My First Million - Brainstorming Ideas with The $200M Man

Episode Date: November 16, 2023

Episode 519: Shaan Puri (https://twitter.com/ShaanVP) and Sam Parr (https://twitter.com/theSamParr) are jamming with Patrick Campbell on trends that are doubling in popularity and the businesses you can start to pounce on them. Patrick also shares three product frameworks, the importance of freedom-inducing purchases, and what his research has revealed about the ultra wealthy. No more small boy spreadsheets, build your business on the free HubSpot CRM: https://mfmpod.link/hrd — Show Notes: (0:00) Intro (2:00) The Bezo's Number Framework (5:30) Trends: Coral bleaching, School shootings, teenage abstinence (12:30) More trends: French Bulldogs, sports betting, and other vices (21:00) Philosophy: Don't innovate (24:30) Patrick's tax strategy: Gas stations (30:00) The 5 Phases of "I just sold my company" (33:30) Freedom-inducing purchases (36:00) Secrets of the wealthy: To-do lists and exercise (39:00) How a researcher measures happiness (41:30) The trap of chasing a "freedom number" (45:00) Wealth, Status, Power (50:00) Product Remix Framework (55:00) Pricing strategy breakdown (1:02:00) New bod, who dis? — Links: • Patrick’s Twitter - https://twitter.com/Patticus • Paddle - https://www.paddle.com/ • Google Scholar - https://scholar.google.com/ • Bezo's Numbers - https://shorturl.at/dgJSV • Casino affiliate - https://playnj.com/ • MyBodyTutor - https://www.mybodytutor.com/ • Price change email copy - https://shorturl.at/kqE49 — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com/ Check Out Shaan's Stuff: • Try Shepherd Out - https://www.supportshepherd.com/ • Shaan's Personal Assistant System - http://shaanpuri.com/remoteassistant • Power Writing Course - https://maven.com/generalist/writing • Small Boy Newsletter - https://smallboy.co/ • Daily Newsletter - https://www.shaanpuri.com/ 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. — Other 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

Like, one of my goals, something, this is going to sound crazy, and this is the perfect audience to say this. But, like, I get so jacked up about the idea of, like, toppling a dictatorship one day. I get so excited by it. And I'm like, I'm not even kidding. All right. Look at what I have on my head. There we go. Oh, look at that.

Look at this guy. Wow, you went from dad to cool dad in one episode with that hat. I'm hip. I'm hip. I saw you had the shirt, too. Did you buy like a full uniform? Are you actually just working there now or what? Jonathan got the hookup and he got a swag bag from them and he gave,

what came over to my house the other day and gave it to me. And have you gotten any compliments or like, do anybody under the age of like 25? Yes. Yeah. Yeah. Or something? A few, a few young people. one young person called me cool guy

that's all the affirmation you're looking for now as a dad get away from me cool guy yeah why why you're staring at me cool guy did you need something that's how it was

you want to kick us off who do we got all right we got Patrick in the house Patrick's been on before so the OG listeners know all about Patrick Campbell, PC as he's in my phone. He created a company called Profitwell, sold it for 200 million bucks. He's got the background that we always talk about where I'm like, I notice that people who have this background tend to be winners more often than not.

He was a competitive debater. Some would call him a master debater. He's a, he was in the NSA, the intelligence agency. So last time you were on, you were telling us about all the crazy shit you did to gather intelligence in the startup world. So like how do you learn about what your competitors are doing and whatnot? And now today he's back with a bunch of ideas. And I want to know what you've been doing because you sold your company for 200 million

bucks and then you had a bunch of time on your hands. And that's a deadly combo. You sent you sent us something. I want to start with this thing you texted us about the Bezos number. And I don't know too much about it. So I want you to explain, you go, I've been working on it. I've been searching for my Bezos number. I don't even know what that means.

Explain what is the Bezos number. Yeah, totally. So here's the thing. As this started from a premise, so sold the company, basically working at Paddle and also thinking about what the next thing looks like. And what I found in the ideation process, like I haven't come up with ideas in like 10 years.

I've helped companies come up with ideas, but it's just one of those interesting aspects of the entrepreneurship journey. And my big belief is your job as an operator is to basically know your customer and know your space better than anyone else. And you need to do this before you start building because a lot of entrepreneurs fall into this trap

where we're really good at willing stuff into existence because that's our job, except it's relatively easy to do that today. So this means that basic ideas are cheap, mostly indefensible, and worse, they waste a lot of our time. And so the first step I come in terms of an ideation process is using this Bezos number framework. And basically when Jeff Bezos started Amazon, he noticed this crazy stat, you know,

this new thing called, called the internet was growing 2,700% per year. So he knows he's got to build something on it. He didn't know what it was, but he was starting from the trend because when you go where the water's flowing as they say in right away, you don't need to be like a genius to figure out what a really cool business looks like. So I have this doc, and I'm happy to share it with the audience where myself and a researcher basically call through industry reports, trend, and stat websites, and then the hack that no one really probably uses, but they should use, is we use Google scholar and other academic kind of publishing sites to find all these trends. Because in academia,

you have a lot of like undergrads and grad students basically writing a bunch of papers about here's what's going on in the space. Here's all these numbers that are going up or down. And then I put this into a spreadsheet and then basically label a couple of different, you know, categories. One in particular is like what's the doubling time of this particular trend? As well as like how long or how fast this trend is going, what the causes are, what the effects are. And the basic idea is then I can find, like, hey, the world needs something in this space or the world's going in this direction. And partially I can figure out like, oh, this is something that I could get paid for, kind of in that Iiki guy framework that you like Sam. I can basically take that by looking at these trends.

So let's describe this sheet. We'll put it up on, if you're smart and you're watching the YouTube, you'll see this. We'll put it up on the screen. But if you're on the audio, I'll describe it. So basically it's like category. So you got like social issues, health care, energy, right? So the big categories. Then within each one, you have a trend.

And so, like, for example, a trend would be top college admissions rates are dropping. So, and then it says Stanford admissions went from 4.8 to 3.9 in the last five years at Harvard dropped from 6% to 4% in the last five years. So then it says direction, you know, decreasing. In five years, you know, what is the kind of rate that this is happening? What's the doubling time? So like how many years would it take for this trend to, where we're at today to double? based on that rate. And then here's the sources and possible causes and possible effects of it.

And so you have, I don't know, like a hundred in here, basically. Let's read a couple of these out. I want you to kind of riff on a couple of these. Or you can pick maybe, what does it mean when it's in blue? Is that mean you like that one or something? What does that mean? Those are just some interesting trends that we've gone deeper on, basically. All right, let's do this random one. I want you to talk for this. Number of coral bleaching events. I don't even know really what that means. What is a coral bleaching event, and why does that matter? Basically, coral is, you know, dying out.

You know, essentially, when there's, like, stressful conditions, coral ends up, like, bleaching. So this particular idea, like, I don't know what a business could look like in here, and that's not the point necessarily of, like, the Bezos numbers. It's, like, I'm not necessarily trying to find, like, one particular business. I'm trying to find an overall trend, right? Because some downstream effects of this could be, there's more money that's from the government, from regulation,

basically going into protecting, you know, international or, you know, national waters. And there's a bunch of different things that are... Why is coral bleaching bad? Okay. Well, let's go back to your high school biology class. I didn't know that's what I would be teaching today. But the basic idea is, like, you're killing off ecosystems in the ocean, right? That's probably the most basic way I can say it. And there's a lot of downstream effects when an entire ecosystem basically falls apart.

