3 businesses we think are about to blow up

1. 0:00 – 3:08

   Intro

   1. SPShaan Puri0:00

      We're going back to the roots a little bit with, uh, MFM. Everyone says they want more ideas. I've got two of them. [upbeat music] Okay. Uh, so everyone's lonely. We know this. I wanna talk to you about two different radical ideas. [laughs]

   2. SPSam Parr0:16

      If you're listening to this podcast-

   3. SPShaan Puri0:18

      Yeah

   4. SPSam Parr0:18

      ... we know.

   5. SPShaan Puri0:19

      [laughs] Yeah.

   6. SPSam Parr0:20

      You know, we know. [laughs]

   7. SPShaan Puri0:23

      Well, I... These two ideas I've already been interested in, and I was just fi- trying to find an excuse to tie them together. I'm trying to make this cohesive. But-

   8. SPSam Parr0:29

      [laughs]

   9. SPShaan Puri0:30

      ... they're two great ideas, and we have a precedent of getting this first one somewhat-ish right. We have predicted a couple, like, biohacking things. Not predicted, that takes too much credit, but, like, we talked about it fairly early in the adoption cycle. Would you agree?

   10. SPSam Parr0:44

       We're, we're basically big pharma.

   11. SPShaan Puri0:47

       Yeah. [laughs]

   12. SPSam Parr0:48

       We have p- predicted and developed several, several pharmaceutical drugs [laughs] on this podcast. Would you like to go down memory lane of a couple of them?

   13. SPShaan Puri0:57

       I don't actually know all the ones that we did. Obviously, uh, GLP-1s-

   14. SPSam Parr1:00

       Oh

   15. SPShaan Puri1:00

       ... testosterone. What else were we talking about for a long time?

   16. SPSam Parr1:03

       You, you've brought up GLP-1s kinda before they even got to market, before Ozempic ever got to market. Uh, TRT businesses, and you were toying around with the idea of like, "Hey, I really believe there's a big business to be built here." We didn't end up building one, but we have invested in-

   17. SPShaan Puri1:21

       What a mess. [laughs]

   18. SPSam Parr1:21

       We inve- Well, we invested in one. That, that worked. You also talked about sperm freezing, not just egg freezing, and I think that's also become quite a big deal. Uh, we've talked about IVF, you know, fairly early on, and the different business opportunities that exist in IVF. I don't think anyone's actually done those yet. The idea there is to build a, a trusted brand in the IVF world, a chain. Um, the Ch- the Chick-fil-A of IVF, as I like to say.

   19. SPShaan Puri1:46

       [laughs]

   20. SPSam Parr1:48

       [laughs] A place you trust. Okay, but go on. What do you got now?

   21. SPShaan Puri1:52

       Okay. So I was scrolling on Instagram the other day, and I saw two things. One, a new version, or rather another health trend that I think is gonna be popular, and two, probably the best way to position this new trend I've ever seen. So-

   22. SPSam Parr2:06

       Okay

   23. SPShaan Puri2:06

       ... Palmer Luckey, CEO founder of Anduril, also started Oculus. He, uh, was at this conference, and someone said something to him, a question that I tend to hate, and he's one of the few people I've ever seen to answer this question in a great way. The question was basically, "Palmer, if you were starting from zero and you had nothing, no connections, what would you do? What would you work on?" And he had the best answer.

   24. SPSpeaker2:32

       If you were starting with zero today, some bet you made wiped you out and you gotta start again, you didn't have your network, you didn't have your wealth-

   25. SPSam Parr2:40

       [clears throat]

   26. SPSpeaker2:41

       ... what would you do today? Palmer?

   27. SPSpeaker2:44

       I would try to end the tragedy of divorce with oxytocin doping for marriage counseling.

   28. SPSpeaker2:50

       [laughs]

   29. SPSpeaker2:51

       We understand mammal pair bonding pretty well. There's a lot of people who wanna stay together. Most of the people who don't wanna stay together should stay together, especially for their kids. Look, if, if, if people think SSRIs are fine, which they're not, but if they were, then oxytocin doping to-

   30. SPSpeaker3:07

       So, so

2. 3:08 – 20:17

   Idea: Oxytocin dosing

   1. SPSpeaker3:08

      I've heard about this

   2. SPSpeaker3:08

      ... stay together is definitely fine.

   3. SPSpeaker3:08

      It's really, it's really critical, right? So, you know, people sort of drift apart over time. Oxytocin is safe, but it's the-

   4. SPSpeaker3:15

      It's safe. It's understood. We use it on mothers-

   5. SPSpeaker3:17

      It's the bonding-

   6. SPSpeaker3:17

      ... and infants who have poor bonding

   7. SPSpeaker3:18

      ... it's the bonding hormone.

