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My First MillionHow To Make $10 Million in 12 Months By Building Apps (#349)
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EVERY SPOKEN WORD
70 min read · 14,448 words- 0:00 – 4:40
Intro
- SPSam Parr
And his verification-
- SPShaan Puri
Right
- SPSam Parr
... is for $100 million liquid plus. And so he, the guy has over $100 million.
- SPShaan Puri
[laughs]
- SPSam Parr
And he did it all through two or three of these apps, and I believe with close to no employees, and he did it over around, like, eight or 10 years. [upbeat music] What up?
- SPShaan Puri
What up? They told us to do, uh, intros now of the podcast, so this is My First Million, the podcast where, uh, we tell you 100 good ideas. Half are good, half are bad, but it's on you to figure out which ones. This is My First Million, where I make fun of Sam about how he talks. He makes fun of me about how I look, and in between we squeeze in a few business ideas. Let's see. What else? What else we got for them?
- SPSam Parr
And supposedly, uh, we're supposed to be successful people, so it's like the reviews people say, they say it's kinda like we're just sitting at a bar with a bunch of our successful friends, dare I say, I hate this word-
- SPShaan Puri
Right
- SPSam Parr
... multi-millionaire friends-
- SPShaan Puri
[laughs]
- SPSam Parr
... and just hear what they talk about. But that-
- SPShaan Puri
Yeah, just a couple of deca-millionaires hanging out on the-
- SPSam Parr
[laughs]
- SPShaan Puri
[laughs] On the pod. Dude, um, yeah, how are we supposed to brag about that? You know, what I learned from s- from my last successful venture, I now take those learnings to the podcast.
- SPSam Parr
Can I just say that regardless of the deca-millionaire nonsense, I did something t- a few weeks ago that I think was amazing. I bought a $60 tattoo gun on Amazon, and I let my wife give me a hand tattoo instead of wearing a wedding ring.
- SPShaan Puri
Oh, wow.
- SPSam Parr
Totally worth it.
- SPShaan Puri
Uh, uh, uh, let, let me be the judge.
- SPSam Parr
[laughs]
- SPShaan Puri
Can you bring that a little closer here?
- SPSam Parr
It- it's-
- SPShaan Puri
What is it?
- SPSam Parr
It's just an X. Can you see it? Is it...
- SPShaan Puri
Right, like an... Uh, that's not focusing. Okay, it's an X, like, you know-
- SPSam Parr
It, it's an infected X-
- SPShaan Puri
Like-
- SPSam Parr
... but it's an X
- SPShaan Puri
... you know, like, where, where something was there, then it's like dead, and now you've, like, put an X there? That's kind of the, the vibe you're going for or what?
- SPSam Parr
Yeah, or like, you know-
- SPShaan Puri
What happened?
- 4:40 – 19:50
How much money it costs to ball out in New York
- SPSam Parr
I just went on a really long walk, and I went and walked around all these fancy neighborhoods in Brooklyn. And I started, you know, I do what, what people do. I pull up Zillow as I'm walking and I'm like, "You know, I wonder what it's like to live here." And the houses that I like, what I usually will do is I see a house and I go, "Oh, I would like to live there," and I pull it up and it's $8 million. And $8 million, that's one number, but then you actually look at how much money you need to come up on at closing, and then you look at how much money you need to, uh, spend each and every month on the mortgage and on your interest and on maintenance and things like that. And I started thinking, I think I'm gonna live over here in Brooklyn, and I wanted to, like, map out how much money I would expe- uh, I would spend to live the lifestyle I want to spend. And it is astronomical, and I want us to talk about some, some of those expenses.
- SPShaan Puri
[laughs]
- SPSam Parr
You wanna talk about some-
- SPShaan Puri
Okay
- SPSam Parr
... how much-
- SPShaan Puri
Walk me through it.
- SPSam Parr
Okay.
- SPShaan Puri
[laughs]
- SPSam Parr
So listen to this. First of all, I'm gonna talk about the life that I'm gonna live when I move to Brooklyn. And all the listeners, there's gonna be a bunch of them that's gonna say, "Oh, Sam, no one needs an $8 million house." Yeah, I get it. You know, like, all I need is, like, a bucket of water and, like, some apples and, like, a pair of Crocs and I'm happy. But this is the life that I choose to live. So, like, I get it, no one needs this, but I'm picking this, so get off my back on this hypothetical case that might be a reality in two years. So I just gotta get that out of the way. But in terms of hypotheticals, it's not entirely hypothetical because I went and talked to a couple friends who do this. But listen to this shit. So I found a home that I wanted to buy, and I actually linked to it on the, the MBD master doc. Okay, so it's a Street Eas- it's on StreetEasy. It's a nice house, okay? It's only 3,000 square feet though, but it's a brownstone in my favorite neighborhood of Cobble Hill.
- SPShaan Puri
Mm-hmm.
- SPSam Parr
It's $5 million. I actually think the range of things I want are between five and eight, but this one I just found, it was available. It's $5 million, which basically means I gotta come up with $1.1 million as my down payment, and then I'm gonna spend around $20,000 a month in mortgage and interest and, and things like that, not including maintenance, which is gonna be, uh, more expensive. It's gonna be probably another 2 or $3,000 a month. Then I think it would probably cost, on the low end, 50,000, on the middle only end of, like, $150,000 to furnish it the way I would like to furnish it, right? Have you ever furnished a house?
