for a vice documentary. And they would make these, like, free documentaries, and they would post them on. It was originally their site.

And then they moved to YouTube, and they would get lots of views. And they would, like, put, like, an Intel logo on there. And that's how they made money. And so he was known for walking around his office of, like, Vice. And I've been to the office. It's, like, as magnificent as you'd think. It's like the coolest of the cool. And he would walk around shirtless.

And he would just, like, say crazy stuff. He was known for just being, like, this wild guy. And so one time when he hired a CEO, her name was name. This was recently. He said, we're the modern day body and Clyde and we're here to take all your money. And he would just say stuff like that all the time. There was another time when they were just getting started. And I believe it was into it. They came, was it into it or IBM, one of those, they came to the office in order to pitch or vice was going to pitch into it. And so what they did was there was a really shitty office at the time. 24 hours before the meeting, he built like a glass conference room. room so it looks legit and so you could see your employees. And then he went and hired a bunch of actors and got tons of friends to come and work in the office to make it look like they're important because he always said something like, we don't want them to think that we're, or what do you say? We want them to think that we're rich. He was like, we're going to act as it. And he did. And they

eventually got a $25 million deal from this company and it worked out. And there was another time where there was this 2003 Vice made their documentary on. themselves. And he tells a story about when they started the company, how he got arrested in Bangkok. Bangkok. And he said something like a few years later. They were like, yeah, I remember that story. You talked about being imprisoned in Bangkok. And he was like, yeah, yeah, I remember that. And he goes, tell me more about that. He goes, well, I made it all up. We needed a story on how we needed a story on how the company started. And I'd heard the story from someone else. So I just took it over and we needed it. And I just had to make it mind. He's like, I watched the hangover three

and decided that was my life. Dude, he would do crazy stuff like that all the time. There was another time where I was reading this interview with him. There was this headline about how he spent $300,000 at dinner in Vegas. And a reporter goes, did you really spend $300,000 for dinner? He goes, no, it was $380,000 plus tip. And it was barely dinner. It was mostly wine.

And so he's just, the, guy's like wild. He even tells crazier stories where he goes, this was a quote from the financial times. He would go, I would be at the party and we'd just go get wasted, take Coke, have sex with girls in the bathroom, and then get, and then afterwards

mail my advertisers' drugs because I knew if I sent them a bunch of drugs in the mail, they would keep buying ads with us. And he admits all this stuff. It's crazy, man. How could this have gone bankrupt? I just don't get it. Well, so check this out. Where did we go wrong?

Was it when we mailed our customers drugs? Or when I did drugs during the day when I was working with my shirt off, having sex in the bathroom? Dude, he tells a story about him and his co-founders having threesomes with people who are going to buy ads with them. And he says that they were like mobsters who accidentally clanked shovels together while they were bearing a body. If that analogy makes sense.

When someone was like, what's it feel like having sex with your co-founder? you know, do guys ever like touch? He goes, yeah, but it's just like two mafia guys and our shovels accidentally clank while we're burying the body. Wow. This guy is a showman. He's a total showman. Of course, it didn't work out well. In all seriousness, I totally blew it. It didn't, it didn't work out well for the company, but it worked out for him. So Google Shane Smith House. Yeah, I see a $50 million house. I'm up two steps ahead. He already Googled it. So there's this amazing article that came out in 2008 where it's all about Shane Smith and it says,

Shane Smith's Living Large. And it documents his new house that he purchased for $30 million, I think. And it's this beautiful mansion up in L.A. somewhere. Well, he recently sold it for $50 million. So, like, this guy has totally come out on top of this, of this whole thing. And it's just really fascinating that he basically came in. He spent about 15, 20 years doing his thing, right before the tide change and like these guys were the opposite of woke. Now Vice is like the wocus of the woke. But right before that change happened, he got his money, he got out and he bounced and he hired a CEO.

And his story is super, super fascinating. So you've never heard of him? I've never heard of him. I briefly knew that Vice started as a zine or magazine. What's your main takeaways? Because this is entertaining because this guy's like Felix Dennis, just like reincarnated. So what's your takeaway? You're a media guy.

