MFM #160: How to Build a Paid Community Making $20M a Year

Sam Parr 0:00 "Hey, I've got a white male, 6'3", he's got a crowbar and I have, uh, and he's trying to break into this building. Here's the address." I've just given them a description of the suspect, a description of the crime, and the existence of weapons. Every single police department in the nation, that's what their dispatch is designed to do, and they instantly categorize this-

Shaan Puri 0:18 You just described Sam at his own house-

Sam Parr 0:20 [laughs] Yeah

Shaan Puri 0:20 ... practicing crowbar combat as a hobby.

Sam Parr 0:22 I know, right. [laughs]

Shaan Puri 0:25 [laughs]

Speaker 0:25 [upbeat music] Yeah. I feel like I can rule the world.

Sam Parr 0:29 Hey, uh-

Speaker 0:30 I know I can do whatever I want to

Sam Parr 0:30 ... your thing looks pretty good. Uh, I think it looks great.

Shaan Puri 0:32 Pretty good?

Sam Parr 0:33 No, I think it looks great.

Shaan Puri 0:33 Hey, hey, I-

Sam Parr 0:35 I think it looks great

Shaan Puri 0:35 ... I look, I look fucking fantastic. You look fantastic. This is the best, this is the best I've ever looked. If I look in a mirror, I have never seen this coming back, so whatever this camera is doing for me, this is... Just know, if you're watching this, I'm uglier than this looks right now.

Sam Parr 0:49 No, I, I think-

Shaan Puri 0:49 So what do you think this means? I'm uglier than this looks

Sam Parr 0:51 ... I think you kind of look celebrity-ish. Like, you got cool hair.

Shaan Puri 0:55 Right?

Sam Parr 0:55 You've got a cool beard. I think you look, I think you look like a, I think you look cooler than you've ever looked.

Shaan Puri 1:00 Thank you. That's how I feel. I feel cool. And I think I need a tattoo or something. I'm just like, now I'm trying to triple down on the celebrity status that I, I see.

Sam Parr 1:08 No, I, I think you look wonderful. Um, two things. First, today w- I wanna talk about paid communities a lot. But before we get into that, the second thing is what I want to tell you. Last night, my wife Sarah goes, "Good night, Shaan." Um-

Shaan Puri 1:23 [laughs]

Sam Parr 1:24 [laughs] Because everyone's been saying that. Dude, they say it in such a mean way.

Shaan Puri 1:30 Was she trolling, or th- was it an accident?

Sam Parr 1:32 It's trolling because someone tweeted like, "Well, we think that you are Shaan and Shaan's you because Indian guys typically have high-pitched, nerdy voice, and white guys-

Shaan Puri 1:41 [laughs]

Sam Parr 1:42 ... like you have, like, low-pitched alpha voice." Turns out Shaan's the one with the alpha voice, and I'm like, "Fuck."

Shaan Puri 1:48 [laughs]

Sam Parr 1:51 So she called me Shaan. Uh, thanks.

Shaan Puri 1:53 Oh, that's amazing. I hope you guys were doing some great things while she called you Shaan. That was awesome.

Sam Parr 1:59 Yeah. Well-

Shaan Puri 1:59 [laughs]

Sam Parr 2:00 ... it was, she burned me good. But, uh, let's get right into... You wanna get, you wanna talk about paid communities? I did a lot of research 'cause this interests me right now.

Shaan Puri 2:08 Okay, let's do it.

Sam Parr 2:09 Okay, so paid communities interest me because I came across this thing called Tiger 21. And this sounds, like, lame that I'm bringing this up now after selling my company, but I've been interested in this for, for years. Um, do you know what Tiger 21 is?

Shaan Puri 2:23 I've heard about it. What I know about it is it's kind of like a, a mastermind peer group thing, but it's for a certain wealth level. I don't know if there's a s- I don't know if there's an actual cutoff, but it's supposed to be for wealthier, and I think it's mostly older people. And, uh, we have a couple friends who are in it, so I, I texted one of them today about it, so I got a little bit of info. But tell me what I missed. What do you know about it?

Sam Parr 2:45 Okay. So Tiger 21, uh, Google it. I don't know the URL. Maybe dot, maybe it's just that .com. Um, but basically it's a peer group where you have to have at least $10 million of investable assets in order to join. It's very expensive. It's $30,000 a year. I wouldn't call it a mastermind, because mastermind has a certain connotation, but yeah, it kind of is that. Um, I logged onto the site. I, I'm not a member, but, uh, I used a friend's login to check it out, and there's, uh, at least 850 members according to the, what I saw and according to their site. So what's that math? $24 million a year in revenue. Um, they have local chapters that meet up, uh, I guess now digitally, and they do things like they share one another's portfolio, and you have to defend your portfolio. And so it's basically rooted in rich people talking about rich people stuff, mainly being investing, but I think it turns into a little bit of therapy every once in a while, like a lot of groups do. But-

Shaan Puri 3:42 Right

Sam Parr 3:42 ... what did your buddy say?

Shaan Puri 3:44 All right. So I texted, uh, our mutual friend Keith. Um, and-

Sam Parr 3:48 So did I

Shaan Puri 3:50 ... he's, he's, uh, he's a real estate guy. He's been on the pod. You can go listen to Keith's episode. And Keith's a good dude, and he goes... I go, "You're in Tiger 21, right?" And he goes, "Yes. Um, what's up?" And I basically asked him, "What do you think about it?" He's like, "It's an interesting group. It's because it's all about investing, preserving wealth. Uh, it's mainly for older people." And, um, he goes, "The typical meeting goes four hours. You do," like you said, "a portfolio defense where you talk about what you're holding and why, and other people get interested in it. And sometimes there's speakers. Um, sometimes it's s- sometimes it's an external speaker, sometimes it's s- somebody from the group who speaks, and there's, like, a moderator." And they also do, like, events, 'cause if you go to the website you can see, like, they hosted a Tiger 21 event at Magic Johnson's house. And so they're definitely trying to build this kind of, like, who's who network, this sort of, like, Soho club v- Soho House vibe, uh, to the whole thing.

Sam Parr 4:44 And it, um... Yeah, so they do that. They also, you get, like, deals. So a friend of mine sent me a deal where they... Basically, when you're wealthy you get this thing called umbrella insurance, which you pay two grand a year, and it's just, like, general insurance. And it's bas- The, the story they tell you is, like, if you get in a car crash and someone Googles you, they're gonna see you're rich and they're gonna wanna sue you for $5 million, and this protects against all types of stuff. And so they give you a discount on umbrella, uh, insurance. Um, and so by my calculation, I actually would bet that they do 30 to 40 million in revenue, and they recently sold to private equity, and so it's a relatively big business. And I actually read about, uh, read up on it, and someone said, like, there's 90% retention rate, which is pretty amazing. I've also been following Reddit's, uh, FatFire, which is a subreddit similar to this, and it's, like, tripled over the last year. So this space has got me incredibly interested, but this is just one example of a paid community. And so what I wanted to do was go through a few other paid communities that are interesting. I want to explain, I'm gonna try to explain why I think they work, and then where the opportunity is for other paid communities. Does that sound good?

Shaan Puri 5:46 Can I start, can I start with one opportunity, which is why isn't this just a business model for our podcast? Like, why aren't we starting Tiger 21 for people that are, you know, that have, let's call it, a million dollars of investable assets, so a million dollars of sort of, like, liquid net worth that you can go invest into something? And, uh, why aren't we starting this now? This seems like the perfect thing to do for a podcast like this.

Sam Parr 6:09 I think that probably there should be something like this. I agree. I, if you go to the Tiger 21 website, um, you'll see, like, you know, the type of models they, people use on their website is, like, their ideal customer. And it's, like-

Shaan Puri 6:20 Right

Sam Parr 6:20 ... 65-year-old white dudes w- who own insurance companies that are quite wealthy, but not young or not, like, our kinda crew.

Shaan Puri 6:31 Yeah.

Sam Parr 6:31 Um, so I agree. I think there's something there.

Shaan Puri 6:35 Okay. F- so fair enough. So l- let's go into it.

Sam Parr 6:38 All right. So let's talk about... W- where should we start? I've done a bunch of research. Um, how about we talk about-

Shaan Puri 6:43 By the way, sorry, sorry, interrupt you one more time. The thing I just said, by the way, I think is important. Uh, I said, why isn't that the business model for this podcast? I think way too many podcasts try to just do ads, and we've talked in the past about, like, Supercast, which lets you do, like, a paid, a paid kinda super premium version of it for your hardcore fans who pay you nine bucks a month, or five bucks a month, or whatever. And, uh, you know, I started a rolling fund largely off of the audience from this thing that said, "Hey, I've listened to this guy a bunch. I trust him. He's, he has a good track record." And so now that rolling fund is $4 million a year that I get to invest into startups. That's more value than all of the ad revenue that we had before. Um, and so I think that more people should figure out bus- business models that are different from the content that they're creating. And so I'm surprised more podcasts don't have-

Sam Parr 7:35 Well-

Shaan Puri 7:35 ... different business models

Sam Parr 7:36 ... I agree with you, but we are-

Shaan Puri 7:38 It is more work

Sam Parr 7:39 ... we're in one of the most lucrative niches there is. I mean, like, if you're a po- a comedian, if you're, um... What's that shit called? The two women who talk about sex all the time.

Shaan Puri 7:49 Call Her Daddy.

Sam Parr 7:50 Yes. Like, that's a little bit different, so how do you make money off that? That's a little bit different, and that's actually what we're gonna talk about with paid communities. So let's actually-

Shaan Puri 7:58 Go for it

Sam Parr 7:58 ... talk about... Let's a- and I'm gonna bring that up. So let's talk about what makes them interesting and what makes them not interesting. So to me, what makes them interesting is that they can grow pretty quickly. So you had a podcast. Um, you do this $4 million fund. Now, building the audience takes a while, but you turned your fund on, and you, it was $4 million in a matter of months.

Shaan Puri 8:20 Yeah.

Sam Parr 8:20 Very quickly. So they seem relatively fast to grow. They're really fast if you have an audience, but compared to, like, a software company, which could take 10 years, I think you definitely could build it in a matter of two or three years. Second, they seem pretty fun to run if the interest of your community is the same interest that you have. If you, if, if you, if they don't, then it's definitely not as fun. But it's kind of interesting if you, or it's very interesting if that's what you care about. Third, you don't really need a lot of money to start one. You kinda actually need no money. You really could just start it with a paid Facebook group. Um, and you could have a really lean team to do it. And finally, they definitely seem pretty profitable because you can have a lean team. But let's talk about the cons. One, and this is what I've learned with our paid stuff and from friends, I think churn could be pretty high. Did you notice that churn was high in any paid communities you've been part of?

Shaan Puri 9:09 Honestly, the churn was not high in the paid community that I ran. Um, but I don't measure-

Sam Parr 9:14 But you did it less of a year.

Shaan Puri 9:16 Yeah, yeah, yeah, for sure. But that was m- it was a monthly, it was a monthly fee, so you could churn out monthly, right? For Trends, I think you charge annually.

Sam Parr 9:23 Yes.

Shaan Puri 9:23 So you don't know your churn until, you know, sorta later, unless somebody actively cancels.

Sam Parr 9:27 So it's not like, uh, like enterprise software churn where it's like a net, like a 100-

Shaan Puri 9:33 Net negative. [laughs]

Sam Parr 9:35 Yeah. So that, that, I don't think that exists in most communities anyway.

Shaan Puri 9:38 By, by the way, my, my paid community, just for real numbers, mine was 7% a month was churning, which is, like, if you just, if you're not adding any new members, you, you know, [laughs] that doesn't take long for it to go to zero. But I was-

Sam Parr 9:48 One year. I think 7% is one year.

Shaan Puri 9:51 No, I'm talking about monthly. I was monthly-

Sam Parr 9:54 I know

Shaan Puri 9:54 ... I was churning n- 7%. And so, uh, so... Oh, you're saying one year for it to go to zero. Yes, exactly.

Sam Parr 9:59 I think if you have a s- I think if you have a 4% churn, that's 18 months.

Shaan Puri 10:03 And, and so when, with including my growth, I think my net churn was, like, 1%. So I think I was adding 6%, and I was losing 7% basically every month. And, um, can you share anything about Trends? What was the retention like?

