From $0 to $100 Million In 3 Years Selling Cold Plunges (#527)

Shaan Puri 0:00 All right, today we're talking about an app that is taking off that I think might be the next TikTok. It's a Chinese app that you've probably never heard of. Uh, Sam got all the numbers behind a cold plunge business that's doing over $100 million a year, including their ad numbers, which is rare. You almost never get to see that. And lastly, we talk about lessons that we learned from Jess Ma, a founder who has built a business up to $900 million, and she shared one or two golden little nuggets that we wanted to talk about. Enjoy this episode. [upbeat music]

Sam Parr 0:35 All right, let me give you an update on something. So we had... You know, I take a lot of pride in the fact that we've had some people on here right before their, like, fame arc really took off.

Shaan Puri 0:45 Right.

Sam Parr 0:45 We had Bryan Johnson on here. Uh, you said that he mentioned that like, "Yeah, you guys are one of my first people." Another one, Andrew Huberman. We talked to Andrew Huberman. I remember we talked to him, and I think he was, like, in this hallway in Stanford or something, like doing an interview with us.

Shaan Puri 0:57 [laughs]

Sam Parr 0:58 And after the pod, or during the pod, I told him that, like, cold plunging is interesting to me. And after the pod, he goes, "Hey, I wanna send you a cold plunge." And I was like, "That's very kind of you. I, I would love that."

Shaan Puri 1:10 [laughs]

Sam Parr 1:10 And so he introduced me to this guy named Ryan, Ryan Dewey. Ryan sent me a cold plunge, and the company now, it's, it's, uh... What's their URL, actually? Is it-

Shaan Puri 1:19 Plunge.com.

Sam Parr 1:19 I don't even know. What is it?

Shaan Puri 1:21 Plunge.com.

Sam Parr 1:22 Plunge.com.

Shaan Puri 1:23 Great domain.

Sam Parr 1:23 Yeah, it's just called Plunge. Um, he sent me this thing, and I started using it, and I loved it, and I dug it. And by the way, this also sounds like an ad. This is not an ad. I have nothing to do with these guys. Um, but-

Shaan Puri 1:34 But Ryan, I will take a free plunge. I said no earlier. I changed my mind.

Sam Parr 1:37 Did you say no when he offered you one?

Shaan Puri 1:39 I said no. I said no the first time.

Sam Parr 1:40 That's crazy.

Shaan Puri 1:41 And, uh, I was wrong. I'm, I'm man enough to admit it. I was wrong. I w- would like a plunge. Thank you.

Sam Parr 1:47 Yeah, they're awesome. But here's the deal. When he was selling them at the time, I think they were like $3,500. Now, I think they're like $5,500. And I didn't know if I liked doing it. So I was like, "Yeah, I'll take one." That, 'cause that's a lot of money to spend just for, to test something out. And so I got an update on these guys. I think they only launched in 2020, and in preparation for this pod, I just went and talked to them and got a bunch of numbers. This year, they're g- So here, listen to their revenue. In 2020, so the way it started is Ryan and his partner Michael, they each separately owned, um, brick-and-mortar bus- businesses. One of them, Ryan, owned this thing called a float therapy, uh, center, or I don't know what-

Shaan Puri 2:21 Yeah, a float tank.

Sam Parr 2:22 Yeah, it's like you go, it's like a... I, I used to call them deprivation tank. I used to do it in San Francisco every once in a while. You, like, sit in this, like, tanning bed that's filled with salt water. You basically float, and it's completely dark and no noise, and you feel funky. It's kinda cool. His other partner owned, like a, like a, it's, I think it was called a reboot. It was like a sauna that you could go to in LA. But COVID happens, so both of those businesses get screwed. And so they're like, "Man, we gotta figure something out." And they noticed that at their places, people were asking for cold plunges, and they also saw that online, I think at the time, it was like 15 grand to get a cold plunge, as opposed to what a lot of people do. What I used to do in college is you get like a big trash can, and you just gotta go to, like, 7-Eleven and buy ice and fill your, your thing up, your, your bucket with, with water hose, uh, or hose, uh, water from the hose, and it takes forever. Whatever. And they were like, "All right, let's create our own." So 2020, they did 270,000 in revenue. 2021, they did 8 million. 2022, I think we got it in '21 or '22, w- whenever Andrew came on. 2022, they did 33 million in revenue. This year, 2023, they're doing around 10 million a month, and they're gonna surpass 100 million in revenue off freaking cold plunges.

Shaan Puri 3:32 Insane.

Sam Parr 3:32 It's wild.

Shaan Puri 3:33 Insane.

Sam Parr 3:34 And the way they, the way that he told me they got started was they basically DM'd Aubrey Marcus, who's this health guy on Instagram who owns Onnit, and they were like, "Hey, man, we're gonna, we'll come to your house and just set up a cold plunge for free." And so they get a U-Haul, and they fill it up with this, like, little homemade thing that they did. They used, like, a bunch of parts from Home Depot, I would imagine, 'cause m- I have an early version. It looks like something you could kinda hack together. And they brought it to his place, and they set it up for him, and they were like, "Is there anyone else you think we should talk to?" And he's like, "Yeah, Huberman. Talk to this guy." And so they get a U-Haul, and they fill it up with five more, and they start delivering it to these guys. And I guess that's how I got it, was Sahil sent me, was like-

Shaan Puri 4:12 They, they called it a plunge tour. They would go-

Sam Parr 4:13 A plunge tour

Shaan Puri 4:14 ... they, they would, they would fill up four or five of these, go on a plunge tour, and they would Instagram while they were doing it. And so people on IG would see it. Like, like me, I would see it on IG, and it'd be like, damn, this m- must be like some super successful company, 'cause they're, they're, they're only delivering to people that I know, like, you know, influencers basically. [laughs] Even though there were no other customers. It was only those customers. [laughs]

Sam Parr 4:32 Yeah, and there was on- it was only, like, a, a few of them. It was like they, they c- they threw this thing together, and I guess that's when I ki- that's when Andrew, like, r- I guess they were like, "Andrew, you know, we have this many for you to give away. Do you wanna give away to whoever?" They gave one to me. They gave one to Sahil. They, so far they've given away hundreds of these things, and they're killing it. And never in a million years would I have thought a cold plunge business would do north of 100 million in revenue.

Shaan Puri 4:55 By the way, they've given away over 1,000 plunges.

Sam Parr 4:59 That's insane, right?

Shaan Puri 4:59 That's like the... That means influencer marketing was, like, so important, uh, to, to them at the beginning. [upbeat music]

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Shaan Puri 5:22 [laughs] And a couple other fun facts. Can I say a couple of these that you have on your notes?

Sam Parr 5:26 Yeah, do it.

Shaan Puri 5:26 They bought plunge.com off of a N- New Orleans jazz band for 250K, [laughs] which is just hilarious.

Sam Parr 5:32 That's a, that's wild.

Shaan Puri 5:33 They basically are riding this wave. So if you look on Google Trends, we'll put this up on the screen on, on YouTube, you could see basically cold plunge versus ice bath, and just both of them rising over time as, like, you know, the kind of the Huberman era kicks in here. So they're, they're riding the back of that. But the insane thing is this ad spend. You gotta talk about this, uh, this data.

Sam Parr 5:51 You talk about it because this is in your, this is your wheelhouse. But basically what they did was they, um, Ryan, I've met Ryan. He's almost like... He, uh, I don't know the best word to describe it, but he's one of these guys that was doing ayahuasca before ayahuasca was cool.

Shaan Puri 6:04 [laughs]

Sam Parr 6:04 Like, when I went and hung out with him, like, he had his toenails painted because, like, there's something around that. I don't exactly know what it is-

Shaan Puri 6:10 [laughs]

Sam Parr 6:11 ... but there's, like, something around that. Like, he's, like, eccentric. And- I don't think he probably knew anything about Google Ads or Facebook Ads, and so he said he hired a guy on Upwork to help run Google Ads for them, and that's how they started. So what... And, and he even sent me a screenshot.

Shaan Puri 6:26 Basically, it shows their revenue, it shows their ad spend, and it shows it broken down on Google, Facebook, and even Bing a little bit. But like, just looking at their total paid media, that's wh- I wanna zoom in on this. This is- these are kind of bonkers numbers. So this is... Is this a month? Wait, what, what is this? I think this is the last month.

Sam Parr 6:42 This is monthly.

Shaan Puri 6:42 I think this is monthly, which is crazy. So last month, uh, I don't know if it's last month, but one month, 860,000 in ad spend. So 860K in a month, and then their ROAS on that, return on ad spend, was 7.1. To get... Just to put this in pers- this is the... That's bananas. Nobody has 7 or 8 X ROAS. They said they've had that basically from the beginning. They, they used to get, uh, 10- over 10X, now it's sort of like between 7 and 10X. Um, to get a 7X ROAS, that means your- it's a- you have a machine. They put a box in this guy's house, and it's a magic box, and the box says, "If you put $1 into this box, you get $7 out." That's what that means. And so they have this box that they're able to put $800,000 in each month and get out, you know, $6 million back, and they're just doing that month after month after month. And so you see it on Google, their ROAS is, you know, 5.8. On Facebook, it's 10.7. I don't know why they're saying this, by the way. I would never reveal this information. If I, if I found a magic box that does this, uh, you know, I would never share this with anybody. But they said to do it, so you know, here, here you go. I think maybe they think they're, they're pretty far ahead in terms of competition, but I don't know. Uh, if they can get these numbers, anyone can get these numbers on Facebook. There's not- they, they have no, uh, special sauce there that, that's gonna be, you know, un- uncopyable, I guess. Why, why did they agree to share this?

Sam Parr 8:06 I just said, "I'm gonna talk about you on the pod."