And the coral is a major part of that. Don't act like I should know this, man. 90% of people... 95% of people... 95% of people listening this do not know if coral it's beautiful coral it's alive

coral it's part of the underwater ecosystem and it's like the butterfly factory you just take away the big part of the ecosystem it's going to have all these secondary effects on the fish do you care about fish Sam or do we need to explain why fish matter

do not care about fish look you guys Sean you know about don't get off your high horse but here's the point Sam Sam here's the point Sam here's the point is we're looking for major trends.

And those major trends, like, you ran basically a trend service slash website. Like, you understand the nature of trends. What I'm looking for in a particular idea is I'm basically looking for really, really fast-growing trends in one direction or another. Because that's where, essentially, as I was saying, like, the water is going to continue this coral theme. And basically, if I can ride a particular wave, I'm hedging, essentially, all these business decisions that I might be making downstream from it.

Got it. So pick another one on this sheet. Patrick, that you find interesting that you kind of have noodled on a little bit. Yeah, so there is, I mean, the obvious ones are like interest in AI, these types of things, but like some less obvious ones might be around the kind of like the social issues, right? So right now, a really sad one to kind of talk about are like school shootings, right? So I don't know if you've looked into this particular market, not obviously increasing or, you know, school shootings, but like there's an entire market that has been created around this because of the rise of that particular happening.

Now, you can get into kind of like the government dynamics of like gun control and stuff like that, but like there still is the fact that schools are looking to like not only make their students feel safer, but also their parents feel safer. So there's things like bookcases that fly in front of, you know, doors. There's things like clear backpacks. There's an entire market that's kind of popped up against this. And when you see this particular trend, you can then think through the second and third order effects to essentially come up with, is this something that hopefully you can, you know, obviously help the actual trend go down, but also. you can make sure that you can build a good business around. I have a random question. Why don't they just put a certain thing in the gun that like, you know, for example, we have metal detectors, which is like, we're trying to find a gun, but there might be other metal. There should just be a thing in every gun that's like a detectable thing that you can now, if you're a security thing, it's like, oh, we're always looking for this certain compound

of lead because that's intentionally put, chipped into every gun that's sold so that we can easily identify, hey, a gun just walked through this door. So a metal detective? Is that basically what you're saying? But not metal. I'm saying metal will catch all kinds of metal. I'm saying they should put something that's unique in every gun, in the mold of every gun, so that it can be detected easier than looking for all metals and slowing everybody down for like keys in your pocket.

Sean, your, your California is showing. Yeah, it's coming out. Yeah, you, you, I thought you were going to say something that they can remotely turn off all the guns in case something happens. Like the gun. Hey, you might even be a status symbol like. a beeps, it's like, hell yeah, I'm packing, right? Who knows? I'm not judging. I'm just saying, we're covering the environmental

global warming debate and guns. That's what makes my first money. Dude, I was just flying. So I went through TSA like three times. I went through Disneyland security. I've just been thinking about how do we make this faster? Because it's a very slow process. Yeah, yeah. Imaging is actually getting really, really good.

You have another thing on here that is interesting. And I think Scott Galloway talked about it was, and I didn't see the stat until just now, teenagers not having sex. So you said that it's doubling every nine years. It rose from 11% to 21% of teens that haven't had sex in the last year. That's kind of interesting. I think that Japan, I mean, you've looked into this more than I.

Japan has suffered from this. And isn't there like an idea that like in the next 10 or 20 years, Japan's population is really, really, really going to be hurting for this lack of procreative? Yeah. Well, there's a lot of countries around that's going to happen. Even China, they're talking about, you know, a pretty big collapse. And so there's a lot of, again, causes for where this is at. And I'm not an expert on like population design or anything like that.

But I do think that this is something that's really big, not only amongst just teens in general, but also amongst young men who are kind of, you know, basically checking out of the ecosystem. And this is like a pretty big problem just for the economy in general, let alone like procreation and fertility and stuff like that. And so this is kind of an interesting space. like, yeah, you have a social issue or like, you know, a cultural issue that's kind of driving things in one direction. Are there, like, private solutions to kind of, quote unquote, solve this particular problem? You know, because at least in America, we're not going to do what, you know, China has been rumored to be doing, you know, with kind of like the reverse of a two-child policy, like these types of things. And so, yeah, it's just, this is one of those trends as well that's,

like, worth going deeper and deeper on to see, like, what's going on, not only make the world a better place, but, like, see where business can be. And this cost of cybercrime one, That's one of your fastest growing ones. What's that? Yeah, so basically the amount of damages from cybercrime. So this is not only things like targeting old people for fraud, but also this is things like a DDOS attack on a particular website or for a company. Basically, cybercrimes exploding.

And it's probably going to accelerate even further with AI beyond this like 7x5 year magnitude that I have in the spreadsheet. And so, yeah, that's something that's really interesting. because you don't really have good solutions for it. You have everything from, like, ORA and some of these, like, kind of VPN slash identity protection products. But on the corporate side, there's been a lot of money that's slashed in there. But I don't want to say it's obsolete, but it's changed dramatically with, like,

the birth of AI and all that kind of fud that's happening with that market. There's a couple on here that we've seen people come on this podcast and talk about specific businesses they created off of these trends. So, for example, you have sports. sports betting revenue. And it's the doubling time you have on here is less than one year. So you said it was legalized in 2018. It's already 4.3 billion in the U.S. right now. So that's a five year, five year span to get to about five billion in revenue on U.S. legal sports betting. And it's still only legal in what, Patrick. I don't know if you know the details, but it's only legal in a couple of states, right? It's not like. Yeah, it's it's it's it's, it's, there are more states, I believe, that have legal marijuana than they do of sports betting. So it's, but. it's getting a little bit easier. The rumor is, and again, not an expert on this in particular, but the rumor is that there'll be a lot more states that come with this

before the other states kind of legalized marijuana. And so those are both markets that are really interesting because it gets into all the vice market kind of dynamics that you see with a lot of those different types of companies. The guy we sold the milk road to is two guys. One of the guys had this interesting backstory, because they bought it with their own money. And they're not like a company that didn't raise money.

And so we were like, where are you getting the funds to make this? sized purchase. And they were like, well, you know, here's our backgrounds. And one of the guys had a fascinating background. So he was a affiliate marketer. So he basically would make like content sites for online poker. And online poker was legal for a while. Then Black Friday came. Online poker is no longer legal in the United States. So it was like business died overnight. And so what every, he was in a really competitive space of all night poker affiliates because it was like a just absolute cash cow to be a poker affiliate because somebody's going to immediately go deposit money.

And you would get your your fee for that. And so when they killed it in the United States, out of the 100 competitors, 99 said, well, I guess we'll optimize for international traffic now. That's the only answer. He just took a different approach. He sat there and he looked and he's like, well, okay, it's illegal right now in the States, but is it going to be illegal forever? Probably not.

And he's kind of waited and he was like, he was just patient. And he saw a little trend pick up where New Jersey was rumored to be the first state that was going to legalize it again. or he was going to legalize online gambling only for if you lived in New Jersey. And I think the way it worked was like there was like local casinos that could have online portals for you to gamble on. And so with everybody else in an international, he's like, I will now be the New Jersey betting affiliate. And he created his website.