Sam Parr 10:18 Yeah. Um, so we had some payment issues when we first launched. So basically, we had some issues, um, where if someone signs up on day one, and on day 366 they get a renewal, um, the credit card statements, the, the, a lot of the banks will be like, "Whoa, whoa, whoa. What's this? That's fraud." So we actually had a f- a big fraud pro-, uh, a problem with banks blocking it. But 80% of people, uh, were opted in to, uh, renew in year one, or in renew in year two in our first cohort.

Shaan Puri 10:46 Yeah.

Sam Parr 10:46 Um, ballpark, ballpark, about 80%, which is pretty good, but not... But, like, it's hard to get new customers on a consistent basis.

Shaan Puri 10:54 Yep.

Sam Parr 10:55 Um, okay. So, uh, the second thing is a lotta times they don't scale that well. And the reason they don't scale that well is if your community is kinda like Trends where you value close-knit connections, or Tiger 21, more people makes it actually worse. Um, now if your community is content based, which we're gonna talk about in a second, it can actually make it way better. But a lotta communities, like a YPO, like, or, um, like if there's 150 people at your meeting versus five people at your meeting, one is worse than the other.

Shaan Puri 11:28 Right.

Sam Parr 11:28 So it's not necessarily-

Shaan Puri 11:29 'Cause the sc- the scale gets worse for two reasons. One is exclusivity. So if the reason to be in this group was that it's exclusive, the more people in, the less exclusive it is. Or the, if the value is that, "Oh, I really like this conversation. This conversation was really h- really nice," but now you get a noisy room of 1,000 people, "Well, now the c- it's just too noisy. I can't keep up with this. I don't know who these people are. Some of these people are saying stupid things. I'm outta here," right? So that's the two reasons that the scale, scalability hurts.

Sam Parr 11:56 Yes. And it can work though because if you're a Reddit, which is a community, not a paid community, but it's a good community, um, you want more. You need more. You need way, way, way more people. If you are, um, Quora, you need way more people. If you're some of the other examples that you need, you need way more, more people is good, and that's great. Um- But it's not always good to add more people. So what I want to talk about is a few communities that I've found that I think are interesting, and then I want to talk about opportunities in the space, and then finally we can talk about what I think you need to build a successful community. Um, so the first one that I discovered, and I've actually brought up here a ton, is called Aventa. Have you seen Aventa?

Shaan Puri 12:37 No.

Sam Parr 12:38 Okay. So Aventa, I know the first example is gonna- it, like, doesn't even entirely apply because I think Aventa is actually a free community, but you need to apply and you- or get invited, so it's somewhat similar. But Aventa is a community- is a professional group. Um, I believe it has, uh, 18,000 participating members, and it's for executives, particularly... Uh, are you on the website right now?

Shaan Puri 13:01 No, I'm on our, our notes.

Sam Parr 13:03 Okay. Uh, basically it's for Fortune 500 or Fortune 100 people. Um, it's people like the... I don't even- like I- because I've never worked at a company, I don't even under- understand all these roles. But, like, a CIO, what's that, a chief information officer? So, uh, I said CSO. I'm looking at their website. Um, CISO. I don't even- I don't know what CISO means. What's that? Chief information security officer?

Shaan Puri 13:28 Yeah, CISO, yeah.

Sam Parr 13:30 So these are, like, things that I don't even know. I guess they have CFO. I know what that is. Chief in- uh, financial officer. So it's basically ex- executives that-

Shaan Puri 13:38 [laughs] This just turned into a, a glossary section for Sam to figure out what the different roles-

Sam Parr 13:44 Do you know what CHRO is?

Shaan Puri 13:46 Yeah, that's basically your HR. The chief, chief, chief HR officer, basically.

Sam Parr 13:50 Okay, I guess that one was easy. How about a CDO?

Shaan Puri 13:54 I don't know that one.

Sam Parr 13:56 Uh, uh, chief data management officer. It's- 'cause come on, a lot of people aren't gonna know what this stuff is.

Shaan Puri 14:03 [laughs]

Sam Parr 14:03 But it's a big thing. They have 18,000 members, and check this out. They sold in 2016 for close to $300 million. It was $375 million they sold for, and it was for 12 times profit, which means their profit was $23 million a year. And almost all of that profit came from sponsorships. And so the way it works is, is that, uh, they would get groups of 10 or 20 people. They would host a talk, uh, like I think it was mostly an online talk that says, like, how Walmart is gonna handle, how Walmart is gonna handle-

Shaan Puri 14:36 Remote work, yeah

Sam Parr 14:37 ... remote work. And 10 people, like I'm just gonna guess, uh, what's a Fortune 500? So, like, the CMO of Northern Tr- the C- the- I'm looking at it now, the chief information officer of Northern Trust. I don't know what that is, but it sounds like a huge company. Uh, the CIO of, um, Delta, of Chevron, of Nestle is gonna go, which is, like, it's only 10 people at that talk-

Shaan Puri 14:58 Right

Sam Parr 14:58 ... but it's 10 people who each control 20,000 people.

Shaan Puri 15:02 Jesus.

Sam Parr 15:02 And sponsors will pay stupid amounts of money, hundreds of thousands of dollars to reach these people, enough that it makes $25 million a year in profit. Uh, very interesting. An interesting community. Again, like Tiger 21, if you go to the website it just kind of looks, like, pretty old school. Mostly older white people, so who knows if it's, if it's hip or, or at least, like, in the know of everything. But where does that- where does this land with you? Interesting?

Shaan Puri 15:31 Uh, it's interesting, but I think f- you know, if I'm most people I'm like, "Okay, the hard part of this is going and getting the CIO of Nestle or the, uh, CMO of Delta to, to join some group. How do you do that?" And I remember, um, what's the name of the, the mastermind group that's the, the more popular company? Not Tiger 21, but like the other one we've both studied. I can't remember the name.

Sam Parr 15:49 YPO? Young Presidential Organization?

Shaan Puri 15:51 No, no, the, the one that does, like, $100 million a year.

Sam Parr 15:55 Uh, it's the competitor to YPO?

Shaan Puri 15:58 Um, yeah, it's like the-

Sam Parr 15:58 Oh, uh, yeah, yeah, yeah, yeah, yeah. What's that? I don't remember what that's called. Uh, it starts with a C I think.

Shaan Puri 16:04 Slips my name as w- it sl- it slips my brain as well.

Sam Parr 16:06 Vistage.

Shaan Puri 16:06 Anyways-

Sam Parr 16:07 Vistage. V-

Shaan Puri 16:07 Yeah, yeah, Vistage, sorry. Not, not, not starts with a... Um, yeah, Vistage. So Vistage, uh, does the same thing as, as this, and I remember getting phone calls saying, uh, from some, you know, pick up some random number and it was, "Hey, Shaan, you know, this is Wendy from Vistage." "Uh, okay. Y- have we, have we met?" "Um, yeah, actually I've heard a lot about you. Um, you're the CEO of Monkey Inferno, right?" "Yeah, that's right. Uh, again, like, where, where did we meet?" "No, no, no. See, I'm, I'm actually the chapter president for San Francisco for Vistage and, um, I actually want to invite you to join our CEO network. Uh, we have CEOs from this company, this company, this company, and, uh, we just really think you'd be a great fit for, for our CEO group. We meet up about once a month in San Francisco. Um, it's a great time," blah, blah, blah. "Uh, okay, CEO group. You, you sound like you know me. You're talking about my city. This sounds pretty legit. Um, okay, so what are you asking me for?" "Yeah, so the membership is $20,000 a year and, uh, you [laughs] ..." And I was like, "Oh, okay, this is a sales call. Shit." Uh, like, good job, you got 45 seconds into the sales call. And so this is how th- them, and I don't know if it was them exactly, but it was a company just like them, uh, was recruiting people, was just- they were just cold calling C-level people with a script that made you feel like they were calling for you, uh, based on your city and your company name and your role, your job title there. And so I think this is what you would have to do, is you'd have to be a pretty badass cold caller and you'd have to figure out how to get this thing going with just enough brand names where this sounds legitimate.

Sam Parr 17:40 I- look, I host an event called Hustle Con. I've- over the years I've probably had 150 speakers, um, tens of thousands of attendees. When I started it I didn't know any of these people. I cold emailed them, and there's a way to play it off that it's cool to be part of. Um, there's a way to get customers, I think, that's a little bit better than cold calling. And now I think cold calling, cold emailing like that should exist and you should do that. I think there's a few different ways, like having a podcast. Uh-

Shaan Puri 18:08 Right

Sam Parr 18:08 ... and there, there's a few interesting ways to do it. Um, but nonetheless, I think it's an interesting

Sam Parr 18:13 community. The second one that I want to bring up, and I got hold of their deck- ... uh, a year ago and I could have invested into it, and I skipped it. I passed, and I think that might have been a mistake, but it's called Sole Savy. Have you heard of Sole Savy?

Shaan Puri 18:27 It's like a shoe thing?

Sam Parr 18:29 Yeah, it's pretty interesting. It's kind of a-

Shaan Puri 18:31 A sneakerhead lover community, something like that?

Sam Parr 18:32 Yeah. So it costs $33 a month, and you basically, when, when I was, got their deck, it was basically just a Slack group. That's all it was. And I don't know if that's what it is anymore, but there's a lot of kids, uh, probably grown people as well, who are, uh, wanna get insider tips on when a certain drop of a shoe is, and they somehow game the system. Like, it's, what... It's called cook groups. So there's these, like, groups where they team up and somehow, I, I don't know anything about the space, but they somehow get insider information on when a drop is gonna happen, and they, and they collaborate and scheme together on how they can get access to these certain shoes. Now, what Sole Savy's doing is they started with shoes. It was just a Slack group, which I think is stupid, by the way. I think if you're building one of these on a Slack group, that's not the right move. But they get, they get, because they have a group of, I think they have 5,000 members now, so that's 160,000 MRR. Um, because they have this contingency of 5,000, like, really big shoe fanatics, they can probably give them special access to X, Y, and Z. They can do interviews with special people, and it's kind of interesting. They raised $2 million, uh, recently. They say that they're adding 400 people to a wait- to their wait list a day. I don't know if that's true, but-

Shaan Puri 19:44 Yeah. [laughs]

Sam Parr 19:45 ... it, it's an interesting, it's an interesting space nonetheless. What do you think of that?

Shaan Puri 19:49 Uh, I think you did good by passing on it. I think it's a cool business for the person who owns it. It's definitely not a, as constructed right now, that, I don't see how that becomes a super large business worth investing in, worth the, why they need $2 million and how they're gonna turn that into, you know, a $200 million plus company. I don't really see that because, like we said, communities themselves, this, you know, these chat groups don't scale. And, um, you know, you're looking for diehards who are gonna pay. If you're paying $33 a month, right, like, you know, that's more than... It's like you're providing more value than Amazon Prime. You know what I mean? Like, that's double, that's triple the price of Amazon Prime. And so, you know, you really have, you're, yeah, the, the hardcores are gonna go for it, but also the more people you let in, then the more people who all have access to the same information, the same tips, the same drops that they're trying to go buy, the harder it gets for you to actually go buy anything that's valuable. So I don't really see how this becomes a big, big venture scale business, but I think it's a great idea for somebody who's a big shoe fanatic to create a community like this. I think that's an awesome lifestyle business to, to own and, uh, like if that's your thing, that's great. I love it.

Sam Parr 21:01 I agree with you. Um, so let's talk about three ideas-

Shaan Puri 21:03 Can, can I

Shaan Puri 21:04 give you, can I give you two characteristics I think make it work? One is high passion, um, and then the second one is the ability to make money on the other side. So this happens a lot with stock trading groups. So, um, there are a bunch of stock tip groups out there where people are looking for additional information, and they wanna be in a cr- a group where the crowd is moving a certain direction. Um, you have this for sneakerheads. You have this for NFTs right now, collectibles. Um, so, so the key characteristic is it's not just like I'm a big fan of the, you know, the Golden State Warriors, so I'm gonna join this paid community for them. Typically, that doesn't work as well as if I join this group, I'm gonna get tools that are gonna help me make more money. So it's a very simple m- money in, money out calculation for people, and I think that's why it works for sneakerheads, and it works for trading cards, and it works for crypto, but it doesn't work as well for like, you know, people who just love Gossip Girl.

