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My First MillionIf I Had To Make $1 Billion... Here’s The Business I Would Start
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65 min read · 13,433 words- 0:00 – 3:00
Intro
- SPShaan Puri
All right. Someone asked me an incredible question today. They said, "If you had to pick one idea that could make you a million dollars this year, and it can't be just a newsletter or a blog or an agency," which are usually our go-tos, "what would it be? What would you do, one specific idea that you would do?" And then he also said, "And I wanna hear one specific idea that you would do to try to make a billion dollars." That's a good question, and me and Sam are gonna answer that right now on this episode of My First Billions. [upbeat music] All right. What's up? We're doing our Q&A, and we got one question that we really love.
- SPSam Parr
But is the question, Shaan, is it a billion dollar in net worth or a company that's worth a billion dollars?
- SPShaan Puri
I'm gonna say it's a company that's worth a billion dollars, so y- and, you know, you own a big chunk of it.
- SPSam Parr
Okay.
- SPShaan Puri
Eh, what's a bi- what's a billion here or there, okay? Look, the company's worth one billion. You're worth one billion. It's all a billion.
- SPSam Parr
It changes dramatically. So I know a guy who sold a company for $900 million, $990 million. You know how much he made after the sale? Three million dollars. That's how much he made.
- SPShaan Puri
Oh my God.
- SPSam Parr
He had, he had four co-founders or f- maybe five, and he raised a ton of money, and they sold it, and he made $3 million. That, that's insane, right? And I don't... I think that's an extreme case, but I think there's many cases where you create a billion-dollar business, and you actually walk away with, like, 8% of the company.
- SPShaan Puri
Right.
- SPSam Parr
Which is still a ton of money, but it's, that's a wild experience.
- SPShaan Puri
That's like a small ton. [laughs]
- SPSam Parr
It's a small ton. It just-
- SPShaan Puri
Not as big of a ton as people think you get when you're, when you make a company that big.
- SPSam Parr
Yeah, it just... The, the, the numbers change things a little bit. But let's just get right into it. The million-dollar one, what do you have?
- SPShaan Puri
Million-dollar one. All right. So, uh, you go first for this one.
- SPSam Parr
So a million dollars in... Is it net worth? Like, and what did we say, three or four years to do it?
- SPShaan Puri
Yeah, you got a couple years to do it. You're gonna make a million dollars in profit.
- SPSam Parr
So to make a million... So I think that there, if you wanna make a certain amount of money quickly, you have to ask yourself, "Is it gonna come through annual cashflow, or is it gonna come through selling something, like selling a business?"
- SPShaan Puri
Right.
- SPSam Parr
So for example, if you have a business that's earning, let's say, $300,000 a year. You, in year one, you do 50,000. Year two, you do 200,000. Year three, you do 300,000. That's not gonna add up to a million dollars. However, you could sell that business for maybe $900,000 or maybe a million dollars. So collectively, you can come up with a million bucks. I think the easiest thing to do would probably be to sell the business if you wanna make that amount of money in a certain amount of time, in, like, three years. What I would do... So first, do you know Quiet Light Brokerage?
- SPShaan Puri
Yes.
- SPSam Parr
So if I wanna make a million dollars in, let's say, three years, I'm probably not gonna invent anything new. I'm just gonna copy what works, and I'm gonna try, maybe not even do it better. I mean-
- SPShaan Puri
[laughs]
- SPSam Parr
... there's four, almost 400 million people in America. Like, I can kinda just figure out someone that already is doing something and copy it-
- SPShaan Puri
Right
- SPSam Parr
... but put a
- 3:00 – 12:00
Idea 1 - The "Me Also" strategy
- SPSam Parr
slightly different twist on it.
- SPShaan Puri
Ladies and gentlemen, we're not gonna be better, faster, or cheaper. We are simply gonna be also in the business-
- SPSam Parr
Yeah [laughs]
- SPShaan Puri
... of doing this. [laughs]
- SPSam Parr
Yeah, yeah.
- SPShaan Puri
That al- that old also strategy. [laughs]
- SPSam Parr
It's a... Yeah, the Me Too strategy. Is that what this is?