I don't know what it was. It's like betting in New Jersey.com or something like that. Like very hyper targeted. Sounded so niche. It sounded almost like a step down. But what he realized was if one state's going to do. it. And then the second state started to get rumored to do it. He's like, oh, this is a trend. I just want to surf. I'm going to start now and make all the content for the states that are

rumored. And I will be the best position when the time comes as this as this accelerates. And so he did the New Jersey one. He sells it for, I think it's publicly out there. It's like $42 or $46 million to a bigger betting company. And then he just, he's like, oh, cool, Minnesota's going next. He does the exact same thing. And does it for Minnesota, sells that one for another 40 something million dollars and to the same company, uh, within a like sort of two year time span. And then that company was smart and then they're like,

hey, uh, okay, now this covers like all states. You can't just do this. You can't just keep flipping these to us for 50 million to pop. And so he basically made like $100 million selling the same business just looking at the data and the trend and the news and realizing, okay,

this is going to happen. It's just a matter of timing, uh, this wave now. And he was the only one that was really paying attention to that. And it was him and one. other guy and they just merged. And so they became, they then owned all the supply so they could jack up the rates as an affiliate, which normally is the other problem with affiliates. They get put under pricing pressure, but because him and the other guy merged, they could go demand whatever

rate they wanted to anybody who wanted customers because they were the only show in town. The other one you have on here is popularity of French Bulldogs. So you say it's doubled in five years and French Bulldogs are now the number one breed of an, in the, AKC, the American Kennel Club, which is like a published database, basically. And so our friend Ramon kind of did this with weiner dogs. He was like, oh, like, look at how popular these groups are, how fast they're growing on Facebook of people who own weiner dogs.

And he's like, then he started brainstorming, like, what's a problem in the weiner dog space? And he found this company that was making ramps for weenar dogs to get on and off of beds and couches. And because he saw the popularity of these groups, groups and how avid the owners were, how fast those groups were growing, how big they were, he knew there's a market for Wiener Dog ramps, which like, if you walk into Harvard Business School, when you're like, here's my big idea, they'd be like, you're nuts. You know, you laughed

out of the room, but that business was doing, you know, whatever, 20 million a year because he was able to, like, correctly identify the right trend. He scaled it, I think, from like 300,000 a year to, like 17 million a year in, like, 20 months or something like that. Yeah, it was insane. But this is why, like, again, ideation is treated a little bit more like a science than just this random, like, listening to podcasts, YouTube videos and, like, having a notebook because there's a lot of these ideas that, like, I couldn't tell you what a good business idea is in them. But if I start to think about it further and further, that's where, like, really good ideas come from, right? So the French Bulldogs, right? Like, I don't know what the pain points of French Bulldogs are, but similar to Remote Story, there's, like, something very interesting there, either directly or, like, sitting around that particular idea that could be really, really interesting. So basically, we've all seen with AI, people can now, it's like generative AI. You can create an image or create a video from just a prompt or from, you could deep fake a video really easily. And so, you know, crypto gets a lot of shit for having like, oh, there's no like use case for this,

even though like money is the main use case, but they're like the blockchain. What are the other use cases for blockchain? And there's a really interesting company that's doing something in the space where they were like, hey, crypto has this really cool thing where you have a private key. You have your own address that only you own in control. And what they normally do is they say, hey, sign it to do a transaction. So if you want to send money, you sign it with your private key. That's how you authorize the transaction.

So these guys, what they realize is, hey, there is now going to be so much video out there. And there's going to be a big question of, is this Photoshop, is this deep faked? Is this real or is this fake? And they're like, people are going to need people, companies, they're going to need a way to authenticate or to sign a piece of content and say, this was real. I made this. This is actually me. Versus the viewer having, putting the burden on the viewer and be like, can you tell if this is real or fake? It's like, dude, I don't know. It's too hard. Like misinformation is going to spread.

So now there's going to be like a watermark that basically the creator, the original owner, the person in question can use their private key to sign and say, yep, that was that was real. That was me. That was my video or that was my writing. I actually said that. That's my voice. I did say those words. And it will become true very soon that like if there's a piece of content, that's, that's unsigned. I don't, you know, I don't know what this is. This ain't organic produce. I don't know what this is. I don't know where this came from.

I don't trust this. And so I think that's going to be one of the consequences of, let's say, you see this rise in generative AI as a trend. You say, oh, that's great. People are going to create all kinds of content. But wait, that means we're not going to know what's real and what's been generated by AI. We need a solution for that.

And I think those guys are going to do pretty well. What's interesting about this is not just the, trends, but the fact that you're doing this. And I think that that's kind of breaks a couple rules or at least rules that people think exist. And a lot of people don't know that Jeff Bezos story. But basically, I think he, I think the exact, the exact quote was pretty good. It said something like, I saw the internet was growing at 2,300% a year. And I realized nothing outside of a petri dish grows that fast. And I just thought, what can I sell? And well, let's just start with books because they're easy to ship. And there's a lot of them. And so I can just pack Amazon.

on with almost every book I can find, and I think people will buy that. Whereas a lot of people think they have to start a company because they have some passion about it or some mission, which I actually think your passion can develop once you start working on it and it starts succeeding. A, have you thought about selling your research process? Because that's actually what I did with Trent. And I made a bunch of mistakes with that. I should have charged more.

Maybe I shouldn't even have done it in the first place. But A, what's your end goal with this? with like, have you thought about making my mistake? Well, it could have done better. I should have charged $30,000 instead of or I should have charged way differently. That's where I screwed up. But have you thought about turning this into a business? The second question, what is your outcome with your second business now that you have

financial security and like, do you have like a legacy plan? Do you have a number that you're working back from? What are you doing to decide which one to actually go down? Yeah, so I think that to answer the first question, I've been asked, because we've talked about research stuff a lot, like either through DMs or on the last pod. Like, I think research companies, they have a fatal flaw where they give people a dopamine rush of understanding something, but people are pretty bad at then using that information in some particular way. So like the retention ends up not being great unless you turn into like a McKinsey style like, oh, We trusted them to come in and do this research and kind of go from there. So, like, even the competitive intel stuff, like, I know how to use that because I've been taught how to use it and I've, like, developed it.

People really like the dopamine of like, oh, I can see exactly what's going on, but they don't know how to like get to the next step. So if I were to do it, it would be some sort of, you know, almost do it for you not only in terms of the research, but then connecting that to some sort of outcome where they can just hook it up and then it targets their ads or something to actually get an outcome. So I can take the thought process out of my customer's particular evaluation of the product. I think in terms of the second question, for me, I'm like a cliche second time founder now, right? So I'm basically like either I'm going to go into like cash flowing lifestyle style points type businesses or I'm going to go into like big ass, you know, innovation type business. And I think the Bezos numbers piece is really, really powerful for the latter one because, you know, you're looking at some really big trends that probably have some social and cultural like implications, but then you're also trying to build like a particularly big business, which is what my intention is essentially.

And I've done a lot of work over the past year to kind of like come to that realization with like coaches and therapists and all that kind of fun stuff. So for me, what I do is I look at this. And I don't know if the Bezos number piece is is necessarily like useful to folks who aren't trying to like build big. I think it's really useful for folks who want to do like quick hits. But I think like the next framework that I kind of put in there around like, you know, taking different product ideas

and then spinning them in terms of different customer bases or different differentiators, that's what most people should be doing because innovation, like a 10x better product is almost impossible in this particular environment now.

Like 10, 15 years ago, you could build an innovative 10x better product because you were the one that had the special relationship with the supplier in Yemen for the coffee or something like that. Or you were the one that only could build

this particular feature, but now everyone in their mother can spin up a website features are no longer really defensible anymore. And unless you have like some sort of patentable or some sort of scientific kind of breakthrough or regulatory kind of protection, your best thing you're going to do is like a two or three X better product.