Sam Parr 21:59 Yes. So there's a few ways I think that if you're gonna build this, uh, you, you've gotta think about. The first is the amount of money that your company's gonna make is exactly what you said, which is it's directly in proportion to the amount of revenue that the, uh, uh, attendee-

Shaan Puri 22:12 Users make

Sam Parr 22:12 ... member can make back. So for example, if you are an enthusiast of RC cars, um, well, the equation here is how much revenue the attendee or member is gonna make times how many there are. So members of, people who like RC cars, I have no idea. I just made that up. But there's probably not that many of them, and because it's like a hobby that you don't really make any money from, you probably cannot charge a lot for it. So that, like, probably won't be massive. That's not, I mean, maybe you should do it, but that doesn't mean it's gonna be actually that big. So that's the math that you have to do, which is how much revenue is the member gonna make and how many of those potential members are there?

Shaan Puri 22:51 Right. Or, or the one like you said with Tiger 21, so Tiger 21 is actually like that, right? When you, when you go and you hear somebody's portfolio, you're gonna get investment ideas, and even a single investment idea, a single, like, improvement to your portfolio, if you have over $10 million in investible assets, one good idea is gonna more than pay for the $30,000 a year membership, excluding the friends you'll make and the deals you'll do together and that real estate thing you'll buy together and all that good stuff, so excluding all that. Now, on the other hand, if you're looking at something like, um, the, uh, Eventa or whatever where it's like what is the CMO of Nestle gonna do when she meets the CMO of Delta, like they're not gonna directly get revenue out of it. I don't think that's why. I think it's like how hard we're, how hard is it to accumulate this group of people in a room? So if it's really hard to reach these people, these are all high-value people, then it's the membership is worth the value of the people in the group. So if it's just a bunch of sneakerhead buyers, each individual member, uh, is bringing zero, like, clout to the table. But if it's CMOs of different companies, then it's about how much clout do they each bring to the table. That's the value, not so much how much revenue they're gonna make.

Sam Parr 24:01 Yes. And so let's

Sam Parr 24:03 talk about three groups that I have that I think this could work for. So if you wanna start a paid community, I'm gonna start with the bottom one, or I actually think it's the best one, but it's bottom one on our list. Nurses. We've talked about nurses a ton. It's an interesting demographic. I think nurses are kind of cool for this space for two reasons, or three reasons. The first, work could pay for it maybe. I think work would maybe pay for it. Second- Nurses are typically ... I've spent time around nurses, so they're typically women, and they typically are people who feel, like downtrodden. Like, they feel like they're forgotten because they're not doctors

Shaan Puri 24:35 Overworked. Overworked, underpaid, o- underappreciated.

Sam Parr 24:39 Yeah, and that is ... So groups that are the, um, whatever you just said, I guess. I don't know how to explain it, but groups that are like the us versus them, like we don't have someone speaking for us, typically that's like ... There's a lot of ... Like, I've looked when I was researching communities, there's so many successful, um, women, like women discussing X, Y, and Z communities. This is just like that. So I think that they have that us, us versus them mentality. And the third reason is there's a shit ton of nurses.

Shaan Puri 25:06 Yeah. H- have you seen this Instagram account Nurse Life RN?

Sam Parr 25:10 No. How many is it?

Shaan Puri 25:12 It's 1.2 million members on Instagram. It's run by this guy, I think his name is E-B or E-B, I'm not sure exactly how you say his name. And it's this guy, this is Black nurse, and, um, there's a whole bunch of nurses-

Sam Parr 25:24 I, I sent private

Shaan Puri 25:26 They just went private. Uh, they used to be public. And I think you have to like, you have to request so that they can make sure that you're a nurse before they let you in. Um, which again, is part, one thing that communities do well. The, you know, what's that quote? It's like, uh, "I don't wanna be a part of any group that would accept me." Um, you know, the, the better your gate at the front, uh, the more people will value being in the group. And so this is a group, and they, they just post mostly like nurse memes. So it's like, you know, if you ... It's like being underappreciated or whatever, they'll make a joke out of it or like, you know, coming home and realizing you still have whatever, you know, on your shoe. And, uh, it's just, you know, relatable memes from the eyes of a nurse. So that's how they like keep their members engaged. It's just meme content that's a good, like inside joke for the community. But he partnered with the makers of Bala Shoes, which is the nurse shoe brand that's coming out that's trying to be Nike for nurses, basically. It's Nike f- for, for medical footwear. And so he got equity in that company and gets paid every month because he is the promotional vehicle for the B- for Bala Shoes who wants to like penetrate this community, right? So, um, not a paid community as such, but it is a private community, and on top of that, they do this. Now, what would Incredible Health, you know, the startup that's raised I don't know how much money, $25 million from Andreessen Horowitz and all that, what would they pay to access 1.2 million nurses that are like engaged and trust this brand and trust this leader of the community? They would pay a lot, right? Uh, nurse job boards, like ... So, so if this guy's ambitious, he could create a job board. He could create the next Incredible Health. Uh, he could take equity in, in Bala Shoes and be part owner of, of the shoe brand. Like, I think that's where this goes for, for nurses. I think this is a great example of one.

Sam Parr 27:08 I think this could crush. I think that guy is gonna ... That guy's sitting on a goldmine. That, like, if you, if you fast-forward 10 years and tell me that he turned this 1.2 million person Instagram page into $100 million company, I won't be surprised.

Shaan Puri 27:20 Right.

Sam Parr 27:21 Um-

Shaan Puri 27:21 If you go and start Truck Life RN right now, uh, I, I, I think [laughs] I think, uh, that's what's gonna happen after this pod. Truck Life RN.

Sam Parr 27:28 I might need to. Um, the second one, this is shocking to me, okay? Google Sheets. There's this guy who tweeted at me, and he started this thing called Sheets Con, and he had 6,700 people sign up. Is that sh- I mean, I guess that's-

Shaan Puri 27:41 That's shocking

Sam Parr 27:41 ... shocking to me because the, like, I know that probably 100 million people plus use Google Sheets.

Shaan Puri 27:47 Right.

Sam Parr 27:47 But ... And I guess it doesn't, and I guess it also doesn't shock me because I am a Google Sheets nerd, and like I've dorked out about what, why I love-

Shaan Puri 27:54 And some of the most, uh, profitable online courses in the world are become an Excel master, uh, how to use Excel, become gr- better at Excel. Those are like, if you'll go look at the charts of, uh, most profitable online courses, highest revenue online courses, Excel is always in the sort of top five.

Sam Parr 28:11 Yeah, Ankur, the founder of, um, Teachable-

Shaan Puri 28:14 Teachable

Sam Parr 28:14 ... one time-

Shaan Puri 28:14 Yeah

Sam Parr 28:15 ... one time told me that, uh, there was some guy making a million bucks a year, and he was like the biggest earner on Teachable on Excel.

Shaan Puri 28:22 Exactly.

Sam Parr 28:24 So Google Sheets, I 100% think you could do a paid community. Now, it would have to be cheap though because it's the same, it's the math of like how much money do you make for Google Sheets. I think that there's absolutely something there. Um-

Shaan Puri 28:35 Right

Sam Parr 28:35 ... and then the last thing is this. Someone tweeted at me a community of vetted senior engineers who talk about adva- advanced, uh, engineering concepts, like how to scale a tech stack from 100K to 10 million users. Totally buy into that. Something like that that is incredibly niche and incredibly high-end where if ... Th- there's a, there's this other component that we didn't talk about with the community is you have to make it so that information that you gather in that group you cannot find online. Like, um, for Tiger 21, not that many people are gonna talk about how, like because it's embarrassing, how do I, um, gift my child $15 million without the government-

Shaan Puri 29:15 Right

Sam Parr 29:15 ... getting their hands on it? Like, that's not something you're gonna tweet 'cause that's embarrassing. Same thing with 100,000 to 10 million users. There's just simply not that many people who have done it.

Shaan Puri 29:23 Yes.

Sam Parr 29:23 Um, so you're not gonna find a lot of reputable information on that. So that's another trait of these paid communities and why I think this one in particular is interesting.

Shaan Puri 29:31 I think any job in any, any job can do this. So nurses is a good one because you have a, like some are gonna be better than others because you have, uh, you know, the more people, the more potential. And the more, um, kinda like insider knowledge is needed, the more, um, downtrodden that group feels. Downtrodden's kind of a negative word, but I, I, kind of what you're saying, like sort of like they feel that they need to take action, um, in order to like level up in some way, uh, the better. And so like, you know, I, it, this could work for nurses, but it could also work for designers. I could see somebody just making a community of, you know, professional designers at all these different companies. It's like, "Yep, we have designers from Figma and from HubSpot and from Okta and from GitHub." And you should j- if you're a designer at one of these companies, you're making $150,000 a year, $200,000 a year, um, why would you not wanna be a part of the, like the best network of other designers like you where you can share tools, tactics, salary information if you're looking for new jobs, opportunities if you're looking for new jobs? Like- Every job I think needs this, and the more new and fringe your job, the more they, the more the community is needed. So, like, I know that our friend David Spinks did this with community, 'cause community was like this... There's not really, like, there's no chief community officer at these big companies, but all big companies say it's all about community. Facebook's like, "It's all about community." Twitch is like, "It's all about community."

Sam Parr 30:53 And what that means?

Shaan Puri 30:53 And, uh, what does that mean and, and who in your company? Show me your, who's in charge of community at your company, right? And there's typically not a, a C-level who's in charge of community. So David Spinks said, "Well, look, there's all these, like, kind of mid-level people who are community. The, they run community for these big-ass companies, and there's no playbook on how to do their job. They're underpaid, they're underappreciated, and they're overworked trying to run all these events. I'm gonna make the c- best community for community professionals." And so he made the community for community people. It grew pretty large. He ended up selling the thing. I, I don't know how big of a business it was in terms of a business outcome. He might've been a little early. But I think that's a great example of somebody doing this, just taking a job and, and making it happen.

Sam Parr 31:36 So there's my idea. I just wanted to talk about communities, 'cause I think they're actually kinda cool businesses. I think a lotta people think that they wanna start one, but, um, I also think that there's a lotta mistakes made of, like, charging too little, and I wanted to show a few examples of companies that make m- like, a quarter of a billion dollars of value off communities, 'cause I think they're kinda cool. So that's all I gotta say about communities.

Shaan Puri 31:57 I'll leave it with this, which is a lotta people, I think the majority of people who listen to us, they would love a non-9:00 to 5:00 way to make $10,000 a month. And if I were gonna rep-

Sam Parr 32:09 Well, I read that in your, uh, I, I read that in your, uh, your-

Shaan Puri 32:12 Survey results

Sam Parr 32:12 ... right.

Shaan Puri 32:13 Yeah. Um, yeah, which we could talk about that, but, but in general, that's, that's the number one thing I think people listening to this would, would just grab right away. They don't all wanna be founders of billion-dollar companies or $200 million companies or whatever. Um, but if I said, "Hey, this is something outside your 9:00 to 5:00. It's a side hustle. It doesn't take up all your time, and it's gonna bring in $10,000 a month," I would say that this, to me, right now, is the number one way to do it. I think there are some other ways, right? You could try e-commerce or drop shipping or something like that. You could try to do a, a newsletter or a paid newsletter. I would do a community if I was gonna... And that would be my fastest path to that right now. And I'll tell you-

Sam Parr 32:50 I-

Shaan Puri 32:50 You know, the reasons why are all the things you said, which is, like, it's not that much work to run. The members provide the value to each other. It's not all about you creating content all the time. It's not that hard to spin up. You just have to be smart about which group you're choosing and what, where you kinda have an edge, what's your group. Um, and then the last thing, the downsides of it are that it can't scale super large, but that's not your goal anyways. You're just trying to get to $10,000 a month of free, free cash flow from your side hustle, and so that is super achievable. You know, uh, $20 a month for, for 500 members, and you're there, you know? So, so I think that is where I think this business fits in.

Sam Parr 33:26 And I, and I, and I said before, I actually do think they can scale, but not all of them can. Some of them, some, some of them can. But I, I'm someone, I've built a, a paid community that makes many, many millions of dollars a year in recurring revenue, and it is, I would say that it's really hard actually to start, because I had to create a lot of the content early on, and I had to create the, um, the culture of the community. But now I barely post, and it-

Shaan Puri 33:53 Right

Sam Parr 33:53 ... has its own culture. So yeah, once it's, once it's taken off, yes, it, you, you create that flywheel and it works. Or not flywheel, flywheel-

Shaan Puri 34:01 By the way, I just did this f- I just did this in e-commerce, and it probably, I've probably put in a grand total of maybe eight hours into this thing, and I'll tell you what it is. So I wanted to create a community for people who have e-commerce stores, so I created a gate at the front that said, "Your e-commerce store must be doing $100,000 a month in revenue."

Sam Parr 34:21 What's the URL?