- SPShaan Puri
Yeah. Yeah, it depends. If you go, like, r- like my wife, she's like, "Oh, yeah." I'm like, "What do you like?" She's like, "Restoration Hardware." I'm like, "Ah, geez." Like, you know, every item in the store is like, you know-
- SPSam Parr
It's four grand
- SPShaan Puri
... 5,000 to $10,000.
- SPSam Parr
Yeah.
- SPShaan Puri
And so, you know, you just add that up per room, you're putting in, like, 20 to 25 grand worth of stuff per, per room, uh, in the house, which is pretty nuts.
- SPSam Parr
Yeah, totally. So, like, 150K is... That's just kinda what it would cost if you wanna go that route. If you wanna go West Elm, West Elm, then yeah, your, you can maybe get it done for 175,000. But it, it's quite expensive. Then if I'm gonna get this fat house, I'm getting it 'cause I have two kids or a couple kids, so I need my $40,000, $50,000 a year nanny. I imagine I would spend around $30,000 a year in food. And so basically it comes up to where I think I'm spending 600 to $700,000 a year to live the life I wanna live in Brooklyn. But here's the kicker. If you're making over a million dollars a year in Brooklyn or p- or for sure, or in Manhattan, it's even more than this, half your money goes away to taxes. So basically, if I'm spending around $600,000 a year, I need to make $1.2 million just to cover my, my monthly numbers.
- SPShaan Puri
Break even. [laughs]
- SPSam Parr
Just to break even. And if I, if it's... And, and I, I talked to two friends, one friend who lives in Brooklyn, he told me that he spends around $500,000 a year, and then another friend that also lives nearby, and he told me he spends $800,000 a year, and he spent me, he sent me his, uh, list. But he goes, "I have an a- uh, an additional house in North, uh, Rhode Island, but if you take that, uh, vacation home, we are spending around $650,000 a year." So to, to, to live like this, it's crazy. And when you go and walk on, on these streets, you know, there's a house every block. If you go in Manhattan, there's this fancy apartment every block. How on earth do you think people, so many people afford this?
- SPShaan Puri
[laughs]
- SPSam Parr
It's crazy, like, when you actually think about the logistics, right?
- SPShaan Puri
Well, well, a lot of the people who own these homes, they owned them before they were worth $5 million. So go look at the, you know, the Zillow history of this thing. 10 years ago, what was this home worth? You know, I'm guessing it's less than, you know, less than half this, maybe 35% of this price 10 years ago, 30%. And so you're, what you're talking about here is, like, you know, a home that wa- that they bought in, their basis is a million, million and a half dollars, something like that, instead of five. So now the monthly payment is less, and now the property taxes are less. And so, you know, you cut out your biggest expense in this case, um, you, you trim that down. So I think that's, that's the answer for how a lot of people have this, is inheritance or, um, or buying in, you know, 20 years ago, 15 years ago, when these were worth a fraction of what they're worth today, and so that's why they can afford to kind of live above their weight.
- SPSam Parr
Well, so I had four takeaways when I started thinking about this. The first was that there's a story behind everything. So all these people, like, a simpleton like me is like, "Oh, you just gotta earn this much money," and they did it by starting a business. It's like, no, that's not the reality. And Zach Crockett, who works at The Hustle, he basically, we were talking about this, and he was gonna write a story on this, and he said that he researched a bunch of these homes, and what he did was he, uh, uh, for all the $5 million brown- or for a bunch of $5 million brownstones in NYC, he used a tool called Melissa, and he looked up the property records. Then he Googled the names, uh, of each person who, quote, "owned it," and then he, like, looked at their family records, which he just did this all through just sleuthing and, like, look at their stuff, and he found out that a bunch of them, like 7 out of 10 of them, were, like, teachers or artists or, or, or a professor, things that you basically, like, you could earn a bunch of money, but you're not earning enough money to buy this home. And what he surmised and came to the conclusion was, like, they just get a lot of help. And so, like, it's hard to own a $5 million brownstone when you're a reporter at the New York Post or some, like, you know, f- $120,000 a year job. So I think there's a story behind everything. The second thing is I think you just have to earn a lot of money. Dude, just listen to this. If you earn [laughs] a h- uh, one mi-
- SPShaan Puri
Hang on. Hang on. That was a killer insight.
- SPSam Parr
What?
- SPShaan Puri
The, you gotta earn a lot of money?
- SPSam Parr
Yeah.
- SPShaan Puri
Where'd you come up with that?
- SPSam Parr
The, you gotta earn a lot of money.
- SPShaan Puri
[laughs]
- 19:50 – 28:52
Making $10M in a year
- SPShaan Puri
we have a friend who it seems like might get rich very quickly here. And, uh-
- SPSam Parr
Richer
- SPShaan Puri
... let me explain. Richer. They created a product or a service or an app, and they, every day they're posting a chart of, like, the growth of this thing, and it's like a early version of a hockey stick. It's like, yep, we went from doing $100 a day, $500 a day, $1,000 a day, today $3,000 a day. Today's gonna be $9,000 a day. Pretty quickly, like, you know, fast-forward two weeks, this person's gonna put a chart in there that's gonna show them doing $200,000 in revenue just today. And it's gonna be nothing has changed, it's just they just let the growth carry on. And you see that and you're like, wow, that's, that's winning. Like, that's the HOV lane. That's the fast lane where you can just go in and you can win faster. Like, geez, I didn't realize that. I thought I gotta bust my ass for 10 years. And the reality is this person has been busting their ass for 10 years building up the skills so that they can launch a new product and they can do, let's call it 5 to 10 million this year in, in potential profits. Now, this person, if you remember, uh, many months ago-
- SPSam Parr
They, they told us
- SPShaan Puri
... they told us this exact, this exact thing. They go, "Yeah, I'm just thinking about ideas that can make..." I forgot whether they said 10 or $50 million. "I wanna make $10 million in a year, or $50 million in a year." And I was like, "Okay," like, you know, "Yeah, sure," I, you know, "and I want Jessica Alba to, you know, add me on Snapchat right now." Like, but it's not necessarily gonna happen. Like, you could just say it. But he was like, "No, I've been studying. There's apps that do that in the App Store." And, uh-
- SPSam Parr
And he's, like, showing us screenshots
- SPShaan Puri
... gave me 12 examples.