- SPShaan Puri
[laughs]
- SPSam Parr
Like, Me Also.
- SPShaan Puri
No, no, no, that's a different thing. We don't want Me Too. We don't want Me Too. [laughs]
- SPSam Parr
We don't want Me Too, sorry.
- SPShaan Puri
[laughs]
- SPSam Parr
The Me Also strategy.
- SPShaan Puri
[laughs]
- SPSam Parr
That's what we'll call it, the, the Me Also strategy. Um, so I would probably go to Quiet Light Brokerage. So Quiet Light Brokerage, I've had a couple friends sell and buy businesses through this. I've had, uh, one friend sell a business via Quiet Light Brokerage for 10 million. I had another buddy buy a company for 300,000 that ended up making 18 million a year in revenue. Um, and I know those guys at Quiet Light Brokerage, and I've talked to them. And basically, Quiet Light Brokerage is a website where you buy and sell businesses. It's a brokerage, meaning it's not exactly automated. But what you can do is you can see anonymous descriptions of companies that are for sale. You can see what the earnings are. You can see what the revenue is. You can enter in your email, and they'll send you all the financials-
- SPShaan Puri
Right
- SPSam Parr
... to the business.
- SPShaan Puri
All you gotta do is say, "I'm interested in this business," and then they send you a packet of information about that business, including the name, who the owner is, where it's incorporated, how they got their first customers, how, where, where they get their customer mix today, what are their areas for growth. They do this fantastic little interview with the person, which is, if you're buying the business, very useful. But also, if you're going, executing the Me Also strategy, it is brilliant. And in fact, we have a friend who did this. We have a friend who was looking at one of these websites, saw a business for sale for, I think, like 120 or $150,000, one of the smallest businesses for sale, maybe on Flippa somewhere or something, something like that. And he was like, "Well, I don't have $150,000, but I do have a lot of time to pick your brain." [laughs] And so he picked the brains of a bunch of people, and then they were like, "Cool, you wanna buy it?" He's like, "No, but you could, you know, you convinced me how, uh, easy this is.
- SPSam Parr
[laughs]
- SPShaan Puri
So, uh, see ya," and went and recreated that and sold it for many millions more. And, um, th- literally did that. And I think once I heard that, I realized, oh, there are easier ways and harder ways to make $10 million. And the easier way is you go look at businesses that are already successful, and you reverse engineer which one you could, you could create and copy.
- SPSam Parr
And, and by the way, I don't think... I think they make you sign an NDA or something like that, so I think you could get sued if you just rip it off entirely. But I think, but I... and that's not exactly what I'm suggesting. I'm suggesting be inspired by and do something exactly like it but slightly different. [upbeat music] I can't find this client info.
- SPSpeaker
Have you heard of HubSpot? HubSpot is a CRM platform, so it shares its data across every application. Every team can stay aligned, no out-of-sync spreadsheets or dueling databases. HubSpot, grow better.
- SPShaan Puri
Well, let's just look at it right now. So for example, I'm scrolling. Uh, you go to Quiet Light or whatever. You could use any of these brokerage sites. We, we both like Quiet Light 'cause it's a little curated, so it's, it's less filled with junk, even though, honestly, a lot of these businesses on here are absolute junk. So I'm gonna show you one of these junk businesses. So, um, you go down to the- Kind of like first sale for 2 million bucks. 2 million bucks is a nice number, right? You could be even a little bit worse in this business and, uh, and, and still make a million bucks. You could- if you sold it for 2 million after taxes, you have a million dollars. All right. So here it is. It's a FBA business, so fulfilled by Amazon. It's a money-counting machine.
- SPSam Parr
And does that mean that they're literally selling a money-counting machine?
- SPShaan Puri
Yeah
- SPSam Parr
Or-
- SPShaan Puri
Like, I like any business that can be called a min- money-printing machine, a money-counting machine. In this case, they literally... So this says, "Launched in 2020," so three years ago. It says, "This business sells money-counting machines and counterfeit bill detectors to local businesses, government agencies, restaurants, financial services, banks, event management companies, and nonprofits." Um-
- SPSam Parr
Is it one like this, like this money-counting machine-
- SPShaan Puri
Dude
- SPSam Parr
... that I have sitting right here on my desk?