Shaan Puri 8:08 [laughs]

Sam Parr 8:08 Like, "Let me interview you," and I said, "Whatever we talk about, this is, like, on the record." Uh, so I guess if they change their mind, they'll let me know. But-

Shaan Puri 8:15 Well, I mean, it's cool that they get a big feature. That's cool. But also, this is crazy. And just props to them. These numbers are insane. So basically-

Sam Parr 8:21 And they own the whole thing

Shaan Puri 8:22 ... It-

Sam Parr 8:22 So they bootstrapped. They haven't taken any funding. And this is, by the way, th- uh, 2020, so they're coming up on four years.

Shaan Puri 8:27 So on Facebook in this snapshot here, uh, if this is accurate, the, the SNA- the, the CAC on Facebook, so the cost to acquire a customer on Facebook for them is $387. They're selling this thing for $5,000. So you can see, you're paying, you know, just under 400 bucks to get somebody to pay you 5,000 bucks. Uh, amazing trade on, on, on the ad spend, and you could see why this thing is scaling so crazy. You know, over-

Sam Parr 8:49 It's wild, right?

Shaan Puri 8:50 Going 8 million, 33 million, and then now over 100 million, and they bootstrapped it. This is profitable. They didn't raise any outside money, and now they're expanding into, like, saunas and other shit too. So that's pretty insane.

Sam Parr 9:00 What do you think this company could sell for? Let's say they, they get to... I have no idea what the profit is. Let's say they get to 100... So 2020, they started. At 200 and... A quarter million dollars, that means 2020. In year four, their fourth year of business, they're gonna do 100 million. What could this sell for? Is this- Could this be a $200 or $300 million company?

Shaan Puri 9:16 Definitely. Definitely. Um, you know, I would... If you're getting... Like, just to put this in perspective, if you're getting 8X ROAS on your money, and let's say that continues, and let's say they can... Uh, if they said they're doing, you know, whatever, 8 to 10 million a month. So they're over $100 million, let's say 120 million in revenue. The minimum that they should be selling for is 1X revenue, so 120 million. In this case, let's say that because of their growth rate, because of the insane profitability on their r- on their ads, this company has to be, you know, making bank, right? Like, normally peop- most people in e-commerce are break even or slightly losing money on first order. The, the... You know, that gets you... That's like you have a ROAS of, like, between one and two. These guys are doing, you know, six or seven times better than that. So, so that's kind of insane. This company should be worth, you know, $250, $300 million right now. You know, I, I don't know how big that ClearLight sauna company is, but I'm pretty sure it's pretty big. Uh-

Sam Parr 10:16 Man, i- if I'm these guys, I might take that sale. That, to make that amount-

Shaan Puri 10:20 Yeah

Sam Parr 10:20 ... of money in-

Shaan Puri 10:21 I agree

Sam Parr 10:21 ... three or four years, and I don't know what their financial situation was before, but let's just assume that they were just getting by owning a brick-and-mortar business. That's wild. That, that is a crazy story. I would take advantage of that.

Shaan Puri 10:32 Or I would sell, like, $30 million of secondary. I would sell, like, $30 million at even, like, $100 million valuation and dilute 30% only, but now you got... You know, you put 15 million bucks in the bank, and you can keep going. If, if you really wanna keep going, that's what I would do, uh, in this case, because you could bank that huge life-changing sum. Uh, because th- these e-commerce companies, let's say that, you know, ad flips, competition flips, whatever, they don't, like, retain that much value because the sale is already done in the past. You basically get no credit for past, you know, past sales here, 'cause it's not recurring revenue. It's not like a network effect style business. So you know, you're really only as good as your next year when it comes to e-commerce, I, I, I think at least. So yeah, I would, I would definitely take some money off the table.

Sam Parr 11:15 It's crazy, though. And, and by the way, I don't know, like, what the science is behind cold plunging. I still, I've ha- How long have I owned it? For two or three years. I still use it three days a week. Like, I'm into it.

Shaan Puri 11:25 It's clinically proven to make you post on social media at least three times more, so that's one proven effect.

Sam Parr 11:30 [laughs] There was this one TikTok where these guys were joking. They were like, "You know, it's crazy to think about it, but for the first 20 minutes after the Titanic sank, the passengers were actually healthier, uh, until they died." [laughs]

Shaan Puri 11:45 [laughs] They actually were increasing their lifespan by 20%-

Sam Parr 11:50 Yeah

Shaan Puri 11:50 ... during that first cold plunge-

Sam Parr 11:52 They were- [laughs]

Shaan Puri 11:52 ... until they suddenly died.

Sam Parr 11:54 Uh, they're like, they're like, "Too bad Wim Hof wasn't there to teach them how to breathe."

Shaan Puri 11:58 Right.

Sam Parr 11:58 Uh... [laughs]

Shaan Puri 11:59 It would reduce their risk of heart attack.

Sam Parr 12:01 They're like, they're like, imagine if Wim Hof was there like, "This feels nice." [laughs]

Shaan Puri 12:05 [laughs]

Sam Parr 12:06 Like there... But there was about 15 minutes when the-

Shaan Puri 12:09 That's what he should do. He should rebrand to the Titanic method.

Sam Parr 12:11 Yeah. [laughs]

Shaan Puri 12:11 He should be like, "Oh, you don't do Titanic breathing?"

Sam Parr 12:13 [laughs]

Shaan Puri 12:14 This would, this would save... You would live un-

Sam Parr 12:16 Yeah

Shaan Puri 12:16 ... even if you were on the Titanic if you learned this shit.

Sam Parr 12:18 [laughs] There was about 15 minutes where they were at peak physical shape. [laughs]

Shaan Puri 12:24 [laughs]

Sam Parr 12:25 Um, anyway-

Shaan Puri 12:26 That's so funny

Sam Parr 12:26 ... that's the update on Plunge. I finally got an update on them. I'm

Sam Parr 12:30 shocked at how they're doing. Um, I guess I'm not that shocked. It's a $5,000 product. I just, I guess I'm shocked at how many people would buy into this. Never in a million years would I have thought- ... this many people would buy into this and wanna get cold however many times a week. Um, so that's my update on Plunge.

Shaan Puri 12:45 I got one thing I wanna jump right into. It's something that's been on my mind, it's been grinding my gears. It's been a little, uh, a little itch I need to scratch, and that is supplement testing. So you're a big supplements guy.

Sam Parr 13:01 It sounds like you're setting up an ad, by the way. We have to say this is not an ad. [laughs]

Shaan Puri 13:04 No, no, this is not an ad. This is just me being, uh, corny. So, um, I've been thinking about this idea, because I've been buying a shit-ton of supplements. And, um, I don't know about you, but, like, people are like, "Oh, you know, you take that?" I'm like, "Yeah." They're like, um, "How, how is it... Like, is it working?" I'm like, "How the fu- how would I know? It's a supplement." You never know if a supplement's working, right? Like, I personally feel that way. I don't know if I'm just not in tune with my, with my body. When you take stuff, do you have, like, a clear, like, this is helping me versus this is not when it comes to actual, like, supplements?

Sam Parr 13:38 There's basically only one or two supplements that I've ever taken where I'm like, "This is working." So I take either melatonin or magnesium at night. Um, and that's the only... Those are the only two where I'm like, "All right, I'm... It helps me go to sleep faster."

Shaan Puri 13:54 Right.

Sam Parr 13:54 Besides that, uh, protein. So but protein, is it... Protein's a supplement, but it's, you know, it's-

Shaan Puri 14:00 Yeah

Sam Parr 14:01 ... it's a nutrient. So, like, when I eat more protein, whether it comes through a powder or not, I notice my muscles get bigger. Besides that, I don't think I've noticed a difference in mostly anything.

Shaan Puri 14:10 Even protein for me, it's not even like I feel my muscles getting bigger. I just feel more full. So I'm like, "Okay, that did something." Like, that is, like, kind of like a meal replacement. Uh, I got it. But, like, even creatine, I started taking creatine, and, um, I thought that creatine would be... I thought creatine was gonna be the hard shit. I was like, "Oh, okay, here we go. I've crossed the line. I'm doing the hard shit now. Now it's just gonna be, like, a little unfair, these gains that I'm about to be having." Can't feel anything. You with creatine?

Sam Parr 14:37 No. No, I don't feel anything.

Shaan Puri 14:38 [laughs]

Sam Parr 14:39 When I was taking testosterone, I felt that, but that's... I don't know if that would be under the, the l- the heading of supplements. But, like, basically-

Shaan Puri 14:48 Well-

Sam Parr 14:48 ... if it's illegal or banned at sports, I've noticed a difference. Besides that, if I could buy it at, if I could buy it at Target-

Shaan Puri 14:55 [laughs]

Sam Parr 14:55 ... I don't know if I've noticed a difference.

Shaan Puri 14:57 Right. If you're not having to text a guy to get it, [laughs] you're not gonna feel it. So I feel like with supplements, there's an opportunity. The opportunity with supplements is to be the most trusted source when it comes to supplements. So for you, where do you go when you wanna find out if which brand you should be taking or which brand you should not be taking, or what's the most effective, what's the cleanest, what's the healthiest for you? Wh- where do you go to get that information right now?

Sam Parr 15:25 So I use Examine.com to figure out which, uh, supplements are, like, which the science has shown that it works. But Examine.com-

Shaan Puri 15:34 That's not the brand, right? That's the-

Sam Parr 15:36 Yeah, Examine.com-

Shaan Puri 15:36 ... that's the science

Sam Parr 15:37 ... in order to stay neutral, they don't promote any brands.

Shaan Puri 15:40 Right.

Sam Parr 15:40 And so I go to Amazon, I talk to friends. It, it's pretty challenging. It's also challenging because do you remember the mattress review websites? Like, the top one, it ended up being owned by Casper.

Shaan Puri 15:51 Exactly.

