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My First Million5 Business Ideas With High Demand & Low Supply | Start These In 2022 (#374)
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80 min read · 16,123 words- 0:00 – 0:39
Intro
- SSSteph Smith
With the pandemic, a bunch of restaurants have gone online, quote unquote. They have the QR codes, right? And something that I think of every single time as an internet marketer is why they are not A/B testing their menus. And so I think someone needs to go and create A/B testing software that restaurants can ingest super easily. [upbeat music]
- SPShaan Puri
What's up, Steph? Steph is back, uh, back in the house, one of the most requested return guests of all time. Um, we should have you on more. What are you doing now, by the way? You, uh, you left The Hustle/HubSpot. You went to Andreessen.
- 0:39 – 1:41
Podcasting
- SPShaan Puri
Is that where you're at still, or are you doing other things?
- SSSteph Smith
Yeah, exactly. I'm at a16z. I'm their new podcast host. So they've had a podcast for, like, seven or eight years, and then it went on hiatus. They looked for a new host, and that's me. We haven't gone live yet, but we will be soon.
- SPShaan Puri
Every time you come on, you bring this, like, document that's basically like... It's sort of what me and Sam do, but when me and Sam do an episode, we have, like, two or three bullet points each. Like, three words, and I have two, and he has two, and that's how we prepare. You send this, like, Encyclopedia Britannica of topics-
- SSSteph Smith
[laughs]
- SPShaan Puri
... ideas, like, half-baked things in your head. Um, so l- uh, like, I'm looking at this. This is, like, seven or eight pages or something like that. Oh, no, a l- 12 pages long. So, um, we have a lot to choose from. So where do you want to start?
- SSSteph Smith
I wanted to share this one idea. I think I've actually talked about it on another couple pods, but with the pandemic, a bunch of restaurants have gone online, quote unquote. They have the QR codes, right? And you pull up the menu. Some restaurants have reverted back to the physical menu, but tons of restaurants are still using these QR codes.
- 1:41 – 7:57
Idea: A/B Testing Menus
- SSSteph Smith
And something that I think of every single time as an internet marketer is why they are not A/B testing their menus. And so I think someone needs to go and create A/B testing software that restaurants can ingest super easily. Um, and the basis of this is, well, A, if you think about what has made so many internet companies successful, it is the fact that they have these alternate worlds that they can A/B test, right? Google homepage, are we using this font or this font? Are we using this color or this color? Uh, Netflix, you know, Amazon, every... All of these large internet companies have used this, but also, there's the restaurant equivalent. So The Hustle did a story on this woman, Michelle Benesh, um, and you can just look up Design Restaurant Menus The Hustle or something like that to get the article. But we wrote about this woman who her job was literally to go redesign menus, physical menus. And based on her understanding of human psychology, orientation, there's, like, this zed or Z effect on the menu and the way people-
- SPShaan Puri
Right
- SSSteph Smith
... scroll. She was able to figure out how to get one restaurant, just as an example, to bring in $9 more per customer by redesigning their menu. Same products, but just the orientation, the order of the menu, the design of it. And I was thinking, why are n- restaurants not using this? As in, now we have the QR code, which allows us to direct someone to any unique link, right? We have the digitization of this. And so you could hire someone like Michelle, and she could probably figure out how to do this for you, or someone should be s- just create a software that allows restaurants to do this. They don't need to change their menu at all, but they can mess around with the menu design the same way you mess around with landing page design and get higher conversion. And of course, the average restaurant owner is not gonna know how to do this, and that's why I think there needs to be just some sort of software that says, "Hey, we can increase your conversions-
- SPShaan Puri
Right
- SSSteph Smith
... by 50%. We can increase your average customer value by $3," whatever it is, and I, I haven't seen it anywhere.