Shaan Puri 34:23 It doesn't even have a website. There's no website. Um, it's, it's called Club LTV. L- LTV is, like, a inside term in the e-com world, lifetime value. It, it's like what every e-com store owner wants is their, their LTV to go up. So I called it Club LTV. It's for people who are trying to increase their LTV. And so I said, "You have to have $100,000 a month of, of, of revenue." I told, so I tweeted it out, so I definitely had a head start because I have an audience. So that brought in about the first 35 members who said, "Yep." And they would just send me a screenshot of their dashboard. "Yep, here's me. This-"

Sam Parr 34:53 How much did you say it costs?

Shaan Puri 34:54 Okay. So, so what I did was I made it free to join for the, uh, the store owners, but you had to have this much value, like this much, uh, you had to be this kind of far ahead in the game. Um, but what I did then was I went to sponsors and I basically said, "Hey, I have a group of 75 store owners ranging from $1 million to $50 million a year in revenue, and all of them trust me, like me, and I meet up with them once a month, and, um, would you like to sponsor this?" So I have one sponsor on board. They pay me $5,000 a month. Um, all I do is at the event, I say, boom, I do my intro, my high-energy intro, and then I say, "Hey, let me pass it to the guy that makes this possible, that makes this group possible," and he says his thing for two minutes. He's had, um, I can't say the names, but, um, I don't know if I sh- I, I guess I could just give him a free plug. So Mercury Bank is the sponsor of it, because that's who I would use for e-commerce projects, and they're, they have a big push in e-commerce. And so they've had, at least from our group, five different, um, five out of the 75 e-commerce stores switch to Mercury just from this sponsorship. So they've gotten their money's worth out of it, including one company that's a $2 billion company has switched over to them. And so, uh, you know, they definitely got their value out of the sponsorship. But-

Sam Parr 36:05 Wait, is th- and is this still going?

Shaan Puri 36:07 Yeah, this goes every month. And so all that we do, we have, we have about one hour a month of, of prep, and then 90 minutes a month of the actual event. And the m- the one hour of prep is that Ben goes and gets a cameo made from a different rapper every month, and the rapper's just shouting out Club LTV. He's like, so we had, like, you know, um- We had, uh, Sean Paul do the cameo one month, and he's like, "Hey, it's your boy, Sean Paul. Just wanted to like-

Sam Parr 36:33 Oh, man

Shaan Puri 36:33 ... big, big ups to Club LTV. You guys are all doing so great with your e-commerce store." And he's like, you know, just it doesn't even make any sense, but it's just like a video that plays, and people like it 'cause it's like, I don't know, it's kinda goofy. So we do one- we get one cameo ordered, and he sends the calendar invite, so just make sure everybody gets it. He sends one reminder email, and then the last thing is that after the event he just says, "Hey, if you learned something really useful that you're gonna implement into your business, um, email me with the one line of the most useful thing that happened for you in the hour." Um, because the structure of it is we break everybody up into groups of six. So you're in a group with six other store owners who do between 1 and 50 million a year in revenue. And then the, the format is you say one thing you did in the last month that's really working, it's driving revenue up, and one thing that you're struggling with that you might want help from, from the group. And so afterwards they all email him the most useful things, and he just comp- he just takes, he just takes that sheet and he just sends it to everybody. So, "Hey, here was the top insights of- from the group."

Sam Parr 37:27 Why wouldn't you charge for that?

Shaan Puri 37:28 So that whole thing takes him one hour. What's that?

Sam Parr 37:30 Why wouldn't you charge for that?

Shaan Puri 37:31 Bec- because I can actually make much more off the sponsorships. F- for example, I've been approached by, you know, the companies that want you to build their e-com store on their platform. There's the people who want you to use them for email marketing. There's the people who want for influencer marketing who are you using. For Facebook advertising, who are you using? What's the agency that manages your, your, um, your da- data tracking, like your pixel stuff? So all these companies each are willing to pay multiple thousands of dollars, I just have to onboard them now, um, because now I have the group, and the group is where the value is. That's the honeypot. It's the same thing you were talking about where, uh, Eventa, they have a free group and they mo- they have th- they are making $25 million a year on the sponsors who want to talk to the people.

Sam Parr 38:11 No, they make more than that.

Shaan Puri 38:12 Oh, sorry. That's the profit. They're making 200 million. But, um, that's the same model that I'm using here. Don't charge the members, just make sure all the members have successful businesses. And once they-

Sam Parr 38:22 And how big do you think this is gonna get, or do you care?

Shaan Puri 38:24 I mean, I put zero effort into it since then, but, like, we have 75 people who show up every month to the thing, and, um, which is, like, 80- 85% of the members show up every single month to the event, so it's ... they're getting value out of it. And so I bet if I told Ben, "Hey, go on Twitter and just reach out to these 250... cold email these 250 or these 500 e-commerce stores," um, 'cause it's very easy to get lists of e-commerce stores that are successful. Um, I bet we could triple the size of the group if we, if we put some effort into it, but don't really care about it. It's more for fun. But it's cool, 'cause it's, it's just free money every month, and, uh, it's a good group to be in. I wanna learn from these people. I wanna learn what they're doing, what's working, what's not, and, uh, make these connections.

Sam Parr 39:04 That's badass. Well, you, uh ... You know, I ... It's funny. I've, I've built a community as well, but it's like every time I learn something, like, you, the way you're doing it is a lot different than the way that we've done it, and it's really neat to hear a different point of view and perspective, uh, on how to get it done.

Shaan Puri 39:21 Right. I optimize mine for how do I spend the least time but get just enough value, whereas I think for you it's like a part of your business. You're like, "I'm gonna ... This is gonna be a multimillion-dollar thing, and we're gonna make it fucking awesome," which is awesome.

Sam Parr 39:33 Which, by the way, if I had to start over, I would've done it differently. Um, I would've charged way more money.

Shaan Puri 39:38 Right.

Sam Parr 39:39 Um, because I've learned the mistakes that you have to add a ton of people to build a big business, and a ton of people for certain groups isn't necessarily good.

Shaan Puri 39:48 Right.

Sam Parr 39:49 Um-

Shaan Puri 39:49 Fair play.

Sam Parr 39:50 All right, I'm gonna-

Shaan Puri 39:50 You wanna do o- one more quick one before we go?

Sam Parr 39:54 Uh, only if it's you, 'cause that's all I prepared.

Shaan Puri 39:56 Okay. Um, okay,

Shaan Puri 39:59 I kinda have like a, like a advice thing. This is my PSA. This is my public service announcement. Um, do you know what the word inertia means?

Sam Parr 40:07 Yeah. It's like, uh, uh, when something starts moving, it's hard to quit moving.

Shaan Puri 40:13 Yeah. So I've noticed this, and you tell me if you've ... if this has happened in your life. But I've noticed for myself and many people that kinda ask me for advice, inertia explains, like, 90% of why people are doing what they're doing, right? They're doing what they're doing 'cause they're already doing it, and sometimes that's good because like, "Hey, the train's in motion, so I kept going even when things weren't, you know, going gangbusters. But I just kept going 'cause it was, it was already in progress, and I'm glad I did, 'cause I had this good outcome." But more often than not, whether it's your business, your relationship with somebody, um, maybe it's something you've invested in, and why are you invested in it? "Well, I already own it. I don't wanna sell it." Okay, but if I gave you that money today, would you buy it? No. So it's like, uh, you know, there's all these weird things. If, if, if I didn't ... If you weren't already doing this business, if, if I gave you a clean slate, tomorrow would you go start this business again? No. Then why the hell are you doing it, right? And so in my life, I've had this kind of, like, weird moment many times where I realize, shit, inertia is a bitch, and inertia is the reason I'm doing all these things I'm doing, not because I actually want to be doing them or think that it's the right thing to do right now. And so I just wanted to say this for ... just, A, see if this has ever applied to you. Um, but B, for anybody out there who's listening to this and, like, something is not going the way they want in their life, go ch- like, just check yourself. Like, is this ... Am I doing these things because I really think they're the right thing to do and I want to do them, or am I doing them because this is just the way that things were already going and I d- I don't have the courage to change it? Um, I remember with my company when we sold our company, it's because I had a conversation with my buddy Sully, and I ... You know, wh- wh- while we were talking, we were trying to figure out, okay, how do we make this bigger? How do we make this grow? And we were both looked at it and we were like, "I don't think there's a ... Like, we don't have great ideas, like, left. We've tried so many things. We've whiteboarded all these different ideas." It's like, do we even believe that this is a big opportunity? Like, knowing everything we know now, would I be still doing this opportunity if I wasn't already doing it? And the answer was hell no. And it was like ... And w- it ... So this was my test. It's if this project ended tomorrow for whatever reason, the company had to fold, would I wake up tomorrow and start working on the same project? And the second question was, if the company had to dissolve, the investor ... You know, the company went bankrupt, and I needed to go start again, would I call these same people? Like, "Hey, you wanna work together on the next thing?" Because if I, if, if no, then I have the wrong people today. If yes, then I have the right people today, if I would call them again. And so for me, it was always the people were right, but the project was wrong, and that's when I decided, "Look, maybe I should sell this instead of keep going on this for another five years and, um, you know, just sort of keep going with the inertia." So has this been a thing for you in your life?

Sam Parr 42:59 Yeah, and I'll tell you how I combat it, and I think I'm actually really good at combating this. I, I think I'm, I'm not great at a lot of stuff, but I'm good at combating this. And Warren Buffett says it's like, uh, uh, bailing out water of a leaky ship. Um, he's like, "It's sometimes it's better just to get a new boat." And the way that I get out of this is I do two things. The first is I burn bridges. So a lot of people say, "Don't burn bridges." I say, "No, I actually do burn bridges." So quit your job or move to another city or do something drastic because for me, I've said I cannot focus on more than one thing at a time. I can only focus on, I can only focus on one thing at a time. And so in order to, like, get, to create a, to break inertia and create new type of momentum, I like to create some- something that I have my backs against the wall, and I think more people should do that. I think that's the way to go. Um, they say that, like, once you have a kid, you, your, that changes, so that's one, that's an example. Once you get fired, a lot of things change. So I like to create those moments where I have, where, yes, I l- I love those forcing factors.

Shaan Puri 43:58 Sure.

Sam Parr 43:58 And the second thing that I tell, that I do and I actually tell people is I say, "Just do something really small." So for example, if you're starting a business, don't think about a million dollars. What can you do tomorrow that's just $1?

Shaan Puri 44:09 Right.

Sam Parr 44:09 And creating the little tiny things actually helps a lot, um, because breaking the pattern is quite challenging, and I love burning bridges. I think that's the way to go.

Shaan Puri 44:21 Like, well, you gave advice on two things there. You said basically you, you cut things off and you burn bridges. That's how you stop current momentum.

Sam Parr 44:29 Yeah. And then start.

Shaan Puri 44:29 And then how... And when you start, you start with ultra small baby steps or, uh... And, and I've heard this now from many people. So when I went to this Tony Robbins event, he used to say, he's like, "How many of you have..." Like, if you think in your life, has there ever been a decision that has, like, altered the direction of your life? Like, obviously, yes, for all of us. Our life is full of choices, and if we had made different choices, we'd be in a different spot right now. And so c- clearly, like, choice and decisions are, like, one of the superpowers that we have. And he goes, "But how come th- there's times where, you know, maybe it's like weight loss. You, you keep saying you wanna lose weight. You keep deciding to lose the weight. You make that New Year's resolution, and then you don't do it," right? Or this and that. You know, you, you, you say you wanna quit your job, you wanna start your business, then there you are nine months later still in your job, still with no business. And so he says, like, the word decision, we've kind of, we just use it too freely. He goes, "The word decision, the r- root word of it, like cision, is like kinda incision, uh, which is a cut." And he's like, "The word decision means to cut off the other possibility. When you decide X, you remove the possibility for Y. You cut it off completely." And he always says, like, I forgot that, uh, famous, like, story or whatever, but it's like y- you know, these people going, uh, the, the, the general's going, they're, they're trying to surge, uh, take over this island. So they arrive on boat, and they're trying to, trying to make it to land, and they're trying to take over the land. And he says, you know, "If you wanna, if you wanna win, if you wanna win the war, g- you gotta burn the boats." Like, so, like, if the soldiers know there's no boats, there's no place to retreat, there's no boat to get back on and go back home where you came from, they'll win this island. And, um, so he's, you know, the, the, the story, I guess, I don't know if this is real or not, but the story is the general burns all the boats, and then the soldiers go and they win. And the same idea. So that's kind of what you're talking about, which is you're better than most in that when you make the decision, you literally cut off the other opport- o- option by physically moving, by sending that email, by, like-

Sam Parr 46:22 Or, or I make-

Shaan Puri 46:22 ... cheap, something drastic

Sam Parr 46:24 ... or I make the old option really embarrassing or hard to continue doing. So a, a good example is this, is as we speak, I have... I'm, I'm actually gonna talk not loud, because you can hear me. I have a chef in my kitchen cooking for me.