Sam Parr 15:52 And so it was incredibly challenging to find, like, which... Like, for example, some protein brands will say, "We have 25 grams of protein per scoop." And then you go to research it, and it's like, no, this one actually only has 18, or this has some certific-

Shaan Puri 16:04 Right

Sam Parr 16:04 ... certification, which means they had to do, jump through this hoop or that hoop. It's actually quite challenging to figure out who's clean and who to trust.

Shaan Puri 16:10 Yeah, I think it was Casper that owned... Uh, was it Casper or Purple that, that owned a bunch of the, the top mattress blogs that had, like... They were like, for 15 years, they were, like, a normal blog, and then they went and bought them out, and then they, like, started promoting their own shit. And it's the same thing with, with supplements. You know, like the... What's rule number one if you create a protein brand? You go, you buy your brand name, your domain, and then you buy thetruthaboutprotein.com, 'cause you're gonna need that too in order to promote your own shit.

Sam Parr 16:35 It's really hard. It's really hard.

Shaan Puri 16:38 The reality is that supplements and health and wellness are on the way up. Uh, people are, are... It's becoming more and more normal to take a wider and wider variety of these things. There's more and more brands on the market, because now you have D2C brands. So anyone can create a brand. You don't need to fight for shelf space, because you can just be on the internet, the infinite shelf. And I think the need has become bigger than ever for somebody to become the trusted person, and I say person specifically here, the trusted person around supplement testing. And, um, have you seen this guy FlavCity?

Sam Parr 17:09 No. How do you spell it?

Shaan Puri 17:10 F-L-A-V, uh, then City. So FlavCity is this guy that my mom will send me. My mom will always send me this link. So this guy's shtick is genius. Like, in terms of content creation, this is such a good niche, and, um, it is so perfect. So what he does is he's like, "I'm a trusted guy. I'm not, like, some super expert or whatever, but I just, I'm a guy who knows things." And what he does is he goes to a grocery store. If you go look at his Instagram, he'll go to a grocery store, be like Costco, and he'll be like, and the thumbnail is him holding up, let's say, Parmesan cheese. And he'll be like, "Don't buy this. See?" And he'll turn it around, he'll be like, "See? It has Parmesan cheese, milk. That's fine, but then it has artificial flavors. We don't like artificial flavors because they're gonna be bad for blah, blah, blah. Instead, buy this one." And he'll have another one at Costco that's better. He's like, "See? This one doesn't have artificial flavors, doesn't have this. It does have this, but it's the best one you can find at Costco."

Sam Parr 18:02 So he's doing it right now on Instagram. He's doing it for Veggie Straws, which is, like, those potato chips that are, like, whatever. They're s- supposedly made out of vegetables. He goes, "This is bad for this reason. Here are some le- uh, here, here are some better ones for you. LesserEvil Power Curls, Siete Puffs, Jackson's Sweet Potato Chips." And he, and he looks at the back of Veggie Straws and he tells you what's wrong with it.

Shaan Puri 18:26 Right. And I'm giving this to my kids, right? Veggie Straws. Oh, that's better than chips. It's veggies, right? And it's like, so he's, he just debunks a lot of things, and he's got his whole thing. He's very high energy. He does mainstream products that are in shopping cen- uh, sh- in shopping stores, and he'll be like, um, "This one, Bobby Approved." And he's, like, got his own little shtick where he's like, "This is Bobby Approved And he's like, he's basically Doug DeMuro but for, you know, um, packaged goods instead of cars

Sam Parr 18:53 And he has 2.5 million followers. That post of the veggie straw ones that I just said has 25,000 likes.

Shaan Puri 18:59 Exactly, 'cause it's super affordable. 'Cause as soon as he says something, and you know somebody who eats that, you share it with them, and then he becomes a trusted source. And he's not selling you anything, he's just telling you better and worse. He's telling you what to avoid. Or he's like, "Okay, it's, it's the holiday..." He- he's got one, holiday booze haul. It's like, these are the things to, you know, to buy and don't buy when it comes to booze. Or farmed salmon. Is farmed salmon good or bad? And he just uses the, like, thinker emoji, so you're like, "Oh, shit, is there something I need to know about farmed salmon? Is that not, is that not healthy? I thought that was." Um, he's got another one. Ditch the goldfish, right? So he's, he's taking

Shaan Puri 19:30 these popular products, he's doing this. So I think this is genius. I think more people should literally just copy him, uh, because there's room for more here, and you could differentiate by being, you know, a mom who's gonna be trusted by moms and do more mom products than, than what he's doing. Or you could be a meathead who's doing more protein, gym, gym bro type of content. That's kinda what More Plates More Dates is doing. But I think this format is beautiful. So let me just tell you about this opportunity, okay? So here's how I'm thinking about this. Do you know Consumer Reports? They test, like, every product. Ellipticals and, you know, uh, coffee machines, and whatever else. Do you know about the company itself, Consumer Reports?

Sam Parr 20:10 I do. We brought 'em up. I'm not gonna, I'm not gonna steal your steez here-

Shaan Puri 20:14 [laughs]

Sam Parr 20:14 ... but it's wild. It's wild.

Shaan Puri 20:15 Well, they're a nonprofit. Do you know, uh, uh, do... You could give, give me an accurate guess. You don't have to give me the homey guess where you guess low just to make me feel good. Give me the, what you think the real guess is, their revenue per year. Do you know?

Sam Parr 20:26 100.

Shaan Puri 20:27 Th- almost 300 million a year. 289 or something like that.

Sam Parr 20:29 That's insane.

Shaan Puri 20:30 So-

Sam Parr 20:30 It's crazy, right?

Shaan Puri 20:31 It's a nonprofit.

Sam Parr 20:31 And it's all subscription revenue.

Shaan Puri 20:32 What's that?

Sam Parr 20:33 It's all subscription revenue too, I think.

Shaan Puri 20:35 Uh, yeah, I don't know the exact mix, but it's, it's a nonprofit, so you can actually go find a bunch of their stuff. Um, so, and they have, like, 250 million of assets on their books, which, like, nonprofits are, are famous for, like, having, you know, high revenue, high expenses, and then just, like, a lo- a lot of assets on the books. And so-

Sam Parr 20:51 You, you have to, you have to spend 100, uh, 60 bucks a year in order to get access to their articles.

Shaan Puri 20:56 And it's old, it's old as hell. Like, you go there and literally, like, the website looks old. You know, like, when you see videos of people from, like, the '90s or the '80s, and it's just, like, the haircuts are old, the fashion is old. It's all old. And, like, these people have '80s haircuts. And I just realized when I saw this, it's time for a new Consumer Reports. J.D. Power does this for cars, right? J.D. Power... What is it, J.D. Power and Associates? I don't know who these people are. I don't know what they do. 240 million a year in revenue. So I think there's an opportunity to create the new age Consumer Reports or J.D. Power around supplements specifically, and I would do it in the TikTok format. So what Flavcity's doing, I would do it that way, and I would test every single product, and I would test it in a scientific way that people can't. So they claim that it has this many, you know, grams of protein per scoop. Let's find out. Truth or dare, right? I dare you to have the amount of protein you say. And you do a little 15-second, tw- 30-second video that's kind of, uh, uh, you know, talking about each one of these products. The beauty of short-form video is for the fa- Mr. B said this to me and, and I, and I kind of was like, "Huh, I never really thought about this before." He goes, "For the first time ever, short-form video is the only content format that can be posted on every social network at the same time." I was like, "What?" He's like, "Yeah." Basically, let's take, uh, you know, Instagram is a single photo that's filtered. Cool, you could post that on Instagram. You could kinda post it on Facebook. You might be able to post it on Twitter, but it wasn't the native way of doing things. And, you know, like, but, but, or you can't post that on Snapchat in the same way. Like, you can't do that. But with short-form video, you can literally get on TikTok, YouTube, uh, Instagram, Facebook, Snapchat. Every single social network is compatible with short-ter- short-form video, which means short-form video is now the dominant, the dominant content format to be creating in. And, um, I, so I think if you do this, you could go across all of them.

Sam Parr 22:50 You can't monetize that. The, so typically the way... There's basically two ways that you... Eh, maybe there's three. There's two main ways you monetize this. So there's affiliate, which is Wirecutter.com. I've got a, a, I know a guy named Dennis who started BestReviews.com. He sold it for $110 million to the worst-named company on Earth. It was called Trunk, which was, uh-

Shaan Puri 23:10 [laughs]

Sam Parr 23:10 ... I, it's basically the company, I think, that owns LA Times. Uh, and he sold it for 110 million bucks after-

Shaan Puri 23:17 Trunk should definitely be, like, a women's jeans brand that's like, "Trunk, all about your butt" or something.

Sam Parr 23:23 Yeah. [laughs]

Shaan Puri 23:24 [laughs]

Sam Parr 23:24 Trunk is a horrible name. It's-

Shaan Puri 23:25 Got junk in the trunk, you know what I'm saying? [laughs]

Sam Parr 23:27 [laughs] It's a really bad name. It's one of those names that sounds like a noise.

Shaan Puri 23:31 [laughs]

Sam Parr 23:32 Uh, and so they, they sold the Trunk I, I think after four years, and they monetized it the same way as Wirecutter, so it was through affiliate. But Wirecutter's one of the few, I think NerdWallet does a good job, where they do trust... where for some, for some reason I still trust them even though I know they're getting paid per click.

Shaan Puri 23:47 Right.

Sam Parr 23:48 Uh, and then the other one, which is harder to pull off but a way better business, is, um, subscription, and that's what Consumer Report does.

Shaan Puri 23:53 By the way, you know why Wirecutter I think r- can, uh, has that trust even though they're clearly pushing, you know, they're clearly making money off the recommendations?

Sam Parr 24:01 Why?