- SPShaan Puri
This is amazing. Um, this is great. I remember... So I, I started a restaurant back in the day. My very first startup was a restaurant. And we were... But when we finally got to launch, long story short, we were like, um, "Do we wanna launch a physical restaurant? We gotta sign this 10-year lease with a personal guarantee. That sounds scary." And our mentor kind of was like, "Could you test your concept by doing delivery only?" And basically, it was like a cloud, what a cloud kitchen is today, but this was back, you know, more than 10 years ago now, where there was no DoorDash, there was no Uber Eats at the time. But it was like, what if people could just order online? What if you just had a, a kitchen nearby downtown, there was no physical seating, there's no s- there's no storefront, you just deliver? And we were like, "Uh, okay, let's..." And so we tried it. And when you do that, you're really conscious of, well, our whole menu's online. So w- that means we could run a test to just see, like, what makes people order more or not. And so we did the most basic of A/B tests. The first thing we did was we were trying to lower prices, and we talked to this guy, Dan Ariely, who was, um... He wrote this book, Predictably Irrational. And we were like, "Dan, uh, hey, we're, you know, three dudes trying to build this, like, sushi restaurant startup. You know, um, do you know anything about the restaurant industry?" And he's like, "I know a lot about the restaurant industry." He goes, "I get paid by companies to come in and help them with either their menu or..." Like, he, he told us about some experiment. I think Panda Express had paid him a bunch of money to do, to basically say, "Could we get people... We have healthy items on the menu, and people tell us the reason they don't eat here is 'cause it's unhealthy, but nobody orders the healthy items. So, like, what gives?" And he's like, "Oh, humans are predictably irrational. They'll tell you one thing, and then they won't do it." And he, the, the one test he had made was when you walk into a Panda Express, instead of putting both items on the menu and just having you choose, it was right when you walk through the door, it would s- there was, like, a little angel path. It's like, "If you're gonna eat healthy, go this way." And there was, like, the dev- "If you're gonna eat indulgently, you know, like, if you want full flavor, go this way." And when people make that choice upon walking in, and then they only see a menu of those items, like, they were happier with their choice, and they ordered more of those items. And so he, like, figured out that was the only way he could design this restaurant to do that one thing. Um, and so similarly, he was like, "Oh," he, he goes, "Oh, yeah, I can help your business. Um, your prices are too low." And we go, "What do you mean? Like, everybody says sushi's too expensive. We're trying to make it more affordable. Like, how is that a bad thing? What are... You know, like, what are you talking about, man? We're trying to do the people's work here." He's like, he's like, "Sushi, uh, people... Like, do you ever wanna eat... If I told you you can eat cheap sushi- Would you want that? And he's like, "No." [laughs]
- SSSteph Smith
[laughs] No.
- SPShaan Puri
And he's like, you know, he- he's like, "So just like the, you know, wine industry, p- uh, people buy expensive things 'cause it makes them feel good that they bought a higher quality thing." So he goes, "Just test the price." So we did it. We basically upped the price 50% on one menu versus the other. We just A/B tested it, and we had, like, higher conversion rate on the higher price, which is crazy. Um, like not even just it netted more money, it was higher conversion rate on the higher price. So that was, like, the first time I saw this, like, menu A/B testing. I mean, think about how big of a lift that is. Like, if you can convert every customer at a higher rate at a higher dollar amount, that's, like, you know, meaningful in an industry that's, like, 10% margins. And so we did that. Then we tested other things, like, uh, instead of just saying, you know, "This is a, a..." Whatever. "This is, like, the Philadelphia roll. We use salmon." It's like, "Alaskan salmon. Hand-caught Alaskan salmon."
- SSSteph Smith
[laughs]
- SPShaan Puri
"Farm-caught, hand- hand- you know, handled Alaskan salmon," or whatever. We just started adding all these extra words that were, like... Meant nothing, changed nothing. They were all true, but it's like, "Always fresh, never frozen Alaskan salmon, hand-caught by a farmer near you." And it's like, oh, people, like, love that, and then they would buy more. And so you, you can see these little menu tricks. Now, what I didn't think of, which is your, your genius idea, is how do you actually turn that into a business where you could become an agency that does this for companies. You could become a piece of software that does this as A/B testing of QR codes. Um, you could do this with physical menus also, by the way. Like, you could just give out-
- SSSteph Smith
Mm-hmm
- SPShaan Puri
... two different versions of the physical menu and say... And just track the tickets, and be like, "Cool. We know what the, what the checkout is for both, um, for how much they spend on both sides, and we can just prove to you that menu design A is better than B. And, like, you know, your current menu was designed by, like, your niece who knows Photoshop, so, like, you know, I think we can do better than that. And if we do be- if we beat your current menu, then you pay us, you know, $50 a month, and we'll keep running tests for you." Yeah, I think this is, uh, actually a really, really great idea.
- 7:57 – 21:04
Inflections that create businesses
- SSSteph Smith
Yeah, I, I think the key difference... I mean, you always look for inflection points, I think you guys say, or changes.
- SPShaan Puri
Yeah.
- SSSteph Smith
And so before, you're right. You could do this with physical menus, but, you know, the data's so much harder to get, and you have to, like, match up the physical menu with the POS software you're using. But now, I don't know what the percentage is, but we all know a ton of restaurants are using these QR codes. And so they're already... They've, like, taken the major step that they wouldn't before of digitizing the experience. And so now what you need to do is just apply those analytics.
- SPShaan Puri
Right.
- SSSteph Smith
And so some company needs to just go create the software. Ideally, it integrates into the POS, so you just literally can pop out a report at the end. Um, but even if you don't have it integrating with the POS, I think you can even just, like, look at, oh, how long does someone spend on this menu versus this menu? How are they scrolling? Yeah, what items are being sold more?
- SPShaan Puri
Well, you... I don't think you would even need to... 'Cause you're basically... So basically they scan the QR code, and it's like, you know, Google Optimize or Optimize, one of those.
- SSSteph Smith
Yeah.
- SPShaan Puri
You'll enter an A/B test.
- SSSteph Smith
Exactly.