And that's why I think it's just one of those things that, you know, innovation isn't something that you should be targeting unless you're really, really going big is essentially what I'm getting at. Why do you care about doing the cash flow thing? Because many of our friends, Sean and I friends, I mean, Sean's friends and you, I'm sure your buddies are all. like this, they're quite wealthy, many tens of millions or hundreds of millions, and they're like,

but I would love to have $5 million a year of income. I, for me, and this is like very personal, it's not for everybody, but like, I discovered in going through this like wave of like massive wealth really quickly, I discovered that like, I'll give you like a little bit of an anecdote. So when the money hit the bank account, I felt nothing. Like I was like happy. I was like obviously, you know, happy for the team. But the thing that like went into the back of my head and I didn't know how to express it in this particular way was very much, well, if I did it, it must not have been that hard, which goes into like childhood, it goes into a bunch of different things. And so when I'm

thinking about the next business, I look at those two paths, right? Like there's like more cash flowy business, own your own destiny, lifestyle, style points, these types of things. And then I think that there's like spending your time going after something that's harder and harder and trying to go after innovation, right? Like the perfect, like, antithesis of how I view the world now is like Nick Huber, right? Nick is like, why would you ever try to like innovate? That's like so much harder, et cetera.

And we've had many like long night conversations about that. And for me, it's like, I want to go after that bigger and bigger thing. And it took a long time to like realize that. Because I went after like, oh, let's do this. Let's do that. Let's see this other thing. Let's go after this quick buck. You bought 19 gas stations. I did buy 19 gas stations.

But that's Jenny. That's the wife. The wife handles the real estate portfolio. And it doesn't mean I'm not going to do stuff, but like, my primary focus is going to be like one big thing. I don't want to be an investor. I don't want to like come up with a bunch of cash flowing like studio style businesses. I respect the hell out of all those things. It's just, I just found out it's not for me. Or at least that's where I got to. By the way, can you tell us the gas station thing real quick? Did what you meet Syed and he told you about his gas station portfolio? So, okay, here's what happened. So I bought 19 gas stations. They're in North and South Carolina. You bought them all at once or like one at a time? Like you bought a chain?

all in one pot. So essentially there was, there was a kind of a patriarch of a family who had built up a portfolio about 120. He passed away. And then basically, I think it was the trust

or the estate, I don't know, which, but he was, they were selling them off in blocks, right? And they don't want to sell off like one at a time because it's 120.

Because the kids, they had a tax bill coming up because the inheritance, yada, yeah. So this actually is, this started with Nick Huber and Mitchell, Balbridge of the COSSEG world

because they started talking to me about, oh, there's some tax implications where if your partner, your wife, or your husband is a real estate professional, your passive losses on like real estate become active losses, and they offset active gains. So it got a big pile of, you know, kind of gains from the sale of the company, and then all of a sudden I can offset those with depreciation of the gas stations, and I can do that with bonus depreciation in one year. So just to use some round numbers, like if I buy $10 million of gas stations, I basically can take $8 million of depreciation, essentially, and that can offset some of those particular gains. And so in October, September, Nick starts

telling me about this. I start talking to Mitchell trying to figure it out. I start talking to tax lawyers. All of a sudden, we got intro to someone who saw this deal of these 120. Jenny, who's been in the real estate game for like 10 years, and so it was one of those things we were able to kind of like, you know, we weren't starting from zero, but it was still like a big, big purchase. And we closed, I think, like, December 23rd or something like that. So like right, right at the particular edge of the end of the year to not only get a good deal because we had, you know, we looked at the real estate deal independent of the tax implications, but the tax implications kind of put it over the top to be really, really good. And has there been like,

is it just like, wow, this was a great asset, great, smooth sailing or is it like, oh my God, I have 19 pain in the asses now? Or what's the, what's the situation? Like, what's the verdict of guy who didn't own real estate and gas stations, like tech entrepreneur, does this thing that has clear benefits on the tax side. Yeah. Might be a nice diversifying part of my portfolio. Might be good cash flow.

Might also be a headache. What's your answer now that you've come out the other side? So they're triple net leases. So that basically means we don't manage, don't handle any operations, anything like that. They're owned by a big flag, a big company.

So they're corporate backed, which may or may not, mean anything, depending on who you ask in the real estate world. So we've had very little headaches. We also have a partner on the deal who's, you know, we were the money. They're handling most, they handled all the analysis and all that kind of fun stuff. So it's been pretty smooth sailing. I mean, there hasn't been any issues that's famous last words. I think there's a way to basically, you know, manage these into more investments and things like that. Those, that's where it can get a little tricky, but like, yeah, we got at least knock on wood pretty lucky in terms of what's going

on. But you got to, can you give any numbers? I mean, how much income is that bringing in? How much did it cost? Can you give any numbers on that? Do you feel comfortable? I can give you some numbers. So, well, I don't know. My wife runs it. So if you don't want to share the specifics on yours, you could just be like, you know, I think about this way, like, this business is a box, like a restaurant. A restaurant will typically cost you, let's say half a million to open. And then your goal is to net, 150k a year per location. You want to get to 20. That's how you get scale. It's simpler than that. So it's 30 million in gas stations. I believe, I can't remember the exact cap rate, basically what we're getting out of it. But we're getting, I believe the caps are at like five and a half.

And so we're not getting like an immense amount of income from that. But we are getting income basically from it. And then the leases on this particular deal, what made it so great is, is all of the rent increases were based off of CPI. And they were written in like the early 2000s. So basically what's happening is, as you've seen all the inflation data, when these rent increases go into effect, the increase in rent is pretty significant.

And so that's what made the deal really, really good. But like, yeah, we're cash flowing. I don't know. It's definitely over a million a year on these. I don't know the exact numbers, which I feel good about because it's one of those things where I trust my wife to figure it.

out. And you also said that there was, like, you sell the company and you're like, you go through this wandering phase for like a year. You said there's five phases. What are the five phases? I just sold my company for a bunch of money. Yeah, this is like the champagne problem cycle, I think. And it's just this crazy roller coaster. And I don't know Sam, Sean, if you guys went through this. But for me, like, I was pretty even keeled emotionally before the actual sale. What I mean by that is like, something bad would happen to the business. I'd be like, oh, that sucks. Okay, let's figure it out.

Something good, I'd be like, oh, great, but we have all these other problems. When the sale goes through, especially if it's, like, announced, like, everyone kind of starts treating you like a god for like a hot second. And then that leads you to go, like, wait, am I a god? Right?

You have this little bit of this, like, almost this, like, imposter, like, I don't know what reverse imposter syndrome is. And, like, I never got, like, I have good friends around me who are like, yeah, your shit still stinks. But, like, it was one of those funny things where you're just like, oh my God, I can do. anything. And then, like, you go through the second phase, which is, like, oh, my God, I fear death.

I'm going to screw this up. I'm going to, like, I don't know how to rich. How does one rich correctly? I'm going to lose it all. And this is when you're like, tax lawyers, accountants, other lawyers. How do I evaluate how they're good or not? Like, all these crazy things, what is a wealth manager? Like, oh, my God, the wealth managers, every single one of them tells you, just put it in index funds. And then you ask them, well, then what's your job? And then they're like, oh, we just advise you. And you're like, okay, what does that mean? they can't answer the question. So do you get one? Do you not get one? Right? And then you start to get a handle on things. You start to kind of like get your feet under you. You buy a bunch of gas

stations. You do this type of a thing. And then like phase three is like, or like part of phase three is like I call this the delusional peak of cocaine energy. And this is like you have all this energy and you're like, I'm going to do everything. Right. This is what I was getting into with Sam before. It's like I'm going to hire 19 people or not 19, 17 people. It's 19 gas stations, 17 people to do research, to look into things, to go look at this deal, to go look at that deal, and just like do all of these things. And I'm going to build this and I'm going to build that because you just have all this energy and this optionality. And that leads to just a full-blown identity crisis. And so I hired a couple of shrinks to basically help because it was a major change in my life

and just kind of a major thing where like it's kind of like, you know, figuring out like who you are, what you want, which I kind of talked about a little bit before, and starting to realize, like, oh, like, I don't have to do these things. I can do these things. What do I want to do? What does that look like? And then, you know, then you kind of even out and you go back to the grind. So that was like my last year of just up, down, down even further, and then kind of back up to figuring out like, hey, this is what I want and kind of going from there. You even did this cool study or this survey where you talked to, didn't you survey a bunch of people who are wealthy and you asked them about happiness and things like that?