   8. SPSpeaker3:20

      That's right. It's the mammal pair bonding chemical. There's things you can do to increase the uptake, and there's, there... It- it's very well understood. Also, totally unregulated-

   9. SPShaan Puri3:27

      [laughs]

   10. SPSpeaker3:27

       ... which is great. Unregulated spaces are a lot easier. You, you can go buy a kilogram of oxytocin on Sigma-Aldrich chemical supply right now.

   11. SPSpeaker3:35

       [laughs]

   12. SPSpeaker3:35

       And if you do that, maybe you won't, maybe you won't die alone.

   13. SPShaan Puri3:39

       Okay, so let's recap what we just heard here. So Palmer Luckey, tens of billionaire guy, very successful. He said, "If I had to work on something again, it'd be saving America from the tragedy of divorce, and that would be oxytocin doping for marriage counseling. If you do this, maybe you won't die alone."

   14. SPSam Parr3:57

       [laughs]

   15. SPShaan Puri3:59

       How great is that? Is that brilliant? Is that the-

   16. SPSam Parr4:01

       Dude, you, you're absolutely right. Most of the time when you ask somebody like, "What would you do if you started up again?" They'll just give you the most vague, h- hand wavy... He immediately had not only a great original, novel, surprising idea, but he had the pitch ready to go, locked and loaded. [laughs]

   17. SPShaan Puri4:20

       The best. The best. And I hate using the F word, first principles. I hate using that word, because it's overplayed and it's just not used correctly. But this is, like, a kind of a textbook case of that. He starts with divorce is a huge deal. It i- impacts 50% of people. What are some potential ideas that could solve the tragedy of divorce? You could say, um, a bunch of stuff. You could say, like, helping people find the right person, uh, uh, having good conversations early in on a relationship. Okay, whatever. Like, one all could do this, and somehow he got to this idea of oxytocin, and I think that is brilliant. I'm not saying that I... In fact, I am saying I know nothing about oxytocin other than a little bit of, like, nerdy research.

   18. SPSam Parr5:02

       [laughs]

   19. SPShaan Puri5:02

       So I'm not, I'm not saying that oxytocin is necessarily great. What I'm saying is the packaging of this is beautiful. And when I heard this, I realized this is actually an interesting business idea, and I've heard about oxytocin. The reason I've heard about it is I follow these weird subreddits with biohacking, and this is how I learned about, uh, GLP-1s, this is how I learned about, a little bit about testosterone. And what I've noticed is oftentimes these people are wrong. They'll say things that are kind of ridiculous. But occasionally, there comes conversations where you're like, "Okay, there's a signal here. Something is interesting." And I followed along on the oxytocin forum on, uh, on Reddit, the subreddit, and there's, there's this one called oxy- just oxytocin. And I've... And it's basically mostly autistic people, so a lot of people who have Asperger's, um, a lot of people who suffer from TS- uh, PTSD, and they've been taking oxytocin for a few years now because it's fairly unregulated, and I'll explain what it is-

   20. SPSam Parr5:58

       Hmm

   21. SPShaan Puri5:58

       ... in a minute. And they've, like, are writing, like, a daily journal about how it makes them feel, and it's kind of amazing. So what is oxytocin? Oxytocin is a hormone that naturally occurs in your body. The most common way that people get oxytocin is when women have babies. It creates a bonding between the mother and the, uh, the-

   22. SPShaan Puri6:16

       The infant, and so it, it, right when they have the kid, it like, oxytocin, I believe, it's one of the... It's, when it's, gets released, the mother starts creating milk, and they bond. Men get it after they have sex. Uh, you know, when you're cuddling, you know that nice feeling. Uh-

   23. SPSam Parr6:30

       Right

   24. SPShaan Puri6:30

       ... that's because of oxytocin. A lot of mammals, a lot of animals, the... It is a strong correlation between when you, when mammals have a lot of oxytocin, they do, uh, bonding better with their partners. So they'll be like, they studied these, um, I think it was called prairie dogs, something like that, and they have huge amounts of oxytocin, and they are lifelong partners with their spouse forever.

   25. SPSam Parr6:50

       Right. Yeah, like, if I have a really solid dap up with somebody, perfect hand clap, I, I feel a small surge of this male po- this, uh, pair bonding chemical released in my body. I can almost hear it when it happens.

   26. SPShaan Puri7:03

       Or when you look your dog in the eye. So there are studies that show when you look at your dog and make eye contact with your dog, you release a little bit of oxytocin.

   27. SPSam Parr7:12

       Dude, when is the... Ha- have you, have you recently just had, like, silent eye contact, very, like, you're four inches away from your wife, and you just hold eye contact for, like, 30 seconds to a minute? Have you done this?

   28. SPShaan Puri7:27

       No, but q- your friend, Chris Williamson, put out this thing where it was, like, questions to ask spouses to, like, make you bond, and, like, part of it was looking at eye contact together. And I told my wife, I was like, "Hey, I wanna try this." And it's, like, so we have, like, we have, like, a scheduled d- time to do this.