- SPShaan Puri
And then you're gonna pass the, the final value. Here's the final cart that they're checking out with to the-
- SSSteph Smith
Mm-hmm
- SPShaan Puri
... you know, to, to the thing. And when it's in person, uh, like, in restaurant, like, they check out, uh, with everything. You know, they, they don't, they don't, like... They don't walk away. [laughs] They actually-
- SSSteph Smith
Yeah
- SPShaan Puri
... do order food, so you can kind of, like, bet pretty heavily on that. I wonder if people would also do this with, uh, DoorDash or Uber Eats. Like-
- SSSteph Smith
Yes
- SPShaan Puri
... could I be a service that just optimizes your DoorDash listing with photos, menus, copy? And, like, if you're a national chain that's in, like, you know, whatever, thousand cities, and I can get you an extra half a point conversion or extra $2, you know, cart size, that's pretty meaningful for, for, for these, uh, you know, these restaurants that are on, on these delivery platforms.
- SSSteph Smith
Yeah, I was thinking about that, too, because Uber Eats menus are always so long. And, you know-
- SPShaan Puri
[laughs]
- SSSteph Smith
... there's, like, that... What's it called where there... you have too many options.
- SPShaan Puri
Yeah.
- SSSteph Smith
Um-
- SPShaan Puri
D- paralysis by analysis or whatever. Like-
- SSSteph Smith
Exactly
- SPShaan Puri
... decision fatigue.
- SSSteph Smith
Exactly. Yeah, and also Uber Eats will have three or so items at the top of, like, our most popular items. And I don't know if Uber actually selects that for the restaurant, but if you had the option... And actually, if you're an engineer at Uber working on this, like, create a platform where people can A/B test-
- SPShaan Puri
Right
- SSSteph Smith
... uh, on Uber Eats so that they feel like that's a platform where they're making more money versus DoorDash versus their own. Like, that's a value add past if someone created their own online menu that people ordered from, uh, which would make, obviously, it more sticky for people to stay there.
- SPShaan Puri
Well, I looked at the startup that was... I know this works because I looked at the startup that was doing exactly this. What they were doing was they would go to a local mom and pop restaurant that was, like, let's say, Chinese food. And they'd say, "Great," you know, "Mr. Han's Chinese, you know, great. You're, you're, you're... Everybody loves you locally, and now you're on DoorDash, but, like, your photos are kinda crap. Your, you know, your descriptions are all off. You're not saying what foods are vegan, even though they are vegan. You're just... You don't list them. Um, like, you're just not optimized." So what he would do is he would partner with the restaurant, and he would just create a shadow, like a, like a clone of the brand, but he would call it, like, you know, um, like, Chu Chu Chinese. Like, it would be, like, a more, like, catchy name.
- SSSteph Smith
[laughs]
- SPShaan Puri
The, all the photos are super bright. Um, so it's, like, you know, on a backdrop of, like, orange or red or whatever, and, like, really good-looking photos, and they would... He would trim the menu down. He'd be like, "Look, people come in here. They want, like, fried chicken, and they want dumplings, and they want this and that." And so he would just do, like, this is just these items. Um, he wrote better copy. He took better photos. And then all it was was when an order gets placed on those restaurants, that same restaurant just gets a ticket. They don't even... It's like they don't even know it's, like, from this other brand, basically. And then later they would send them packaging that's like, "Hey, if it comes in through this regis- this, like, uh, ticket printer, um, put it in the Chu Chu Chinese, like, box. Don't put it in Mr. Han's, like, you know, like, local box." Um, and so they would just create a separate packaging. So he's like, "Yeah, we have 200 restaurants. We do, like, you know, 17 million in GMV, and we operate none of these restaurants. They were already restaurants that already existed. All we did was just rebrand them for Postmates and Uber Eats and DoorDash." And I was like, "Oh my God." Like, this is, like, a mind-blowing [laughs] idea that a-
- 21:04 – 31:45
Breakup Businesses
- SSSteph Smith
a while ago. I didn't write this, but, um, it was this stat which is the average person spends one and a half thousand dollars after a breakup. I have no idea where this stat came from, but-
- SPShaan Puri
[laughs]
- SSSteph Smith
[laughs] Definitely got the wheels spinning, and they came up with a bunch of different ideas, which I think actually are getting some traction. Divorce party ideas is something that gets search volume, breakup cake, um, people throwing their own breakup parties. And I was just like, huh, I don't know if there's, uh, you know, specific brands that are taking this on, but I was like, huh, that, that stat. One and a half thousand dollars, don't know where it came from-
- SPShaan Puri
Right
- SSSteph Smith
... but there's something there.
- SPShaan Puri
That's like if I'm, if I'm FJerry, you know, that like Instagram account, and they have these like... They built a kinda like a little media empire. They have a bunch of other accounts, but they also have products they make. Like they made that, that card game, I think. They, they make some products now.
- SSSteph Smith
Mm-hmm.