Yeah, this is how I cope with things, research, as you clearly can see. So I spent 50 grand on like a study, basically run, and this is one of our products at Profile was like basically running research studies. And so I spent 50 grand basically trying to get in front of as many, like, rich folks as humanly possible. And then doing a bunch of qualitative conversations with like, you know, a number of billionaires, a bunch of like centa millionaires, et cetera, and just trying to figure out like, like, okay, what makes them happy, what makes them unhappy so that I can, you know, kind of take

some of those lessons for me personally. What were the lessons? One of the biggest lessons that I think is most helpful, and I don't know if everyone's going to be able to, like, hear it, or they'll hear it, but I don't know if they'll actually like internalize it is when you look at the stack of like how money can actually bring happiness, there are some really, really obvious things. Like people who spend money on stuff, they are happier than people who don't spend money on stuff. But they're not as happy as the people who spend money on like a particular hobby or a

particular like narrowing of stuff. So buying a Birkenbag that you guys talked about, I think last episode, like that brings some joy. It actually does. It's not something that it's like completely joyless. But if you're really into F1 and you buy your own car that you go race in the track, that brings you more happiness, right? And then one layer above that in terms of increasing even more happiness is experiences. So this is something that we've all heard about. Like, buying experience actually does bring more happiness. And what was really interesting were the top two. One is really, really obvious. So above experiences was like giving money away in like a targeted way, not just like general like here you go, this organization or this nonprofit, but like actually giving it to a

cause that you really cared about. But the top one was kind of fascinating. Like the things that we coded that built or brought the most happiness were what I kind of labeled freedom-inducing events or freedom-inducing items. So things like a jet, if you can afford a jet and you can fly private, it's not the nature of the jet, it's that it brings you so much freedom. And so we saw this kind of coded in all the responses. And so things like, I know Sam, you've been a little hesitant to it, things like getting a personal assistant, things like getting someone to take care of stuff at the home. Those things actually bring a lot more happiness because unless you really, really like buying the groceries or doing something like that, that brings more freedom. And that actually

increases happiness levels even more than all the other things that we talked about. The other big thing that was really interesting is that the happiness scales that you see kind of online in those studies for both income and net worth, like typically they can't. They're bullshit. They're limited. That's what I would say. Meaning like, they basically are like, oh, 75,000 your happiness doesn't increase. And then there was another study that found enough people, you know, up to about a half million where happiness increased. Well, I took it all the way to, I think it's like three to four million a year.

And the happiness just continues to increase. It's not at the same rate. But like more income and more net worth does bring more happiness. Like I'm not sure where it's going to like level off. But right now in my data on net worth, I have a good enough sample that I can actually map it from zero to about 50 million in net worth. But the one really interesting thing was, no matter the net worth, particularly for the folks who have more than $5 to $10 million in net worth, no matter what it was, if it was higher and some of the billionaires qualitatively, this was also the case, you would see that if the net worth went up, they got happier. If the net worth stayed the same, they were a little bit happier. If the net worth went down, even just like a minuscule amount that the reduction in happiness was considerable. And so it's one of those things where it's like when you get wealthy, it's like all about protect, protect, protect.

That's, you know, for a lot of obvious mathematical reasons, but also from a happiness perspective, that's where a lot of like the anxiety was coming from from some of the more wealthier folks. There's a couple other things. Oh, like, this was really fascinating because this was like a little more personable. Of wealthy folks, let's just say, I think it was like folks over five million in net worth, but it continued the trend even higher. there were only a couple of like trends that everyone did like almost every single person not 100% but like you know let's just say 90-ish percent plus. Lists was a big thing like lists or like a to-do list of some sort. Wealthy folks almost to a T had some sort of system where every day they were like

here's what I'm going to do. For some it was like I got one big thing each day. For others it was like some hardcore like to-do list app and all this other fun stuff that was organized, but that was a really big thing. Everyone's still in the game, meaning still building a business, still trying to build their wealth, worked out or had some sort of fitness regularly.

Folks out of the game, they started to kind of fall off on that particular fitness. But like 90% of people, it wasn't they're all doing CrossFit or all doing anything crazy, but a lot of them were doing at least something consistently every single week. So that was really, really fascinating to see as well.

There were a couple other things that were pretty consistent, But those were the really, really big ones that stood out that would be most helpful, I think, to folks. I have a nerdy question about the happiness thing. How do you, what is the actual, like, how do you know how happy somebody is? How do they know how happy there? So are you just saying, how happy are you? Did you get happier when you got more money?

It's like a self-reported, like, one to ten thing? Or is there a better way that people ask that question? Yeah, totally. So my instinct is to, like, teach stats right now. So I'm going to try to avoid that as much as humanly possible. but that you don't, when we look at like temperature, just trust me for a second,

like we can get very, very accurate readings on like how cold it is in your apartment right now or your house right now, right? And we can be very, very confident in that particular like measurement, right? Now we can also get the temperature measurement by like maybe measuring the outside temperature and subtracting what we think the insulation is of your house

and trying to figure out like in a backwards way. That would be less accurate than like measuring the outside. actual temperature, but still more accurate than if I went and I asked you what you thought the temperature was, right? And there's different ways that I can ask you temperature, right? If I just straight up ask you, what's the temperature? It's like, it's actually kind of a difficult question for you to answer. But if I ask you, do you think it's more than 68 degrees? It's a little bit easier for you to answer. So there's different ways to answer these questions. Now, what that means is, and the reason I gave that little metaphor is like, there's, we're not looking at measuring

temperature, like the way that we would in a very scientific way. Like, we'd, like, we'd just can't do that because, like, happiness, it is relative. There's a bunch of different factors, but that doesn't mean we can't, like, measure it purely, right? So what I did, and I'll try to, like, keep this as helpful as possible is I looked at how the $75,000 study does, and there is a happiness kind of research center. There's a number of different, actually, the first undergrad research I ever did was how do tax rates impact happiness in the economics department in school. And so there's different ways to ask it. So the way that this was asked, there's a number of, number of different ways. There was a scoring system. There was a this happened. How does that

affect your happiness? So there's a composite score that we kind of put together based on those different inputs to come up with essentially here's what their happiness level is comparatively. And then you keep that consistent across the board. And there's ways you can adjust the model. But long story short, like it's the way I describe temperature. It's a little bit closer to like, hey, what do you think your temperature is? So it's not. Dude, I think that's just fascinating. I think it's incredibly fascinating. And I think it's amazing that you're doing this. I like seeing your nerd come out. I think this is very, this is very cool. Yeah, yeah. I got really excited. I felt my heart rate just go up there. Sorry. I think Sam,

Sam hit the nail on the head where he's like, these things you said are interesting, but what's more interesting is that you did this. And, you know, you were just describing like people spend on stuff, but they're more happy if they spend on a targeted set of stuff. Yeah. That's you spending 50 grand on a study about wealth, right? That's you. You don't have a model train hobby. You have a research hobby. And you were like, oh, how do I use these funds to scratch my itch in a way that I haven't done before? And I'm sure that it was like, it wasn't the takeaways from the study, probably.