   29. SPSam Parr7:43

       I mean, it's a little bit weird, but if you wanna be adventurous tonight [laughs] -

   30. SPShaan Puri7:47

       The eye contact thing-
3. 20:17 – 27:30

   Idea: Loneliness solutions

   1. SPShaan Puri20:17

      Um, okay. Second one. Have you ever heard of the Knights of Columbus?

   2. SPSam Parr20:23

      No. Is this that medieval play that you told me about once? [laughs]

   3. SPShaan Puri20:27

      No. That's, uh-

   4. SPSam Parr20:27

      Like, where you go, it's like a buffet? [laughs] What is that called?

   5. SPShaan Puri20:30

      No, r- that's a Renaissance fair. I forget the name of the restaurant, but so check this out. So we're talking about the lonely- loneliness epidemic a little bit. Uh, so in eighteen eighty-two, there was this guy, he was a priest up in New Haven in Connecticut. What was his name? His name was, uh, McGivney. He was a Catholic priest. Someone in his parish died, and he was like, "Dude, this sucks. This man had two kids and a wife, and he died. He was the earner for his family. We have to do something about this." So he convinced something like two hundred of his male people in his priest to join what he called a mutual benefit society, where they would all chip in money, and they would help pay for this guy's family for a little while. And then if any o- any of them other, uh, died, some of the money would go towards them. This sounds very similar to life insurance, right? Um, and that's sort of what it became. And so [chuckles] the Knights of Columbus is now an organization. It's a fraternal organization that's been around since eighteen eighty-two. It has something like two or three million members. They have thirty billion dollars in assets. They do, like, ten or five or ten billion dollars a year in revenue, and it's a fraternal organization for Catholic men. And the whole thing is that they, um, you pay dues, something like three hundred dollars a year, and you basically show up in your church after hours, and you guys plan charities that you're gonna do together. So predominantly, it's like pancake drives, or they do a lot of, like, homeless stuff, and they're there to help each other. And at this point, they're a huge lobby. They, like-- It, it's quite powerful. But the way that they m- they make money is they sell life insurance to their members, and they crush it. It's been around for over a hundred years, and it's a massive business. And I've always been interested in this type of business. And th- what this is, is basically a shared interest group that they get together for and, and help other people or help themselves in a variety of ways, and it monetizes by selling financial products, insurance products. And I think that this is a really interesting business for a couple reasons. Number one, the Knights of Columbus, they are actually growing mostly through young men. For decades, young men were not joining. It was mostly old men. Um, and they have local chapters. I think they have, like, fourteen thousand chapters all over the country, and it was mostly old men, and it was kind of dying. And what they're noticing is that young men bef-- uh, like between thirty and forty are joining, and it's their fastest-growing segment.

   6. SPSam Parr22:51

      Mm.

   7. SPShaan Puri22:51

      And so I'm interested in it for that reason. The second reason I'm interested in it is because these exist for all types of organizations. So, for example, uh, let's use Good Sam as an example. Have you heard of Good Sam?

   8. SPSam Parr23:03

      No. [laughs]

   9. SPShaan Puri23:04

      Good-

   10. SPSam Parr23:04

       What is Good Sam?

   11. SPShaan Puri23:05

       Good Sam is an RV owner membership. So it's all based around a shared identity and community, and they monetize through financial stuff. So Good Sam is if you own an RV, you spend a couple hundred dollars a year, and you get some better insurance for your RV, but you also get, like, you get ac- discounts to, like, campgrounds and things like that.

   12. SPSam Parr23:24

       Okay.

   13. SPShaan Puri23:24

       Um, another one is there's this thing for, uh, c-- it's called the USCCA. I was a member of it. When you get your conceal and carry license, you can pay three hundred dollars, and you can get access to monthly trainings for, like, gun ownership. But also, you get insurance if you ever get prosecuted for shooting someone. And they do f- about four hundred million dollars a year in revenue. And these are huge businesses that last a very long time. And in my opinion, there's a lot of interesting opportunities to jump on this whole loneliness thing and monetize it via financial products.

   14. SPSam Parr23:58

       You're saying you basically take a deep interest-based community-

   15. SPShaan Puri24:02

       Yeah

   16. SPSam Parr24:02

       ... could be religious, could be non-religious, could be RV owners or whatever. Um, and then you become a member. You get to meet other members. You kind of get community belonging. You get maybe some discounts that immediately kind of justify the value of your, your membership because it's, it's marketing for them. But the real, the real banana is you figure out how to sell a finan-- a commodity financial service, but people will have some preferential attachment to you because you are the community.

   17. SPShaan Puri24:34

       One hundred percent. And I think now is an interesting time because the loneliness thing, it's quite easy to, like, capitalize on that. And two, these things last forever. What do you think?