- SPSam Parr
Yeah.
- SPShaan Puri
Yeah, just showing us screenshots and examples. It's like, that does that? Yeah. This does that? Yeah. And you st- now you see 10 of them, and all of a sudden... First of all, I never knew somebody who even stated a goal like that, so just hearing it for the first time was like, "That's interesting." I knew people that would say, "I want to build a huge company, a billion-dollar company." That was normal. I'd heard that before. I'd heard, uh, "I wanna get a high-paying job," you know, "I wanna make, you know, 500K a year at, at this company." I've heard that before. I had never really heard somebody be like, "I'm looking for a way that I can make $10 million in three months." That was actually the exact thing. It was, "How do I make $10 million in three months?" And so I was like, all right, well, never heard that. That was new. Then I thought, well, my brain doesn't come up with any examples of how to do that that's like, you know, doesn't involve, you know, putting a ski mask on and walking into a Wells Fargo. So, like, you know, wha... H- and then he gave me 10 examples, and so I was like, okay, well, now I got 10 examples. Number 11 doesn't seem so far-fetched at that point. And I remember coming to t- and talking to you and being like, "Dude, have you heard anybody think like this, talk like this, come up with ideas like this?" Because I believe that there's great power in questions, and I'd never really heard somebody ask the question, "How do I make $10 million in the next three months?" And once that question was asked, now my brain has to start coming up with answers. And at first my brain was struggling, and then as he gave me examples, it started to get better and better and better at coming up with examples about how you might do that. And now it's literally happening. Like, that-
- SPSam Parr
Right in front of us
- SPShaan Puri
... that scenario is actually playing out right in front of us. What do you think of this?
- SPSam Parr
I think it's awesome. I think, I think it's still too early. I think anything that comes fast will go away fast, or can go away fast. But-
- SPShaan Puri
Right
- SPSam Parr
... he called his shot, and we are seeing on a daily basis whether it's com- uh, it's coming... It is, in fact, now coming into reality, and I think it's awesome. I think that there's ways... I think Peter Thiel said it, where he's like, "What's your five-year goal?" And then someone says their goal, and he says, "Cool, how can you do that in six months?" So I usually believe in that.
- SPShaan Puri
Right.
- SPSam Parr
This guy took it even further, which is, "What's your five-year goal? Do it in three months." And it's awesome. And there's another guy who I know that's done this, and he's public. His name is Alan Wong. Do you have the f- uh, the, the app on your iPhone that lets you listen to police scanners? It's, like, the police scanner app.
- SPShaan Puri
[laughs] No, but I know, I know of these apps. These are-
- SPSam Parr
It's like-
- SPShaan Puri
... these apps are weird.
- SPSam Parr
Yeah, it's, like, 5-0 Radio app, I think. Like, 5-0 Radio app.
- SPShaan Puri
[laughs]
- SPSam Parr
And this, this guy, Alan Wong, he posted in Reddit in 2013, and he basically said, um, uh, he said, "Hey, I'm Alan Wong. I was told to create an AMA here."
- SPShaan Puri
I have, I have it up here.
- SPSam Parr
Yeah. You wanna, you wanna read it, or you read parts of it?
- SPShaan Puri
I, I have it up here. He goes... Yeah, he goes, "I'm a per..." Uh, "Ask me anything. I'm a person in his 20s who went from rags to riches during the recession." He goes, "How I did it: I develop apps. My most popular app is called the 5-0 Radio Police Scanner. It lets you listen to police chatter around the world. You've probably seen this used in the latest Spider-Man movie, although they rebranded it." And as of 2012, my apps have been downloaded by 20 million people. By the way, this is 10 years ago he wrote this, so he did this in the 2008, 2009 time frame-
- SPSam Parr
Well, I have an update on it that I can give you in a, in a second
- SPShaan Puri
... essentially. So, so he goes, "My parents were raised in the slums of China. They fled here with my brother to New York. My mother worked in a sweatshop in Chinatown before she quit and became a homemaker. My father was a herbalist before he passed away unnaturally three months after I graduated from college. After his passing, no one in my family had a job." And so he says, "I found a full-time job at Columbia University. I was the only one with income, so I taught myself how to create apps in my free time, and I created apps on the weekends with hopes of making some side income. I didn't expect this to make me millions." And then he says... Where does he say his money? I don't think he says his money somewhere here, but, uh, yeah, go ahead. Fill in the gaps since-
- SPSam Parr
So he doesn't say it there, but I found it. So there's this oth- other subreddit that I talk about all the time called FatFire, and they've got this particular type of flair called Verified by the Mods, where the mods, the moderators, look at the income or your balance sheet. They look at something and they say, "Yeah, we believe it, what you are saying is true."
- SPShaan Puri
Right.