You're a bit of a wild man. What's your take on this? Not that wild. I mean, this guy makes you look like a, you know, choir boy or something. But what's your takeaways from this story? I have a bunch of takeaways. But first, let me tell you how their business model works,

because that's part of my takeaways. So a lot of people don't realize how they make money. They're going bankrupt now, but they still make $600 million a year in revenue, but it's just like wildly unprofitable. So their company, it's basically like, I can say, consider it like a mortgage-backed security for media. And so do you remember like the mortgage-backed securities of 2008, where it was basically like banks would buy like tens of thousands of mortgages in one tranche?

Turns out like 4,000 of the 10,000 were shit. That's exactly what Vice does. And so they got famous because they only had like 20 or 30 million monthly visits to their website, Vice.com, which isn't a ton. That's not a ton for hundreds of millions in revenue. What they did was they partnered with OMGfax.com, distractified.com, and all these other clickbait websites, and they would roll that up. And so they would call them part of the vice network. And so they would tell people, you know, like Intel or whoever the big advertisers are, look, we reach all of millennials and we have 100 million, 200 million monthly uniques to our network.

In reality, it was on like shit sites, like, you know, all those other things. And that was like, once that came out, it was kind of frowned upon. And then the other way they made money was they had an agency called Virtue, like Vice and Virtue, which is pretty clever. But their whole company is basically a creative agency. So they would make content for Snapchat, Facebook, and then eventually HBO. And they would get paid like a service fee, basically, for it. And it was basically one big agency.

And that's how they made money. Which brings me to the takeaways. Takeaway one. If you're going to be a company that makes money from multiple different streams of revenue, you've got to nail one first. They didn't even nail one stream of revenue. They had like five other things that added up to a lot, but not one of them worked wonderfully,

at least not enough to be profitable. So that's one major takeaway. The second major takeaway is they'd always say they're going to be the next Disney. They go, we're going to be a mini Disney. Shane once said, we're worth $10 billion right now, but conservatively, I think we're going to be the next Disney. going to be worth 40 or 50 billion in a couple of years. That couple of years would have been like in 2020 or something. Never worked out. He goes, we're going to be just like Disney except

with like cocaine. Didn't work out. Why? Because no one likes them. If you're going to build the next Disney, you got to be like people got to love you. You know, people love Mickey Mouse. They don't really love like Shane Smith, you know, and all that stuff. You know, they like them. They don't really love them. So if you're going to be a media company like that, you have to have something that people love. The next thing is news, if you're going to be in the news business, that's really, really hard because you have to stay relevant. And I actually think that you should be something that typically people don't grow out of, but they grow into, meaning a Wall Street Journal, a New York Times, if you're going to be like one of these publications, economists,

Financial Times, things like that, you want to grow into it, meaning like as you get older, you want to aspire to be able to read it and like it and understand it and brag about it. Whereas with Vice, it was like, I'm no longer 28 years old. Reading about this stuff is not exactly cool. And plus, the people working there, you kind of look silly. I've always said about this about Barstual Sports. I'm like, dude, Dave Portnoy is getting older. Some of these antics are kind not going to be cool anymore. They're more so, like, pathetic. Do you know what I mean? And that's kind of happened with Vice. Yeah, you basically, you either stay with the schick and you just start to look like a clown as you get older and older,

or you've got to sell, get out, and change your life, you know, change your lifestyle. And it's pretty interesting because it's very hard to let go. Because if you weren't such a nut, you wouldn't have got this level of success in the first place. So it's kind of like a self-fulfilling prophecy. And then on the second part of it, you know, it's very easy to get addicted to the character, the fame, the money that comes with acting a certain way.

You're being rewarded, rewarded, rewarded. And then now you're 57. and you're, you're Vince McMahon now, or you're Hugh Hefner now, or you're whoever, like it's hard to leave the character even though you might actually,

maybe you actually should, you know, grow out of it. Anyways, but I'm glad that these guys don't grow out of it. It's for our entertainment. Thank you. Thank you for your service, Shane Smith. It is. And the last two things,

if you're going to build a media company, avoid New York City. Like, when you're a creative service, business, you need, it's a talent arbitrage. And it's really hard to do that when you're in a really high cost of living city, like New York. And also, you saw that they like became this woke company, which I don't entirely believe like go woke, go broke, like that type of thing. I do think that, um, I think that like there's a niche, you can make money in any niche.