Shaan Puri 46:38 Yes.

Sam Parr 46:38 And it's very expensive. It's a very expensive fee. And I'm doing it because I'm trying to... I, I got actually really fit the summertime, and then I got a little chubby, and now I'm gonna get fit again, and it costs me a lot of money to have this guy here doing this, and I don't-

Shaan Puri 46:50 Right

Sam Parr 46:50 ... want to. And the reason I'm doing it is because I'm gonna lose weight quickly and eat only the food because-

Shaan Puri 46:57 Right

Sam Parr 46:57 ... I wanna stop doing this. And so that works really well. Another example is if you wanna lose weight, you sign up for a competition like an Ironman or-

Shaan Puri 47:05 Right [laughs]

Sam Parr 47:06 ... or-

Shaan Puri 47:06 Something you can't get out of

Sam Parr 47:07 ... something you cannot get out of. And those types of forcing functions are the... I have found for me personally, who's pretty lazy and stubborn, it's the only thing that works.

Shaan Puri 47:16 Right. I'm, I'm the same way. I wanna use psychology against myself. I wanna use my own psychology against myself. So if I say something publicly, like we've said on this pod, "We're gonna grow this pod. We're gonna make this a top 10 podcast. This podcast is gonna be doing 100,000 listens per episode." We've said that. Now egg on our face in front of all these people that we think are cool and we wanna seem cool against if we don't make it happen, if we don't, if they don't see us taking the steps and taking this seriously to make it happen. So when they see us putting thousands of dollars into our studio, adding video, adding YouTube, d- uh, doing res- more research so we're coming onto this podcast more prepared, they see that we are taking massive action towards it, and we can't be embarrassed on it. Tim Ferriss used to do this thing where he would say, I don't know if, I don't know how real this was or if this was just a thing he used to sell his books. But he used to say, "If I wanted to lose weight, I would give my friend a $5,000 check and say, 'Donate this to the KKK if I'm not this weight by d- this date. It's already in the envelope. You just have to put it in the mailbox.'" And that he doesn't wanna lose the money, and he doesn't want it to go to the KKK. He thought of the worst possible outcome for himself that would give, give, use his own psychology in his favor to serve him in this case.

Sam Parr 48:23 Yeah, there's a business around that. It's called Stick, S-T-I-C-K-K, or it's spelled, like, with two K's or something. It's, like, a cute spelling. And you have a referee of a challenge that you wanna do. You fund the account with a certain amount of money. You pick something you hate, and the referee deems if you've hit it or not, and then that money goes to your anti-charity.

Shaan Puri 48:42 Right. Yeah, I, I, I think that's a cool idea. I think there's even more people can do to, like, use, use our own psychology to get us to do the thing we really want to do in our life. And of course, you know, like, these things are kinda external motivators. They're not great. You know, like, what you would rather do is, you know, build great habits, [laughs] and you would rather be internally motivated and make a decision for yourself that this is, this is, like, a must for you. You're gonna do it. It's not a should. Um, but, but, you know, some of these, these tools can help you get leverage. And th- I, I'll actually leave it with that.

Sam Parr 49:11 Hey. Well, what, what changed... What are you talking about? Can you say or no?

Shaan Puri 49:15 Uh, from what? What do you mean?

Sam Parr 49:17 You-

Shaan Puri 49:17 Like why did I bring this up?

Sam Parr 49:18 Yeah.

Shaan Puri 49:19 I was talking to a friend, and I just realized, like, I can help this friend. The friend just needs to make a change. And then the re- realization was that the friend didn't even wanna be doing what they were doing anyways. They were just doing it because of inertia. And I looked at my own life, and I saw all these different examples of where inertia had... Inertia was ha- inertia had the driver's... You know, had the, had the wheel. And, um, inertia should not even be in the passenger seat. Inertia should be in the trunk, and it's just something you carry with you at, at the, at the mo- at the most. And so I just felt like I need to say this in case there's somebody out there listening for whom this happens 'cause, yeah, my... When my friend was in that situation, I explained it. And they were like, "Dude, thank you. Like, I needed to hear that because it made it more clear, and now I'm kind of embarrassed that I'll just keep doing this just because of inertia. Like, no, that's not a good enough reason for me. I'm gonna actually choose the things I do, and then for better... whatever they turn out, at least I chose that path rather than, like, autopilot, sleepwalking."

Sam Parr 50:13 Yeah, I think there's a lot of people listening that might say, like... I... And I think you agree with me on, like, taking drastic changes. I think there's a lot of people listening who are like, "Well, that's pretty reckless." Um, and my answer to that is yeah. If you want, like, dra- a drastic outcome, you have to take a drastic measure.

Shaan Puri 50:28 Right.

Sam Parr 50:29 So yeah.

Shaan Puri 50:29 Yeah, or, or, like, l- be honest. What is the real risk? The real risk in almost all of life is mediocrity. V... You know, like, my, my trainer tells me this all the time. He goes, "Most people are so afraid of so many things, it's like there's a lion sitting in the room." He's like, "And I'll be the first to tell you, look, if there's a lion in the room, don't meditate. Don't, um, don't take deep breaths. Run. If there's a lion, run. Sure." He goes, "But most of the time, there's no lion in the room." And basically what he's saying is, like, the things that we, the things that we want to do, we should have the courage to do. The reason we don't do them is fear. And, um, and one of the... You know, like, we should not be fearful all the time 'cause most of the time there's no lion in the room. Most of the time the risk is much lower than you think for the things you're hesitating on. And the, the real risk over the long term is mediocrity, is having a mediocre life, a, a life that's not on your terms, that isn't the way you want. And so, um, you know, I think that's true. And I think you can apply this to anybody. Like, Abhra, you, if you... If, if I, if I say this to you now or as you've been listening to this, Abhra, you, is there a part of your life that you s- you think is like, "That's inertia, that's inertia driving, not, not me choosing"? It could be doing this podcast. I don't know how long you've been-

Sam Parr 51:42 I hope you won't say that.

Shaan Puri 51:44 It, it could be, though. Like, 'cause he... Abhra, he has big dreams. Abhra, he wants to start a company. He wants to do all this stuff. And he... You know, this pr- this podcast was a passion for him, and it turned into a job for him. And I don't know. Like, is this what he wants to be doing with his time, or does he have a bigger dream and he's just doing this 'cause he was doing this? I don't know. Is-

Sam Parr 52:02 What do you think, Abhra? What do we... How, what, what... This is a weird episode.

Speaker 52:05 This was the weirdest episode. It kind of became about me. Um, but, like, that, the community part felt less like a podcast, and, like, we could charge for that. There was so much value in there for the right person. I think for a lot of people listening, I think that's... It was not as entertaining as the stuff that we normally put out, I think, but it was more valuable, if that makes sense.

Sam Parr 52:26 Yeah. Uh, I don't know which one was best, but I guess I'll find out.

Shaan Puri 52:31 Tweet at us so we know. And just tweet at us, like, I, I don't know if Abhra, uh, I don't know if Abhra speaks for the average listener. We think he does, so that's why we ask him. But if you're like, if you're like, "Yeah, I generally agree with Abhra's grades," then tell us. And if you don't agree usually and you're like, "Don't listen to that guy," also tell us. Go, just go on Twitter or email us or something.

Speaker 52:49 And I don't blame you 'cause I disagree with myself, so.

Shaan Puri 52:51 Oh, also, I put this out there. Uh, Abhra, put the link to the hotline in the description of this. I wanna start doing Q and A's where we take, um, ideally, like, somebody asking a question. Like, you talking, somebody asks us a question, we play it, and we respond to it, or we take call-ins or something like that. But me and Sam wanna do some bonus episodes. I opted him into this. I didn't even ask him if he wants to. But, uh-

Sam Parr 53:15 Well, I-

Shaan Puri 53:15 We wanna do some bonus episodes

Sam Parr 53:17 ... I committed to a, I committed to a third episode. Um, so... And if it's a Q and A, that's, like, the e- that's, that's required zero work from me, so.

Shaan Puri 53:26 Yeah, I think it'll be fun. So, uh, we're gonna put a thing in. It's basically a hotline where you can just ask your question to the MFM hotline, and we will get those. We'll sort through them. We'll put the good ones into the episode, and we'll answer them. So, uh, do that.

Sam Parr 53:38 All right, I'm out.

Speaker 53:40 Hey, everyone. We did an interview with Dave Selinger, AKA Selly. He's the founder of Deep Sentinel, really interesting home security company. Dave is also really interesting himself. He's a multiple-time founder, really cool guy. Not only do the guys discuss Deep Sentinel, but they also talk about some of the opportunities Dave sees in the moment. So we'll leave this interview here at the end as a little bonus, as a little nugget. Hope you guys enjoy. And as always, leave us some feedback.

Sam Parr 54:07 So we're gonna do a, a relatively quick segment, segment. Uh, Dave, do you go by David or Dave?

Dave Selinger 54:13 I go by Dave, go by Selly. Most of my, my friends and coworkers call me Selly.

Sam Parr 54:18 Sally, all right. That's a good one. Um, I-

Dave Selinger 54:20 Uh, uh, Selly, S-E.

Sam Parr 54:21 Selly. Uh, I dig it. Um, okay. So I invited you to come on because I have this thing called Sentinel, Deep Sentinel. Did I say it right, Sentitel?

Dave Selinger 54:31 Yep. Deep Sen- Sentinel, yep.

Sam Parr 54:32 Sentinel. Um, my friend Noah-

Shaan Puri 54:35 You mispronounced his name. You mispronounced his company.

Sam Parr 54:38 [laughs]

Shaan Puri 54:38 What, what... Is your friend's name really Noah?

Sam Parr 54:41 Yeah, I, I... People make fun of me 'cause I mispronounce a lot of stuff. But, um- I have been using this. It's quite interesting, and I wanna give a summary of what this is. My friend gave it to me. Basically, I had Ring, these Ring cameras, and Ring is pretty good. I mean, it's fine.

Dave Selinger 54:56 Mm-hmm.

Sam Parr 54:56 It's cameras. But my friend Noah was like, "Oh, that's cool. You can watch people steal your shit."

Dave Selinger 55:01 [laughs]

Sam Parr 55:02 Um, and I was like, "What do you mean?" He's like, "Well, I mean, what's the point? Like, you gotta monitor it all the time." And I was like, "Yeah, that's actually a great point." He goes, "Here, try this thing called Deep Sentinel." So I tried it, and basically what it is is it's a, it's a, it's a bunch of security cameras around my house, and there's security guards watching it all the time. And if something is triggered and, uh, they see someone at my door that looks suspicious or even just someone at my door, they say, "Hey, who are you? Uh, do you know the person who lives here? What are you, what are you doing here?" Um, whatever, yada, yada, yada. And I tested it online on my Twitter handle, and I, like, did the secret sign. You can, like, put your hands above your head and do a sign. And someone checks in and goes, "Hey, is everything okay?" And it's just, like, pretty badass. And so I invited you on 'cause I wanted to learn a little bit about this. Did I, did I describe the company accurately?

Dave Selinger 55:46 Y- you nailed it, right? Like, our, our, our motto really is, um, and one of our, and one of our marketing gimmicks is that we make a, a T-shirt that says, "Oh, you have Ring, congratulations. Uh, you know, now you can watch people steal your shit." And that's, and that's literally kinda where, where Noah got that is that I, I personally have, uh, I have a ton of cameras. I've been a camera fanatic for a long time, and my neighbor had a home invasion. And so, you know, the, the, the neighborhood, it's a pretty safe neighborhood. We, we all freak out, and we're like, you know, "What, what can we do?" We have the police come, and I introduce myself. I'm kinda the head of the, the neighborhood watch and blah, blah, blah. So I, I, I ask the cop, I say, "You know, look, my neighbor, she has all these cameras. She has an alarm system. You know, why did she still get a home invasion?" And the cop, w- who I'm now friends with, by the way, says, like, the rudest possible thing, which is, which is straight on point. He says, "Well, you're the tech guy. What did you think the fricking cameras were gonna do?" And it was like this moment of just utter eye-opening WTF was I thinking? You're right, like, they're just cameras, and they don't actually stop anything. And so I, I spent the next five years building a product that turns cameras into something that can stop crimes. Um-

Sam Parr 56:59 How many subscribers do you guys have?