It was doing the study that actually made you happier and felt like a good use of your time. I'll also say, like, you know, a lot of people listen to this podcast will probably be, probably make this mistake. And so I'll say it out loud because I made the mistake, which was I thought my goal was I don't want to be rich. I want to be free. I think that's a common thing people say, makes themselves feel a little bit better

than I'm just chasing money. I say, no, I'm chasing freedom. And it's true. Like, it is better to chase freedom than money. But I thought,

you know, there's a number. And I remember thinking, when I was like, maybe 26, 27. I was like, six million, right? Yeah,

I was like, $6 million. That's my freedom number. And I, like, I was focused on six is my freedom number. I even had it in my passwords. It would be like a six in there. Because I was like,

every time I log in, I want to be thinking about that number. And that's how I was thinking about things. I passed that number and I was like, well, uh, or was my math wrong or is this concept of a freedom number wrong? And I had a very simple realization, which was that being financially free doesn't mean you have a certain

amount of money in your bank account. It means you are now free from money owning you. And that is a decision you make. And so for example, the simple test is, um, how much of, how much of what you do is because of, money. And somebody who's truly absolutely financial, financially free, they do not make a choice

based on money. So that could be they buy something. Oh, why do you buy? Why do you shop at this grocery store? It's more expensive. Well, because I'm not making my decision based on money. It could be a job. Why do you, why are you working on this? Oh, because I think it's going to have a big payoff or I think the salary, the salary is, you know, too good to pass up. Well, you're making a decision based on money. And the true financial freedom isn't on some number. it's when you can get to the point where you stop making choices that are based on money, which is half minds, at least 50% mindset, if not 80% mindset. And maybe the remainder is an actual financial reality of how much money you have in

your bank account. I would edit that very slightly. And it's almost semantic. I think it's almost a function of force rather than choice. So what I mean by that is there are a lot of people, myself included, who are still making decisions with money in mind, right? Because to me, there are certain goals that I have that are probably going to change as I get nearer to them, not just for a number's sake. Like, I'm not one of those people who, which I don't judge, but like there are people who just want the number to continue to go up, right? There's other folks, and I count myself as one of them, is like, I want ever-increasing waves of, like, freedom, the ability to do stuff.

and money unlocks that ability. So I still make decisions based off of it, but I don't have to, right? Like, I can rationalize as to why I don't want to. So I just found that there's still a lot of people who have, like, there's this billionaire who I was talking to about this, and we were basically having coffee. And, you know, he's going through, like, he's still in the game.

He sounds just like us. He's still like, oh, yeah, I'm going to go do this. I'm going to go do this. Like, the stakes are different. The numbers are different. And some of them, the moves are very different. But I asked him, I was like, so why? You don't need to do any of this, right?

But it seems like you don't want to do this decision, but it's going to net the most money for you in this particular situation. So, like, why do you want to do this? And his answer was basically what I was just saying, which is like, well, if I get another billion, I can go do this thing. And his thing was like this nonprofit thing that he kind of wanted to do. And so does he actually believe that? I have no idea, right? I can't read his mind. But like, for me, the idea of like, okay, I can buy 19 gas stations.

I'd like to buy a skyscraper next. Do I need a skyscraper? No. Do I want a skyscraper? Not really. But I like the idea that I can't. But you realize that sounds totally ridiculous, right? I understand it sounds ridiculous, right?

Like, one of my goals, something, this is going to sound crazy. And this is the perfect audience to say this. But like, I get so jacked up about the idea of like toppling a dictatorship one day. I get so excited by it. And I'm like, I'm not even kidding. And I'm like, okay, well, if we go after Cuba, it's going to cost this much because I have this idea and this idea that we can figure this out. You've done research on this. You have a spreadsheet. Oh, 100%. Yeah. Well, how much does it cost in which order of countries do you put like, what's like your top three of like? Yeah. I don't want to name, I don't want to name countries quite yet because I think that that like could get me in a little bit of trouble. And also like, again, my point is more like, will I ever actually do this? I have no idea, but it gets me so jack. But maybe. I think that there are certain countries that I think are, there are certain countries that I think are. in really, really dire straits that I think like three, 400 billion, you could really immediately make a dent. And it wouldn't involve like doing anything like crazy illegal or anything

like that. It would involve basically, because if you think about it, if you really want a nerd out on this, which I don't think you want to, but it's like countries breathe with their GDP, right? The money coming in, the money going out, et cetera. So when you look at that as like an access that you can attack, there's so much you can do. And that doesn't even get into like stuff you can do with social media and with the actual, like, you know, people. He's like, we haven't even mentioned murder yet. No, no, no, no. Yeah, yeah, yeah.

You're the second successful entrepreneur I've met who has researched this and has serious, not, they haven't seriously consider it because they're not there yet, but they're like, you know, I think I could take over Bangladesh. Like, like, I don't want to take it over. I'm not going to install myself as a leader or anything. I just want to, like, genuinely help, right? Like, look at Cuba. Like, Cuba, you know, it's one of those.

things where it's like it's been in problematic, you know, a problematic state for a long time. Part of that's our fault is the United States. Another part of that's just, you know, the people who governed it. But like, I think it'd be really cool to like basically free Cuba. People can't even free the city of San Francisco right now. Like they're trying to get the mayor, you know, to actually like, you know, enforce, you know, punishment on crimes or, you know, trying to recall Gavin Newsom. I think it is a lot tougher than you think. But it's surprising how many I guess like the game from you know sort of wealth to status to power

you know it's it is interesting to see how many people end up in the power game it's not a like I want to be clear it's not a it's not a it's not a it's actually more of like a social entrepreneurship thing than it is anything yeah no that's not true dude that is not true I get I okay I've done the work I've done the introspection

yeah it more like like the debate you're having in your head it's basically like if you are Mark betting off and you create the Benioff Hospital in San Francisco, what ratio is because you want the Mark Benning Off Hospital or because you want to cure cancer? And I don't think it's wrong that it's higher on the I Want My Name on it. It's not wrong.

If there was a pie chart, right? There's like the challenge of it, the intellectual stimulation and the challenge. That's definitely one. There's the impact and the wanting to do good in the world. That's two. There's the bragging rights slash power game of like, yeah, I did that shit. I helped do that. That's what I did with my time, my talents, my money. I think there's some

combination. Whatever the combination is, I don't think it's zero on all the other things. But there's a really big difference, right? There's a really big difference, right? So like, I'm as close to nihilist as like I think one can get without being a full-blown nihilist because I just from just the way my brain's wired, if I was like a nihilist, I just would be like, well, I don't know if I'm going to be a net positive, therefore like nothing matters, et cetera. So to me, it's like you get to design the game, right? You get to design the game that you want. And when I look at like spending money to put your name on something, it does feel kind of

like a waste. I don't, I don't like, at least personally, like I haven't had my name on anything. I don't really get excited about that. But what I do get excited about is like the challenge part. And then, yeah, like, oh, I, you know, if I could be the person who did X, like, that is really, really interesting, right? Like, that is interesting. But it's not like a, it's not this like this, I want to name a journalist who has

a very cynical view of our industry, but it's not like this, like, you know, cynical view, or it's not this like, oh, I need to, you know, have a dick measuring contest or something like that. Like, that's not how I think about it. And that's why, like, I think that, like, doing stuff in San Francisco, I think some of the worst days in San Francisco are still better than some of the other stuff that's happening in the world, right? And so that's why, like, looking globally, I think are really, really fascinating. I think after this podcast, you're going to be adding a third shrink to the payroll. Yeah, probably. Probably.

probably just based on this. Yeah, yeah, yeah. You have two other really interesting things that you set over. I want to hit. So one is you had this remix framework that you kind of talked about earlier, but I want to like go down and we should put the slide up on YouTube because it's hard to describe. It's too much to describe,

but the slide makes it really easy. So you basically were like, look, innovation, you know, maybe you're not like all innovation nor are you, Nick Hubert, you know, innovation is a waste of time. You're kind of like your goal is to, you know, I don't know, you could say this, but you want to take a product and you want to remix it. That's one way to think about how to come up with a novel business opportunity

is to remix an existing one. And you had these remixes. I thought the good example was you took consumer products and you were like, if you take it and you make it cheaper, that's a way to differentiate through better supply chain. You could take it and you could say, I'm going to align it with a celebrity. That's a differentiator.