Shaan Puri 24:02 I think it's two things. One, it's, like, good design and copywriting, so it feels like a person is talking to you, and it feels-

Sam Parr 24:07 Right

Shaan Puri 24:07 ... like, it's, like, clean.

Sam Parr 24:08 Same with the points guy.

Shaan Puri 24:10 They're not saying who's the best. What they're sa- what they do is they say, "Best on a budget, this is the one we recommend. If, if price is no, no problem, this is the best one, period, on the market. And then kind of the most common, popular option is this one." So instead of it being, "Here's our favorite, and yeah, it's the one we're getting the best kickback on," they kind of give you options of, like, "Depending on your situation, we think this is the best in that situation." And I feel like for some reason, that changes the... And then it's like, yeah, we, we make money. You know, we get an affiliate on each one of these, but, like, they're all equal. We're not saying one is better than the other. We're saying one is better in this situation. So I think that helps them.

Sam Parr 24:46 And one of the reasons why I think they do that is I, I know the founders of NerdWallet, and if I remember correctly, so NerdWallet.com/best-credit-card. So that's one page If I remember correctly, that wa- So basically, their whole business model was to make that page rank number one in Google if you search best credit card. And for a long time, that one page was making, like, 40 million of their, like, $45 million a year in sales. And then they were like, "All right. Now we need to do best credit card for students, best credit card-

Shaan Puri 25:17 Right

Sam Parr 25:17 ... for fixed income people, best credit card for your first-time credit card," and they had to diversify because best, nerdwallet.com/bestcreditcard was getting all of their sales. It was... That, that... And their whole company strategy

Sam Parr 25:30 was write articles that get linked back from, like, pr- uh, you know, usanews.com or-

Shaan Puri 25:35 Right

Sam Parr 25:35 ... Business Insider, whatever, get high-quality links, and then in those articles, link back to /bestcreditcard. It, it was a pretty wild strategy and it worked, or it's working.

Shaan Puri 25:44 Yeah, yeah. You basically wanna write articles that get links so your overall domain authority goes up, but then you got one or two money-maker pages, and those are, those are the pages that you need to be the number one search result for. The way you do it is by creating all this goodwill around the other pages, this sorta SEO goodwill. So I think you would think that short-form video is hard to monetize, but w- that's not what you're monetizing. You're not monetizing the short-form video. You're monetizing the trust. So today, who is both the most trusted voice in science and supplements and the man most likely to be in Sam's fantasies?

Sam Parr 26:22 Yeah, my husband, Andrew Huberman.

Shaan Puri 26:25 Exactly.

Sam Parr 26:26 Yeah. [laughs]

Shaan Puri 26:26 And as a... [laughs] What do they call them? My Hu- my Hu- Huberman husbands or something like that?

Sam Parr 26:29 Yeah. [laughs]

Shaan Puri 26:30 Um.

Sam Parr 26:31 What, what did they say? Uh, so I, I posted a shirtless picture of him, and he's like... And I, and I was like, uh... People were like... What did they say? They're, "I'm Huber's, I'm Huber's man." Uh.

Shaan Puri 26:41 [laughs]

Sam Parr 26:42 Yeah. He, he posted his first shirtless video the other day, and, uh, men around the world were gasping.

Shaan Puri 26:49 Clear the calendar, honey. [laughs]

Sam Parr 26:51 [laughs] Yeah.

Shaan Puri 26:52 Um, all right. So Huberman makes money through his ads and his podcast, but remember when Rob Dyrdek was on the pod and he was talking about Momentous protein? And he's like, "Yeah, Momentous was kinda dead in the water. We thought we had made the best, cleanest protein, but it really wasn't going anywhere. And then we did a deal with Andrew Huberman," and we were like, "How much did you pay him?" And he goes, "I don't know. Whatever it was, it wasn't enough." [laughs]

Sam Parr 27:14 It wasn't enough.

Shaan Puri 27:15 And he's like... And he was just, like, laughing at, like, how crazy that that was. So you know, I think the business model here is you build trust for a couple years, and then you come out with your own branded supplement, right? S- You wanna be in the supplements game. You don't wanna be the authority.

Sam Parr 27:29 That ruins your whole premise, though, of finding the most trusted.

Shaan Puri 27:33 No, no, no, no, no. You, you are the most trusted. You build the trust-

Sam Parr 27:36 [laughs]

Shaan Puri 27:36 ... by say- and then finally you say, "Look, I've had it with these companies. I've had it with these. I am just gonna make the one that I wish existed, the one that is truly clean, that is gonna hold the up- utmost standard," right? Derek from More Plates More Dates, that's exactly what he did. Uh, somebody like Jessica Alba with Honest Company kinda did the same thing. She builds up a bunch of fame and trust in one area, but then she comes out with The Honest Company, and she's like, "This is gonna be the honest brand, the product I wanna give to my kids." I think-

Sam Parr 28:01 Which, by the way, I buy Momentous protein in part because I trust Rob and Rob was involved, and I buy BPN, which is, uh, Nick Bare, you know, the jack guy who runs fast. I was like, "Well, these guys both seem trustworthy. I'll buy their stuff."

Shaan Puri 28:15 [laughs]

Sam Parr 28:15 So I spend all my money with them.

Shaan Puri 28:17 Right, 'cause what else do you have to go on? You, you have nothing else to go on. Uh, uh, this packaging or that packaging, right? Like, what else do you have to go on besides the words of somebody you trust? And so I think that's the way you do this ultimately is you, uh, you ultimately build your own supplement franchise around this, more like The Honest Company.

Sam Parr 28:35 So you-

Shaan Puri 28:35 But I think first for a couple years, you're just becoming the most viral, trusted source when it comes to the truth about X, and you gotta pick things that are gonna be very shareable, um, as well as y- you know, uh, you know, establish your authority in that niche to be able to, "I'm, I'm the most knowledgeable, trusted source when it comes to what should I be taking."

Sam Parr 28:58 By the way, we've talked about the Eat This, Not That category, and we, we loved it. I think we talked about it a year and a half or two years ago. We love the Eat This, Not That category.

Shaan Puri 29:08 Yeah.

Sam Parr 29:08 It's the best.

Shaan Puri 29:09 Well, when-

Sam Parr 29:09 I love that stuff

Shaan Puri 29:10 ... when did we say that? 'Cause I remember talking about Flavcity 'cause that's his thing, right? Eat this, not that. He was doing... Uh, we... I t- I mentioned it maybe a year ago, uh, but I really hadn't, like, fully wrapped my head around it.

Sam Parr 29:19 So Eat This, Not That was a line of books, um, I remember buying at Barnes & Noble, like, I don't even know how to say... How do you say it? I used to call them Barnes & Nobles. Uh, I remember buying it at Barnes & Nobles, uh, years ago when I was, like, in fourth grade. It was Eat This, Not That, and it would just show a picture of Doritos, and then it would show an alternative, and then it would explain why. It was a massive hit for a book series, and I remember buying, like, all of them. Um, and w- I think we said, we're like, "Fine for a book, but this has to be beyond that."

Shaan Puri 29:47 Right.

Sam Parr 29:47 And we talked about it, I think, with Steph two years ago.

Shaan Puri 29:50 Yes, yes. So I think this is a, a clear, like, content niche that could turn into a pretty monster business. Um, and there's a bunch of different, and there's a bunch of different angles depending on who you are. Derek from More Plates More Dates

Shaan Puri 30:00 obviously hits the gym bro market, but then Flavcity hits the, like, mom shop, Costco shopper market, and you should just keep... There's, there's a lot more niches than that.

Sam Parr 30:08 The New York Times did this article the other day or, or a few weeks ago, and it was, "My Guru Is Better Than Your Guru," and they talked about how people like you and I, you know, you, you and I are Team Huberman, but then there's this other group who's Team Peter Attia, and then there's this other one who's Team Peter. Like, my father-in-law loves this guy named Mark, uh, Mark Hyman or something like that. Uh, and it's like, "Well, my guru said this."

Shaan Puri 30:32 Right.

Sam Parr 30:32 And it's just crazy how we find these guys that we stick to, and whatever they say, we don't know... Like, I can't tell you entirely wh- why Huberman suggests X, Y, and Z, but I know he s- s- suggested that, and I will go to bat and fight other people whose, their guru said X, Y, and Z, and I don't even know why. I just know that I trust Andrew. That's my guy. And I thought that was really interesting how it is turning into be something like that.

Shaan Puri 30:56 Have you ever heard this explanation of why gossip exists evolutionarily?

Sam Parr 31:01 No.

Shaan Puri 31:01 It's sort of nerdy, but it's, i- it's kinda fascinating. So Everything has, uh, a value, right? Like, even, like, what we consider negative emotions like fear. Why does fear have value? Well, you know, if you're a hunter-gatherer and there's a lion, you know, fear or paranoia can be a very useful survival tool. And, and you needed to be super fearful and paranoid at a certain period of time, maybe less so today, but we can see why that's evolutionarily baked in. But that a- that applies to everything. And so gossip is a good example. Gossip, if you just talk to most people, gossip, negative thing, right? Shouldn't do it. Bad... You know, poor form. It's, uh, it's sort of a lowly thing to do. And actually, gossip is extremely useful. So you think about, uh, humans live in tribes and we're in this society. Well, it's impossible for me to know one by one with each person about their character and their reputation myself through only firsthand experiences. And so how does a tribe function? Well, gossip is actually a necessary thing. I should know that if this person's untrustworthy, 'cause rumors should spread so that the tribe as a whole becomes almost immune to this charlatan, uh, through gossip, and I don't have to myself go and have a firsthand bad experience. So in that way, gossip has saved me from getting my, you know, my hand burned on the, on the stove many times. And so I kinda feel like the, the same thing exists where it's sort of silly in a way to, oh, you just trust these online influencers, these gurus. Don't you know they're just trying to sell you something? Well, yeah, and there's, there's some amount of that. But at the same time, what am I gonna do, go test all my supplements myself? Like, the inefficiency that would be brought in if I didn't trust these people, what am I gonna do, go read all the white papers myself about clinical studies? No, I'm not gonna do that. I'm gonna... We're all gonna outsource that task to somebody, and we're gonna trust them until they burn our trust, and then we're gonna move on to the next one. But, like, ev- almost, like, as a tribe, it is the efficient way to do things. Even though it's kinda seen as this low IQ move, it's actually not a low IQ move. It is the, like, sort of, like, game theory optimal move to trust people or to trust gossip in certain situations where you're not gonna wanna do the firsthand work yourself.