- SPSam Parr
And his verification is for $100 million liquid plus, and so he, the guy has over $100 million.
- 28:52 – 40:41
Scott Painter
- SPShaan Puri
Let's talk about, um, this guy Scott Painter. Do you know who Scott Painter is? This is my, this is my Billy of the week. This is guy Scott Painter. I don't know if he's a Billy, but he's got that big Billy energy for sure, and I'm gonna tell you this guy's story, and you're gonna be, you're gonna be amazed by this guy.
- SPSam Parr
All right, go for it.
- SPShaan Puri
Do you know who I'm talking about? Do you know who... Have you ever heard this name before?
- SPSam Parr
No, I'm just looking it up now.
- SPShaan Puri
So Scott Painter is known because he was the CEO of something called TrueCar, and so TrueCar is, like, a super successful, um... It was, like, one of the super successful early, uh, car companies on the internet. So what they were doing was they were publishing price information so that you could go and figure out, you know, the, the, what the true price of this car is so that, um, you know, if... Before you would go to a dealership, and depending on which dealer you went to and which salesperson you talked to and what, how they s- sort of sized you up as a sucker, you would get, like, a 30% price differential on the price of the same car. So you could go to one place, in the same exact car, they'll, they'll charge you, um, you know, 30% more or less depending on, uh, which place you went, so it was a huge spread. After TrueCar, people could just go figure out, "Well, this is the price of this car." A 1997, you know, Mazda Miata is suppo- with this many miles is supposed to be this price, and in every market they would go into, the price gaps that, that dealers were charging would spread, would change from 30% down to, like, 3%. And so they were, like, helping bring in price trans- transparency. But this dude has a, a crazy story. He has built... He has basically spent, like, 20 years just constantly trying to reinvent the auto industry online. So this guy did, uh, I'm just gonna read you, like, his, his LinkedIn. So he's, um, he's the- he starts off... Well, he goes to the Army, first of all, and he's a Spanish interrogator, which is just like a kind of a crazy little path that he took. And he talks about, like, you know, why he went there as like, you know, "My, you know, dad wasn't so cool. I needed freedom. Army was freedom for me, so I went to the Army." And, um, so anyways, he go- he goes, and he becomes VP of marketing at 1-800-Car-Search. This is early internet. We're talking, like, 1999, basically. He... And so there's 1-800-Car-Search, 1-800-Dentist. He's, like, the VP of marketing for each. Then he creates, like, a consult- So he's just hopping, one year, one year after another. Then he creates Dental Advantage. It's, like, consulting for dentists about how to use the internet. Then he starts another one called Vision Incorporated. This is, again, 1999-ish. And he's, like, um, helping companies transform, like, for e-commerce. Like, "Hey, companies are gonna need to do e-commerce. I'm gonna help them do this." Like, he, he was right. He was just way early on, on this trend of e-commerce. And then he just starts this, like, crazy run in the car industry. So he goes, the f- he's the founder of Cars Direct. They go from zero to 650 million in sales in year one. Then he goes-
- SPSam Parr
He started that?
- SPShaan Puri
... uh, and starts advertising.com. Yeah. Then he's CEO and, and founder of TrueCar. Then he's CEO and founder of PriceLock, which was like, a lock into your, like, gas prices. Then he was a founder... Then after... So he's, he does TrueCar. He takes it public. And he gets on this crazy scenario where he is the l- uh, I think he's the largest individual shareholder. He's not only the largest individual shareholder, he's buying up a ton of stock. He believes in the stock like crazy. They have an earnings miss. Uh, like, the economy sort of turns. Car own- You know, people start s- uh, slow down with their car buying. They have a big quarter miss. Stock drops like crazy. He gets margin called, 'cause he was buying so much of his own stock. [laughs] And he's basically forced to borrow money from friends to pay off his margin call, and he, he resigns from the company. That same month, he basically res- has to step down as CEO. He lost a ton of money on his own stock. He, he gets a divorce, and his literal house burns down. [laughs] And-
- SPSam Parr
Oh, my God
- SPShaan Puri
... uh, what does he do the following week? The following week, he incorporates Fair.com to a new way to buy cars. And this was, like, basically the idea that, like, hey, car buying is super, super complicated. You go, you buy a car. I don't know if you've ever done it, but, like, the process of, you have to buy a car, you have to qualify for financing. Like, you know, 80% of cars are financed in the United States. No- nobody buys cars all cash here. And, um, and then you have, like, this complicated, like, credit check, payment thing. Then you have your, your insurance on top. You have your title insurance. You have to do the ri- registration. You have to do all this different stuff. And he's like, what if instead it was like, you know, what if buying a car was as simple as, like, buying a coffee or Netflix, like, subscription? So what he would do is you would just put in your phone number. It would, like, find out all your information. It would... And it would say, "What car do you want?" You pick a car, and it would be like, "Cool, that car's $500 a month," and you own that car, and you can turn it in at any time if you don't want that car. So it's like a long-term rentals, basically, was what Fair was doing. Fair grows like crazy. They raise hundreds of millions of dollars because, A, this guy is got this crazy track record. B, he's very, like, kind of charismatic and, uh, formidable. Like, you see this guy as a founder, and you're like, "God, I would hate to be competing against this guy in the same market." And he thinks very big. He's like, "You know, we're gonna change the way that car ownership is done. We're gonna make this faster, cheaper," whatever. SoftBank piles in $300 million into a Series B round, and, um, and they're on their way. And Fair ends up going up really fast and then crashing really fast because, uh, a few years ago, I don't know if you know about it, basically, like, the, you know, as the tech markets, like, valuations turned, SoftBank, which, which was the big whale in this sp- space, started losing money. They lost money on WeWork. Then they lost money on, uh, what was the other big one? SoftBank had, like, I don't know, three or four, like, huge things like Uber. Like, they had a hu- a bunch of huge things go and, like, m- the prices crashed from where they had invested, and so he couldn't raise any more money, and he had built this, like, very complicated thing. They would lay off 40% of people. Fair doesn't really work out. And now he's back again because I see this thing that says, "This new startup, Autonomy, has placed $400 million worth of purchase orders to buy 8,000-something Teslas this year." And it's like, what? Who is buying 8,000 Teslas? Who is paying $400 million to buy Teslas? And it's a startup called Autonomy that is trying to make it where you can just rent electric cars. Simply, like, you, you, you p- there's a lot of people that wanna own a, a electric car, like a Tesla, and, um, they can't afford it. It's too expensive all in. So here, pay this monthly fee, and you get to rent a Tesla. You get to own... You ba- basically, you get to, like, have a Tesla. You're not renting it on the day by day.