Dave Selinger 57:01 We have, uh, about 2,500 customers across the country. About half of them are businesses, and half of them are, are residential.

Sam Parr 57:08 And how many security guards do you have, and where are these security guards?

Dave Selinger 57:12 So you... We're, we're, we're bordering on, like, kind of the, the secret sauce here, but I'll tell you, we have a ratio of about one guard for every about 100 properties right now, and that's how we make it so that it's affordable. Because, uh, it, it's $100 a month, kind of our starting price point. And if you think about, like, having a security guard at your house if, if you happen to d- you know, have a bunch of friends who are billionaires, for example, they're spending 30 to $100,000 a month for a security guard.

Sam Parr 57:39 [laughs]

Dave Selinger 57:39 And our, our entire point was, like, that's just not attainable to most people, but security's really, really important. How do we make it affordable? And so we use AI and, like, a bunch of technology in the middle to make it so that we can have one guard protecting lots of properties at once.

Sam Parr 57:55 Okay, so you don't have to answer exactly, but if I had to guess, and I mean, you just said it, around 25-ish security guards. A couple dozen, a few dozen, some-

Dave Selinger 58:05 Yeah

Sam Parr 58:05 ... some number in that ballpark.

Dave Selinger 58:07 Yep.

Sam Parr 58:07 Um, and how can this... How... Well, the question that I had when I was thinking about this business is two things. The first is this whole idea of, like, someone real life actually doing manual work is, like, on the other side of a, of a tech, a tech product is kind of interesting to me. I remember... Do you guys remember when you were younger, there was that service called ChaCha, and you could, like, text them a question, and they would answer it?

Dave Selinger 58:32 [laughs] Totally.

Sam Parr 58:33 Like, I think there was a real person on the, on the other end who would just Google the question you had.

Dave Selinger 58:38 Yep.

Sam Parr 58:38 Because Google wasn't on your phone at the time.

Dave Selinger 58:40 Yep. That's exactly what it was.

Sam Parr 58:42 And that's kinda, like, what you're doing. And so my question is this: How do you scale that, and do you just have-

Dave Selinger 58:46 Mm-hmm

Sam Parr 58:46 ... a ton of guards? And also, what other services can I apply this to?

Dave Selinger 58:53 So, uh, uh, that's exactly the way that we think about it ki- kind of inside of our four virtual walls of the company. Um, so, so number one, the, the number one thing that we do to scale is that if you think about the, the old business of security, right? Like, a, a guy or a gal sitting at a chair watching the entrance to, you know, a corporate building. That is inherently not scalable, right? You have no levers because you have a physical chair. And what's neat about Deep Sentinel and, and the, and the big kinda aha moment for me is that there's all this internet stuff that can sit between the cameras and the guards. And, and when there's internet stuff, that means you can instrument it. That means you can, you can start measuring things, and then, like, uh, w- what I did at Amazon and my last couple companies, you... once you have data, you can start optimizing it. You can start looking at what are the real problems, what are the things that aren't problems, how do I, how do I make the guards into super guards, right? Like, in fact, at our office, we have an Iron Man at the entrance 'cause that's, that's the way that we think about this, is that our technology turns these, you know, regular awesome guards into super guards that can, instead of having four guards protecting one property, you have one guard protecting 100, one guard protecting 200 properties. Because all of the, the, the AI filters out events. It also sends them clips that it thinks are interesting that they should look at. Like, "Hey, here's a clip from 30 seconds ago. Maybe these things are tied together." And so as you do more and more of that, it's not like we're getting rid of the people, but we're making each individual person more powerful, right? And more engaged in their work. Um, the last thing I'll toss out about this too is that one of the other things that p- a lot of people don't know about guards is let's take, let's take, like, the most badass Special Forces guy in the world, right? Like, I'm ripped. I've been trained for, for years, and I'm gonna put you on night watch. So you get to stay up between 10:00 AM and 6:00 AM, and you're in an area that's, like, that's dangerous. It doesn't matter how badass you are, right? Like, the tendency to fall asleep when there's nothing happening for eight hours in a row is incredibly high. One of the other neat things about what we do is because we spread this across all of our customers, there's always something happening. We don't have, like, a lull time where, where our guards are just not doing anything. They're always engaged, and so we're, we're able to keep them awake, engaged, like, i- you know, stimulated in, in a way that allows us to provide, like what you just said. You show the, the, the symbol on your cameras, and bam, within 10 seconds there's a guard responding. You can do that 24/7.

Sam Parr 1:01:29 Okay, and so where are the other opport- like, the... wh- what do you call this, this, this model? I, I don't know what you call it, where you have, like, real, real people doing stuff.

Dave Selinger 1:01:38 Yeah, so, so, um, the, the kind of, like, way to still be called a tech company is y- you make the human the second part. So you call it human in the loop, that it's a technology loop, and there just happens to be a human for a tiny piece of the work, uh, versus a traditional services business where the, the human's doing everything. And so human in the loop, uh, it's being applied right now already in some other industries. Like cybersecurity uses it, so if they detect, like, a, what looks like an intrusion, or like in the case of Ricotta where they don't detect it until after it's done and, and the hackers release it, uh, you know, the, the, you know, that was a, that was a jab at them. But, like, you know, the, the idea being that the computers can detect things that are kind of anomalous, but that the human really applies his or her intelligence to figure out the last little bit. So it's also being applied, like, in, in medical h- telehealth, right? So you have these experts, and you use technology around them to make sure that y- you take an expert who could only generally be regional historically, but now a cancer expert because of video conferencing and, and, you know, uh, remote records and, and things like that can actually have a lot, lot more impact. Um, for us, what we think about are how do we take this in a security context, 'cause we wanna stay in security, and how do we expand that to a, uh, a virtual greeter at a multi-tenant, uh, apartment building, a skyrise in, in New York, for example? Um, how do we apply that to watching elderly folks at home who may need just a check-in every 15 minutes? How do we apply it to hotels where you don't need to have a guard there 24/7, but you need to check the lobby every 15 minutes? And how do we do that at a cost that's 10 or 100 times less than having a physical guard on location?

Sam Parr 1:03:19 That's interesting. How big is that, how, how big is that market of just checking in on a... Like, how many doormen are there in New York, do you know?

Dave Selinger 1:03:26 You know, it's, it's, it's a great question. Actually, one of the most interesting things about this market is, uh, that it's, it's pretty big, right? So the alarm side's about $20 billion, and then the guard side's like 20 to $30 billion. But what, what Deep Sentinel hits is, like, this really kinda weird seam where there hasn't been a solution at all ever, and that price point's between about 100 bucks a month and $10,000 a month. There is nothing. And, and there's nothing there not because there's no demand. It's supply side constrained. There's never been anybody that's been able to create a product that has a price point in that price band. And so what we're finding is that there's just this huge vein of untapped demand, right? Like a hotel. Let, let, let's use that example further. My friend happens to own a, a few hotels, and he was telling me it costs him $3,000 a month to have this guard who's kinda schlocky, to be completely honest. Uh, I don't know if that's an appropriate term on, on, on your podcast, but, but, uh-

Sam Parr 1:04:25 I don't even know what that means.

Shaan Puri 1:04:26 I've never, never heard that word. [laughs]

Dave Selinger 1:04:28 Am I the only Jewish person on here? Okay, so I, I, that's a... So, so, uh, uh, I don't know another word for it, but, uh, but he's schlocky. So he's, he's, he's kinda sloppy. He, he, he, you know, he, he's not really gonna scare anybody away, and he shows up-

Shaan Puri 1:04:40 Like a schlep, to use another Jewish word

Dave Selinger 1:04:41 ... he schleps up to the place. That's right. That's right.

Sam Parr 1:04:44 [laughs]

Dave Selinger 1:04:44 Um, [laughs] so he, uh, he shows up three times a night. This is for $3,000 a month. He shows up three times a night and just walks around the parking lot for about five minutes. He gets a total of 15 minutes of security over the course of 10 hours, and it's 3,000 bucks. Whereas w- with us, we'd be able to provide that service for, for maybe $1,000 a month, and there'd be someone watching 24/7 in case something happened. It's just, it's so massive w- what the disruption is when you create something where there's literally just been kind of a vacuous hole. And so, you know, that's kind of a way of me avoiding the question, answering the question, but, like, it's, it's tens of billions of dollars that's just untapped. There's buildings that would love to have somebody greeting them in New York that don't have someone because their cost would be 20,000 bucks a month. But if it costs 1,000 bucks a month, bam, they'd do it in a heartbeat.

Shaan Puri 1:05:36 So w- what does your security person do when they see somebody that is a potential intruder? Are they calling the cops? Are they, like, yelling through the camera, "Hey, buddy, back away, I..." You know, "I'm a, I'm a tough guy inside." You know, what, what are they doing to actually eliminate the threat?

Dave Selinger 1:05:48 [laughs] Yeah, so, so there's, [laughs] there's a bunch of different things that, that we do. And, and, you know, you mentioned two things on, on kinda the ends of the spectrum, right? And it's a, it's kind of like an escalation spectrum.

Shaan Puri 1:06:02 Right.

Dave Selinger 1:06:02 And so on one end, right, like, "Hey, I see a kid," right? That's the really most innocent thing, and the kid's kinda, like, poking at the door. And so we have a juvenile protocol. Uh, each of these things are in their own little protocol that we train the guards on, and that's part of what the technology does. The technology helps them know the, the potentially relevant protocols t- to engage here. And the, uh... And, and with a kid you'd say, "Hey, hey, kiddo, I, I see you're there. Y- do you belong here?" Right? And that's kinda the softest just touch, right? Then there's an adult that, that may be looking a little creepy, and then we say, "Hello, this is Deep Sentinel Security. Can I help you?" And that way if it does happen to be a friend or family, we're not insulting them, right? So if Sam's best friend from college that we've never seen before shows up and he decides that the right thing to do is go right up to the door and start looking through the windows without knocking, you know, that's the, the greeting he's gonna get. He's gonna know somebody's there-

Shaan Puri 1:06:53 Watching

Dave Selinger 1:06:53 ... uh, but he's n- he's not going to necessarily feel insulted right off the bat. If, if somebody shows up and they've got a crowbar- It's sirens on, "Hey, stop what you're doing." And, and the, the... We automatically escalate so either that guard or another guard is contacting police. All of that's happening within about 10 seconds. And that's where the neat, the, the other neat thing starts, is that because we have somebody watching, our calls to police are very different than what they get from, like, if you have ADT or, like, some, some, uh, I'll use the word again, some other schlocky kind of home security system. ADT calls and they say, "Hi, uh, this is, this is Becky from ADT. Uh, I have a motion alarm in the living room." And the police say, "Well, is it the homeowner? Is it a cat? Is it the wind? Is it the dog?" And she says, "No, no, no. This is Becky from ADT. I have no idea. I'm just calling you 'cause I thought I'd waste your time." Hangs up. When we call, I say, "Hey, I've got a white male, 6'3", he's got a crowbar, and I have, uh... And he's trying to break into this building. Here's the address." I've just given them a description of the suspect, a description of the crime, and the existence of weapons. Every single police department in the nation, that's what their dispatch is designed to do, and they instantly categorize us-

Shaan Puri 1:08:05 You just described Sam at his own house-

Dave Selinger 1:08:08 [laughs]

Shaan Puri 1:08:08 ... practicing crowbar combat as we listen.

Sam Parr 1:08:10 I know, right? [laughs]

Dave Selinger 1:08:13 A- and that's why two-way au- by, by, like, that's a, that's a good joke, but, like, that's why two-way audio is really important, 'cause by the way, homeowners do do crazy stuff.

Shaan Puri 1:08:19 [laughs]

Dave Selinger 1:08:19 And so sometimes we see stuff that-

Sam Parr 1:08:20 Well, I have, like, a sledgehammer that I use to, like, exercise. You've just described me working out my back yard.

Dave Selinger 1:08:25 A- a- well, and, and we'll say, "Hey," like, "Are, are you there?" And you'll say, "No, no. It's me, Sam. Here's my special code word." And then we don't call the police. So when we call police, it's 100% verified. Our calls are 100% verified. And most people don't know this. When alarm companies call the police and ask for dispatch, it's 99% false alarms. In fact, Freakonomics wrote a little piece about this, and they're just like, "It's, it, it's horrendous. It's a waste of police time."