It doesn't matter if you're woke or not. But they like changed that way when that wasn't originally what they did. And I think they changed that way because they moved to like Williamsburg and and everything like that, and it totally changed their, their, their stick. But the last thing is actually a compliment.

So you texted me the other day, right before you're about to go on to, you were going to speak at this conference, and you said, what did you say? About to drop some showmanship on these bitches. Is that what you said? About to show these bitches some showmanship.

Yeah. And that is totally true. And that is what he did. And frankly, even though he, it seems as though he conned a lot of people, he kind of got the last laugh. And he had showmanship.

throughout the entire thing and had it worked out, it would have been a lot cooler, but having showmanship, it totally works. By the way, there's like, people ask me,

like, oh, do you get nervous before public speaking? It's like, I don't know, man. If I was nervous,

probably wouldn't be thinking, I'm about to drop some showmanship on these bitches. It's a different attitude. Exactly. Versus, I hope I don't mess out. Dude,

he, he, like, throughout his career, you can, like, there's so many crazy stories about this guy.

It's all about showmanship. He does the wildest stuff where he, like, tells stories. The way he tells stories, it captures your attention. And some of his employees were like, when I'm with Shane, I feel like I'm going to war and I'll go to any war

with him. Or there's like, Johnny Knoxville did an interview and he was talking about Shane and he goes, he's the greatest leader you could ever have. Also, the greatest drinking buddy. And like, he does this. What a bio. Yeah. He like has all

of these like amazing one-liners, even if they are full of shit. But whatever I hear him talk, I'm like, oh, my out, I believe everything you said. So, for example, have you ever heard me say, the best way to circumvent someone's bullshit detector is to not bullshit? I've used that line a couple of times. I stole it from him.

So he has all these, like, amazing one-liners, and that showmanship, it's absolutely captivating. There's like a story about him with Rupert Murdoch, and Rupert Murdoch and Shane are walking. And Rupert Murdoch is like a, you know, if you see the movie's TV show succession, he's like that guy. He's like a mean old man. And Shane sits down with them and goes,

You don't have millennials, but I do. I have everything you don't have. And like he's talking to this billionaire. Is it testosterone? The value of my youth? One of the things I don't have. But he just totally like swings above his weight. And I think it's really fascinating to learn from this guy.

So if you're listening to this, Google Shane Smith. There's like crazy stories about this guy. Good segment by you. Good job by you. Good job. I like that one. I actually have a spinoff of that. You mentioned a company in there.

there that I was like, hmm, that sounds familiar. I kind of remember this name. So you said OMG Fax. Do you know who started OMG Fax? I do. I forget his name, but he's an oddball, right? This guy Emerson Sparts. And I met Emerson Sparts maybe 10 years ago.

And when he was building OMG Fax and building a network called Dose Media. He's like a genius, right? He's, he is, I met him and I was like, wow, this guy is super smart. I actually think that he is kind of like, if he had just applied himself to some other areas, he would have like totally done, done some absolutely amazing things. Everybody would know his name versus just kind of me

and half of you knowing his name. So I'm going to tell you a couple of things about Emerson Sparts. So the guy when he was 12 years old built a website called MuggleNet. And I don't know if you're a Harry Potter guy, but I'm a Harry Potter guy. And I was on MuggleNet all the time. And I used to love this because it was the number one Harry Potter fan site in the world. Tons and tons of traffic.

At the time, Harry Potter was like, you know, Justin Bieber, Harry Potter was super, super famous. And in between the books, people wanted a place to discuss, to post theories, to post fan fiction, to debate, you know, what should have happened, blah, blah, blah. And so Mughal Net, when he's 12, he builds the super popular site getting millions and millions of visitors. When he's 18, he publishes a bestselling book. His bestselling book is called, I think it's called Harry Potter should have died. Controversial views from the number one fan site. And basically it's like, Harry survive, but should he have?

You know, I run the world's biggest fan site for Harry Potter. And here's some of the controversial viewpoints that people have about Harry Potter. You can already see this guy's got the, he's got the certain that, oh, that comes with the sandwich. He's got the sauce and he's got the showmanship. And so I met him, maybe he was, I don't know how old he was, maybe 22 or something like this at this point. Where'd you meet him?