- 12:00 – 16:00
Idea 2 - Niche community that solves for X
- SPShaan Puri
that this guy's made, and, and you know, he's 500 to 1,000 members
- SPSam Parr
And the reason if you're starting from scratch is you don't need that particularly big of an audience. You don't need a... You, you'd cold email people. You would also build an audience. But in order to get to a... Let's say you have an audience of 5,000 people, which is very attainable to get, particularly if you give it a year. You only need about 100 to 200 people to buy what you're selling in order to hit that target. And you could-
- SPShaan Puri
Right
- SPSam Parr
... so your podcast doesn't need to be huge, your Twitter handle, your cold email outbound strategy doesn't need to be huge. And so that's probably what I would do to get to a million dollars. What do you think about that?
- SPShaan Puri
Well, you have-- You basically said two ideas, right? That was a two for one special. You had go to Quiet Light or a, a business brokerage and find a business that you can either reverse engineer or legitimate... So, you know, reverse engineer, we kinda say, and that's, I would say a little bit generously, let's call it scrappy. The scrappy way to do things. You don't have any money. You, uh, you know, you need to get i- y- you know, rather than just try to come up with an idea from scratch when you're kind of a beginner, the better way is to go learn what businesses actually work, how they work, why they work. Go look at 30 to 50. That's like a real world NBA that you picked up, and then find one of those that you think you could mimic and put your own twist on, right? That's, that's idea one you had. By the way, with that comes also you could just buy the business. So for a lot of these, even a $2 million business, you can, um, go get an SBA loan. A lot of these will say that they're SBA loan el- eligible. So let's say that you're in the United States, you can go get an SBA loan, put down 10 to 15%. So if you can go get 200 grand, you could buy a $2 million business that's doing 600 m- 600K of profit, um, per year. And so you could actually go buy that business and just try to grow it, because actually getting a business from $0 in revenue to 2 million in revenue, or 1.8 million in revenue, is pretty hard relative to taking a business that's at 1.8 and getting it to 3.1 million, for example. Like you know, g- adding an extra million of revenue to a business that's already working is actually much easier than going from zero to one.
- SPSam Parr
For sure.
- SPShaan Puri
So I think you got both options on the table there.
- SPSam Parr
It's just more risk.
- SPShaan Puri
Well, yeah. There's, there's a little bit more risk 'cause you're personally liable for the, for the el- for the loan there. So you know, you have to buy a good business. You have to, you have to be able to know what a good business is, and that's where maybe some mentors could help. Um, the other business... The other idea you said was basically a membership service, a, a membership si- a membership community for some niche, right? That's kind of like a separate idea.
- SPSam Parr
Some... But it, it, it has to solve a specific problem. So a lot of these, like you'll see a lot out there that are memberships for launching a business. That's not speci- That's not nearly specific enough. It has to be geared towards employees and s- and like there's a clear beginning, middle, and end, and there's an outcome, uh-
- SPShaan Puri
Right
- SPSam Parr
... and there's a clear ROI as opposed to like accountability or whatever it is. You know what I mean?
- SPShaan Puri
Right. Right, right. Nothing soft and fluffy. Um, all right. So those are good. I think those are really good. In fact, I think the first one you said is, I think, the right answer. Um, that's what I would... In reality, that's what I would go do. But to make it fun, I'm gonna come up with some other ideas. So-
- SPSam Parr
Is that what you had?