Shaan Puri 1:08:51 Right.

Dave Selinger 1:08:51 And so most police jurisdictions have actually passed laws where they don't have to respond at all to alarm calls.

Shaan Puri 1:08:56 Yeah, that's what I was gonna say. In San Francisco, I feel like I can call the police and say, "Hey, this guy's got a gun to my head," and they'd be like, "Well, you know, let's see if you could, if you can resolve that with your HOA before we, uh, send somebody out there," right? They're, they're not gonna help you.

Dave Selinger 1:09:07 If, if you could get his name and call us on Monday, that'd be great.

Shaan Puri 1:09:09 Right. [laughs]

Dave Selinger 1:09:10 Right? [laughs]

Shaan Puri 1:09:10 A- and so how many crimes have you guys stopped?

Dave Selinger 1:09:13 We stop about 15 to 20 crimes a day.

Shaan Puri 1:09:18 Wow.

Dave Selinger 1:09:18 I mean, it's, it's-

Shaan Puri 1:09:18 That's incredible. And that's, crimes means, like, stealing packages, it means everything, right?

Dave Selinger 1:09:22 Drum beats, right? Like, it's just, it's stealing packages, it's attempted break-ins, it's assault. Um-

Shaan Puri 1:09:27 Okay, why don't you have a, a TikTok channel that just-

Dave Selinger 1:09:30 We do

Shaan Puri 1:09:31 ... publishes every crime that's stopped?

Sam Parr 1:09:32 We do.

Shaan Puri 1:09:33 Just the footage of the crime.

Dave Selinger 1:09:34 We do.

Sam Parr 1:09:35 It's great. We've got a YouTube channel as well.

Dave Selinger 1:09:35 It's, it's the Stopped video channel.

Sam Parr 1:09:37 Yeah.

Dave Selinger 1:09:37 Send everyone to it.

Sam Parr 1:09:38 We've got millions of views.

Shaan Puri 1:09:39 Okay. I gotta get... What, what is it called?

Dave Selinger 1:09:41 It's Stopped, and it's on YouTube. We're just starting TikTok. We just found TikTok, right? Like, I'm old, sorry.

Shaan Puri 1:09:46 [laughs]

Dave Selinger 1:09:46 So, like, I didn't, I didn't really get TikTok. My kids were on it, and they were like, "Look at me dance."

Shaan Puri 1:09:50 Right.

Dave Selinger 1:09:50 And we did, like, the dances, but I didn't really think about it as, like, "Hey, let's post these things on there." Uh, people are loving it on TikTok because-

Shaan Puri 1:09:57 So, so o- on YouTube, what is it? It's Stopped what?

Dave Selinger 1:10:00 It's the, uh, it's the Stopped, Y- Deep Sentinel Stopped video series. And every single week we produce the, the best five, 10, 15, 20.

Sam Parr 1:10:09 Um-

Shaan Puri 1:10:10 That's amazing. These have thousands of views. Great. Good for you.

Sam Parr 1:10:12 No, some of them, some of them have close to a million I think.

Dave Selinger 1:10:15 Yeah. We ha- we have a couple-

Shaan Puri 1:10:16 Wow

Dave Selinger 1:10:16 ... that have a million. Uh-

Sam Parr 1:10:17 A lot

Dave Selinger 1:10:17 ... and, and it's, it's cool. Like, it's, it... What's neat about it is it kinda taps into, um, you know, if you've ever been the victim of one of these crimes, like, you, you want nothing more than to get back, whether you're getting back at that individual person or just, like, getting back at the world, because it makes you feel powerless. And one of the neatest things that, you know, we actually don't really publicize that we do-

Sam Parr 1:10:37 Yeah

Dave Selinger 1:10:37 ... as a company, um, is we, we actually reach out to, to people that have been the victims of, of, like, really heinous crimes. And, uh, s- you know, a lot of the times I, I reach out personally to say, like, "Hey, I, I, d- I'm not asking you to promote us. I'm not asking you to do anything. I just want you to know that we've created a product that actually can make you feel safe in your own skin, safe in your own home again, and I'd love to just give it to you for the next six months." And, uh, and it's the neatest thing. Like, I actually, uh, this morning I happened to drive by, there was a, there was a home invasion in my hometown, um, last year, and I gave the system to these people that, that live in Pleasanton. And, uh, and I happened to be by their house this morning, so I stopped in this morning, and the husband answered the door. And, you know, he's like a, he's a, like, a big, tough dude, right? And he, he's not the type of person that you, you would s- expect to say, like, "I'm really scared in my home." But we all have, like, our, our kids, or our family, or the moments where we're not home or, or, like, we're asleep. And it was really neat to hear him just, you know, eye to eye say, like, "This is, this has really changed the way that we live." And, and after something that horrible, you know, it's, it's really life-changing.

Sam Parr 1:11:48 So we only have a few minutes left in this segment, but what I wanna ask you is where's the opportunities based on what you've discovered? Because I think, like, I've actually read... I like reading about, um, companies that got big 20, 30, 40 years ago, and there's a lot, like, b- the beginning of ADP, or AZP. What's the, what's the security company?

Shaan Puri 1:12:07 ADT.

Dave Selinger 1:12:07 ADT.

Sam Parr 1:12:07 ADT.

Shaan Puri 1:12:07 ADT.

Sam Parr 1:12:08 ADT is payroll. Um, and a bunch of other, like, interesting security guard comp-

Dave Selinger 1:12:11 Basically the same company, but, but yeah, yeah. Go ahead. [laughs]

Sam Parr 1:12:14 Uh, a bunch of companies that, like, ha- are just, like, n- like, um, the guy who started, um, you know Wonderful Brands?

Dave Selinger 1:12:21 No.

Sam Parr 1:12:21 They make the POM, the POM water, or the POM drink.

Dave Selinger 1:12:25 Juice.

Sam Parr 1:12:25 And they make the sauces.

Dave Selinger 1:12:26 Okay.

Sam Parr 1:12:26 Like, he got a lot of his wealth, I believe, from a security guard company. Like, security guard companies are just kind of interesting to me for some reason. It's kind of weird. Um, in this space with this, like, human in the loop service in the security space,

Sam Parr 1:12:40 where's interesting opportunities that I wouldn't know about because I'm not involved?

Dave Selinger 1:12:45 Um, w- one of, one of the ones that we see a lot of, uh, is construction recently. Um, and- Uh, the, what, what's, what's interesting about construction yards is you have like these massive amounts of assets with no security. Like, literally no walls most of the time, right? Like, sometimes you have chain link fences and, and, and that's gonna... Generally in security, like speaking outside of like Deep Sentinel in terms of human in the loop, one of the other interesting things that, that we're seeing is like just the movement of stuff seems pretty unsolved, right? Like, there are still companies that make $100 million a year, and they have a, a line of business called cash. Right? Like, in the age of Venmo, and in the age of PayPal, and in the age of Apple Money, and Facebook Money, and, and every type of virtual currency in the world, there's still people getting paid money to like put their lives in danger to go move pieces of paper around. I mean, it seems like so absurd. But I'm reading, uh, Hitchhiker's Guide to the Galaxy right now. In the first chapter it says like, "Humans are generally miserable because they spend all their time moving green paper around, and green paper doesn't make them happy."

Sam Parr 1:13:54 [laughs]

Dave Selinger 1:13:54 And, and it made me think of like the, this, this business that like, oh my God, every, every year people are like scared and die 'cause they have to move the paper around. How dumb is that, right? Like, there has to be something for... I mean, just, I don't know, vapor- take a picture of it and vaporize it [laughs] and then digitize it. I don't know. But that one seems like there's, there's just a, a, a asinine amount of risk and opportunity there.

Sam Parr 1:14:19 So construction. Is there one more?

Dave Selinger 1:14:21 Um, what's another one? I mean, like most of them are pretty obvious, right? Like car lots. Oh my God. Actually, car lots are interesting too 'cause one of the things that, that, that people don't realize is that everyone thinks like, "Oh my God, car lots. Everyone's gonna come and steal a car, but that's kind of a big crime." Actually, the number one thing that we see is people going and breaking into cars at car lots because, uh, they, there's just lots of, um, catalytic converters, there's lots of stereos, and there's lots of leather. And so, you know, every once in a while there's somebody like stealing cars off the car lots, but what we see a lot of is just these people going and, and, and grabbing the doors. Actually wait, I'll, I'll go with one more. Meth. So meth. Uh, meth is, uh, a, a horrible thing, right? Um, but what meth has led to is like this really weird pattern of mail theft, and I call it agricultural mail theft. And so one of the things that, that you'll see this a little bit on Nextdoor like, "Hey, I saw this guy like going and, and checking my door handles or checking my mailbox." And then it goes on Nextdoor and everyone in the neighborhood for like 15 miles says, "Oh, I saw that same gal or guy too." And meth has created this entire lifestyle where these people, uh, actually go and farm neighborhoods, and they'll go in, in a, in a, in a cyclical schedule go from this neighborhood tonight to this neighborhood next week and this neighborhood, and they literally check every single door, every single mailbox as i- as, again, kind of tending it like they would be tending their plants in agriculture. And, uh, and, and it's just really i- i- it's a weird phenomenon.

Sam Parr 1:15:51 What, what are they stealing? They, is, they're just stealing mail, or they're stealing-

Dave Selinger 1:15:55 They're stealing wallets

Sam Parr 1:15:55 ... something related to m- Okay.

Dave Selinger 1:15:56 Yeah. They're, they're stealing wallets and, and mail that's just typically checked. They're actually pretty careful, and when I say agricultural, like they're actually careful. So like, so when they put your mail back, it's very infrequent that you see them just throwing it on the ground 'cause that s- that, that like ruins their, their agricultural area.

Sam Parr 1:16:11 Right.

Dave Selinger 1:16:11 So it's actually really interesting when you see the video. They're like, they open your, your door, and then they're very careful when they put your mail back 'cause the last thing they want is for somebody to find out. And, and frequently, again, i- if you look at Nextdoor, what you'll find, and this is why Deep Sentinel is needed everywhere, is they'll go be like, "Oh my God, I went back for the last three months, and this guy's been coming every four days and I only happened to notice this one time 'cause he took something too valuable to me." And, and it's just this really consistent theme across America that your doors are getting checked, your mailbox is getting checked way more than you're aware of.

Sam Parr 1:16:48 I've caught a bunch of people on my cameras being, being weird. I get an email where it says, "A guard intervened." I've caught a few people. Uh, I hate it.

Dave Selinger 1:16:57 Yeah.

Sam Parr 1:16:58 It, it's almost made me freak out more now that I know. Um-

Dave Selinger 1:17:01 Well, I mean, I, I, it... The, the, the good news is that, you know, you do have a layer of protection. The bad news is you now know like for real, like if, if you had a Ring you're getting 100 alerts a day, and so you just didn't know 'cause who's gonna comb through all 100 of those alerts every single day? It's just not, it's not worth it.

Sam Parr 1:17:18 Well, I appreciate you, uh, coming on. This is super interesting. I've been a fan of your product, so it's nice to talk to the creator of it. Uh, one of the creators of it. Um, this is pretty badass. Um-

Dave Selinger 1:17:28 Well, well thank you, guys. Yeah, it's, I mean, as you can tell, like I'm super proud of it. I'm happy to talk about it any day. If you put me on for five hours, I'd keep going, right? Like, I love it. It's, it's the neatest company I've ever had a chance to touch, and I'm, I'm so proud to be able to touch people's lives.

Sam Parr 1:17:41 And you helped, you helped build Ring. Did you help build Ring or did you, you worked at Amazon?

Dave Selinger 1:17:44 I worked at Amazon. Yeah. So I, I was there way before Ring times.

Sam Parr 1:17:47 How long, what year did you start there?

Dave Selinger 1:17:49 Uh, 2002.

Sam Parr 1:17:51 Holy moly. I bet we should have you on another time just to ask stories about that too.

Dave Selinger 1:17:55 I, I, I have lots of stories. There's lots of people that have great stories about Amazon. Amazon is such a neat company to have watched go from, you know, when I joined, every single, uh, every single quarter The Wall Street Journal would run a story, "When does Amazon shut down?" 'Cause it just isn't sustainable.

Sam Parr 1:18:11 What, uh, number employee were you?

Dave Selinger 1:18:13 Oh, gosh. Uh-

Sam Parr 1:18:15 You guys were in the thousands at that point, right?