   18. SPSam Parr24:45

       Well, I, I mean, I've never heard of this. I have heard of healthcare shares. I mean, I just did in general. That's a thing, right? Like, there's a whole health insurance, life insurance model that's kinda like this. It's u- usually religious, I think, is the, the general way these go. And I never understood if this is just some tax loophole type stuff, or if there's a better value prop for these things. Do you, do you know a lot about these healthcare share programs?

   19. SPShaan Puri25:10

       For some, it depends what your offering is. For some of them, there is tax benefits. So there's some, like, weird rules around if you are a membership and you are considered a, um, I think they call it a me- um, uh, a mutual benefit membership, where, like, everyone gets the same benefits, you do get... Where you don't have to pay taxes on, I think it's the, the ga- the investment gains of your premium, something like that. There is some tax advantages for sure, but that's not required in order to make this awesome.

   20. SPSam Parr25:40

       So, so I'm looking at this now. So, so it looks like these healthcare share programs are often like, instead of paying into your-- paying, you know, two grand a month to Blue Cross, you pay the same two grand a month, or maybe even a little bit less, you pay maybe a thousand a month into a healthcare share program. And now, if anybody in the community has that $40,000 surgical bill, the group coordinates to get the money paid out to that person who needs it. But I think there's some weird stuff where, like, legally, they're not obligated to pay it. It's like a high trust type of situation, but, like, not contractual in the same way that, that health insurance might be. Although people who have had trouble getting health insurance to pay for things that they think should be covered probably would disagree that, that [chuckles] that is any more likely to be paid out [laughs] is, is, is, is probably a fair, fair criticism.

   21. SPShaan Puri26:28

       But what's going on here, first of all, health insurance is, like, a whole other thing where I'm like, "I, I don't know if I would touch that. That's very messy." But the majority of these businesses, they're not insurance companies. They are partners with someone else who does it, and they get a, a more tailored plan.

   22. SPSam Parr26:43

       So, so the Knights of Columbus, they just have all the money and the members, and then they go to who?

   23. SPShaan Puri26:47

       Uh, Knights of Columbus might be one of the few that does it, uh-

   24. SPSam Parr26:51

       Maybe because they're big enough now

   25. SPShaan Puri26:52

       ... on their own. But, like, AARP, if you know AARP... So AARP does billions of dollars a year in revenue. AARP is a Association of Retired People, I think. It's if you're above 50 or 60, you automatically get a letter from AARP that says, "Hey, come join AARP. You'll get our magazine, you can come to some of our events, and you'll get a, a discount on your health insurance." And they partner with United. And so they are not-- They license their name. So they are the trusted brand and so- and, like, the marketing channel, but they do not actually provide the health insurance. But, but they're a partner, and so they aren't actually running that.

   26. SPSam Parr27:27

       Well, these, these faith-based businesses are very interesting. So,

4. 27:30 – 27:33

   Idea: Faith-based businesses

   1. SPSam Parr27:30

      um, I just did a, a, a interview

5. 27:33 – 34:36

   Angel Studios

   1. SPSam Parr27:33

      with the guy behind Angel Studios. So Angel is probably the tenth biggest studio in the world, and you've never heard of it, and it's basically all values-based content, they call it, which is like one out of every ten of their movies or TV shows is religious. Like, it'll be like, um, the Jesus-- like Game of Thrones for... But the, but the book, underlying book is, uh, the New Testament, and it's, like, called The Chosen or Chosen, something like that. It's like a, a show about Jesus, and he said two hundred million people have watched that show.

   2. SPShaan Puri28:06

      What?

   3. SPSam Parr28:07

      Um, it's like, it's like on Amazon Prime. It's like one of the, one of the most watched shows ever in the history of television is that show. It's on sev- it's on the seventh season, and they helped produce the first three seasons of that. But they make, they make all kinds of movies and shows, and their community is basically three million members who want content that's gonna have no cursing, no drinking, no drugs, um, stuff like that, and also just heroes. Like, good, good people doing good things are in the movie. So, like, it can't be just, like, a dark film where, like, everybody's kinda bad, right? Or, like, everybody's flawed and messed up, and it's just a bunch of messed up people living together, [chuckles] right? Like, they're trying to avoid that type of content, and so, like, for example, they have one movie right now called The Runner. If you watch the trailer for it, it's Owen Wilson and, um, this guy Allen, whatever, Richardson, something like that. And basically, the, the premise of the thing is they're delivering a, a, an organ donor, like, their organ donor, uh, van. They're, like, driving this, this liver. And suddenly, like, three cars, like, pull up in front of it, and they have guns, and they're like, "Um, how much does this liver go for on the black market?" And they're like, "A million dollars." And they're like, "Oh, shit, we gotta get out of here." And they're, they're just-

   4. SPShaan Puri29:18

      Dude, I saw that trailer last night at a movie, and I-- in my head, I was thinking, "There's like eighteen guys, like, trying to kidnap this, this body part for only a million dollars?" [laughs]

   5. SPSam Parr29:31

      [laughs]

   6. SPShaan Puri29:31

      It's crazy. Like, it-- they did so much work for... I, I-

   7. SPSam Parr29:34

      What kind of margins is this, is this, is this operation running? [laughs]

   8. SPShaan Puri29:38

      I just, that doesn't seem-

   9. SPSam Parr29:39

      The overheads are killing you

   10. SPShaan Puri29:39

       ... that doesn't seem worth it, right? Like, in the movie, they're, like, blowing stuff up.