- SPShaan Puri
Uh, that's what I would j- like if it was my cousin and my cousin's like, "Yo, how do I do this?" I'd be like, "All right, look, this is what we're doing. Um, you need to do this." Worst case scenario, you're gonna go learn what a bunch, a bunch, a bunch of blueprints for successful businesses, and maybe you don't pull the trigger on any of them, but still was a good use of your time. And best case scenario, you find one of these that you say, "I could do that," and either you buy it or you're gonna like remix it and create your own version of that. So that is, I think, the right answer. The second right answer would be an e-commerce company, 'cause it's not hard to build an e-commerce brand either on, on Amazon or, or on Shopify that can sell for a million dollars, but kind of, again, a boring answer. So I'm gonna give you a more fun answer. So here is, uh, here's one idea. The four most beautiful letters in the English language are QSBS. All right. So what's the QSBS idea? You're gonna create a QSBS advisory firm. Well, what is that? That's super niche.
- 16:00 – 24:00
Idea 3 - QSBS advisory firm
- SPShaan Puri
Eh, technically this might be considered an agency, but, but I think we'll allow it because it's so specific and niche here and off the beaten path. So what, here's what you're gonna do. Now, when any company starts, a tech company starts that's going to be QSBS eligible, that QSBS eligibility is worth a lot.
- SPSam Parr
You have to say what QSBS is.
- SPShaan Puri
Oh, sorry. QSBS is a tax treatment for qualified small business stock. What that means is that if you're a business that fits like these five criteria, which most tech companies fit, then when you sell, if you've held the stock for five years or even if it's a little bit less than that, you can still kind of roll it over. Um, your first $10 million of your gain are gonna be tax-free. And-
- SPSam Parr
Not only most tech companies, most new C corps that hold for five years will, would, would fall under this.
- SPShaan Puri
Right. There are some exceptions, like you can't do it if you're a doctor or lawyer or real estate. Like, there are things that are excluded, but again, that's kind of the point here. It's QSBS advisory. We're gonna help you figure out are you eligible or not, and we're gonna provide a letter that says, "We attest to the, you know, the belief that this is gonna be qualified small business stock." Now, why is this easy to do? Why is my strategy this? Well, if I'm trying to make money, it's kind of like you described with the membership. I need to create 10 times more than I'm taking, right? This is a general l- rule of life. That's probably a good rule of life. Create more value than you're trying to take, and that's what I'd be trying to do here. So I was looking for something where with a small amount of work, I could create a lot of value for my customer. Well, all right, that sounds generic, but like in this case, if my stock is gonna be QSBS, uh, eligible, that might save me $10 million down the road, and that's a pretty big, huge benefit. So would I pay $5,000 or $10,000 for, um, you know, in legal fees in order to... in advisory fees in order to, um, protect my possible $10 million gain? I would, and I think a lot of people do. And so what, what I would do here is I would build a f- advisory firm that says, "We are QSBS experts We know the ins and outs of QSBS, we're respected. Um, I would hire maybe lawyers or accountants that have done this before, and I would say, "Hey, on a as-needed basis, I'm gonna... When I get a customer, I will pay you, whatever, $300 an hour, $500 an hour for your time to do an assessment and write a letter that basically assesses the eligibility you think for QSBS." Now, QSBS is not, like, a black-and-white thing. Um, it's not like a... QSBS is basically when you, when you get the sale, you d- declare, you say, "This falls under QSBS." But if you ever got audited, you'd have to be able to protec- you know, uh, defend that. Why did you say it was QSBS eligible? And so what companies and individuals do is they will go to- go get a letter that basically says, "We as experts have looked at this business and we believe that this is gonna be QSBS. This is q- qualified small business stock."
- SPSam Parr
You know, like, the 409... What's it called? The 409-
- SPShaan Puri
409-A. Yeah
- SPSam Parr
... 409... So when, when... In order to do a bunch of stuff with your business, you, a lot of times tech companies have to get valued every year for-
- SPShaan Puri
Basically every year-
- SPSam Parr
... internal purposes
- SPShaan Puri
... every year you should get valued, and then that also is necessary when you wanna issue new stock or whatever, uh, for employees or for investors. You-
- SPSam Parr
And there's-
- SPShaan Puri
... typically set a benchmark for 409-A
- SPSam Parr
... but there's a lot of companies that do this as a service where you sp- you spend 5 or $10,000... 5 to $10,000 and you don't actually give them that much information. You give them your financials, and then they ask you to submit, like, 10 publicly traded competitors.