I don't even remember, man. I remember being on a call with him, a video call. And it was him, and I think his girlfriend at the time. And they were creating something called Dose Media. And I go, so what is it? He goes, well, we were going to make really viral content. So they had OMG Facts. That was one of their companies.

they had like four or five websites like that, one that was like science facts, ones that was funny things, one that was whatever, controversial or pop culture stuff, like references to TV shows and things that were hot right now. And they had these websites and I go,

okay, so how do you like, at the time in my mind, I was like, going viral is getting, lightning strikes you. It's just not something you try to do. It's just something that happens

or it doesn't happen. And it usually doesn't happen. He's like, no, no, And he had built a four-part system. And this is the first guy, he's like, yeah, we're a different type of technology company. We have 18 engineers and we have four writers.

And we reach millions and millions of people a month. And I was like, no, no, it was actually good. I was like, so what do the engineers do? He's like, well, basically all the viral content in the world starts either in one of three places, Reddit, Imager, or 4chan. And he's like, basically I built a detector that would find stuff that's getting hot on those, on those three platforms first,

before it hits Instagram, before it hits Facebook, before it hits Twitter, it's going to get popular there first. And he goes, so we built a detector. Then we built a, like a, then the writer basically would, would build like write a summary. And then we built a AB tester that would basically

create headlines, headlines and, like different like frames. of that same story. It would test them really quickly. We had a tester that would spray that out. We would pay to get that in front of like, 5,000, 10,000 people. We would find what's the winning angle?

Then we would have the post and then distribution, right? And then we would actually distribute that to our audience. And so we could engineer a higher degree of virality in every piece of content. Why? Because we're finding the best stuff. We're packaging it quickly with our writer. Then we're remixing it with our automated AB tester that's going to juice up the headlines and then the images.

then we're spraying it out, getting data feedback, telling us which of these 15 variations is the winner, and then we post the winner. And I was like, dude, this is amazing. And over the few years,

I saw him build this up. And his traffic kept going up and up. Now, the problem was his traffic wasn't that valuable. It was kind of fly-by traffic. It was kind of like the lowest common denominator of the Internet. And from Facebook, I think.

It was very dependent on social networks. And then Facebook changed. And for a while, Facebook was like rewarding the head. out of anybody that could post viral content. And then it got two clickbaity on Facebook. And then Facebook just manually went and unplugged the viral engines for these companies. And so, like, 10 companies died, like, you know, in that transition.

I don't think his totally died, but I think it definitely slowed down. And I think he also grew up and was sort of like, what else do I want to do with my life? So now I just went to... By the way, really quick before that, before you go on to him, did I, have I told you about my partner at Hampton, Joe. He had a company called Little Things, which was the same thing as that it was a content like Clickbait website. He started it in New York and then like he had all these, he had multiple floors in an office building and it was killing it. They were at $100 million in revenue. He had a deal to sell. They went through due diligence. The deal was going to close in two

weeks. That changed that you just referred to. It happened to Little Things. At the time, Little Things was the most trafficked website from Facebook in the world. So it was like little things, and then it was like Huff Po and then like BuzzFeed. The deal was about to close, I think for a hundred and something million. He was going to walk away with 50 million after taxes. Two weeks before the money was supposed to go through, that changed happened. The deal, he lost the deal. And weeks or months, like only a couple months later, they had to shut down the company.

And it was all because they built everything on top of Facebook. That's a Mike Tyson gut punch, right? like birds fly, fish swim, and deals fall through. That is the sad part about deals. That is too common. Yes, and that's very common. That's what happened to this guy. Emmett Smart.

Emmett Spark. Emett Spark. Emett Sparts. Emerson Sparts. Emerson Sparts. Sorry. Yes. But here's his bio now.

His thing says like AI, history, complex systems of Bitcoin. Then he goes, goal. I want to die number one on the leaderboard of people who changed the world. And so his, what he's doing now is something called nonlinear. And nonlinear, it looks like, is basically a, is basically a company that is funding people working on AI to make it make sure that it's safe. And so, um, so they fund basically nonlinear entrepreneurs, people who are trying to work on these like exponential technologies. And so, yeah, they, we incubate X, X risk, X, risk nonprofits. I don't even know what extra is nonprofit means, by connecting founders with ideas funding and mentorship.