- SPSam Parr
And this is Sam?
- SPShaan Puri
It's a long-term rental. He's back. And so they've placed $1 billion of purchase orders across different electric vehicle manufacturers to do this. So he's, he's back. He must have raised a ton of money again, plus, like, raised a bunch of debt, and, uh, he's back with his new startup, Drive Autonomy. And this guy is fascinating. I went down a rabbit hole listening to interviews with this guy.
- SPSam Parr
How, how, how did he come on your radar?
- SPShaan Puri
He is a very, very interesting dude. Because of this Autonomy thing. I worked backwards from the last thing I told you, where I was like, "How the hell did this start?"
- SPSam Parr
But wh- why were you just looking up purchase orders of electric cars?
- SPShaan Puri
Spent 400 mil... I saw a tw- I saw a tweet. You know, you fo- I, I follow on Twitter, like, you know, Elon and a bunch of, like, these, like, kind of Tesla fanboy and Tesla hater accounts. Like, the, I follow both sides. Like, there's basically a huge group of people that... Or I should actually say it's a small group of people that believe Tesla is a giant fraud and is going to zero. They're called TeslaQ. And then there's other people that believe that Elon Musk is, you know, the second coming of Jesus, and I follow both. And the, the second coming of Jesus camp, they were like, "Tesla, you know, the huge... You know, here's more good news for Tesla. These guys, Drive Autonomy, has placed $400 million of, of orders for, for Teslas because there's so much demand." But, and Elon had re- replied saying, um, he was like, "Demand has never been the problem. It's supply. Like, manufacturing, like, production of cars is our problem. Like, yeah, this is good news, but, like, we don't have a demand problem. We have so much demand, we have a supply problem." But I, I was curious- Where is this ha- you know, half a billion dollars of demand coming from? I've never heard of this startup before. What do they do? And, um, and that's what they do.
- SPSam Parr
What, what was he like when you hear him talk? Is he charismatic? He just looks like an, a, a normal white dude.
- SPShaan Puri
Very charismatic. Very matter-of-fact. Um, so he's basically, like, he's a good storyteller. He's quick and to the point. He, um, he reminds me a lot of, like, you know that other guy we like, Frank Slootman, the guy who runs Snowflake, who wrote that amazing blog post, Amp It Up, which basically describes, like, you know, "Don't be such a wuss." Like, you know, "Run your company to win, and we're here to win, and, like, th- this is the plan to win." And, uh, that guy's just been, like, a serial CEO of companies that just grow really fast. This guy's like that. Um, so l- let me tell you some of the kinda like interesting little nuggets that came out of this. So I'm just gonna keep rambling on this guy. So he's basically, he's like, um, he's like, "I'm a multi-time college dropout. Like, I have dropped out of college multiple times. I dropped out of, like, my kind of prep college. I dropped out of undergrad. Um, and I dropped out of grad school." And he's like, "I basically had a ton of failure. Do you guys know me? Because I've tried, like, 25 things, and 3 have worked." And he's like, you know, "But that's entrepreneurship. Like, you know, you need 3 to work out of 25 in a 20-year career, and, like, that's, that's, like, what winning looks like." Um, he's like, "You know, I always loved cars." He goes, "Cars are a where-am-I-at-in-life purchase." He goes, "I can just look at a, look at a car that I own, and it would tell me a story about where I was in life. You know, like, you know, when I'm graduating from f- from when I'm graduating, right? I'm coming of age. Or when I, like, you know, when I moved or when I got a, got a, my first good job or, like, whatever." He's like, "A car basically marked, you know, each chapter." He's like, "That's how it is for most people. I kind of had that insight, which is like a car is like your avatar that you use when you go around the world. A car says something about you. And, uh, yeah, when you, when you go upgrade to the minivan, it's 'cause you're going into family mode. And, like, that's what I kind of realized." He goes, "People spend a crazy amount of money on cars." 'Cause in the interview, the guy's like, "How have you been able to raise so much money?" He goes, "Well, I play in, like, the biggest market." He goes, "15% of all people's gross income goes to mobility, half in buying their car and half into fuel, taxes, repairs, insurance, et cetera." He's like, "So when you have this thing that makes up 15% of what everybody makes-"
- SPSam Parr
Yeah
- SPShaan Puri
... or just put differently, like, I think it's, like, a third of your net worth, you know, uh, if people are spending on new c- uh, when they buy a new car. He's like, "The TAM is just enormous." Like, you know, it's, like, 5 billion tr- uh, 5 trillion a year, uh, goes into cars or something insane like that. So he's like, you know, "That's the easy answer to how have I raised so much money. I went and played in this big space, and then I tried to reinvent it at every... Every time I would do one, I would try to reinvent it." So he's like, you know, "We were the first ones to be like, 'We would put the upfront price of a car on the internet.' Nobody was doing that at, there in the early days." I think that's the Cars Direct. Um-
- SPSam Parr
Is he successful? Uh, you said that he got margin called. Does that mean he was broke?