- SPShaan Puri
Right.
- SPSam Parr
And then they just, like, say, "All right. We think that your valuation is blank." And you, you spend 5 to $10,000, I think, for that. You're basically-
- SPShaan Puri
And you want it to be low usually. So usually what you're trying to do is get a low 409-A so that everybody's options are priced low. Um, and so it's like you're not, not even like you're trying to justify a high valuation. You're actually trying to justify a low valuation in most cases.
- SPSam Parr
And it's kind of crony capitalism a little bit. Like, they'll be like, "Yeah, yeah, yeah. It... We'll make it low," and they-
- SPShaan Puri
Right
- SPSam Parr
... or, "We'll, we'll be fair," and then they wink at you. Uh-
- SPShaan Puri
[laughs]
- SPSam Parr
... and they, like, set it really low. But-
- SPShaan Puri
[laughs]
- SPSam Parr
... uh, yeah, basically you're, you're... what you're suggesting is doing the same thing for QSBS, which is smart.
- SPShaan Puri
Yeah, and 409-A is a equally valid idea. But what I would do is I would, I would create this firm. What I like about the QSBS thing is it's a little bit higher ticket. So typically these people will charge, let's say, 10 to $15,000 for the initial at- uh, attestation letter. I don't know if I'm saying that word right. Um, but then on top of that, you could even charge kind of like an ongoing fee because there are all these, like, foot faults. So it's not just like a... There is some genuine help. So for example, oh, you're gonna sell secondary? There's things you might do wrong when you sell secondary that could disqualify you. There's disqualifying events. And so, uh, you know, you can't bill for revenue in specific ways. If it's categorized as X, it might take you out of QSBS eligibility. And so it's just an insurance policy. It's a cover your ass. It's a legal thing. It's something people don't wanna do themselves. It's too high-risk to do yourself. Um, and you literally can't do it yourself 'cause you can't write the letter for yourself. And so, uh, you don't have to have it, but it is a nice-to-have. And what I would do is I would go scare the living shit out of every tech company that I find on Crunchbase, and I would say, "Don't you want this $10 million exclusion for you?" It's, it's per person, by the way. It's not per company. So it's per tax return. So let's say there's a company with, uh, that's gonna be b- gonna be big. Every single one of those executives is gonna want their stock to be QSBS eligible. And so I would go to them and I would scare the living shit out of them that they might get this wrong, and I would tell them, "Don't worry, we can cover this for you, and here's how we'll cover it for you. Pay us whatever, either the lump sum up front or a monthly recurring fee or an annual recurring fee, 1,500, 1,500, $1,500 a year or $2,000 a year, and we will, uh, kind of make sure we're your advisory on that so that, you know, you're covered at the end of the day."
- SPSam Parr
That's a pretty brilliant idea-
- SPShaan Puri
And-
- SPSam Parr
... actually
- SPShaan Puri
... you know, if you just think about it, right? How do you get to, let's say, we talked about to sell a company for over a million dollars, let's just round up and say you've gotta have $300,000 of, um, of n- annual net profits. So how do you get to 300,000 of annual net profits if you're charging, you know, roughly $10,000 a year? You only need 30 customers a year. 30 customers-
- SPSam Parr
Yeah, it-
- 24:00 – 44:00
Idea 4 - Pizza robots
- SPShaan Puri
you are up. Your first time providing the Thrill of the Shill. For those who don't know, this is where we shamelessly shill one of our companies. But- We have to do it in a thrilling way, meaning we gotta provide some value, some entertainment, some insight. We gotta provide something, a little something.
- SPSam Parr
Um-
- SPShaan Puri
We gotta have attributes if we're gonna do this. Here we go. Thrill of the hustle.