   11. SPSam Parr29:42

       Dude, have you seen the cost of ammunition lately? [laughs]

   12. SPShaan Puri29:45

       It-- They definitely spent more than a million to, to get... Yeah, I saw that.

   13. SPSam Parr29:49

       To get the liver. [laughs]

   14. SPShaan Puri29:51

       But the, um... And so what about it?

   15. SPSam Parr29:54

       Well, the, the idea-- so but this, this business is a juggernaut. They're doing four hundred plus million dollars a year in ARR.

   16. SPShaan Puri30:02

       What?

   17. SPSam Parr30:02

       Four hundred and fifty million in ARR. It's a public company. You can see their, their, their data. And the way they did it was they basically said they had a worldview. In fact, the guy who started it, he's this ep- epic marketer who did, um, the marketing behind, like, Poo-Pourri and Squatty Potty. He was, like, one of these, like, really viral marketers. You know, like, Dollar Shave Club? Like, they would make videos like that, that would-

   18. SPShaan Puri30:24

       Dude, there's, like, a whole, like, Mormon cabal of these, like, really good marketers up there in Salt Lake, and they, they... All those companies I think you named are either Mormon-based or, like, some affiliation, and they're really good at marketing.

   19. SPSam Parr30:34

       Right. So, so this guy's a Latter-day Saint, and, and, you know... So what he did was he was, like, tired of looking at, like, YouTube videos where y- you know, your kids, you never know what you're gonna get when your kids click on YouTube. Like, they can get to... They're two clicks away From watching somebody like, you know, smoke meth. And so he's like, "You know, that's not great." So he created this like filter and like his-- the, the project didn't even start as a real business. He literally just took a movie, I think it was like Cinderella Man. It, it, it would wipe out all of the cursing, the sex scenes, the drug scenes, but it would leave the, the rest of the movie. And so it was like, you know, the gluten-free movie basically.

   20. SPShaan Puri31:09

       Yeah.

   21. SPSam Parr31:09

       And so he creates this filter, and he publishes it. Uh, he publishes the movie and immediately gets sued [chuckles] and he ends up having to like pay ten million dollars in a lawsuit somewhere along the way. But he, he-- this tool and these movies started attracting, um, a lot of people. So like a hundred thousand people eventually wanted like the service. They then started doing this thing where like you would go rent the-- like technically you would rent the DVD for a dollar, and then that gave the, his group the like permission to like wipe out all the scenes and then give it ba- give you the streaming version of it or something like that. Like created this whole loophole to try to make this business work and finally said, "All right, I'm tired of getting s- like sued by the, by the movie industry because they don't like that we're doing this. Why don't we just make our own movies and our own TV shows that just have th- like out of the box are clean cr- you know, better for you?"

   22. SPShaan Puri32:01

       Did he raise funding?

   23. SPSam Parr32:02

       Um, yeah, they raised some money. Um, but like it's amazing that they've, you know, that they've reached this in-incredible scale, and it's really only like, you know, th-they... it's like two or three million people. It's not like that many people, but two or three million people each who pay, you know, thirteen to twenty bucks a month for the subscri- this streaming service, you know, just like you're paying for Peacock and Paramount and, you know, whatever tier two, tier three streamer service that you, you, you subscribe to. Um, and then the members vote on the content. So basically they'll take a, a, a movie that's already made, and they'll show the, the trailer, or they'll show like a snippet of the movie to the two million members, and the members vote, and if seventy percent-- if less than seventy percent green light it, the deal's dead no matter what. But if more than seventy percent say yes, then the movie like kind of, uh, gets picked up by them, and it's gonna go into their marketing pipeline and whatnot. And they have like a higher average, like r-Rotten Tomatoes and hit rate than, you know, all the popular studios.

   24. SPShaan Puri33:01

       How did you meet this guy?

   25. SPSam Parr33:03

       Ben met him somewhere at a barbecue or something like that and was, you know, Ben knows that I've been, um, you know, curious about the movie and TV industry and making a movie, and he said, "You know, you should talk to this guy. He's done it. You know, he's went from no experience in the movie business to now doing almost half a billion dollars a year in revenue for their movie," kind of, kind of their like values-based A24, right? Like-

   26. SPShaan Puri33:25

       Do you know anything ab-- I, I saw a movie last night. I went and saw the Chris Hansen movie. You know what that is?

   27. SPSam Parr33:30

       [smacks lips] Catch a Predator?