Sam Parr 33:11 Look, if George Foreman tells me what grill is best for my bratwurst-

Shaan Puri 33:14 [laughs]

Sam Parr 33:14 ... I listen to George. He looks like he eats a lot of bratwurst. No, I get it.

Shaan Puri 33:18 [laughs]

Sam Parr 33:18 Where, uh... Did you just go and read a book on gossiping? Where'd you get this?

Shaan Puri 33:22 I heard this a long time ago, and, uh, you know, my brain was just connecting the dots just now.

Sam Parr 33:27 I wanna tell you about another health company that's related to all this. But before you do, we have a quick segment. It's called Thrill of the Shill.

Shaan Puri 33:36 [laughs]

Sam Parr 33:37 And so it's a time where we're each gonna take a turn, your turn is, is this time, to promote whatever we want. But it's the Thrill of the Shill because you're gonna shill something, but you're gonna thrill me a little bit.

Shaan Puri 33:49 [laughs]

Sam Parr 33:49 So about eight months ago, you invested in a company called Shepherd.

Shaan Puri 33:55 Yeah.

Sam Parr 33:55 You sent me a graph. I get updates every once in a while. I try not to get too much information 'cause I don't ever wanna reveal something I'm not supposed to reveal. But you sent me a graph. Things are going more than good, I think. I think it's... You could say how many times it's multiplied. But now's your 60-second Thrill the Shill moment. Hit it.

Shaan Puri 34:12 Oh, amazing. Oh, the pressure is on to thrill with this shill. Listen, the way that I'm gonna make this thrilling is I'm gonna share a little info, right? Share a little info, not about the business and the internal numbers necessarily, but about what's working. So I can... What I can say high level, we, uh, the business was already doing great before we joined.

Sam Parr 34:29 What's the company? You gotta say the company.

Shaan Puri 34:29 The company's called Shepherd, and what they do is they basically make it easy to hire. So I was using them to hire for my e-commerce company, 'cause I wanted to hire more people, but I didn't have the budget. So I was like, all right, Shepherd has talent in the Philippines, in LATAM. So, like, we needed a Shopify developer. All right, I can either pay an agen- expensive agency or hire some guy, but I found a guy for 2,500 a month who's awesome. And I did the same thing with customer support, and I did the same thing with a whole, a whole bunch of these roles. And so I was using them, and I was like, "This is a great business and I'm gonna buy into it." So I bought into it. And since then, the business has basically tripled. So we've tripled the business in eight months. And the business was already doing well to begin with, so that was kind of, like, way exceeded expectations. Now, what actually worked? Well, when I joined, I thought, "All right. Boys, I'm coming in hot. I got ideas. I don't know if you've heard, I got a business podcast. I think I know a thing or two about business. Why don't you listen to my ideas?" And I had all these, like, exotic ways that I thought we could, you know, make things better. And the reality was, the, the, the big lesson, the big takeaway here was a lesson that I had heard early on in the podcast. There was a guy who came on this podcast, I don't remember his name, but he made this... He has this bag comp- Peak Design. Forgot his, his first name, sorry. But Peak Design, and I was like, "Dude, you sell, like, $80 million worth of this, like, camera bag. What the hell, man? Like, what's your... What was your growth hack? What's your secret?" And he's like, "Oh, dude, I used to listen to all these business gurus, and they'd talk about this, like, advanced planning and, like, you know, like, long, long-term thinking and super strategic stuff." He goes, "To me, business is the six inches right in front of your face." And I was like, "What?" And I was like, "This is also the speech from Any Given Sunday?" And he's like, "Yes. Business is the six inches in front of your face, and you just gotta keep knocking out the six inches." And so when we were talking about Shepherd, it was like, "All right, well, uh, you know, cool ideas, Shaan, but, like, what's the six inches right in front of our face?" And, uh, we basically did one thing, one thing that really, really worked. Uh, and the one thing that really worked that was not expected for me was they just did a very simple analysis. They go, "How do we get more of our best companers-- cu- customers and less of our worst customers?" Which is, I think, an exercise anybody should do. Like, did you ever do this with either advertisers at The Hustle or, like, for Hampton? Like, did you ever defi- like, bu- bucket out, like, who are the best customers, who are the worst customers? 'Cause the worst customers take up 80% of your time.

Sam Parr 36:47 Basically, what happens is you get in this habit of where you're just like, "I'll take any amount. I'll take any customer and take any money, whatever. I'll just do whatever." And then you get all these shit people, and then you're like, "Oh, my God, this sucks. Like, this guy takes so much time, and I don't even make that much money from them. I have to learn who do I fire and who, who's, who, who do I go after instead

Shaan Puri 37:06 Exactly. And what most people do is they do it at the beginning, which I think is the wrong move 'cause at the beginning you don't really know, and you do need to be just a little bit desperate and kind of brute force things. But there's a point where you gotta check in. Like, you know, if at nine months in you haven't checked in, do this check-in, which is basically draw a little piece of paper and write our top, you know, 10 to 20% of customers and our bottom 10 to 20% of customers. Bottom is, like, drag out your time, lowest profit, um, you know, like, m- most headache, most support required, and then the top is the opposite. And so we did this little exercise, and the thing we realized was we thought the business was people hiring virtual assistants, 'cause that was the most common thing people would come in for, right? You come in, you need a VA just to do some tasks, or maybe it's a personal assistant for you or p- have b- travel booking, meeting scheduling, that stuff. And it does do that. That's fine. But then we were like, "Yo, who's this group of customers that they hire twice as much as everybody else and their, like, LTV, their lifetime value of these customers is also, like, you know, 40, 50% higher?"

Sam Parr 38:02 So who was it?

Shaan Puri 38:03 And it was people who needed bookkeepers. [laughs]

Sam Parr 38:05 Oh.

Shaan Puri 38:06 I was like, "What?" [laughs] And they're like, "Yeah, bookkeepers." And they're like, "You know, the reason we didn't see it is because it's all concentrated in certain spikes." So basically bookkeepers, everybody hires them after tax season. [laughs] It's like you go through the pain of tax season and then you're like, "All right, never again-

Sam Parr 38:20 Never again, yeah

Shaan Puri 38:20 ... am I gonna feel that." Um, and so you're like companies will basically hire a bookkeeper. Like, dude, it was such a mess, such a time suck this year, we just need a b- a bookkeeper. And we're, like, a small business. We don't need, like, a fancy bookkeeper. Let's hire an overseas book- bookkeeper. And so they, they do that. Or accounting firms or anybody who is a tax, tax, uh, company, they need more bookkeepers, or they're a bookkeeping firm, they need more bookkeepers. And so they would hire, they would hire lots of the same talent. That talent is priced a little bit more, so there's more profit on that hire. And so anyways, we just, just by identifying one little thing, but there was like three things like that that we did, those were the, like, tweaks that weren't very sexy that made a big difference. And so kind of... That's my little t-

Shaan Puri 39:00 my, my Thrill of the Shill today is to, to remind you, go do that little 80/20 exercise on best and worst customers once you're, like, I don't know, about right around a year into the business, 'cause it will refocus you in a good way.

Sam Parr 39:11 You gotta give the URL.

Shaan Puri 39:13 Oh, yeah. So go to supportshepherd.com for whatever you need to hire for, whether it's bookkeepers, virtual assistants, developers, designers. They got... You know, basically they go find the top 1% of talent in these countries. They got boots on the ground there, like, literally interviewing people, and then you can go find the elite talent there for basically 80% less than if you hire people in the States.

Sam Parr 39:33 All right. That's the Thrill of the Shill. That's pretty good. Pretty good first thrill-

Shaan Puri 39:36 First thrill?

Sam Parr 39:36 ... of the shill. Yeah. I, I was thrilled.

Shaan Puri 39:39 Um, all right. So let's do another one. So I got, uh, I got one thing for you. So did you see Trung tweeted this out? And I found this kind of interesting. So he tweeted out about this Chinese Quibi. Did you ever see this tweet?

Sam Parr 39:53 No. W- but is it working?

Shaan Puri 39:55 So, uh, yeah, I think it is [laughs] which is the funny part. So-

Sam Parr 40:00 Is it Chinese as in in China or for Chinese American but Chinese content?

Shaan Puri 40:05 It's Chinese like TikTok is Chinese. It's made by a Chinese company, but it's at the top of the US charts. It's a company called ReelShort. Go check that out.

Sam Parr 40:12 ReelShort it's called?

Shaan Puri 40:14 ReelShort. Um, so basically here's what he says. [smacks lips] "It's bite-sized English scripted video content." So it's like Quibi, but instead of paying for Hollywood hitters, it's cheesy D-grade soap operas/Hallmark films. The shows are all about affairs, scandals, marital intrigue, and absurd plots. For example, Son-in-Law's Revenge, I'm Getting Married Without You, or Never Divorce a Secret Billionaire Heiress. Let me just pause here. I'm in on ReelShort, okay? That was all I needed to hear. I... This is, this smells like a winner to me. All right. [laughs] So, so I, I like this general concept, short video that's scripted versus just, like, people's, you know, TikToks. Um, but it's like junk food. It's junk food content. Um, it's, it, it, it's, like, you know, Maury Povich, Hallmark film. Like, you know, it's just stuff that, like... It's not highbrow. It just appeals to people. People are gen... You know, people have to turn their head to, to look at this stuff.

