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My First MillionMy First Million

The $20 Million/Year Personality Quiz 89% Of Fortune 100s Swear By

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Shaan PurihostSam Parrhost
Mar 15, 202454mWatch on YouTube

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Transcript

  1. 0:00 – 1:00

    Intro

    1. SP

      Now, the grit score goes, I think it's zero to 10. I want you to guess my grit score

    2. SP

      10 is super gritty

    3. SP

      S- gritty as it gets. [laughs]

    4. SP

      Uh, I would say, I, I would put you six. Six, seven. You're pretty gritty.

    5. SP

      I appreciate your faith in me. I scored a 2.5 on this grit test, bro. [laughs]

    6. SP

      [laughs] Dude, you should have taken it again.

    7. SP

      A two and a half out of 10. [laughs] [upbeat music]

    8. SP

      All right, Shaan, you're back. How was the trip?

    9. SP

      My trip was great. Me and Ben went to Phoenix, and, um, I'm not gonna share all the details, but it was a dope experience. Dope life experience. I think one great thing to share, by the way, when's... Like, Sam, when's the last dope life experience you had? Something you didn't have to do, but you did anyways.

    10. SP

      Probably Camp MFM-

    11. SP

      A year ago. [laughs]

    12. SP

      ... two years ago. [laughs]

    13. SP

      Don't let that happen. Don't let too much time go by. Uh, I think, like, every three months or so

  2. 1:00 – 7:00

    Data mining the basketball court

    1. SP

      you should try to do something that's, uh, a little extracurricular, if you know what I mean. Just something that's outside of the routine, outside of what you have to do. Um, so I did that. Anyway, so we went to Phoenix, um, because, uh, Matt Ishbia, who is the owner of the Suns, the Phoenix Suns, the basketball team there, we had gotten in touch with him and he was like, "Hey, if you guys ever wanna come check out a game, come hang out." So we go down to Phoenix and we meet Matt, we meet the team, we get to go s- courtside, do, like, live life as an NBA owner, which is awesome because I always dreamed of doing that. Now, what I wanna tell you though is not about Matt. Uh, what I wanna tell you about is actually much more, uh, i- in the weeds. So here's a little in the weeds, um, a little in the weeds story. So I think Ben emailed him when he bought the team and was just like, "Hey, congrats, buddy."

    2. SP

      Sup. [laughs]

    3. SP

      And then the guy was like, "Thank you. Thank you, Ben Levy." [laughs]

    4. SP

      [laughs]

    5. SP

      "Goodbye." And then that was the first touch point. Second touch point was we invited him to Camp MFM. We're like, "Hey, you u-..." He used to be a college basketball player. So he was a college basketball player, now he's a multi-billionaire who owns an NBA team. Well, that's a mix of basketball and, you know, entrepreneurship that, that's who we try to invite to the camp, and so we invited him. He was like, "Oh, I'd love to come." Couldn't end up making the dates, but his kind of make good was, "Listen, sorry I couldn't make it, but if you guys are ever in town, let me know. We'll, we'll hang out, we'll check out a game." Hey, what do you know, Matt?

    6. SP

      [laughs]

    7. SP

      We're in town. When are you in town? 'Cause that's when we're in town. [laughs]

    8. SP

      [laughs]

    9. SP

      And so we worked with his assistant to be like, "When do you think we should be in town?" And we did that.

    10. SP

      And so this is the rule of reciprocity, by the way. You offered someone something, and regardless if they take you up or not, they now owe you.

    11. SP

      Right.

    12. SP

      We should just host events that aren't ever gonna happen and we make sure we follow the person online. Like, oh, they're out of town that date. They're already busy.

    13. SP

      Yeah.

    14. SP

      Let's ask 'em then.

    15. SP

      Ah. [laughs] We're hosting a charity event honoring you. Uh, [laughs] so-

    16. SP

      [laughs]

    17. SP

      So yes, we did that. Now, the funny thing is, uh... Well, the, the background here is that why, why, what's the randomness here? Ben used to- Ben is a diehard Phoenix Suns fan. He loves the Phoenix Suns more than you love your child. He loves the Phoenix Suns with a deeper passion than Romeo loved Juliet. And he was a ball boy for four or five years, so, like, literally was, was with the team every day. Volunteer ball boy, basically. Um, just to give you a sense of this guy, so when, every year when there's an All-Star Game, so you, what, the way, the way it works in the NBA is the fans vote on who gets to be named an All-Star. So Ben, supporting his guys, being the loyal, supportive guy that he is, takes literally 100,000 ballots home, forces his family every night to sit there and punch the ballots to vote the Phoenix Suns guys in, [laughs] and himself, over the course of a couple months, they churned through 100,000 ballots to try to support the team. The guy, the players didn't care. They didn't know about this. He just did it 'cause he's that, that big of a diehard fan. So-