- SPShaan Puri
If I was, if I was one of those accounts, I would be jumping on this. I would basically say, all right, it's already viral. It's meme-worthy. It's n- it's remarkable. People are gonna talk about this. So how do I make, you know, like the best breakup cake delivery service or like-
- SSSteph Smith
Yes. [laughs]
- SPShaan Puri
... um, you know, like, uh, the, the revenge body kit? And it's like, you know, we send you this like d- seven-day detox, um, or, you know, we'll send you like a healing crystal. We send you like a ju- juice cleanse and whatever else to like, you know, get that person out of your, out of your life, you know, get the bad juju, you know, away. And I'd be like, you know, th- this is called bad juju or whatever. And I would just try to create like a viral product through that, um, because I think it's on brand, and I think it has like enough demand where there's a... You could see this doing, you know, 2 to $10 million a year all organic-
- SSSteph Smith
Oh, yeah
- SPShaan Puri
... just because the product is so viral. Um, you know, it's probably not gonna be enormous, but there's e- there's enough of a niche there, especially if you're one of these accounts 'cause you already got distribution. Um, or-
- SSSteph Smith
Oh, yeah
- SPShaan Puri
... you're somebody who goes to those accounts and partners with them and says, "Hey, I got the right product for you guys. Let's do, you know, some kind of profit share, and, uh, I'll run this business, and you guys just help me promote this," like, you know, uh, whatever, like the breakup vodka. And it's like, you know, this is the breakup vodka kit or whatever, you know, whatever the thing is.
- SSSteph Smith
Yeah, I mean, I'm imagining, you know, all the tropes of someone gets broken up with and then they become super fit and like they get a PhD, and they just become like the best version of themselves-
- SPShaan Puri
Right
- SSSteph Smith
... after the breakup. Doesn't always happen, but you could imagine something like that.
- SPShaan Puri
Or, or something-
- SSSteph Smith
Here is your-
- SPShaan Puri
... that's even less work. It's like what's those, what are those like voodoo dolls where you like poke it, and you're like, you know-
- SSSteph Smith
[laughs] Yeah
- SPShaan Puri
... you're sending like-
- SSSteph Smith
Yeah
- SPShaan Puri
... ill will towards them? You could just like-
- SSSteph Smith
[laughs]
- SPShaan Puri
... upload a photo of your person. We print you a doll that looks l- you know, like close enough like them, [laughs] and like you can do that.
- SSSteph Smith
That reminds me of, did you see that startup Empti? It was fake. Did you-
- SPShaan Puri
No. What is this?
- SSSteph Smith
Did you hear about this? It, it's, I think it was, you know, it had the silly spelling too. It was like E-M-P-T-I or something, and it was a fake startup that people thought was real. And basically, they sent people these empty boxes. Um, and-
- SPShaan Puri
[laughs]
- 31:45 – 50:29
Cheating Scandal
- SPShaan Puri
What else you got?
- SSSteph Smith
Cheating scandals.
- SPShaan Puri
[laughs]
- SSSteph Smith
Everyone's talking about it. Chess, poker, fishing. I even saw Irish dance in a newsletter recently.
- SPShaan Puri
Oh.
- SSSteph Smith
So every, you know, cheating's everywhere. But, uh-
- SPShaan Puri
Well, well if, if people are out of the loop, frame it, frame it for them about what, what are, what are the controversies?
- SSSteph Smith
Okay. So I don't know all of them in depth, but I've been following the chess one pretty closely. Magnus Carlsen, world chess champion, played Hans Niemann several weeks ago. Uh, N- Niemann beat him, but then there was all this controversy after where, uh, Magnus was acting sketchy and then eventually came out with this statement saying, "Hey, I believe Hans cheated. Um, I can't speak to exactly why." And then there has been a history of Hans cheating in the past as well. So there's all of these people on the internet who are taking sides and saying, "No, Hans has been really good. How could you cheat over the board?" And then there's people who believe in Carlsen and are like, "No, he's had a history of cheating. We just don't know how." Um, and then there's been a similar poker controversy and then a fishing one where they were stuffing fish with, like, lead balls. And so I think a bunch of people have just, you know, become fascinated with this idea that, "Oh, my gosh, people are cheating," even though they have been for a long time. But, um, I have a couple ideas around the idea of cheating.
- SPShaan Puri
Mm-hmm.
- SSSteph Smith
But I first wanna hear your take. Like, what, what do you think about these cheating scandals?