Sam Parr 41:12 It's like Hallmark, right?

Shaan Puri 41:14 So he goes, "A show is typically 50 episodes. Each episode's only 90 to 120 seconds each." Um, they started off by adapting a bunch of Chinese romance, like, kind of soap operas for Western audiences. Um, it's free to watch, but you watch ads, uh, to unlock more episodes, or you can pay coins to unlock them faster. Um, TechCrunch estimates that this app has been downloaded 11 million times already across iOS and Android and generated over $22 million in revenue since August 2022. So $22 million in year one. Not bad. Uh, it's owned by this Chinese company, COL Group, [smacks lips] and they're exp- expanding their audience because the shows were so kind of, like, addictive and, like, you know, bad that they were banned in China. So where do you go? America, the Las Vegas of the world, where anything goes. And so they brought it here, um, pretty crazy. And so, so don't you... What do you think of this concept?

Sam Parr 42:07 But, uh, I'm, uh, it's... This is insane to me. So the actors and actresses, they're white people. So is it white... Is it, like, are they appealing to Ch-

Shaan Puri 42:16 Americans

Sam Parr 42:17 ... like Asians?

Shaan Puri 42:17 This is for Americans. It's like everything else, made in China, made for Americans.

Sam Parr 42:22 So who's, who, [laughs] who's buying? I mean, so d- this is just boggling my mind. So you know Hallmark. You know Hallmark, like, you know, the cards and channel.

Shaan Puri 42:29 Familiar, yep.

Sam Parr 42:30 So that, that company still does about 5 billion in revenue. I think it's-

Shaan Puri 42:33 Wow

Sam Parr 42:34 ... a family-owned business. So it's still, like, a huge thing.

Shaan Puri 42:36 Wait, the-

Sam Parr 42:36 So the Hallmark Channel-

Shaan Puri 42:37 Is it the shops plus the TV or are they separate businesses?

Sam Parr 42:40 It's, uh... So the whole company does 5 billion in sales. Um, but I think a l- a significant amount of their revenue is not from cards. I think it's from the, the, the channel. So it says worldwide Hallmark has 27,000 em- employees. Holy crap. Um, so, and, and Hallmark Channel is, like, a big line of their business, which I think they sold part of it to, uh, Liberty Media. And so it, it's like a huge company still, and I think it's f- it's family-owned based out of Missouri.

Shaan Puri 43:13 Yeah, yeah, that's great. Uh, okay. So Hallmark's great, so you're in. [laughs]

Sam Parr 43:17 It just-

Shaan Puri 43:18 Just tell me you're in

Sam Parr 43:18 ... I guess, so a few years ago, I'd, I've told this before, my friend Ramon and I ran a test where we created this book called, um, Captivating Claire.

Shaan Puri 43:31 Right.

Sam Parr 43:31 I think that's what it was. Was it called Captivating Claire? And basically Ramon ran a soap opera website, and he had this guy on his staff that loved to write short stories, and they were erotic short stories. And what we did was we created a WordPress blog, a w- a WordPress blog, and I think we called it shortbutromantic.com. And basically w- over the weekend we, he had wrote a story on a Friday. On Friday night the WordPress blog was made, and at the very bottom of the WordPress blog, it was basically just one page of a blog post and it said, uh, "We hope you enjoyed this first iteration of sh- of Captivating Claire from short bro- but for- shortbutromantic. If you wanna see part two, here's a PayPal link. It's $10 a month. Sign up and we will mail you the part two of the story next week when it comes out." And we used Fiverr and we got a narrator to do it. This whole project took $400. We drove tra- traffic for it. The next day on Saturday we had, like, $300 in sales.

Shaan Puri 44:31 [laughs]

Sam Parr 44:32 Um, and we were like, "Holy crap." And if you look up the blog, you might have to use Web Archive to do it, uh, but, because I think we took it down or the domain expired.

Shaan Puri 44:40 I remember reading it.

Sam Parr 44:41 If you look at the blog and you go to the comments section, you'll see these people were obsessed with this. They were like, "Oh my God, Claire did this. I can't wait to read part two." And it was mind-boggling. And then we were, on Sunday we were like, "We don't really wanna be in this business. Like, this doesn't really fit our interest." Uh, I think he should, still should've done it.

Shaan Puri 45:00 Well, he, he was going to. He, he, n- Ramon was gonna do this business. We, we had both invested in him. He was about to do this business and then one of his other businesses kinda took off, so that, that became a thing.

Sam Parr 45:09 Yeah, Dog Ramps took off. But he was, like, really dead set on this, and I was like, "I don't know. It seems like it could be pretty great." And this is, ReelShort is proof that that, that, that, that idea, I think, was onto something. It's, it's... I was amazed at young women and what they wanted to buy.

Shaan Puri 45:25 Me and you were u- undoubtedly, you know, uh, uh, we're trying hard with this channel. We go every, every week, we work on this channel. We have a Y- we have YouTube, and it's growing. We're doing, we're doing great. Small and mighty, we've been climbing up the charts, and in about a year we got to about 350,000 subscribers. And when we really knock it out of the park with a great episode, we might get few hundred thousand views. Well, just go look at ReelShort on YouTube. So somebody started uploading the ReelShort episodes, but, like, the f- like, episodes one through 20 together. So ReelShort Romance, um, 330,000 subscribers.

Sam Parr 46:02 And this-

Shaan Puri 46:02 They posted a video, uh, like two months ago, and it has, uh, you know, it's, it's The Double Life of My Billionaire Husband. 3.7 million views. Go look at the comments. It's exactly what you're talking about. Christine Joy says, "I hope there will be more video from these two. The chemistry they have," heart emoji, prayer emoji.

Sam Parr 46:18 Dude, and they're not even optimized. They have a ReelShort, uh, watermark on them, and it's vertical video.

Shaan Puri 46:24 Yeah, exactly. And another person s- you know, JoLynnBongo9- 6996 says, "Oh, I watched this on Facebook Reels and I got hooked by it. I love the story and the cast. Good job, guys. I can't wait for the next episodes." And there are thousands of comments, uh, in this comment thread that are all about, "I can't wait for the next episodes. I love the storyline. This is better than Hollywood. Oh my God, I'm hooked." This is working. Um, and, uh, this is, you know, my... What is my take here? So my take here is number one, interesting business that I had never heard of. Good job, Trung. I had, I had never heard about this, so I'm glad he put this on my radar. Second thing, the difference between a good idea and a bad idea is just a few small decisions. Quibi gets made fun of as a classic s- Silicon Valley idiotic startup. It's like, "Oh, man, remember Quibi?" It's like a, it's like the butt of a joke in Silicon Valley. Uh, yeah, this will be as successful as Quibi. Quibi I think was the right idea. Small microcontent, like, you know, TV shows shrank down, I think can be really successful. The problem was they raised $2 billion and spent it all on, like, really high production quality stuff that wasn't that juicy and never got people hooked. Um, whereas ReelShort is basically, like, starting with getting people hooked and then figuring out, you know, the rest as it goes. The third thing is, the third takeaway is why do I have so much faith in the Chinese? Like, when I even started to read his tweet, I was like, "Oh, a Chinese company's trying to do Quibi but better?" And I was like, "Probably gonna work."

Sam Parr 47:44 [laughs]

Shaan Puri 47:44 I would bet more on this random Chinese company that I've never heard of than Jeffrey Katzenberg, the guy who created Quibi, that was, like, the creator of DreamWorks. And why is that? I don't know. May- maybe it's 'cause through my e-com brand I, like, do business with, uh, you know, Chinese companies, and the way they run their businesses, I mean, like, that's my real MBA is when I talk to, like, the factory owner in China about how he's running his business, and I watch how he moves. And he came out here to meet us and we were talking to him, and the, you know, just the, the way they conduct themselves is awesome. The way they work is awesome. Their, like, level of complexity they can, like, handle is awesome, and it used to just be with manufacturing only. And then TikTok came and was a total narrative violation. It was like, oh, you think they could just, you know, make cheap plastic toys? No, no, no. Watch this. We'll make the hit social app that's all about cool and culture. We'll appeal to the US teen better than an American startup could.

Sam Parr 48:36 Do you know what it is? Is-

Shaan Puri 48:37 That's amazing to me

Sam Parr 48:38 ... it's a lack of ego is what it is. So, uh, Quibi was this cool LA company. I think they even reached out to you and I. They were like, "You guys wanna make content for this?"

Shaan Puri 48:45 Yeah, you wanna do a business show? Business Unscripted?

Sam Parr 48:46 And we were like... Yeah, I was like, I, I, I, uh, I don't know. But, but not that we're, quote, cool guys, but we are, we are based in San Francisco, and we lived a, on paper what seemed like an interesting life, like people building startups, whereas-

Shaan Puri 48:59 Let's just say it. If you're gonna spend money on us to start your platform, your platform's gonna fucking fail, all right? [laughs]

Sam Parr 49:05 Obviously. But, but they-

Shaan Puri 49:06 We sh- we should not be part of your platform. [laughs]

Sam Parr 49:08 But they went after, like, cool people. Like, you know, I m- I imagine they had, like, high, like, big time celebrities and shit like that, whereas- I think a lot of people in Silicon Valley and LA, I think they do the same thing. You know, if you look at a lot of the D2C brands, it's like they spend most of their money on shit branding, some agency that was overpriced with lowercase letters based out of Brooklyn. And in reality, like this whole Middle America, I think particularly since a lot of entrepreneurs in the tech space are young men, they forget that there's this whole contingency of 150 million people who are at home, and they just wanna goof around and watch something like this, and their ego prevents them from creating something that's, quote, "low quality". Which-

Shaan Puri 49:49 Exactly

Sam Parr 49:49 ... this fits that bill. You would see this and you're like, "This is stupid. No one will watch this." Whereas someone else who's just like, "Yeah, dude, I just wanna win. I just wanna do-"

Shaan Puri 49:57 Right

Sam Parr 49:57 ... whatever it says. I'm gonna follow the numbers. And I think a lot of people would be embarrassed to create this thing, and I don't think they should be, but I think they feel that way. Whereas whoever we're talking about, these Chinese folks, they're just like, "Yeah, but we're just setting out to build a great company."