    18. SP

      That's ridiculous

    19. SP

      ... Ben obviously does a lot for me. I was like, can I... What's a, what's a, how can I make a Ben appreciation weekend? And that's what this was. This was go and, and kinda let him live a, live a childhood dream out. So he goes down there. We, we watch the game. It's all good. One of the cool things was... And this happens all the time, by the way. You think you're there to meet the, the famous person, but it's actually this other thing that's really interesting, that's more accessible, that ends up being the fascinating thing. You wouldn't have known it until you showed up. So similarly, we go and we have this great conversation with one of the guys in their kind of, like, data department. So it's like analytics, data. That's become a big part of sports. And so Ben is grilling the guy. Ben's like, uh, the guy came down to say nice to meet you and Ben's like, "Cool, I have 1,000 questions [laughs] for you. Have a seat."

    20. SP

      [laughs]

    21. SP

      And he's like, "In the year [laughs] 2013, you picked this guy. Why? I'd like to know, [laughs] like, what was telling you that? What..." And he's like, "What are the metrics that matter right now for us when we play a game? Obviously besides the score, like, you know, what leads to the score?" And he's, like, he's asking all these detailed questions.

    22. SP

      And when Ben asks questions, sometimes I've noticed the person won't even finish and he's like, "I got what I need. Next." Like, [laughs] and it's just like...

    23. SP

      And he's a, he's, he's great because, um, everybody needs a place where they're shameless. Like, for me and you, like, I'm shameless about, like, I'm a monologue, okay? I got something inter- interesting to say. I know that's not how this is supposed to work, but I'm gonna monologue 'cause that's, I just need to get this off my chest, and trust me, you're gonna like it by the end. Your thing is, like, you'll just ask a blunt question. You'll just be like, "Well, dude, you keep saying this. Like, what is it? How much? What's in your pocket right now?"

    24. SP

      [laughs]

    25. SP

      And they're like, "Uh, I guess nobody's ever asked me that. Here, here's the answer." Ben's thing is that, he's like, "Oh, we're, um, you know, we're supposed to be at dinner. I'm gonna ask you all of the questions."

    26. SP

      [laughs]

    27. SP

      "I will, I, my curiosity is endless," and, like, I don't care what the social situation is. Like, we'll be playing basketball and he'll be guarding a guy, and he'll be like s- he'll be like, "So, like, what's revenue like nowadays?" [laughs]

    28. SP

      [laughs]

    29. SP

      And I'm like, "Dude, Ben, like, you gotta let it go. It's this moment in time. Like, just give it a rest." But he doesn't. He doesn't do it. Anyways, we're doing that with this guy, and one of the interes- one of the fascinating questions that he asked, we were like, "What's... You're the data guy. What's the data you wish you had that you don't currently have? Like, what data would, would help you do this?" 'Cause he's showing us these cameras in the gym where if you're just shooting around, there's cameras now that will, it does facial recognition- It'll track, okay, Sam is shooting in the practice session. It'll record the length of the session, the number of shots, the exact arc on every shot, his exact, um, field goal percentage without anybody having to be there to keep sh- ta- track of stats. So cool tech, right? Now, his answer was very interesting. So he was like, "You know, we test for... We can, we know everything you've ever done on the court, but what we've learned, uh, uh, what everybody knows who's been around sports is that the difference between the Michael Jordans and the, you know, our Isaiah Ryders, or the Kobe Bryants versus the, uh, Lenny Brooks." It was like, it's like, what's up top? What's in your mindset? And the guys who are completely obsessed, extreme discipline, they're able to work harder than the next guy. They don't take those days off. They, um, you know, t- are receptive to coaching and they're gonna improve on their weaknesses, they're gonna double down on their strengths. They can keep their confidence even when something goes bad. It's all about the mental, right? Like, every athlete, every great athlete would tell you how much of the sport is mental, but they have no way of measuring the mental. And

  3. 7:00 – 15:30

    Origin of Myers-Briggs Test

    1. SP

      so we said, "Interesting. What would be the way that you would wanna do that?" He's like, "Grit." "Grit? What do you mean grit?" He's like, "Well, there's this book that came out." I don't know, have you ever read this book, the Grit book?

    2. SP

      Love it. Angela Duckworth.

    3. SP

      Duckworth, yeah, exactly. So I went down this rabbit hole after that. So that was just my segue into me going down this rabbit hole on these m- uh, m- mindset tests. So first, I actually wanna tell you about a different test, which you've probably done in the past, and that's the Myers-Briggs test. Have you done this test?

    4. SP

      Mm-hmm. Yeah.

    5. SP

      Do you know the backstory of this? You know where this came from?

    6. SP

      No, but is it even real?

    7. SP

      Are horoscopes real? Right? [laughs]

    8. SP

      Yeah.