- SPShaan Puri
Well, there's something very seductive about them. I don't know about you, but, like, I don't follow chess normally. But when, when it came to this, I was like, "Goddammit, if I don't have to get to the bottom of this," like [laughs]
- SSSteph Smith
[laughs] I know
- SPShaan Puri
... you know, here goes four hours of, like, YouTube rabbit holing to figure out... And, and I don't, it's not even... Like, it's a better entry point for me than just, "This person is great," or, "This was a great match." It's like, "Here's a controversy." Oh, what is it, right? And it goes back to this thing that, uh, I remember Dana White said once... Dana White's the president of the UFC. And he goes, he go, uh, they were like, "You know, UFC is kind of this fringe, small thing, but you're saying it's gonna be huge. Why do you believe that?" He goes, "I believe that because if you go to a park or a playground right now, and you got a basketball court, people are playing basketball. You got a football field, people are playing football. You got soccer over here, baseball over there, and then somebody screams, 'Fight,' and there's a fight going on, guess where everybody's head's turning? To the fight." And that was his whole thesis of, like, why I think the UFC's gonna be big, because fighting is this universal, universal thing that just gets you to turn your neck, whether you wanted to or not. And it's actually kind of played out. The UFC's become this global sport, you know, a $5 billion plus company. And, um, and it's succeeded in places where, you know, like, football doesn't really translate into Europe or Asia, but fighting does. Fighting, you know, like, there's Chinese, Ch- the Chinese viewership is big in the UFC, so is Russian, and so is, you know, wherever. Every little country. So I think controversy is kinda the same thing, uh, where, like, I wasn't that into chess until I found out that there might be this, like, scandal. What's the scandal? I gotta know. And, um, and then you look at the evidence and you're like, uh, well, there's two kind of, like, interesting components. One is, like, how did, how would somebody cheat? That's kind of interesting. It's sort of like a, uh, Ocean's 11. Like, how did they rob the bank type of thing. Uh-
- SSSteph Smith
Mm-hmm
- SPShaan Puri
... because, you know, you're sitting there at a chess board. It's not online. So, you know, this guy had been, he had been caught cheating online, admitted to cheating online, and many people cheat online. They basically have a program running, 'cause, you know, AI can play chess better than a human can. Um-
- SSSteph Smith
Mm-hmm
- SPShaan Puri
... but then you have, how is he cheating over the board? And there was this, then somebody threw out this crazy, uh, theory, which was that-
- SSSteph Smith
The anal beads. [laughs]
- SPShaan Puri
Yeah, he's got anal beads, you know, basically up his butt that vibrate and tell him, you know, what to, what move to make or whatever. And so, uh, and, and, and the way that Magnus did it kinda added to it. So he, first, when he got beat, it was big news, 'cause Magnus is the greatest player in the world, maybe the greatest player of all time. He then goes online and he tweets out this thing, like, um, a, uh, he tweeted out, like, a meme or a quote from a soccer coach who was like, "You know, I can't... If I say what I wanna say, I'll get in trouble." And the people are like, "What is he trying to say?" Then he comes out with a statement saying, "I think he cheated." Then he plays him again, and w- one move or two moves into the match, he just, uh, resigns. He basically quits and walks away, um, again, sort of like saying, "I'm not gonna play with this cheater." And, um-
- SSSteph Smith
Mm-hmm
- SPShaan Puri
... and so some people are like, "Is this just sour grapes?" And other people are like, "No, he knows something." But he's not said why he thinks he's cheating yet. And then over time, more information-
- SSSteph Smith
Probably because he doesn't know, right?
- SPShaan Puri
Well, now he-
- SSSteph Smith
Like, I don't think Magnus can-
- SPShaan Puri
Now he did come out
- SSSteph Smith
... he, he thinks that Hans cheated, but he doesn't know how, and that's probably why he hasn't been descriptive about it.
- SPShaan Puri
Well, there's two-
- SSSteph Smith
'Cause he's like, "I think this guy's cheated."
- SPShaan Puri
There's two pieces of evidence. The, uh, one is just he says he didn't look like he was trying. Like, "The guy beat me. I'm the greatest player in the world, and I know what it looks like when people try to beat me. They're very focused and concentrated. He barely looked like he was paying attention, yet he played basically a perfect game and beat me." That was his first thing, was just like, "I didn't th- feel like he tried, and he beat me." Um, so that was the first piece of evidence. And then the second was people went back and looked at all of his, like, past games as he ranked up, 'cause he's had, like, this crazy rise from, like, you know, a normal great player to, like, grand master or whatever, top-ranked player. And they, and they did this thing where they basically can put your game history back in this, like, chess solver engine and see how close to perfect, how close to AI did you play. And, like, the greatest players of all time have played, like, at 62 or 72% of their moves matched, you know, like, what the AI would do, like, perfect moves, and he's had, like, several g- many games where he's at 100%. And, like, the greatest players ever h- m- will have, like, no games at 100% during their, like, rise to the top, and so it's sort of fishy on that front. Like, you know, really this guy's making, like, 100% game theory optimal moves, uh, and the greatest players ever are, at best, are, like, at 70%? And so that, those are the kind of pieces of evidence against him. But still nobody knows how he did it if he, if he is indeed cheating.
- SSSteph Smith
Yeah. Exactly. So I used to play chess competitively as a kid, and both of those are very compelling arguments, the first one especially. Like, if you've ever played chess across the board, if you're in a tough situation, certainly if you're playing the world chess champion, you are concentrating so hard. I think there's stats that say, like, you know, a full chess match can burn, like, 1,000 calories or whatever if you're sitting at the board for several hours. And so I think that's really compelling. My question is, A, how do you prove that someone's cheating? I don't know if you can. I think you can prove someone has the intent to cheat if you catch them with, like, yeah, some anal beads or something in their shoe. Um, but how do you actually prove that someone has cheated? And then I'm also curious to know how these, you know, like the Chess Federation, et cetera, how are they going to change the way they operate to catch this cheating in the future? I don't, I don't know. I guess they make people walk through a metal detector, but, um, I don't know how, how do you actually catch cheating?