- SPSam Parr
And I'm, uh, I'm gonna try and keep this one short 'cause this short- this might be a short episode. But basically, I remember in 2017 I went to NerdWallet, nerdwallet.com. I went to their office. Tim Chen was the CEO and founder. He invested in The Hustle. And I remember being like, "Tim, I'm freaking out, man. My expenses went up because of payroll from 30,000 to $80,000 a month." And at the time they had just rented Twitter's old office, and they were... You know, they probably had a payroll of $3 million a month-
- SPShaan Puri
[laughs]
- SPSam Parr
... or maybe even $5 million a month. And I remember he looked at me funny, and he was, like, trying to be empathetic, and he was nice, and he, and he kinda, like, was nice by saying, "Oh, wow. Wow. Yeah, I understand." And I was like, "Tim, I'm so stressed out about this." And what he said to me was basically, "Look, you kinda have to detach yourself, and your payroll needs to just l- you just, it's just a number on an Excel sheet, and you just have to, like, figure out h- do I deploy this much money here, and what's my outcome going to be, and what's my profit going to be?" And that didn't sit well with me until about 12 months ago. So I launched this company called Hampton, um, joinhampton.com. It's, like, a community for founders who are doing at least a million in revenue, but the average member's, like, 25 million a year. And I remember, like, that freaking me out forever. We had a team retreat last week, and I went out there, and right now we've got 16 full-time employees or f- 15 including me. And then we've also employed, I think, 50 facilitators now. So in, like, 18 months we've created, what's that? 70 or 65 jobs, something like that. And I am so not stressed about it this year. This is the only time I've not been stressed about payroll and providing people. Because the way that we've looked at it is exactly how Tim has explained, where it's just like, "What's my input? What's my output?" And this idea of being, like, a capital allocator. I've never had that where it's, like, been as clear-cut as, "Well, I hired this person. I get this much out after three months." It's completely changed how I've, um, how I've run this company, and it's made me so much more relaxed. And I don't know what made that shift other than his conversation. But you know what I'm talking about? Have you ever, like, been through this where you're-
- SPShaan Puri
Well, we both used to be kind of like, oh, i- if you're an entrepreneur, you're a product maker. And, like, we'd be sitting there writing... You know, you're writing The Hustle, and, you know, I'm sitting there and f- and designing things and working with engineers trying to make a product. But there is an up level of that, which is at, as, at, once you build the product and the product has pro- which Hampton does, it has product market fit. People like it. They use it. They, they're in it. Now you're a capital allocator. Basically you're take- you're s- you're just deciding where resources go. So, um, I need to be able to... Like, you can't be tight on money because money is your job. You have to deploy that in a way that's gonna get more output than the input. And sometimes you'll miss. You're not gonna be 100%, but-
- SPSam Parr
No
- SPShaan Puri
... knowing that that's the job makes it easier. And it sounds like having the right conversation at the right time from somebody who's a peer of yours was the key.
- SPSam Parr
Yeah. And that's, by the way, what h- the whole, one of the whole things about Hampton is that you have peers with other entrepreneurs that are of similar size company, uh, that, that, that you have. And anyway, that, like, learning, I remember having our team offsite at previous companies and I'm like, "How?" Like, "This person just had a baby. Basically, I just had a baby. How am I gonna create enough revenue-"
- SPShaan Puri
[laughs]
- SPSam Parr
"... in order to, like, provide for this kid?" 'Cause that's how it feels at first.
- SPShaan Puri
She's like-
- SPSam Parr
Or you're like-
- SPShaan Puri
"No, you didn't." [laughs]
- SPSam Parr
[laughs]
- SPShaan Puri
"I did, remember?"
- SPSam Parr
Yeah. Like, "Hey, uh-"
- SPShaan Puri
"I'm the one who did that." [laughs]
- SPSam Parr
"Hey, Jess, when's our baby shower?" Uh. [laughs]
- SPShaan Puri
[laughs]
- SPSam Parr
And I was just... And this year it's been... Or, or you'll be like, "This person costs $250,000? There's no way that's a fair salary."
- SPShaan Puri
Right.