And you got like, you have the example here of Feastables with Mr. Beast. You have, you can align. with a lifestyle like keto or Christian or hunting. Do you have like Yeti coolers here? Yeah. Science backed. You have another one that's like you align it with an identity, like a political party or LGBT or you have here as the example, Black Rifle Coffee. So does this only first talk about this and then is this only for consumer products or does this work across the board in your opinion?

So here's where this comes from. So we had 50,000 different, there are subscription companies, but 50,000 companies using our financial. financial analytics, and we were helping them with pricing, their churn, and giving them this data. And they were from across the map. B2B SaaS, subscription nonprofits, D2C was one of our big segments. And I started to notice that, like, for just under 10,000 of these DDC brands, the playbook was almost the same over and over and over again, right? Like, it wasn't like there was some innovation in creating mattresses. It was literally like, we will be cheaper through better supply chain and we will help the

environment and maybe we donate money to people who don't have bets, right? Like, it was just over and over and over again. So I wanted to create essentially a unified theory of, like, creating products, right? And so I shared the consumer one because that's probably the easiest one to talk about. But there's just, there's only 10 things that these brands differentiate on. And there are a number of the things that you talked about. And my point around innovation is that like, don't try to necessarily innovate. Maybe don't even try to, like, raise money for any of these types of, like, consumer ideas.

because all you really need to do is take a particular product and then remix it with some of these differentiators, right? So, for example, like, you mentioned black rifle coffee. That's basically aligning with an identity, right? So black rifle, you know, it's guns, it's right wing, it's veterans, it's all these other fun things. Well, identity-based products increase willingness to pay by about 20 to 40%. So if I just had regular coffee,

and then I had regular coffee that was built, particularly for this, like, we'll just say, like, conservative, but I don't think they necessarily claim that party. All of a sudden, that coffee's worth 20 to 40 percent because you're niching down into that particular group. So I put together these 10 things and also the data around increased willingness to pay. But for example, if I was a, you know, particular entrepreneur who didn't necessarily like want to necessarily innovate, which most people shouldn't, I might go and be like, cool, well, I like coffee. I think coffee's great. I think I get really excited about that. what's another lifestyle, right?

So creating woke roast, right? Coffee for the left, basically. Where all of a sudden you could have coffee, you know, basically for that particular identity, and people flock in, your retention is typically much, much higher when you do this as well. It's something that really works, right? I had a friend, a really good friend,

who wanted to create a business. He's involved in the LGBT community. So we talked about kombucha, specifically for the gay community, calling it Bubbles for Bottoms, which was kind of a fun name. And so it was just one of those things where it's like creating this like product remix.

And you can do this in a bunch of different ways. Like you could be the premium version of whatever you're actually selling. You know, Shinola, right? It's watches, it's notebooks, et cetera. But they're premium versus, you know, some of the other stuff that's out there. You have here, you have health plus lifestyle, athletic greens for dogs, condoms plus organic materials. Yeah, organic condoms.

They're just going to sell you a package with nothing in it. That's the organic condom. That's basically what it is. Yeah, yeah, yeah. I didn't even think of that. That's good. Made out of air. I like it. Honestly, I bet you could sell that. That's liquid death, right? Liquid death is water in it, and I mean, looking can.

I think you could probably sell, like, an all-natural condom. That's just nothing. You could literally sell it the natural way. Yeah, yeah, yeah. There's a way, yeah, you got to look at it's like sustainable, right? I don't know a lot about the sexual wellness market, but it's like, yeah, long story short, like, it doesn't have to be complicated. The effort and the execution is really, really hard, but the ideation doesn't have to be

that hard. Did you make this chart? This is really good. This is great. Where'd this come from? Yeah. So this is based on like probably collecting, I don't know, I don't know the number, but it's hundreds of thousands of willingness to pay data points. Because we did the pricing, I don't know if you guys even know that. We've never talked about pricing. That was like my core thing. That's what I was most well known for in the SaaS community. So we did the pricing for like blue bottle coffee. We did lifts pricing. We did a bunch of other like B2B style pricing. So we have a lot of data in the pricing space. And when I say we did it, it's like, we might have done it or we might have helped them do. It depends on the company. If you had to summarize your learnings with pricing,

is there like two or three bullet points where you'd be like, just do these three things and you're 90% there? Sort of. But with like giving you a little bit more bulleting, you should be changing something about your price every three months. That does not mean raise your price every three months. But it means like changing up your packaging, going up market, down market, changing up an add-on, changing up your discounting strategy. it's this forgotten growth lever in most businesses. You acquire customers, you monetize them, retain them. We focus probably 60% of most budgets, more so in D2C, less so in B2B on basically acquiring

customers. We spend a little bit of time in retention. We spend like no time on pricing. So change something every three months. One of the biggest hacks that's easy to talk about on a podcast, add-ons, they're the the most underrated, underutilized aspect of all pricing, consumer B2B enterprise. They boost lifetime value by about 20 to 50%. So just to make sure this is clear, like, hey, they bought your core product, which is a fitness shirt.

Well, add a white t-shirt for $10, like stuff like that. Those are like add-ons. Hey, they bought your SaaS app, add priority support for whatever 10% of your list price is for the software. Most companies, like the most high growth companies, at least in the subscription space, they have 12 or more add-ons typically. Customer never sees them all 12 of them, but they'll see like one or two of them. And then one other really quick hack is localization. This doesn't work for every company, but like internationalizing your pricing. So the Nordics, you know, when we take into account exchange rates and stuff like that,

they're still willing to pay about 30% higher than the U.S. for the exact same product. Folks in like Southeast Asia, it's about 40% less. There's a really large variance on that. But that's a really quick thing where you can boost typically your revenue per customer by about 15, 20%, literally by just like changing what the pricing looks like depending on where they come in across the world. Dude, you're insightful as shit.

That's fascinating. Yeah, that was good. You also said a really good thing in the sheet here that you didn't say, which was how do you measure if your pricing changes like a good change or a bad change, right? How do you know if you did it right? What's the metric you choose? Yeah, it's revenue per customer, which is going to be different for every company. So in your business, if you're doing pricing properly,

that revenue per customer number should be going up into the right. So like Arpoo, ARPA, ACV, however you're measuring it, that should be going up. And now it's not going up as fast as your sales or as some of your other numbers, but like, you should, if you're changing something about your pricing every three months, you should basically be seeing that number go up. I don't know, it's hard to give like a benchmark because later stage it goes up slower, but it should just be going up every single year, if not every six months. Is that assuming you have free and paid as a mix?

Because like, for example, if I'm an e-com store, I could quadruple my price. is I would make more money per customer, but I would just have less customers and less money overall if I did that, right? Because it's an e-com, like, you know, for example, what we use is revenue per visitor, which is like, if somebody hits the site, how much do we make $2 off them, a dollar off them, for every average customer? Because that takes into account conversion rate and how much they spend when they convert. Yeah, so I would say, and you can get into like cart, average cart, those types of things.