- 50:29 – 52:11
Ethical hacking
- SSSteph Smith
Uh, but I kinda love the idea of ethical hacking. Have you seen ... There's been someone recently, I think their, their code name or their hacker name is, like, Bjorkska or something, and they've hacked into three of Indonesia's, like, large government databases. And at first people were like, "Oh, man, this is ..." Just Indonesia's a huge country, right?
- SPShaan Puri
Yeah.
- SSSteph Smith
In terms of population. They're like, "Oh, they've got, like, millions, hundreds of millions of records," the first time. And then the second time they were like, "Oh my gosh, it's happened again. Like, this person has way too much data." But by the third time they were like, "This person is just exposing how fragile all of our systems are."
- SPShaan Puri
Right.
- SSSteph Smith
'Cause they haven't, you know, sent the data anywhere. They're just like, "You guys, [laughs] you have to fix this."
- SPShaan Puri
[laughs]
- SSSteph Smith
And they're just, like, using proof to show it instead of saying, you know, going to people and tweeting, like, "Our systems are really insecure," or whatever. Instead they're just like, "Let me just show you." And I think it's, uh ... I mean, I think ... Have you heard of Wiz? I think that's, like, enter- some sort of enterprise security software. Uh, was the fastest, or at least one of the fastest that hit 100 million ARR recently, like faster than Deal-
- SPShaan Puri
Yeah
- SSSteph Smith
... faster than a lot of the companies that we're familiar with.
- SPShaan Puri
Yeah, just W-I-Z, right? I think that's the, the name of it.
- SSSteph Smith
Yes.
- SPShaan Puri
Wiz Cloud Security.
- SSSteph Smith
Mm-hmm.
- SPShaan Puri
Yeah, exactly. Yeah, they had, they came out with some k- ... I'd never heard of this company, and it's like, "Hey, we're the fastest growing company in the world." [laughs] It's like, "Well, what's that? What?"
- SSSteph Smith
Exactly. [laughs]
- SPShaan Puri
[laughs] And they do ... Is this what they do? They do the, uh, sort of, like, bug bounty stuff? Yeah, 100 million ARR-
- SSSteph Smith
I don't think they-
- SPShaan Puri
... in 18 months.
- SSSteph Smith
I don't know exactly what they do, but I just know they're some sort of enterprise security software. And, uh, yeah, they're, like, quietly the big- the biggest, fastest grow- or not the biggest, the fastest-growing company in a while.
- SPShaan Puri
Yeah. That's insane. All right, enough, uh, enough hacking and cheating and, and stealing. Uh, although I do, I just, I love that stuff. I can't get enough. Um-
- SSSteph Smith
I love a controversy, I
- 52:11 – 1:05:30
Internet portfolio
- SSSteph Smith
know. Same.
- SPShaan Puri
Let's do these internet portfolios. So I think these are, these are pretty cool. I, I think these are good inspo for people, and you've curated a group of them. Let me, let me s- kind of set it up, which is basically people have these kind of, like, um, personal websites, portfolios. And y- I think you, you w- you wrote something on this doc I want you to explain. You wrote, "Evidence greater than, greater than, greater than confidence." Uh, so what does that, what does that mean, and then why do these interest you?
- SSSteph Smith
Yeah. So I think in the age of social media especially, it's, like, really easy for you to be seen as an expert in something. You know, someone who's done no marketing can look up a bunch of Wikipedia articles and start tweeting threads on it, and a bunch of people who don't know any better can just say, "Oh, wow, this person has a lot of confidence."
- SPShaan Puri
Right. [laughs]
- SSSteph Smith
And, you know, that's fine. Um, but what I think is important, especially in this era where everyone can seem like an expert, is evidence. So evidence over confidence. And what do I mean by evidence? It's like, don't tell me you're this business expert. Show me the businesses that you've built and how successful they are and how you built them, or let me see how you built them instead of you telling me how you built them. And I think one version of this for individuals are these personal portfolio sites. So, you know, you can have a site which again, it's like, "I've written for Fortune, and I have this many followers on Twitter," or, you know, all of these things that you've made up that tell people you're confident instead of, "How about you just show me your skills?" And some of these portfolios, which we'll hopefully pull up here, um, are just really fascinating because as soon as I go to them, I'm like, "This person is a badass. I wanna hire them just based on what I see here, based on the evidence-
- SPShaan Puri
Right
- SSSteph Smith
... that they are a killer creator." And so we should pull some of them up. But for example, pull up this one from Bruno Simon and tell me what you see.
- SPShaan Puri
So basically it's bruno-simon.com, and you land and it's literally a, like, Jeep that's on the screen. You hit, you click Start, and there's a Jeep that's on the screen, and it says, "Use your keys to move around." And it's just like vroom, and you just like, you can, you can go forward [laughs] and you can just, like, drive into stuff. It's like a 3D ... It's basically a game. Uh, and it's, like, his resume almost. But you can basically drive around, crash into stuff, and, like, clearly this person is, like, super talented. Artist, creative, web developer type of person. It's like, all right, I'm gonna drive to the Projects section. Um, and, like, okay, I'm in the Projects section and I can see the different things. If I park my car on the open, on the, on the parking spot there, it'll open that, like, you know, um, that link to go see that website that they built. It, this is amazing. Like, this is one of the best portfolios I've ever seen. [laughs] Like, this is, like, stunning.