- SPSam Parr
And it's like, well, that's not how you-
- SPShaan Puri
That's a house where I'm from. Are you a house? [laughs]
- SPSam Parr
Yeah. Like... [laughs] Yeah. Can I live in you? [laughs]
- SPShaan Puri
Do you have three beds and a bath? [laughs]
- SPSam Parr
[laughs]
- SPShaan Puri
If not, I'm not paying you $250,000. [laughs]
- SPSam Parr
So that's been my biggest takeaway this year with running Hampton. So anyway, if you're, particularly if you're listening to this and you do at least 50 million in revenue, we're building groups for that. Joinhampton.com. All right. Let's do, uh, the billion-dollar one.
- 44:00 – 59:42
Idea 5 - Buying a university
- SPShaan Puri
into more of the, the gray or dark areas where it's, you know, there's a bit of war and destruction involved. But here's the light idea. Here's another idea. Um, we're buying a university. Okay, so what are we doing? There are a lot of colleges for sale, more than you would think. Um, so go to a-
- SPSam Parr
Are they on Quiet Light?
- SPShaan Puri
They're on DealStream. So go to a b- a website called DealStream.
- SPSam Parr
Come on, that was kind of funny.
- SPShaan Puri
Well, they could be. Uh, Qu- DealStream is literally like Quiet Light. It's just different name. It's the same idea. It was a business brokerage.
- SPSam Parr
All right.
- SPShaan Puri
Uh, but if you look colleges for sale, they're, they're there, and they're not that expensive. You could buy colleges for, like, $5 million, $10 million. So to do this, you're gonna need a lot of money, but the good news is that universities are worth a lot of money. Like, what would you peg the value at? Let's start at the top end. Like, what do you think Stanford or Harvard is worth? If somebody real... If, if mega billionaire genius wanted to buy Stanford or Harvard, what, what would it even cost? Could it, could it even be-
- SPSam Parr
I don't even know
- SPShaan Puri
... what would the price have to be?
- SPSam Parr
Would it, would it be like a, a H- Harvard, a h- a hundred-plus billion dollars?
- SPShaan Puri
I mean, the endowment alone I think is, like... What? The endowment alone's almost $100 billion, right? So the-
- SPSam Parr
Yeah, it's hard to even
- SPShaan Puri
... the whole-
- SPSam Parr
It's, it's hard
- SPShaan Puri
... the whole enchilada's gotta be 500 billion. It might... Like, these are companies that are worth... Or sorry. The universities are essentially properties that are worth, you know, a Facebook. [laughs] They're crazy, they're crazy big.
- SPSam Parr
Harvard endowments is, is 53 billion, so yeah, I don't know. They, uh, a hu- a hun-
- SPShaan Puri
100 to 200 billion, 300 billion, something like that?
- SPSam Parr
Yeah. Like h- so big that it's hard to understand.
- SPShaan Puri
Hard to even fathom, right? Not for sale, can't be bought, essentially. Same thing with Stanford. Now, let's even go to, like, a Belmont, right? So, like, let's just do some quick math here.
- SPSam Parr
[laughs] Where I went, Belmont University.
- SPShaan Puri
If you went to Belmont, what's the tuition at Belmont?
- SPSam Parr
Back then it was 30,000. Let's see what it is now. Belmont University tuition, $38,000.
- SPShaan Puri
All right, so $38,000. And how many students go to Belmont?
- SPSam Parr
Let's say 5,000.
- SPShaan Puri
5,000, uh, per year. Per year, per c- or the whole, whole university?
- SPSam Parr
You could say, um, let's say f- 1,800 per year.
- SPShaan Puri
All right. So let's go, let's round up to 2,000. So even a small, small private school. Where, where is Belmont? I don't even know where it is.
- SPSam Parr
Nashville, Tennessee. It looks like they have 7,300 students, so 2,000 per class, let's say.
- SPShaan Puri
Cool. So $76 million top line. That's not counting endowments. That's not counting gra- grants and research. It's not counting the fact that it's tax-free, that it's, uh, has, like, all these other benefits. Like, we've talked about this before.
- SPSam Parr
So you can actually see, see the numbers, by the way. The Belmont's, uh, annual revenue is $464 million. Their expenses are $350 million, so they make $100 million a year in profit. They only have $200 million in liabilities, and they have $1.5 billion in assets.
Episode duration: 59:42
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