I think that as you get more sophisticated in how you think of, like, for example, like, for an e-commerce world, I would probably want to look at, like, maybe lifetime, like, dollars in, like, that average number going up. Because what that means, theoretically, is assuming revenues going up and all those numbers are great, that means, like, I'm monetizing better, right? So it's not necessarily in a vacuum, right? Like, if my revenue per customer goes up, you know, a thousand X, but I don't have any other customers, obviously that's not great. but it's one of those things where most people, again, they don't, like, the average, like, people don't, it's kind of crazy. Like, it takes, when we looked at how often people raise their prices, so you should be raising your price at least once per year. There are some topouts and there's some exceptions to this particular rule, but everything about your price is basically this exchange rate on your value. So, like, you've created this value. And because, you know, we don't trade goat for wheat anymore, you're basically saying this value is worth this much dollars, right? And so it's that exchange rate. And there's a bunch

of things that influence that. Like your brand, the quality of the product, which customer you're going after, like some customers will value your product higher. And so if your product is improving, every single year, your brand's improving, you should be able to demand higher prices. But most people, I think the average amount of time they take between pricing changes, like actual price increases, it's like three years. And I've seen so many companies. Because they're fearful. because the CEO is fearful? They're scared. Is that the number?

Is that like 80% of the issue? They're just scared? It's just scared. Yeah. And we tried to fill this gap with our pricing product, and we still do because it just gives them confidence because we're like, all right, here's data that says you sat in a room when you founded the company and said, ah, base camp does 50 bucks. Let's just do 50 bucks too.

And then you never revisited that, like for years. We have this data that says you can actually charge this customer 500, this customer 100, and we're going to like roll it out in like a nice way just for new customers first and all of a sudden your conversion goes up and your revenue per customer goes up and you're really excited. And then all of a sudden you're like confident enough to basically put that for your existing customers as well. So yeah, I think that's it's just a lot of fear. you get all these, like I've been in so many, like, so many exec teams with this product where it's like, the smartest people I've ever met just sitting there and like, if I give them any other problem in their business, they're like, okay, I'm not an engineer, but like, let's figure it out. What's a stack? What is this? Like, they'll go, like attack it. You give them pricing and they're all like, I don't know, what do you think? What do you think? Because it touches every area of the business and they just lack that confidence in looking at it. And so I think like starting off with like, let's introduce an add-on. Let's introduce some. of this stuff, that's typically like the gateway to, oh, this pricing stuff works. Let's, you know, let's raise our prices. And I have it, I have an email that I've, um, I've basically cultivated

over the past decade for like changing prices. I'm happy to share it. And we can put in the show notes or I'll throw it on Twitter where it's literally like just steal the template. Like T-Mobile used it. They stole it from the website and they used it, which was kind of fun to see. But it basically just goes through like how to communicate a price increase. The TLDRs don't make it about you, make it about them, because they don't care about your costs or whatever. they care about their costs and that's the biggest mistake most people make but yeah i'll share that you're uh you're this is very insightful you're very fascinating uh you have a lot of really interesting insights and i think you approach things in a really cool way where you have a good amount of self

deprecating humor but also like academic rigor you're you're a fascinating person so are we gonna is that we're going to do the skin-to-skin bonding now or is that later that's in the podcast is that bro what i told shot the same thing pop the top baby Come on. Let's go cheek to pass. I'm losing weight, so I don't feel uncomfortable taking my shirt off. Yeah, you've lost 40 pounds, right? Yeah, yeah. I'm down like probably about 90 total, but 40 since I saw you guys. Wow.

And as Gucci Main once said, money makes you handsome. So like all cliched post-exit founders, I have to get healthier and basically take it seriously. What's been the number one driver, just eating less or what? I use my body tutor. So I know you're a big fan of that. I don't know if Sean, you're still using it. Sean, you're using it? Yeah, I went back to it, and I'm having such a good time.

The key was doing the call, the daily call. I do the daily call, yeah. We have to tell people, it's my body tutor. So basically, it's like the simplest thing ever. By the way, we don't get paid for this. There's no, I don't at least, Sam, maybe you do. But I don't get paid for this. I talk about the constantly.

They said eventually, if I tweeted about it, I sent a bunch of people and they're like, hey, we'll give you a little bit of money. But I don't care. Don't even mention me when you use them. I don't give a shit. but basically it's a 6.50 a month and they call you daily and it's like a five minute call and they're like, why did you eat this? You're too fit. Let the fat guys talk for a second here. All right. Go ahead. Yeah. What's the service? Thank you. Here's the deal. Thank you. Thank you,

Sean. I didn't want to say anything. No one wants to hear the shredded guy talk about this. Yeah, yeah, yeah. I'm down to like 2% body fat. I'm still experimenting with OZempic. It's not a big deal. If you're in this spot where you feel a little shitty about yourself, you're like, all right, I'm overweight. I know this was completely in my control. And you've done all the things. You've listened to the podcast. You got your Andrew Huberman's got you injecting sunlight into your eyes in the morning and you've you've you've tried keto, you tried paleo. You did all the shit, right? And none of it's working or it all kind of worked. And actually the problem was not in the plans.

It was all you to begin with. What my body tutor did was smart, which is they realized it's not the diet. That's the problem. It's you sticking to the diet. That's the problem. As we all actually know deep down inside. And so they help you with that root cause, which is how do they hold you accountable and help you actually stick to the thing you actually want to know? They do give you some strategy along the way.

They do give you some helpful ways to think about things. I'll give you a very simple example. Haley was like, hey, when you eat, I want you just take note for a second, like in a scale of one to five, one being like, I'm totally satisfied. Five being I'm like ravenously hungry right now. Where are you when you sat down for that meal? If you're sitting down at fives, the problem was like we spaced out these meals the wrong way or we're not getting the right meals in.

And you're not expected to have good willpower when you're just like completely ravenously hungry. And so like we want to be eating at a three. And we want to leave it at like, you know, you know, we want to leave the meal also not completely stuff. You want to leave at about a three, too,

two or two or three. Like you want to get in and just get your meal. That way you're just fueling up versus like, you know, going to this like feeding frenzy. So there's little mindset tips, but more than anything, it's,

you get a call in the morning and she's like, so what's the plan for today? Eating wise, you're like, I don't fucking know. I'm just going to eat everything I see, I guess. Oh, wait.

no, that's not the right answer. Hold on. I'll eat it these times I'll eat these meals No I think the only thing I would ask Is like or also add is It

Health is in your control Like if you're listening to this Like you know Unless you have like an obvious Like disability or something like that Like health is very much in your control And what I love about my body tutor Is it kind of cuts through the BS

I ask Kaley about all these like Asoteric things like Hey I read about this like like, you know, the cold plunging movement and she's just like, fitness, strength training? Which country should I take over, Haley? Haley and I don't have that relationship, but no, I think it's, I just think it's one of those things where we're bombarded with a lot of like either quick fix or very marginal stuff. Like even the, you know, I'm a big humor fan. Sam, you tweeted recently, you would. I also would.

like that's, you know, he's, he's a very, very awesome guy. But I think it's one of those things where a lot of that stuff, like, unless you have the basics in place, it doesn't matter. And so Haley, like, has helped me accountable and like, no, no, no, no, we're going to do Peloton today. We're going to do this. By the way, it's not even anything she says that keeps you accountable. It's just saying the shit out loud. And you're like, actually, what the fuck am I talking about? Never mind.

Sorry. I apologize. Well, and for me, it's been, it's been like a, you know, probably a year-long journey. and it was it started off with like you know basically just breaking all of these conventions like Sean you were saying where it's like oh I can't like BS myself out of doing the right thing here because I'm going to have to talk to Haley tomorrow about it and she's going to not be like sympathetic she's going to be like why did you do that and she's like you shouldn't do that I'm like yeah I know and it's like cool let's not do it tomorrow

which is you know obviously really helpful we appreciate you coming on man you're super insightful um you're always fun to talk to uh I don't remember the last time you came but uh I feel like this time definitely probably kicked its ass because this was the tent. Awesome. That's my goal in life. I'm not Jesse. I'm not all these fancy people. I got to bring the noise.

That's the goal. All right. Go follow him on Twitter. He's at Paticus. Yeah. We appreciate you. That's the pod. 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 a road, let's travel. Never looking back.