And so that's what he's working on now. But this guy's always going to do interesting things. This guy can't, this guy can't be uninteresting. Dude, when I read about him, I was like, why are you doing this, dude? You're doing this dose media thing. Like, you seem like a genius. You're just absolutely wasting it. This is a, what do you say? It's a high, high, effort, low. Or what do you say? Horamosey had a good one for this. It's a 10 out of 10. 10 out of 10 entrepreneur going at a 4 out of 10 opportunity. And that's how I felt when I met him.

I remember literally like this is now 10 plus years later. I have not spoke to this guy. You mentioned OMG Facts. And in my mind, I'm like, that guy's smart. Follow up with that guy. Right?

Because he left such an impression on me where I was like, this guy is really, really clever, really smart, really also like wholesome. Like even at the time, he was like, uh,

even though he was working on something that's like, typically I would say almost everybody I know that's in this kind of like viral media. Actually just like lame. There's kind of shitheads. And I made that like in an endearing way. Like, you know, some people are shithets and it's all right. You're just like, yeah, I'm trying to, I found this arbitrage.

I'm making it happen. And so he was not that. He was really soft-spoken, really, really nice guy. Ben says, X-risk is the risk that something could end the world. It's an existential risk. Okay, yeah, good. So he's going to save the planet, which is good. Dude, and his website is a dot-org.

Yeah. Noble mission. org type of guy. When I was in Austin, a friend of mine was hanging out with Justin Mayers, who's been on the pod before. I think I can quote this because I think it's a good quote. But he said, he goes, Justin said the best thing. He goes, it doesn't matter how you make your first nut.

He's got to make your first nut. But after you do that, then you want to work on a noble mission. And he's like, dude, he's like, I like that. He's like, you know, do whatever you got to do to make your first nut, which is, you know, get your, the first few million dollars where you're financially free and your, and you're, you don't have to have a job, you can work on whatever the hell you want. But then after that, don't go chase the second nut. Go after something that's a noble mission.

Go after something that's awesome. And very few people actually do that. In fact, I don't even think Justin is doing that at the moment. But I love the quote. Isn't he doing like an FSA spending store? That's like the most opportunistic thing I can hear. The way that he pitched it, it was pretty awesome. He said something like obesity in America is like an epidemic.

60% of people are overweight. We want to make you eat healthier by making it easier to acquire, like, you know, this types of food and this type of health care. And we're doing it via, and then you're like, that's where the pitch comes in. That's always a good pitch. Let's go look. So, his site. I think it's called true medicine.

True med. So true med. He says food is medicine, exercise, medicine, sleep is medicine. We don't mean this in a theoretical sense. Food, exercise, and sleep are all scientifically proven to prevent or alleviate physical and mental illness. In short, these are all medicine. It's a true med is a payment integration that enables qualified customers to use pre-tax

HSA and FSA funds to purchase health promoting products and services from their favorite merchants. Soon it will be available in the checkout flow for all merchants who are for merchants who sell healthy food, supplements, extra scrimand and other health and wellness products. This is such a good idea, by the way. This is a phenomenal idea. This is a 10 out of 10 opportunity. Dude, he pitched me to invest. Why haven't I not invested in this?

I didn't invest because I was just like saying no to everything and I deeply regret it. I deeply regret it because by the way, this is the best way to pitch a business, which is like, you like paint this like dreary picture like the world is obese. You know, did you know that like if you add up all the terrorist attacks, all the guns, all the car accidents, it would only be one tenth of the people who die, you know, from being obese. Like, you know, that type of fact. And you say like, if we continue this, this is what the. outcome's going to be this and that. And so we need to solve this. The way that we are

happened to happen to be trying to solve this is by doing X, Y, and Z. And I'm like, all right, that's a great pitch. Yeah, this is, wow, I am so jealous that I'm not invested in this. I'm messaging him right now. All right. Yeah. That's it. That's the pod. We're out of here. I feel like I can rule the world. I know I could be what I want to. I put my all in it like Days off on a road. Let's travel. Never looking back.