   28. SPShaan Puri33:32

       Yeah. He, he-

   29. SPSam Parr33:33

       He's got a movie?

   30. SPShaan Puri33:34

       It's about him that he doesn't l-like.
6. 34:36 – 42:03

   What’s the reaction to the action?

   1. SPSam Parr34:36

      is to find the reaction to the action. Like, for example, when Facebook was in its absolute prime and everyone was using Facebook, Facebook created this world where all your photos would be public and they would be permanent. You'd post them on your profile, your timeline, your history. Everyone could see them. And so that became the action, and the reaction became Snapchat, photos you could send that would self-destruct in ten seconds. And it's actually that the, the popularity of one creates the need for the other, and you see this a lot of times, right? So you-- as you know, we talked about GLP-1s. As food calories become abundant, you know, you have DoorDash, and you have fast food, and you have all these, you know, the, the way that the food industry went, well, then there became a higher, a greater need for the reaction, and this happens over and over and over again. You see this right now with like screen time limiting apps and Brick and things like that, like things that are getting quite popular that are really just like a reaction to kind of the, the current norm. And so, uh, A24 was also a reaction to the action in a way, where the movie studios and the people in Hollywood really started to become extremely conservative and predictable in the movies that they would film, uh, fund. 'Cause why would you fund an unproven screenplay by this, you know, cool hipster who's drinking matcha when you could just go do Spider-Man 7? You know, like why, why not? Why not just do Spider-Man again? And so they kept gravitating towards what they call these like four quadrant movies. [chuckles] I don't know if you've seen like the quadrants. Have you, have you ever heard this before? It's like-

   2. SPShaan Puri36:11

      No, what are they?

   3. SPSam Parr36:12

      It's like males under 30, females under 30, males over 30, females over 30. It's whatever, a simplified version of that, but it's basically The Big Short. Uh, like if, if both of us said like, "Yo, do you like The Big Short?" "I love The Big Short." Well, we love The Big Short 'cause we're in one of those quadrants, and it hits for us, but guess who it doesn't hit for? It doesn't hit for like women over 40 in the same way as it does for, you know, men in their kind of 20 to 40s. And so the highest kind of potential for a film is something that satisfies all four quadrants. You know, Harry Potter right now, it's like if you go, you know, the new HBO, uh, series for Harry Potter, they will put a billion dollars into this because they know that Millennials who read it growing up are now thirty, forty, fifty, you know, f- fifty years old. They like it, but so do kids still. And so you're gonna get this, like, huge demographic. The TAM is really large. And so what happened was studios became quite risk-averse, and they started gravitating towards sequels, superhero films, and other things. A twen- that created an opportunity for folks like A24, who could go pick up at pretty low cost and pretty uncompetitively all the other films that were being ignored. All... What, what are the great films that are being ignored right now? And so what they found was that these independent directors were creating really interesting things that could be produced on a fairly low budget, had pretty low expectations 'cause they, there was not a lot of demand in Hollywood for their, their product, and so they started creating cool, edgy... They're making stuff nobody else was making. So they were, like, differentiated out of the box.

   4. SPShaan Puri37:45

      Do you remember the, the early movies? It looks like, um, like, it was, like, the movie The Room, which I saw. It was pretty awesome. Um, I don't know some of the other earlier ones though, do you?

   5. SPSam Parr37:56

      Um, no, and I'm sure by the way, this is, like, a extreme oversimplification, and somebody who, like, lives in the movie business is probably, like, yelling at their phone right now being like, "What? That's not it. That's not the whole story. You're forgetting A, B, and C." And I'm sure there's A, B, and C. And they, they did a bunch of things well. You know, they, they branded their studio well. They have limited edition merch. They figured out m- a different form of marketing. So, like, the Timothée Chalamet, like, uh, where he leaked his-

   6. SPShaan Puri38:21

      Zoom

   7. SPSam Parr38:21

      ... you know, the movie trailer. Instead of saying, "This, this summer, coming to a movie theater near you, this guy, this guy in the hottest film of the year," it was, like, a Zoom recording, like, a meeting that got accidentally leaked, that had a file name that sounded like a real thing, and it was, like, an hour long, and it was this weird thing that they were doing. Um, you know, that, that sort of stuff. You know, for example, the, the guy yesterday was saying they have a movie with Kevin James, you know, like, uh, King of Queens, Kevi- Kevin James. And they were like, he was like, to market that movie, uh, Kevin James was like, "Hey, you know, the character in this, he's, like, this painter, this, like, teacher who's, like, a painter. So let's just create an Instagram account where I'm a teacher and a painter we don't even mention." And people are gonna be like, "Isn't that Kevin James?" But then people will be like, "Uh, is that just, like, a Kevin James lookalike? This guy says he lives here, and he's just painting every day, and he doesn't... What, what's going on?" Let's just do weird shit like that. And then they sent him to the Super Bowl, and they bought 12 seats, and they left, you know, 10 of them empty, and he sat, you know, 11 of them empty. He sat in the middle of the Super Bowl with, with empty seats on either side. He was wearing a tuxedo, and he was holding flowers 'cause that's, like, a famous scene from the movie. And they didn't even explain what was going on. And suddenly... And then, but they paid for other influencers to be in the same section 'cause they knew those influencers would be like, "Dude, that's Kevin James, and why are all those empty seats? Why is he wearing a tuxedo, and why is he holding flowers?" They put out their story, and it created intrigue, and people started wondering what the hell's going on. And then the movie comes out, and it does really well because they can, like, do this guerrilla marketing that the traditional studios don't really understand or don't have the, like, DNA to go do. I think A24 and some of the upstarts have figured out that because make it... Like, when you think about the cost of making a movie, it's pretty mind-blowing. So [chuckles] he was telling me about a movie they made, and he goes, "Yeah, it cost $14 million to make." "Okay. How much do you spend on marketing?" "40." So 14 million to make and 40 on marketing.