- SPShaan Puri
Uh, it doesn't necessarily mean he was broke. It means he didn't have enough collateral for, like, what he had borrowed for his stock. Now, if the stock recovered, which I don't know, I haven't looked at TrueCar stock, but like-
- SPSam Parr
Dude, TrueCar, their, their market cap is-
- SPShaan Puri
... the stock recovered since then
- SPSam Parr
... 230.
- SPShaan Puri
Million?
- SPSam Parr
Yeah.
- SPShaan Puri
That's, that's, yeah. [laughs] That does, does not look like it has, uh, done very well since then. So, uh, yeah, it's, like, basically d- [laughs] you know, a third of where it was back in 2014. So yeah, that's, that's not doing so well. Um, and he says that in his thing. He's like, "I've..." He's like, "I've made a bunch, and I've lost it all m- many times over." Um, and so, you know, I'm sure this guy's done well. Like, I, I don't think-
- SPSam Parr
I love him, though
- SPShaan Puri
... you can build multiple companies that get valued at billions of dollars, take a company public, I don't think you can do that and, like, you gotta real- you gotta be, like, kind of really fucking reckless to walk away with less than, you know, 20 million at, at the end of all that. Um-
- SPSam Parr
Dude, I love people who take-
- 40:41 – 49:44
Adam Nuemann.
- SPSam Parr
that right now, tell me what you think about him. Adam Neumann, the founder of WeWork, he just raised $250 million in seed funding for a $1 billion apartment business. I don't exactly know what the business does. But it sounds like it's WeLive, the thing that we were talking about where you, you know, it's, like, fancy apartment buildings that are all mostly the same. You pay a premium 'cause it's all pre-designed and looks really nice, and it has a community on it, which honestly I think is awesome. I also think WeWork is awesome. Uh, what do you think about a guy like Adam Neumann taking another swing? [upbeat music]
- SPSpeaker
Our software is the worst. Have you heard of HubSpot? See, most CRMs are a cobbled-together mess. But HubSpot is easy to adopt and actually looks gorgeous. I think I love our new CRM. Our software is the best. HubSpot. Grow better.
- SPShaan Puri
I think it's great. I think it's so easy for people to shit on him. Uh, and you... People shit on him for two reasons. One is... Well, I forget the reason. I'll give the explanation. The reason is just simply, like, you know, it's fun to hate on somebody, you know, that you don't know, that, like, you know-
- SPSam Parr
Well, and he's full, he was full of shit
- SPShaan Puri
... seems like they flew too high. They, they got too big-headed, and then they, they crashed. People like that. But I think the criticism is what? The criticism is WeWork failed. Well, WeWork didn't really fail. It just didn't achieve the, like, h- you know, what's WeWork worth today? WeWork is still, like, you know, a-
- SPSam Parr
Like 5 or 6 billion
- SPShaan Puri
... a company more valuable than, than anything that we've ever built, you know? So it's like, uh, yeah, WeWork is valued at 3.96 billion right now, publicly traded. Um, you know, so it's not like the, it's not like WeWork actually failed. It just, you know, he raised too much money at too high of a valuation, didn't live up to that, uh, that dream or that, that promise. And a bunch of people got burned if you bought the stock or you joined the company at that really high price. Yeah, you're underwater for that. So that's the first criticism. The second is he lied, cheated, steal. You know, he licensed the b- he was, like, paying himself out of the company for the trademark of We. He, like, you know, did stupid things, like, you know, this, like, summer camp where everybody got drunk and whatever. Uh- Those things to me are somewhere between, eh, a little whack, a little messed up, to actually, like, understandable and more common than you think when it comes to these, like, hyper-growth companies led by, like-
- SPSam Parr
Yeah, I don't think he's a liar. I think he's crazy
- SPShaan Puri
... you know, really hard-charging, kinda ego-driven people. But there's crazy good, there's crazy bad. Is he crazy good-
- SPSam Parr
He's both
- SPShaan Puri
... or crazy bad? What do you think?
- SPSam Parr
Mostly good-
- SPShaan Puri
[laughs]
- SPSam Parr
... but could be, in some cases it was bad. But I think that when I, at least when I read about him, and I don't know the guy. I've hung out with, um, Miguel, the co-founder. And my, my read on these guys is I don't think you're lying, I just think that you got some things wrong, and I think that you're just, like, incredibly enthusiastic. And I don't know, like, is it... When you paint the picture of the future and you end up being way wrong, you're, you're not a liar, you're just wrong. You, you know, you're optimistic, but you still called it wrong.
- SPShaan Puri
[laughs]
- SPSam Parr
But you're not a liar.
- SPShaan Puri
Right.
- SPSam Parr
Or at least you don't, you're not a liar-
- SPShaan Puri
Right
- SPSam Parr
... if you believe that it's gonna be true.