Dave Selinger 1:18:16 Probably like 3,000. Something like that.

Sam Parr 1:18:18 Well, hopefully you, uh, haven't sold too many shares. Congratulations.

Dave Selinger 1:18:21 All of them.

Sam Parr 1:18:22 Oh my God. [laughs]

Dave Selinger 1:18:24 But good, good, but good news though, I sold them in order to start Redfin, so. I, and I held onto some Redfin stock, so.

Sam Parr 1:18:30 I did not know that, dude. You've been doing it... Wait, Redfin the real estate thing?

Dave Selinger 1:18:34 Redfin the real estate thing.

Sam Parr 1:18:35 I didn't know you started that. So you've done all types of shit, man.

Dave Selinger 1:18:39 I try to. Yeah, it's been, it's been really neat. I've had, I've been, I've had a very blessed career. Um, but again, like what's neat about this one is, you know, Redfin's really, really cool. It, we invented interactive mapping. But this business, the number of times I get an email every single week that says, "You changed my life," that's-

Shaan Puri 1:18:57 Yeah, you know, like-

Dave Selinger 1:18:57 There's nothing that beats that

Shaan Puri 1:18:58 ... te- tech companies get criticized for, like, "Oh, you're just building toys and frivolous stuff."

Shaan Puri 1:19:02 Dude, like, it's like you're literally saving lives. Uh, so, so you get to do both. You get to do fun, you know, tech with, with all kinds of crazy shit involved, a- and at the same time, you're saving lives. So I, I like that. Uh, I'm jealous of my friend James who invested in you guys early on.

Dave Selinger 1:19:16 [laughs]

Shaan Puri 1:19:16 I should have invested. I remember seeing him post about it on Facebook, and I was like, "This is a pretty good idea." And what I didn't put, I didn't think about at the time, 'cause I was like, "How are they gonna scale this up?" I thought, "Oh, they're gonna do labor arbitrage. They're gonna g- get people in the Philippines to watch your stuff, and, uh, you know, it'll just be a lower hourly rate, you know, and the price point will be, you know, sort of high, un- unachievable for most." But what you're saying is smart, which is one guard is gonna have 100 houses under monitor. Most of them, most of the time nothing is happening, so you don't need eyeballs on the screen.

Dave Selinger 1:19:45 That's right.

Shaan Puri 1:19:45 And the AI's gonna basically say, "Something's going on on house 42." 42 pops up. Human eyes decide is this good or bad.

Dave Selinger 1:19:52 Yeah.

Shaan Puri 1:19:52 Next. Swipe to the next. And so it's really, it's actually more than human in the loop. It's, in my opinion, like these should be called something else. This should be called, like s- you know, super services or something like that, because it's taking a service-based business-

Dave Selinger 1:20:03 Ooh, I love that

Shaan Puri 1:20:04 ... and it's scaling it like a superhero, where it's like, oh, what if that security guard could not just watch one house, but actually could watch 100 houses? Now you have a super service that can scale in the way that services typically can't. And so I think that's even more... I know for pitch decks you use human in the loop, and I've seen that a bunch, but I, I think this is a actually-

Dave Selinger 1:20:22 It's super services. I freaking love that, dude. I, I'm gonna steal that from you, if that's okay.

Shaan Puri 1:20:26 Yeah, that's great. Uh-

Dave Selinger 1:20:27 That is awesome

Shaan Puri 1:20:28 ... I, I think this is awesome, and now, now I'm kicking myself, 'cause I'm like, "Oh, shit, that, uh, this actually... If I'd asked one question earlier, this would've made sense to me, and now it does." So thanks for coming on and, and, uh, explaining it to us.

Dave Selinger 1:20:40 Hey, thank you. And, and, and if you're still interested, we're raising another round this year, so, hey, uh, you know, let me know.

Shaan Puri 1:20:44 See, the only problem is I'm a cheap Indian dude who's like-

Dave Selinger 1:20:47 [laughs]

Shaan Puri 1:20:47 ... "Oh, the price back then, the price then would've been..." I don't know what you raised your first round at, maybe 10 million or something like that, 20 million. I have no idea what it was. But, uh, now I bet... Like, have you... You've raised an A, right?

Dave Selinger 1:20:58 Uh, we're in the process of raising the A right now, so-

Sam Parr 1:21:00 Oh, you guys are raising.

Shaan Puri 1:21:01 Okay. Actually, I'm gonna email you. I'm gonna invest in this company anyways. I will, I mean-

Sam Parr 1:21:04 Oh, wait. No, no, no, no, no. I... You gotta send it to me, too. Look, you guys have raised over a third-

Shaan Puri 1:21:07 It... I'm not taking your spot. We can both get in, baby.

Dave Selinger 1:21:10 [laughs]

Sam Parr 1:21:12 Can we? I mean, you've raised $24 million, um, right? Or 23?

Dave Selinger 1:21:16 We, we've raised, we've raised a bit. We have a, we have a really unique investment vehicle that's open right now, so i- you know, if you're serious, uh, uh, there, there is an opportunity.

Shaan Puri 1:21:24 I am serious. Because, you know, ADT and these guys, uh, w- what are the other security companies, the big ones? I, I've looked into this before, but they're all multi-billion dollar sort of sleeping giant a- incumbent types that for them to do something like this, they either have to buy you or they have to, like, change their DNA inside their bodies, which is not gonna happen, so, um-

Sam Parr 1:21:42 ADT has a, uh, $6 billion market cap and... Wait, I'm so confused. ADT has five billion in revenue and a $6 billion market cap? Is that right?

Dave Selinger 1:21:52 If you look at their enterprise value, that's the secret. They have a $6 billion market cap because they have $10 billion in debt. So they actually have an enterprise value of $15 billion, 16 billion.

Sam Parr 1:22:01 Got it. Okay, so there's some... Oh, okay.

Dave Selinger 1:22:03 By the way, uh, the other way, like, we could do this is if you ha- happen to have $10 billion I could borrow, I could do that, too.

Shaan Puri 1:22:08 [laughs] Yeah. [laughs]

Dave Selinger 1:22:11 [laughs]

Shaan Puri 1:22:13 This podcast doesn't pay that well, my friend.

Dave Selinger 1:22:15 [laughs]

Sam Parr 1:22:18 Yeah, we, uh, we missed that one. But, uh, dude, send me the information. I'm definitely interested if, if you wanted to talk about it, or you're willing to have either of us.

Dave Selinger 1:22:28 That sounds awesome. Happy to do it.

Shaan Puri 1:22:30 It's s- funny how such a small thing makes a difference. I saw the video Sam posted, and the operator, the security g- guard who spoke back was, like, clearly not, like, you know, my relative in India. And I was like, "Oh, wait, this is actually gonna feel totally different to have a human who's got your back, who feels like a trusted American voice-

Dave Selinger 1:22:49 I'm, like, right there with you. Yeah

Shaan Puri 1:22:51 ... right there with you. And then, like, right, right now in my neighborhood, our front gate, we have, like, a door guy just sitting there all day. Couldn't stop anybody if he wanted to. Um, but, you know, just sort of useless. Uh, you know, there's, there's all these little points of failure, whether it's mail, it's the doorman, it's your personal house, it's my... For example, for e-commerce, our warehouse. The, you know-

Dave Selinger 1:23:10 Yeah

Shaan Puri 1:23:10 ... they spend a lot of money, you know, just guarding the, because they have millions of dollars of goods in their warehouse. And, um, and it's just so inefficient, so capital inefficient the way they try to, uh, secure, you know, have security for those things nowadays, because you have alarms, which are just gonna be, like, kind of just a sound. Uh, you know-

Dave Selinger 1:23:27 Yep

Shaan Puri 1:23:27 ... you're playing an MP3 to protect you.

Dave Selinger 1:23:28 [laughs]

Shaan Puri 1:23:29 Or, or you have a human. You've got, you know, a club bouncer.

Dave Selinger 1:23:32 I think it's Spotify now, by the way. MP3s are the old one, so they, they turn-

Shaan Puri 1:23:35 That's right. That's right

Dave Selinger 1:23:35 ... on Spotify for you.

Shaan Puri 1:23:36 We're gonna stream, we're gonna stream the security to you.

Dave Selinger 1:23:38 [laughs]

Shaan Puri 1:23:39 Or you have a guard who's 99.9% of the time gonna do nothing.

Dave Selinger 1:23:43 Yep.

Shaan Puri 1:23:43 And, um, and so it just doesn't make sense, right? Like I said, uh, finally, you know, a solution that, that makes more sense. And no, I'm not paid to say this. It just makes sense to me.

Dave Selinger 1:23:50 Well, I, I, I... If I can, I'll tell you one more story. One of the things that, that got me off my butt to do this was, uh, there was a story of this elephant that escaped a zoo, and the video was, uh, the eleph- like, a, not, not, not a small animal, right? Like, an, an elephant.

Shaan Puri 1:24:06 Right.

Dave Selinger 1:24:07 And the elephant did not escape the zoo by going around the guard. The guard was sitting at the, at the gate and, and, like, you know, the chair's tilted back the way that you expect a chair to be tilted. Guard is totally asleep, and a freaking elephant walks right by him and leaves the zoo, and you're just like, "There has to be something better than this. This is ridiculous."

Shaan Puri 1:24:27 Right. Has there ever been a conversation, like in San Francisco, there's all these car break-ins. Like, can a city adopt this? Do you ever s- Do you think a city realistically is gonna ever adopt this, where, you know, the cameras are on the street post or, you know, on, on, on the lights, and basically you can guard the whole street of cars that way, or no?

Dave Selinger 1:24:43 You know, we've, we've talked to a couple of cities about it. The thing that I don't like is I don't like the idea of Big Brother being part of the government.

Shaan Puri 1:24:52 Surveillance, yeah.

Dave Selinger 1:24:52 Like, I, one of the things I really like from kind of an ethical visib- I'm a pretty principled guy, I like to think, um, is that by making this surveillance private and focused on private property and protecting that property in service to that individual, you don't have that, like, panopticon risk of turning into, you know, the evil eye. And, and, uh, you know, we never question who our customer... Our customer is the person that, that pays us and owns this property, and that's a, it's a tried and true, like, deep principle of-

Shaan Puri 1:25:20 Right

Dave Selinger 1:25:21 ... you know, American liberty.

Shaan Puri 1:25:23 That's fair enough. I like that. Yeah, the person who buys it is the one who's opting into their own protection-

Dave Selinger 1:25:27 Yeah

Shaan Puri 1:25:27 ... basically. Yeah.

Dave Selinger 1:25:28 Yeah. That's right.

Sam Parr 1:25:29 Dude, my, um... Someone just rang my doorbell, and I know that because my, I just got a notification on my phone that Deep Sentinel is talking to them.

Dave Selinger 1:25:36 [laughs]

Shaan Puri 1:25:38 This is where you're gonna get made fun of.

Dave Selinger 1:25:39 Isn't that awesome, by the way, dude?

Shaan Puri 1:25:40 People, people are gonna be like, "S- you didn't know they rang your doorbell 'cause they rang your doorbell?" [laughs] Like-

Sam Parr 1:25:45 Oh, I can-

Shaan Puri 1:25:45 You needed an app? [laughs]

Sam Parr 1:25:46 ... you guys get this. I can't, I can't hear it, but I know that, uh, I, I can s- I can see on my phone. I just got the notification. I love it.

Dave Selinger 1:25:53 It, it makes me feel so much safer. I, for, for my, I've got two little girls, and I absolutely love it.

Sam Parr 1:26:00 It's great. I'm digging this. I'm, I mean, I can see my wife in our courtyard. This is awesome. I'm a fan.

Dave Selinger 1:26:06 Well, thank you, guys. I, I love, I love getting the opportunity to be here. Thank you so much for bringing me on, and, uh, you know, and, and for being a g- a good customer.

Sam Parr 1:26:13 Thank you.

Shaan Puri 1:26:13 Right on. Good talking to you, man.

Speaker 1:26:15 Uh-huh. Yeah. I feel like I can rule the world. I know I can be what I want to. Uh-huh. I put my all in it like no days off. On the road less traveled, never looking back. Oh, yeah. Uh. Feeling like gold. I don't wanna hide it. Uh-uh. Ain't nobody telling me no. I'll catch a fuse wherever I go. Uh-huh. Yeah, yeah, yeah. Like I can rule the world. Like I can rule the world. Yeah, yeah, yeah. Like I'm on top of the world.