   8. SPShaan Puri40:11

      Whoa, so the 14 million, does that include the actor's salary?

   9. SPSam Parr40:15

      Everything, yeah.

   10. SPShaan Puri40:16

       Okay.

   11. SPSam Parr40:16

       Full production costs.

   12. SPShaan Puri40:16

       So it's $54 million all in for this.

   13. SPSam Parr40:19

       All in. So, so, but, but this is very common. I, I was talking to a friend who made a movie, and I was like, "Uh, it'd been three or four years since he had first told me about the idea to when it came out." And I was like, "Damn, that's takes forever, but I guess that's just the creative process." And he's like, "Do you know how long filming takes for a movie?" I was like, "No." He goes, "30 days. 37 days for us." I was like, "You shot the whole thing in 37 days?" He goes, "Yep. End to end, 37 days." And that's comp... I was like, "Was that fast?" He goes, "No, that's normal. 30 days, that's how long it normally takes to shoot these things."

   14. SPShaan Puri40:49

       Is that for a-

   15. SPSam Parr40:50

       Now, the editing takes a lot of time. The post-production-

   16. SPShaan Puri40:52

       For a normal movie-

   17. SPSam Parr40:52

       What's that?

   18. SPShaan Puri40:53

       A normal movie can only take 30 or 60 or 90 days?

   19. SPSam Parr40:57

       The sh- the actual shooting of the, the filming-

   20. SPShaan Puri40:59

       Yeah, the film

   21. SPSam Parr41:00

       ... of the movie.

   22. SPShaan Puri41:01

       Wow, I didn't have no idea.

   23. SPSam Parr41:01

       So you, you spend time, like, writing, getting it funded. That could take, like, years sometimes to get it, like, it, to get it to the for day one of principal production. And then afterwards, you have to do all the other, like, mixing, mastering, color correction, like, all that stuff. That could take time. The edit can take a lot of time. And then you have the marketing and distribution. So the whole thing takes years, but the sh- the making of the movie, like, the, the actual, like, "Hey, lights, camera, action, go. Say your lines," that thing's, like, 30 days, which is insane to me. Same thing with costs.

   24. SPShaan Puri41:28

       That's wild.

   25. SPSam Parr41:28

       Like, uh, I think the Grand Theft Auto games, they would spend, like, a couple hundred million making the game, like, years of development and engineering time and animation and all that stuff, but then they would spend equally, like, hundreds of millions on marketing. Uh, and like, uh, maybe not Grand Theft Auto specifically, but video game, for the video game industry, it's very common to do that. So for movies and, and video games, which are two of the kind of, like, biggest, you know, parts of the American economy, they spend more money on marketing than they do on actually making the product, which is s- some people would say is kinda sad, but it's kinda crazy.

   26. SPShaan Puri41:59

       This business is foreign to me. Um, I definitely... We should do a whole

7. 42:03 – 47:09

   The brutal business of making hit movies

   1. SPShaan Puri42:03

      episode on, like-

   2. SPSam Parr42:04

      Oh, it seems like a terrible business. He was telling me, he goes, "Our biggest hit, it did 250 million box office. Um, and it, but, and it only cost us 14 to make." So then I go, "Okay. How much was the other cost, like marketing?" "So that's 40." "Okay, so now we're at, now we're at 54. 250 million in revenue. All right, that's not bad. You got a 5X return. Oh, but wait, that's box office. So how much do you keep out of that? Like, what does the theater get? The, the distributor?" He's like, "Well, 50% because we're big. W- be much smaller than that if, uh, if you're kind of a new- newcomer." So the 250 becomes 125. 125 on, against 54 million to create. So you, you, your biggest hit in, like, a hits-driven business where you can have lots of flops-

   3. SPShaan Puri42:48

      Yeah, that profit needs to cover six flops

   4. SPSam Parr42:50

      ... is a, is like a two-point-something X return.