    9. SP

      Are palm readers real? Like, there's a lot of bullshit in this industry, which is why I'm fascinated by it. [laughs] So let me... I'm not saying it's completely bullshit, but there's a lot of hand-wavy stuff. Here's the story. There's a woman, and her name is Isabel. Isabel, in 1942, uh, I think World War II is going on, and Isabel's reading Reader's Digest. And she reads in Reader's Digest this article about people sorting. People sorting. And basically, it's how companies are using tests to do people sorts. And so she reads that Lockheed, uh, Lockheed the aircraft, uh, company, was using it to locate, you know, possible troublemakers. They were like, "We need to do some screening r- so that we can identify who's gonna be a troublemaker, who's gonna have some mischief in them." Another company was using it for finding, uh, you, you'll appreciate this one, henpecked husbands.

    10. SP

      [laughs]

    11. SP

      And they were basically... Uh, the argument was that if the man is under the thumb at home, then he'll easily also be submissive at work. Fascinating, right? Like, people were legitimately doing this. They were, like, trying to figure out, like, who's, who's got that alpha? Who's got that dog in them?

    12. SP

      All right, everyone, a quick break to tell you about HubSpot, and this one's easy, because I'm gonna show you an example of how I'm doing this at my company. When I say I, I mean not my team. I mean I'm the one who actually made this. So I've got this company called Hampton. You can check it out, joinhampton.com. It's a community for founders, and one of the ways that we've grown is we've created these surveys where we'll ask our members certain questions that a lot of people, a lot of times people are afraid to ask. So things like what their net worth is, how their assets are allocated, all these, like, interesting questions, and then we'll put it in a survey. And I went and made a landing page. So you can check it out at joinhampton.com/wealth. You can actually see the landing page that I made, and the hard part with this is with Hampton, we are appealing to a sort of a, a higher-end customer, sort of like, like a Louis Vuitton or a Ferrari. So I needed the landing page to look a very particular way. HubSpot has templates. That's what we used. We just changed the colors a little bit to match our brand. Very easy. They have this drag and drop version of their landing page builder, and it's super simple. I'm not technical, and I'm the one who actually made it. And once it's made, I then shared it on social media, and we had thousands of people see it, and thousands of people who gave us their information. And I can then see over the next handful of weeks, this is how much revenue came in from this wealth survey that I did. This is where the revenue came from. So it came from Twitter, it came from LinkedIn. Whatever it came from, I can actually go and look at it, and I can say, "Oh, well, that worked. That didn't work. Do more of that. Do less of that." And if you're interested in making landing pages like this, I highly suggest it. Look, I'm actually doing it. But you can check it out. Go to the link in the description of YouTube and get started. All right, now back to MFM.

    13. SP

      So she writes to her mom, Catherine. She's like, "This is fascinating. Companies are doing this, blah, blah, blah." She's interested in psychology. Her mom writes back and says, "You should make your own test. Um, and you should do it, you've al- you're always telling me about that guy Carl Jung. You should..." Uh, Carl Jung, Jung? I don't know how you say it. Uh, but he's like, "You should do it on those principles." So, um, she ends up creating, and then their last names are Briggs and Myers, and she ends up creating the, uh, the, I, I forgot what it's called, the Briggs-Myers Type Indicator or something like that, right? Like, that's, that's how this test started. And she creates a test, and basically he had this theory, this psychologist had this theory that there's like people branch out in this, like, decision tree. It's like you're either a thinker or a feeler. So you're a perceiver or you're a judger. And the- and they, if you just go down the tree, it ends up with 16 possibilities, and they gave each of the 16, like, kind of a positive affirmation name. So there's no ba- there's no bad score.

    14. SP

      Yeah, they give you a fortune cookie.

    15. SP

      Everybody gets a trophy. And so they were like, "Oh, you are an executive. You are a caregiver. You are a scientist. You are an idealist." And they just had all these labels for the, for the 16 categories. Now, of course, the funny thing is if you end up taking the test, you'll get one score, and on average, if you take the same test weeks later, 50% of people will ha- will end up with a completely different label. So yeah, I don't know how reliable these things are. And the, you know, people who criticize it, they say this takes advantage of something called the Forer effect. Have you ever heard of this thing, the Forer effect? It's basically the same thing that astrologers, fortune tellers, and other pseudoscientists use, where they kinda cold read something general about you, like, "You're the type of person who, um, you know, you don't let everybody in, but once, but when som- you get close to somebody, you really open up." Or like, "You're the type of person who, um, you know, sometimes when things get hard, you're able to really, you know, you're able to really stand up and, and, and, and, and make it happen." It's like, "Eh, you know, I, I do have a little bit of that in me. You know, you're right. How'd you know? Um, here, here's some money." And so, so anyways, they create this test It's not that popular at the beginning, but it ends up getting picked up by, uh, you know, fast-forward many, many years, it gets picked up by a company called, um, CPP, the Consulting Psychologist Press, CPP. And so n- and they picked up the distribution rights, and they're like, "Hey, we are gonna market this to American businesses. We are gonna tell American businesses about this."