Shaan Puri 50:12 Right.

Sam Parr 50:12 Uh, you know what I mean?

Shaan Puri 50:13 Supply and demand. Well, what is there demand for? We can be supply versus, uh, you know, we hired... You know, if your company has 20% of people that wear non-prescription glasses, like it's... You're not gonna make it in this game 'cause you just have too much, uh, you know, sort of like hipster into you that's not actually gonna focus on what the market wants. You're gonna try to sell them what they should want rather than what they actually do want.

Sam Parr 50:34 Someone tagged us in this picture of a Thai restaurant, and it was called Thai Near Me. Uh-

Shaan Puri 50:38 Thai Food Near Me.

Sam Parr 50:39 Yeah, Thai F- Thai Food Near Me, where it was clearly someone was just naming the restaurant, uh, you know, AAA Locksmith in order to rank high on Yelp.

Shaan Puri 50:46 Yeah.

Sam Parr 50:46 And that's that immigrant hustle that I appreciate and I respect.

Shaan Puri 50:49 [laughs]

Sam Parr 50:50 And they actually made their branding cute. It was like a, it was a cute sign, and it was clearly a joke. Uh, but that is lacking, I think, in a lot of our circles. And this app, ReelShort,

Sam Parr 51:00 they don't have that.

Shaan Puri 51:00 Thai Food Near Me. [laughs]

Sam Parr 51:01 Yeah, it's Thai Food Near Me. They, they've got... They- they're just like, they own a store, and they're like, "Oh, looks like people buy a lot of vapes. Looks like we're in the vape business."

Shaan Puri 51:10 Yeah. [laughs]

Sam Parr 51:10 You know what I mean? [laughs]

Shaan Puri 51:11 [laughs]

Sam Parr 51:12 A- and I appreciate that. [laughs] Like, man, these kids love this grape flavored smoke.

Shaan Puri 51:18 Right. [laughs]

Sam Parr 51:19 We're gonna start selling more of that. Uh, even though I don't always agree with it, I appreciate the mentality.

Shaan Puri 51:24 So you, you weren't there for this one, but I did an episode with Jess Ma. I don't know if you heard, heard it yet. Jess came out today.

Sam Parr 51:28 Yeah, I started watching it this morning. I love Jess Ma.

Shaan Puri 51:31 Do you know her besides like the episode? Like, had you met her? 'Cause she's friends with some of our friends.

Sam Parr 51:34 Well, so Jess Ma was, um, I, I was gonna ask you all about her, but Jess Ma, I know her as, like, she was the prodigy. So she was like on the cover of magazines at the age of 19 or 20 for starting Indeniro, an accounting software.

Shaan Puri 51:45 Well, she was like... The, the person on the cover of Inc. before, right, the month before me was Elizabeth Holmes. [laughs]

Sam Parr 51:50 Well, yeah. And so she was like the it person for a minute. But then over the last like six years, she's went silent, which in my head that either means you've done something bad or you're just quietly killing it, and you just don't wanna talk about it. And it sounds like the second one was definitely the answer. And Indeniro has been crushing it, and she's been taking the profits or money from that and doing more things. Is that right?

Shaan Puri 52:12 Yeah, pretty much. Exactly. So she was like, "All right, Indeniro's a good business. It's not gonna be a monster business." She had like a crazy life experience where her boyfriend died suddenly, and then she was like just kinda depressed, didn't wanna even go into work, and was just like, "All right, what do I wanna do with my life?" Like, you know, reminder, life is short. Nothing is guaranteed. Wait-

Sam Parr 52:27 But she didn't say how big Indeniro was though, did she?

Shaan Puri 52:30 It's over nine, it's nine figures, and it's profitable is what she had said. Um-

Sam Parr 52:34 Wow

Shaan Puri 52:34 ... and so it's over $100 million in revenue and profitable. So she was like, "All right, I don't wanna run this company anymore. I'm hiring somebody to run that, and I'm gonna do whatever's most interesting to me." And so her bets were kinda like she wanted to like... She's like, "Well," you know, like, "What am I... Like, what if I wasn't afraid of failure? What would I go do?" So she had a couple things in the episode I think are gonna get lost in there, but the big thing that I took away that I went and like... Basically, after every episode, I send a voice memo to Ben about like here's the three things that like really, like that, that are my notes from this episode.

Sam Parr 53:04 Dude, I, I, I keep my notebook right here.

Shaan Puri 53:07 But basically the thing I wrote, I was like she had like three or four golden questions. One of them was, what would I do if I wasn't afraid to fail? Um, the other one was, uh, what was the other one? It's weird.

Sam Parr 53:16 Wasn't it like what would I do if I was a billionaire?

Shaan Puri 53:18 Yeah, if I had, you know, if I had $500 million in the bank, what would I do with my time? Um, and she had another one which was how will I deal with being an absolute beginner? 'Cause if I'm gonna go do something new, by definition I'm gonna be a beginner and suck at it, and I know I'm scared of that feeling, and I know that feeling is uncomfortable, especially now that I have a little bit of an ego. I've been on the cover of magazines. People think highly of me. How will I, how will I deal with being at the bottom again? And just asking that f- sort of acknowledges that, and then it kinda takes the power away from like that insecurity. So I thought she had some like golden questions, and then one of them was like, she's like, yeah, like... 'Cause I was, I was like, "Dude, you're building these like biotech companies. You're telling me about these technologies that I can barely even understand. Do you even understand these? Like, is this your background? Are you just a science genius?" And she was like, "No, like I was a C student in biology." [laughs] Like, you know, "And now I have a biology company that's valued over $100 million." Like, there's some irony there. And I was like, you know, "So what is it? Are you just like faking it till you make it, or did you like get really good really fast?" She's like, "Well, no, like I partner with people who are experts, and I do the stuff that they're not experts at, like commercializing it." She's like, "But also I just started as a beginner." She's like, "I literally hired a biology tutor, and I started watching podcasts and TED Talks, and then I would go meet the people and I would ask them like 1,000 questions, and I would go do research after they answered those. And I would ask them 10 more questions after that, and I would just keep doing that until like I felt like I had a handle on things."

Sam Parr 54:37 That's amazing.

Shaan Puri 54:38 And I was like, "Oh, well it's simple when you say it like that." And so similarly, um, I don't know about you, but every day I go on Twitter and I see AI magic in my feed, and AI is the best magic trick, like awesome, cool demo product that I've ever seen in my life. It's just like an endless supply of awesome, cool ten-second demos. I don't know if those will all become big companies, but they're amazing demos.

Sam Parr 55:03 And you did a tutor thing.

Shaan Puri 55:04 And so I did a tutor thing. I was like, oh yeah, I should just hire somebody who... 'Cause I was like either I'm gonna drop everything that I'm doing and like go learn about AI from, as a beginner, or I'm just gonna sit this one out 'cause I don't know, it's just this fast moving thing that the kids are doing, and I, I guess I'll just kind of catch up later. That doesn't feel right either. So I was like, "Why don't I do this?" And I was like, I put out a tweet that was like, "Well, if you're somebody who plays around with all these tools, knows how to use them, I will pay you $500 an hour. I'll pay you whatever, 500-plus an hour to just sit with me a couple times a week and just show me, just teach me about these tools to save me the kinda like 10 hours of fumbling around I would be doing myself."

Sam Parr 55:42 How many emails did you get?

Shaan Puri 55:44 I got, like, over 100 replies from, like, interest- like, really interesting people, so it's gonna be hard to kinda pick. Uh, I might pick a couple people actually instead of just one 'cause there's so many good ones. And I might publish this. So I'm thinking about creating a side channel that's just, like, Shaan's Playground, my little YouTube channel, where I'll, I'll actually just publish the call so that even if somebody's not paying $500 an hour for this-

Sam Parr 56:02 That's smart

Shaan Puri 56:02 ... they can just get the benefit from it. Um, 'cause I, I, I don't need to hold this close to my vest or anything. Um, but I think this is great, and I wanna give myself a little pat on the back, but I really wanna say it out loud because there's probably a lot of things like this. Like, I know you're taking a finance course right now, and that's, like, the same version... That's, like, the same thing. Like, like, don't be afraid to go be a beginner. You're supposed to be Sam Parr, business podcast, sold a business, you know. Uh, you, you're supposed to be the guy who knows a bunch of stuff, and you, you came out and you were like, "I feel like an idiot when it comes to finance, like corporate finance. I just really don't know what the hell I'm doing. What's the best course in this place, i- in this thing I could take?" And you're, I think you spent, like, five grand on a course, right? How's that going?

Sam Parr 56:40 Yeah, it's called, um, The 4-Day MBA with Keith Cunningham. Um, and yeah, I'm trying to learn how to do all this stuff. It coincidentally, someone did a video. Some billionaire guy did a video and he's like, "Don't get an MBA. Just go take this course." Uh-

Shaan Puri 56:52 I know. Huge endorsement. I, like, I saw it when you said it. I went to the website. Website sucks.

Sam Parr 56:55 It sucks.

Shaan Puri 56:56 And I was like, "This sucks. Why did Sam do this?"

Sam Parr 56:58 No, it's awesome.

Shaan Puri 56:58 And then I heard that clip and I was like, "Okay, that's now two people that said this is awesome. I will now go do this thing."