- SSSteph Smith
Yeah. It's pretty awesome. Pull up, um, another one, which is just another example. Click the one that says Interactive resume from Robby Leonardi.
- SPShaan Puri
So Robby ... Okay. Oh my God, it's, like, basically like a game of Mario. So there's a character, and I'm scrolling, and all of a sudden I'm like, okay, level one, that's his About. Oh, wow, this is cool. Um, this is sick. It's basically like a chart of like, oh, I'm good at design, illustration, whatever. But it's like I'm running through the level, and I'm like learning these different things about the person, about what they're into. Okay, NBA fan. Oh my God, now I'm underwater. I'm doing the underwater level.
- SSSteph Smith
[laughs]
- SPShaan Puri
Yeah, so this is crazy. They basically just took a resume, designed it beautifully, and made it play like a Mario, Mario game. And at the end of the level, it's like, "Contact me here. If you wanna work with me or whatever, you know, here's my contact for me. You, you've won. You've made it to the end of the level."
- SSSteph Smith
[laughs] You've won. The thing I love about this is I assume these people are not applying for jobs. But can you imagine if you had a job opening, and you had like 100 typical resumes of people being like, "Yeah, I've worked here for three years," or, "I've done this. I have this degree," and then one of them was this?
- SPShaan Puri
Yeah.
- SSSteph Smith
How could you not hire this person? How could you-
- SPShaan Puri
So, so I made a crappy-
- SSSteph Smith
... do something-
- SPShaan Puri
... version of this when I applied for... So when I moved to Silicon Valley, I did this. So basically I, I applied to two jobs when I wanted to move to Silicon Valley. I w- I applied to Stripe, and I applied to a place called Monkey Inferno. Stripe everybody knows. Turned into like, you know, whatever, $100 billion company. I would've been like employee, I don't know, like 35, 40 at the time. So it would've been great. [laughs] Would've probably made like 10, $30 million, something like that, just as like a mid-level sales biz dev type guy that I was gonna join as. Uh, unfortunately I crashed and burned in the interview when he was like, "Sell me this pen." And I was like, "Uh..." And I just fumbled and stumbled.
- SSSteph Smith
[laughs]
- SPShaan Puri
Um, but the, uh, the other job I applied to was Monkey Inferno. And Monkey Inferno was this really cool company. And one thing that's interesting is the more the company shows that they're unique, the more you sort of get the vibe and you're like, "Okay, I can read the room. You're cool and unique, and you appreciate like a, you know, creativity and a sense of humor, so that's how I'm gonna apply." So I didn't send in a resume.
- SSSteph Smith
Mm-hmm.
- SPShaan Puri
I just made a website. And I, you know, I can't code. I'm not... Like, you're way more technically talented, let alone these people who are like, you know, freaking... You know, they're creating like, you know, fake Mario game as their resume. But I made a basic website that was basically... Uh, and I just sent an email. I tried to copyright it well. I was like, you know, my first line of the email was like, um, you know, uh, "Hey, Michael, um, I'm applying for the... You know, I saw your j- role for product manager. Um, and e- even though, you know, I have none of the qualifications you're looking for, let me explain to you why I'm the man for the job." And like, you know, I think that was like gonna get his attention to read the next thing, just to be like, "Is this guy, you know, a complete clown, or like is there something here?" And so I wrote this email, and then I said, "You know, I... Rather than add a, you know, resume to the stack of resumes, like I made a website for you." And so I, my re- my website wasn't about me. It was like why I should work at Monkey Inferno. So it was like more tailored, um, to him. And I had these same things. I had this like, um, skills chart. But I included stuff that I wasn't good at. I was like, hard work. I was like, eh, 40%. Like, you know, that was like one of my lowest skills.
- SSSteph Smith
[laughs]
- SPShaan Puri
I was like, yeah, I'm kinda lazy actually. Um, you know, I- I'm kinda lazy. I can't force myself to do things that I don't love to do. But I gave him like things... And then in the interview, like I remember one of the guys was like, "Why would you apply for a job and write hard work is not high?" [laughs] And I was like, "Well, I'm glad you asked. I can explain. Here's m- here's what I think about that." And, um, and so I had this whole thing, and I kind of wrote a resume exactly for them. I was like, you know, here are some of the, my mottos. Here's like, I looked at your companies. Here's some of the things I think I could do for them. And so I kinda tailored it to that. And I remember he later told me, he was like, "You know, if you hadn't done that website, like there's no way we would've hired you, 'cause on paper you had like literally none of the qualifications we were looking for. Like the entire job description was like just not you. But, um, that website was really cool. It was really unique. Nobody else had done something like that. And so it just made me feel like we gotta talk to this guy." And so that was like the, the in that got me, got me the job in the, in the end, in the end.