- SPShaan Puri
Yeah, delusional is different, right? Right, delusional or irrational is very different than, like, lying or fraud. And I think there's a line. Who knows if he crossed it? I don't know all the details. I'm not involved in all that. But from, from the outside, it looks to me like he was one of these guys who is huge dreamer, un- irrational self-confidence, so unbelievable self-confidence that they are gonna pull it off, that they're gonna pull off this crazy, crazy dream. I do think they get, you know, high on their own supply, where they start to think that, like, you know, the stuff that got them to the, to the point where, you know, you're on the cover of Time magazine and everybody's throwing money at you to fund you. Then all of a sudden you think, "You know, I can't be touched." And I've seen this play out many, many times. I've gotten burned on some of these, so I've, you know, like, like, like, I, uh, you know, I invested in Terra, uh, in Terra, which was, like, you know, um, the Luna, like, crypto coin, right? And the, the founder of that was the same way. This guy Do Kwon, super smart, charismatic, uh, unbelievable confidence that his thing was gonna work. And some pe- though some people along, all along the way were saying he's crazy. And then slowly but surely a bunch of smart people gave him money, you know, because it was like, "This guy's crazy, but he's kinda pulling it off, and maybe he is just crazy enough to pull it off. And we have many examples in history of people who are crazy enough to pull it off. Let's see if this happens." And, um, and sh- and then over time his ego ballooned, and it ballooned, and it ballooned, and he kept basically taking larger risks and tempting people to, uh, to, you know, sort of call him on his bluff. And then, and then somebody did, and the market, like, a series of events happened, and it crashed, and all went to zero, and everybody looks dumb. And, you know, I lost a million dollars of, like, you know, what I had in worth of Luna in, like, two days because I believed that this guy was gonna be one of the crazy ones to pull it off. I didn't think he was not crazy. I thought he was crazy and, like, might be the good crazy and, uh, was worth the bet. And so, on, on other times, I've bailed because I thought, "You know what? I'm not falling for this sort of the hero entrepreneur, the charisma, the, the visionary entrepreneur thing." I owned Tesla stock when it was, uh, really, really low. I remember, um, I remember at the time Tesla was valued at maybe, like, 2 billion and, uh, 2, 3 billion, something like that. And I remember investing in it. My dad was like, "Tesla? They don't make any money." And I was like, "Yeah, but I think that," like, you know, "Here's my reason why I think they're gonna be big, b- ABC." And then I s- I say, he's like, "Yeah, but, like, you know, it's already valued at 3 billion." I was like, "Well," you know, at, at the time I think GM was, like, 25 billion or something like that, um, one of the big companies, I don't know-
- SPSam Parr
What's, what's Tesla now?
- SPShaan Puri
... or GM or something.
- SPSam Parr
Like 500 billion?
- SPShaan Puri
Yeah, I mean, it hit a trillion. So, like, you know, I would've rode 2 billion to a trillion. And-
- SPSam Parr
I can't do that math
- SPShaan Puri
... you know, so basically, like-
- SPSam Parr
But that's, like, a, that's, like, a-
- SPShaan Puri
This was my f- it was the first stock that I bought. I, I think I put in, like, 25K or something crazy like that. I, I forget the exact numbers-
- SPSam Parr
The 25K would've been, would've been, like, millions, right?
- 49:44 – 1:00:06
Worst thing I've seen: TechTarget
- SPSam Parr
few weeks, and number two is a company that is making way more money than I thought, and I'm absolutely gonna clone it eventually. I'm gonna start with the second one. The f- uh-
- SPShaan Puri
Oh, go for it
- SPSam Parr
... go to Bit- yeah. Go to Bitpipe.com. So B-I-T-P-I-P-E.com. Tell me what you see.
- SPShaan Puri
Okay. Oh my God, all right. I see a Craigslist-looking website. It says, "Bitpipe is the enterprise IT professional's guide to IT resources. Browse this free online library with the latest technical whitepapers, webcasts, product information..." All right, I don't know what this is, but-
- SPSam Parr
Okay, so it's just-
- SPShaan Puri
... basically looks like a set of blogs maybe, uh-
- SPSam Parr
So-
- SPShaan Puri
... content about IT
- SPSam Parr
... click one of them. Click one of them. Click content management.
- SPShaan Puri
Okay, I'm... Done.
- SPSam Parr
Then click view now.
- SPShaan Puri
Okay, it looks like it's a set of reports.
- SPSam Parr
So click view now. So I did it for you, and it says-
- SPShaan Puri
Click view now
- SPSam Parr
... this is an article from Computer Weekly. It was released on August 22, uh, August 2022, and it's called, uh, uh, uh, uh, like it's so technical, I don't even know what it a- actually is. What, what are the, what's the one that you're looking at?
- SPShaan Puri
[laughs] I'm looking at Eurotunnel's digital journey for realities of post-COVID travel, and it tells me I can download this e-zine, e-zine. What the hell is an e-zine?
- SPSam Parr
All right, and I'm gonna, let, let me tell you an even worse one. This one's called How to Choose an HR Software System.
- SPShaan Puri
Is that like what people call a, a, a magazine on the internet, a e-zine?
- SPSam Parr
Yeah.
- SPShaan Puri
Is that what it's called?