   5. SPShaan Puri42:54

      But that's the same way with all-

   6. SPSam Parr42:55

      What's going on?

   7. SPShaan Puri42:55

      ... w- with all creative businesses, that's the case. So for example, um, Mark Manson, when he came on two or three years ago, he either said this on the podcast or w- when I was hanging out with him, his book for, I think it was Penguin, sold 20 million copies. Um, and he was telling me one time, uh, he was like, "Yeah, like my mom and dad, like they always kind of gave me a hard time because I was... They thought I was just kind of playing on the computer because I was blogging, and then I... It turned into a book deal and all this stuff." And I was like, "Well, when did they start taking you seriously?" He was like, "Well, Penguin put out their annual..." I think it was Penguin. I could be getting it wrong. They put out their annual report 'cause they're owned by News Corp, and he was like, "They said that I outsold Hillary Clinton, and I was, uh, and I helped, like, make the whole company profitable that year." Uh, and he like was... And I was like, "Wait, so you were the reason the company was profitable?"

   8. SPSam Parr43:44

      [laughs]

   9. SPShaan Puri43:45

      And basically, with a lot of these publishing businesses, whether it's games or it's movies, it's like one or two things, it's, drives everything, and the rest is like, hopefully it doesn't fail.

   10. SPSam Parr43:56

       Well, that's normal. What was surprising to me was that the one or two things that hit really big, like your biggest hit, I would have just expected to be much more than like a two and a half X return. I would have thought it's like a, like 'cause i- in his case, like a book, yes, you're right, most books fail. Sure. But when a book hits, like The Subtle Art hit, and you sell 10, 20 million copies, well, that book costs almost nothing to print. And so they're printing money when it hits. And, um, that's what I was surprised at. You know, like in startup investing, like you get a 50X, 100X, a 200X, 1,000X return when you hit. And I was surprised that the movie business isn't like that, uh, or at least my layman's understanding from a few of his ex- a few of his examples and looking at their business.

   11. SPShaan Puri44:38

       Yeah, and it doesn't seem like it's a fun business to be in right now.

   12. SPSam Parr44:41

       And, um, I think he explained why, by the way. He goes, "Have you ever met a billionaire who doesn't wanna make a movie? I haven't." [laughs] And he said, like, "There are, every year, let's say 1,000 films get made. Far less than that get distributed. So most, even of the films that get made, not just the films that get pitched and, and written, like screenplays and stuff like that, like-"

   13. SPShaan Puri45:02

       But I think there's some, uh, tax ad- advantages there. I get pitched this all the time, and I never, like, I get these emails, and I never, like, actually seriously read them. But isn't there something where if you fund a movie, there's some type of sh- like, it, it, you can depreciate your-

   14. SPSam Parr45:16

       Yeah

   15. SPShaan Puri45:16

       ... something weird?

   16. SPSam Parr45:16

       But it's, uh, it's not that good. Like, uh, you can, i- it's, uh, you can write it off, but it has to be, it has, the thing has to go into production. So it's not like you could just, like, say you're doing it and, like, get it. You have to actually spend the money. The, the money has to go into the project, and the project has to actually go gr- get, start, you know, day one of production. They changed the rules on this. And so it has to actually get, get made. And if there's no return, well, yeah, you might have saved money in taxes, but you lost your entire principal. You know what I mean? [laughs] Like, if you have a million dollars in, maybe you get a 300K write-off, but you might lose your million dollars. You'll probably lose your million dollars. [laughs]

   17. SPShaan Puri45:51

       I didn't think it was gonna take the entire episode to give a shout-out to Grindr, by the way.

   18. SPSam Parr45:54

       [laughs] What?

   19. SPShaan Puri45:57

       They listened to the e- So we had the-

   20. SPSam Parr45:59

       Oh, are you wearing a, are you wearing a Grindr vest?

   21. SPShaan Puri46:01

       Dude, they listened to the episode, uh, that we had with the, uh, fou- or the, the former owners of Grindr. Great episode. Did not hit in terms of YouTube. Wonderful episode with Mick- Rick Marini, when we talked about Grindr and how they, like, turned the business around. They decided to send me some merch, and it's kind of the least gay merch ever. It's-

   22. SPSam Parr46:20

       [laughs]

   23. SPShaan Puri46:21

       It's an Arc'teryx vest. Like, I wanted something a little bit more, like, with some pizzazz.

   24. SPSam Parr46:26

       Like a scarf?

   25. SPShaan Puri46:27

       Yeah.

   26. SPSam Parr46:27

       Or a bunch of rocks.

   27. SPShaan Puri46:27

       I don't know, like something.

   28. SPSam Parr46:29

       [laughs]

   29. SPShaan Puri46:29

       Uh, they, like, this is, this is way too straight for me. I wanted something a little bit more gay. I thought it would be more enjoyable.

   30. SPSam Parr46:36

       [laughs]

Episode duration: 47:09