- SSSteph Smith
Yeah, I mean, I think I- I've hired a decent amount now, and there's so many people who mass apply to jobs, and they're like, "Yeah, I, I'm interested in this job and I have the qualifications." But the times I've been really impressed is like you can tell someone really wants to work there and has done their research. And you know the second they get in you almost don't have to train them on the company. You probably have to train them on other things, but you know they understand exactly what you're trying to do because they've been following your company or your team or your people for a while. Um, so I think that's, that's spot on.
- SPShaan Puri
Right. Let's do a couple of, couple of these other ones. So, uh-
- SSSteph Smith
Yeah, let's rapid fire through some of those.
- SPShaan Puri
So Neal, the Neal.Fun one I think I've talked about before on here. This one's awesome. Um, so it ne- it's N-E-A-L.fun. Uh, but I don't know if you could pull it up. But basically it's like, it, it's just like, it, it, the headline is, "A tiny website on the internet," and then he's basically got a bunch of little like interactive little projects that he's made that you could do. And I, I remember I went through the absurd trolley problems one, um, which is basically-
- SSSteph Smith
Yeah
- SPShaan Puri
... like if you remember in school where it's like, you know, there's a train on the tracks that's gonna, you know, kill five people, but you can pull the switch and just kill this one. Would you do it? And you're like, "Yeah, I guess I'd rather kill one than five. I think I would do it." And then it basically like changes it to like, but the one is a baby. Would you do it? And you're like, "No, I wouldn't kill the baby." And then it's like, [laughs] and it's like, okay, but the other one is five cats. Would you do five cats? And it's like-
- 1:05:30 – 1:08:53
Salty bowls and smelly water
- SSSteph Smith
was interesting. I'm calling it Salty bowls and smelly water. And so basically there's two examples of everyone wants to eat healthier. Uh, that's, I think a pretty universal human, uh, want at least. And two companies are doing something interesting here. So Kirin, which is K-I-R-I-N, it's a company in Japan, and they partnered with a university, and they found a way to make, to basically use a super weak electrical current, both in bowls and chopsticks, so that when you're eating, something about the ionization or the electric current makes something taste saltier. So you can imagine like when you actually eat something, your, um-
- SPShaan Puri
Wow
- SSSteph Smith
... taste buds or... Yeah. What, there's some s- something happening chemically on your tongue, and they've basically found a way to somewhat reproduce this. So you can actually eat food every... Well, not everyone. A lot of people, including myself, love salty food. You're actually eating foods with less sodium, but they taste salty. And then I'm just gonna quickly tack on the other one, which is similar, where it's, I'm calling it smelly water because it's this company, uh, called air up, which basically has found a way to create a scented ring around a bottle's lip. So similarly, they found a way to make something taste better, in this case through scent instead of electrical current. And they, I think, raised $68 million. And so I, I think it's just this like interesting phenomena of [train horn] how do you make something... And there's the train. How do you make something taste good without actually changing the caloric or the, the intake of the food?
- SPShaan Puri
And hang on. Your, your note here says it's making 100 million plus a year, um, p- p- uh, as like an estimate according to Glimpse. Air Up is this like flavored ring of the bottle. So you basically, you bring a bottle up to your lips. The water itself is not flavored. The ring is scented or flavored in some way so that when you drink the water you get that, you know, whatever hint of citrus or whatever you're looking for. Is that it?
- SSSteph Smith
Y- yes. And I put according to Glimpse because I wasn't able to r- reproduce or like find that number online. I don't know where they got it. Um, they definitely raised a bunch of money. I just don't know if that revenue number is correct.
- SPShaan Puri
That is crazy. Wow. Um, [laughs] have you tried either of these? [laughs]
- SSSteph Smith
No. I want to. I saw the chopstick bowl one very recently, so I kinda wanna order one. And then I haven't tried Air Up.
- SPShaan Puri
Wow. Uh, these are... This is fascinating. I had not, uh, I didn't know... You, you had said the salty bowl smelly water thing. I didn't understand what it was until you said that, but that's crazy. I mean, the, the sort of like salt taste without, without extra salt, that's kind of, I mean, that's, that's kinda genius if you could do that.
- SSSteph Smith
All right. You wanna close things off?
- SPShaan Puri
Yeah, we can wrap it up. Where, where should people kinda find you, follow you? Where do they get your next podcast that's coming out? Uh, tell the people what they want.
- SSSteph Smith
Yeah. So you can find me at stephsmith.io or on Twitter stephsmithio. And then yeah, we're gonna be hopefully launching the podcast soon, the a16z podcast. You can find it anywhere that you find your podcasts.
- SPShaan Puri
Do you have a name yet or, or not yet?
- SSSteph Smith
It's called the a16z podcast.
- SPShaan Puri
Oh, okay. [laughs]
- SSSteph Smith
[laughs] Yeah.
- SPShaan Puri
Sorry. That one went over my head.
- SSSteph Smith
So it should be easy to find. Yeah. [laughs]
- SPShaan Puri
[laughs] All right. All right. Uh, thanks for coming on, Steph, and, uh, best of luck with the pod.
- SSSteph Smith
Thanks. [upbeat music]
Episode duration: 1:08:53
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Transcript of episode 7x5M4lxK-dw