Sam Parr 57:04 It's a great course. It's a great course. And I think, I think my opinion... How do I say this without sounding like a huge douche?

Shaan Puri 57:11 [laughs]

Sam Parr 57:12 Once I got a little bit of success, I got way less nervous about hiring people to teach me how to do things. Um, additionally, m- I mean, I've, we've talked about a ton, my body tutors or, and hiring a fitness coach. Hiring coaches and things like that kinda changed my perspective of, of the whole quote coaching industry, which I used to think was bullshit. No, like teaching, having people teach me how to do stuff has kinda changed my life a little bit. Um, and this course is awesome. I have nothing to do with it. I p- I posted that link and people thought that I, like, ha- I was like, "No, I, I just think it's cool." Um, it, it's changed my life, uh, to be honest, like going back to school and, like, learning and having people just teach me things. I think it's gonna be really smart for you to do it this way. I also think that if you promote it, it will, uh, pay for itself, so that's always fun. Um, but I think you're gonna have a life-changing next two months if you follow through with this.

Shaan Puri 58:05 Yeah, yeah. Yeah, I'm, I'm already... You know, the, the ROI i- is, is baked in, in, i- into this because, because of it. But I guess, like, I wanna say it because I wouldn't have thought to do this unless Jess Ma... She said, she just said that thing in passing, like, "I hired a biology tutor," and I, in my mind I was like, "Tutors are something that end when you're 20 years old. There is no more tutoring after that." And I was like, "Why? Why is that the case? I... Hold on. There's no rule about that." Um, and there's probably other people out there who kind of could do something similar. So anyways, I said it out loud mostly because if you're w- the 1% of people that hadn't really thought about this but could benefit from it, like, do it.

Sam Parr 58:42 Do you know really what I wanna do is what I wanted to do was I wanted to take a, like, one of those two-week MBA courses at Columbia or Stanford or something like that. That was, that's my goal for next year to do it, and I went and I looked at, like, the list of topics that they're gonna cover and I was like, "I don't, I don't even know what those topics mean, so I gotta go take this online one-"

Shaan Puri 58:58 Precursor

Sam Parr 58:58 "... just to prepare for this in-person one," because I was so embarrassed to, to, like, see this. And I used to make fun of these people that would put, like, Stanford, uh, you know, like, two-week course and-

Shaan Puri 59:07 I'll, I'll say w- one warning though. So I took a, a similar, like, a finance thing last year I think, and it was good. There's nothing... Like, it was a good course. There's nothing wrong with the course.

Sam Parr 59:15 What, you did it in person?

Shaan Puri 59:17 Uh, no, it's a online, online thing. But I attended it and I paid attention. Like, I was like, "If I'm doing this, I'm gonna do it."

Sam Parr 59:22 Where'd you do it at?

Shaan Puri 59:23 I'm gonna do it all the way.

Sam Parr 59:23 What's, what school?

Shaan Puri 59:24 It was on Maven, so it was a, a Maven, uh, finance course. And so it was a really good course. There was one thing that I'll say out loud, which is before you go drop thousands of dollars because, oh, Sam Parr said this course is great, make sure that you, like... To me, the way I, the analogy is, like, these are all clothes on a hanger, but you need a hook to hang things on. And, like, if you don't have a hook, the hook would be, like, a business you're currently running or, like, a, a place you can go apply these learnings, then I think they can be kind of, like, fancy procrastination or just, like-

Sam Parr 59:56 Yeah, for sure

Shaan Puri 59:56 ... not worth the, the time or the money. So you have to have enough s- either battle scars or, like, a place to go apply these that's actually gonna be, like, relevant for you. Otherwise, it's very easy to just, like, intellectually sit there and be like, "Yeah, cool. All right. Well, I hope I keep that in mind one day when this becomes relevant." Like, you're better off, like, building the business and then learning the things just in time that you need to know when you need to k- like, when you need to know them versus trying to learn everything in advance and then be like, "Now I'm prepared to go do the sport of business."

Sam Parr 1:00:26 Well, the reason I'm doing it is because when I was selling The Hustle, we, uh, like, this whole thing came at the end called networking capital, and I, I was like, "I just don't know what this means."

Shaan Puri 1:00:34 Right.

Sam Parr 1:00:35 And I optimized my business in one way, but then I f- I didn't know what this term was, and I, there was many things that I could've done differently that would've helped. And, like, I felt so emasculated and stupid when these people were talking to me about networking capital and I'm like, "I just can't figure this out when you're explaining it to me." I don't wanna experience that pain again. And also I'm getting my balance sheet and my income statement and the cash flow statements every month from my accountant, but I'm like, "I, I don't know if this is good." You're just, you... Accountants typically tell you facts, and I'm like, "But I don't know how to interpret it. I need to know how to interpret this to spot strengths and weaknesses." And I just remember when I was selling my company of not, I'm like, "Well, I know, I kinda know how to make the money, but I don't know what, I don't know how to optimize any of these equations and I don't know what they mean," and I felt so stupid during that.

Shaan Puri 1:01:19 [laughs]

Sam Parr 1:01:20 Um, it was just so challenging to figure out

Shaan Puri 1:01:23 Can I tell you one lesson I learned from that thing that was probably the one thing I remember that I didn't know going in, um, that I just never even thought about, which was the course I think is called Good Business - Bad Business or something like that. And, um, one of the things it's talking about when you differentiate between a good and bad business financially is your reinvestment runway. So I don't know if you've ever heard this term or thought about this, but it's essentially the idea that every business, let's say, you know, $100 comes in and you get $20 out, out of the bottom line, right? You have $20 net profit. What do you do with that net profit? So idiots like us, uh, you know, I think you probably ran your business the same way I did. I don't know, it just sits in the bank account. I don't even think about it really. Like, uh, it's there. I, I hope one day to take this out or maybe I'll, I'll, I'll use it to spend if we need, if we have some expense or a rainy day. I don't know. Let's think... I won't even think about it. And then you, uh, start to realize that, okay, the best businesses, they can either reinvest into the business itself so that like when a dollar of profit comes out, you can reinvest it back to the top and get more than ano- another dollar out. And so he broke down like some of Warren Buffett's businesses that had no reinvestment potential. So like basically profit comes out and that's why Buffett would take it to the headquarters, the holdco, and just say, "You..." The, the best optimization he could do was when he bought a business, he's like, "You're reinvesting capital poorly. I'll take that money. I'll reinvest it in a whole different business and you will be a little cash cow, but I'm not gonna keep investing back for more organic growth into this business." And so-

Sam Parr 1:02:51 Which in our case would be like, would be like, um, maybe like a course business or maybe even this podcast. Like this podcast like grows like mostly organically. We don't need to spend more money in order to grow.

Shaan Puri 1:03:00 Correct. Spending more money is not gonna create more money out of this business. The best thing we could do is take the profits from this bad business and invest it in a better business that actually can do that. Um, and so, uh, you know, that, that was a... And what he talks about is like every business over time, like you start out being able to reinvest, but you hit a certain point where, a certain dollar threshold where now you can't reinvest more than that into this business at an efficient rate. So you have to identify that point and know that, and then you could judge the business based on that. So similarly, um, you know, the best business like Constellation Software or Berkshire, they're famous for basically taking profits from one, one bad business, you know, bad defined as like it's a normal cash cow business, but you're not investing it back in that one. You're investing it to buy another one of those. And you invest that to buy another one of those. And that one arbitrage alone-

Sam Parr 1:03:47 By the way, that's the, that's the whole point of this book, Good Profit or Profit First. Um, Andrew recommended, I read it this weekend. He recommended the same thing, was take money out of the business at least and put it into a different bank account and then redeploy it into the-

Shaan Puri 1:03:58 Right

Sam Parr 1:03:59 ... your fast-growing business if it, if it warrants it.

Shaan Puri 1:04:01 Or if you have a business that can take the reinvestment, then you know that that business is actually even better than you, than it looks on paper because it has this extra capability that most businesses don't have.

Sam Parr 1:04:12 Which is what Cold Plunge is, by the way.

Shaan Puri 1:04:14 And all this stuff is pretty beginner for like anybody in like private equity or whatever, but that's not where we came from, right? Like we're basically like dorks on the internet who then started creating internet companies, who then like tried to get rich off internet companies and now, you know, like we're starting to wrap our heads around like a lot of the like, you know, one, 101 type of concepts.

Sam Parr 1:04:29 Which by the way, I think it's better to go that route. I think it's harder to start things from scratch and then learn how to optimize eventually versus you optimize, you're a good optimizer, but you don't know how to start things from scratch. Like just creating the widget that someone wants I think is more challenging.

Shaan Puri 1:04:42 100%. Plus it makes me feel good that that's true. But like YC did the same thing. He's like, "It's gonna be easier for me to take badass engineers and teach them the basics of fundraising and hiring and firing than to take an MBA who knows everything about fundraising and hiring and firing but can't build shit." And that was like the core bet of YC was we don't need to start these companies with MBAs. We could start these companies with engineers because we could t- it's easy to teach them that. It's impossible to teach the other way.

Sam Parr 1:05:08 Yeah, I, I, and I completely agree with that. [laughs] And yeah, it makes me feel better that way.

Shaan Puri 1:05:12 [laughs]

Sam Parr 1:05:13 So therefore it is true. Um-

Shaan Puri 1:05:14 In summary, we're the best. [laughs]

Sam Parr 1:05:17 Yeah, we bragged a lot in this episode. It, maybe we'll have another episode where we'll just make fun of each other. Um, all right.

Shaan Puri 1:05:22 [laughs] No, the comments will do that for us. Here, let me move the microphone so you get a good look. Uh, here's my face, here's my hair, here's my body. You can hear my voice. I, I, I stutter sometimes. What, whatever you got. Go ahead, hit us in the comments.

Sam Parr 1:05:36 Um, all right. That's the pod. [outro music]