- SPSam Parr
It, it's, it's old. So this one's, there's one called-
- SPShaan Puri
[laughs] There you go
- SPSam Parr
... How to Choose... Listen to this one. It's called How to Choose an HR Software System. "An HR system is one-
- SPShaan Puri
Right
- SPSam Parr
... of the most important purchases an organization makes. Nowadays, the stakes couldn't be higher." And, "Download this gui- this guy, this e-guide and learn all the key steps in setting up an effective buying process and how to identify HR, HR software features." Then it says, "Give us your corporate email address, your first name, last name, company name, job title, seniority, job function, number of employees-
- SPShaan Puri
Everything
- SPSam Parr
... industry, address, country, state, ZIP, phone, and just click download now-
- SPShaan Puri
Yeah
- SPSam Parr
... and we'll send it to you." All right. So this website, it's owned by a company that h- owns, like, 20 or 30 of these websites. And it only has about 3,000 customers, but it makes around 400 to $500 million a year in revenue. And the way-
- SPShaan Puri
No
- 1:00:06 – 1:06:09
Worst thing I've seen: The Crying CEO and why we need bullies
- SPSam Parr
All right, last thing, the lamest thing that I saw last week. So this guy posted on LinkedIn a picture of him crying. And it, it, he's, the post starts off, "This will be the most vulnerable thing I'll ever share. I've gone back and forth whether to post this or not, but we just had to lay off a few of our employees." And he talks about how it's his fault and how he made all these decisions. And I'm gonna have to file this under things that I'm gonna take to the fucking grave. I cannot believe this post. [laughs] I cannot believe this post. What happened to, like, a man being stoic and just, like, [laughs] you know, like, just taking this? Just take these feelings and just push them down. You know what I mean? Just accept it and push them down.
- SPShaan Puri
[laughs] Hey.
- SPSam Parr
It's cra-
- SPShaan Puri
Hey, hey, on that shelf that just has daddy issues, make room.
- SPSam Parr
Yeah. [laughs]
- SPShaan Puri
We got something new I need to put on the shelf-
- SPSam Parr
Yeah. I'll put that right-
- SPShaan Puri
... that I'm burying deep down in my gut.
- SPSam Parr
Yeah. Yeah, yeah. I want that problem to walk over and be like, "Excuse me, you mind if I scooch in right here?" That's what needs to happen with this. I cannot believe-
- SPShaan Puri
[laughs]
- SPSam Parr
... this person shared this. Is that ridiculous?
- SPShaan Puri
I mean, the, I don't even understand it, by the way. Uh, he goes He goes, uh, "I've seen a lot of, I've seen a lot of layoffs over the last few weeks on LinkedIn. Most of these are due to the economy or whatever other reason. Ours, my fault. I made a decision in February that I stuck with for too long. Now, I know my team will say, 'We made this decision together.'" By the way, they won't. [laughs]
- SPSam Parr
They won't.
- SPShaan Puri
They'll say, "You made this decision." [laughs] They're, they're not gonna be like, "We all made this mistake, boss." [laughs] Um, yeah. And so then he basically writes this long thing, and he writes it, like, in the marketer style where it's every other line, like single line, enter, one line, enter. And then he posts this picture of himself looking into the camera crying, and this has, um, I think it has 50,000 likes and 10,000 comments, but most of the comments are just shitting on him, which is hilarious.
- SPSam Parr
Oh, sorry. You said what? It has 50,000?
- SPShaan Puri
It has 50,000 likes, 10,000 comments, and most of them are just making fun of this guy, so a- a- as, as is deserved, to be honest. Like, you know, at My First Million, we don't con- condone bullying, but we definitely don't condone f- absolutely faking the funk like this guy's doing. The, the t- the top comment that I liked was some guy was like, "Hang on. Did you turn your ring light on before you took this selfie? 'Cause I can kinda see the reflection. Uh, it looks like you turned a ring light on to take this selfie of you crying to post on LinkedIn." And, uh, that's like, that just calls it out so perfectly, the, the, the inauthenticity of the fake authenticity that this guy tried to, tried to portray.
- SPSam Parr
I condone some type of bullying. I condone bullying this guy 'cause if the bullies, had they done their job, nerds like this wouldn't be going around existing. This is the rid- most ridiculous thing I've ever seen. I saw this [laughs] and I was like, "Bullies, you failed us." How on earth did this guy get away with this?
- SPShaan Puri
Bullies-
- SPSam Parr
This is the w-
- SPShaan Puri
You need, like, you know, in every ecosystem, it's like, yeah, well, these, uh, the plankton have to be there 'cause they're absorbing this.
- SPSam Parr
Yeah.
- SPShaan Puri
And, like, you know, these parasites, actually, you need them because of the... That's why we need bullies. Otherwise-
- SPSam Parr
Yes
- SPShaan Puri
... shit like this is gonna run rampant if there's no bullying. [laughs]
- SPSam Parr
Yes. This guy, someone need, he needed a big brother. He needed a s- a big sister, someone to be like, "Look, this isn't how you act. This is not, this isn't the right way to behave when something like this happens, you dork." I cannot believe this post.
- SPShaan Puri
We're pro-bully. We're pro-bully here at the My First Million podcast. [laughs]
- SPSam Parr
Dude, there's just gonna be a generations of cool ... uh, uh, a generation missing cool kids because of this. Um, no, I saw this post, man, and I thought this was one of the most-
- SPShaan Puri
This is the definition, this is the definition of small boy stuff. Like, when we say it was small boy stuff-
- SPSam Parr
It was the definition of cringe
- SPShaan Puri
... this is what we're talking about. Yeah. [laughs]
Episode duration: 1:06:10
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Transcript of episode uNGiJt90ac4