    16. SP

      When you say picked up, do you mean was this a publication that promoted it or bought it?

    17. SP

      It was a publishing company, and they buy the licensing rights to market it. And they're, Isabel and her mom are just gonna get a royalty. And basically, right as she dies, she dies at 82, sales start taking off. By 1983, a- almost a million people are taking the Myers-Briggs test annually.

    18. SP

      Is it free?

    19. SP

      No. So the way it works is it's a, it's kind of a brilliant business model. So basically, to take the test is somewhere between 15 and 40 bucks. So everybody who takes the test, you get, you know, let's say a- on average, 30 bucks from them. But then, well, you can't just take the test. It has to be given to you by a practitioner. Well, the practitioners have to pay $2,000 to become a certified practitioner. That's the only way you can take this test. And so, like, last year, they enrolled 5,000 practitioners who each paid, you know, about 1,500 to $2,000 each. 8 to 10 million bucks in revenue off of just the practitioners, and then each of the practitioners, um, then distributes the tests, and they get, they get paid by distributing the tests. So they, it's kind of like a multi-level marketing scheme, right? The practitioner makes 30 bucks a test, and then the extra royalty, the extra 10 bucks on top, goes back to the, to the, um, to the parent company, to the publisher. And, uh, so this thing, they don't know the revenue 'cause it's still private. It's been private for, like, whatever, you know, since, you know, the '80s. And, uh, they once said their number was over 20 million in revenue. I suspect it's higher than that. Um, there's been millions of people who take this te- who've taken this test, and Myers-Briggs is that company, CPP, it's their biggest earner. It's that, that's their cash cow. And so-

    20. SP

      That is insane

    21. SP

      ... dude, it's used by the government. It's used by tw- 200 federal agencies use this. Um, you know, just the EPA itself, they use it on a quarter of their 20,000 employees. I think 80% of the Fortune, 89, uh, 89 of the Fortune 100 use this test. 89% of the Fortune 100. Isn't that insane?

    22. SP

      The, there's a, a few things that are insane about it. One, to create something... So when did she create it, in '42, 1942?

    23. SP

      Yeah.

    24. SP

      So we're coming up, uh, uh, 80 years now. As, we're gonna be close to 100 years soon. That's amazing to create something that lasts that long. I mean, that, that's, it, it's such a reputable brand, even though I think it's nonsense. Uh, but many people think it's reputable. That it, uh, it's b- at this point, it's an, an annuity, so you just, like, it's predictable revenue all the time. Um, we talked about, uh, was it Gallup? Gallup polling, and they own CliftonStrengths, which is famous for StrengthsFinder 2.0.

    25. SP

      Yep.

    26. SP

      And I tried to find how much revenue they did, and I could not find anything. I believe Gallup, I, I, we did this two years ago, so I don't remember. I believe Gallup does something like a billion a year in revenue or, or hundreds of millions. But if you go to the StrengthsFinder website and you look at their traffic, it's huge. It's a huge, huge, huge thing, and it costs the same thing, 20 or $40 for one of these tests. I loved this business because the test business is so fun because you're desperate to know. Like, when you're in a hard time, you're desperate to know. You just want affirmation that things are gonna be okay. And I loved it. I loved it. And I used to do these

  4. 15:30 – 17:00

    Formula for Grit

    1. SP

      all the time, and I would even game them. I'd be like, "Well, that's not right. I should, I should take it, I sh- I should take it again. I probably answered a few, a few wrong." Uh-

    2. SP

      So check this out. So I read about that. Now, when we meet this guy and he tells me about the mental makeup, the, the grit, the mindset, uh, being important, I'm like, "He's totally right. The mindset thing is super important." And so I'm like, "What was that book, Grit, Angela Duckworth? What was that all about?"

    3. SP

      I, I believe it's, um, uh, I, you could put off desire. What's that called? Or you could put off a reward.

    4. SP

      Delayed gratification.

    5. SP

      Delayed gratification is, like, the big one.

    6. SP

      I think that's a part of it. But, uh, the ones I think they had is basically, uh, it's ability, so, like, your talent. Basically, your ability times zeal, which is, like, your passion or enthusiasm about something, times capacity for hard labor is the formula for success. And with what, with grit specifically, it's around zeal and the perseverance. So it's, you know, basically your, your enthusiasm, your passion times, uh, times perseverance. Okay. So here's what's interesting about this thing. So he tells me about this, and I'm like, "All right. Dog, like, h- how, what's my grit score? Let me go, let me go test it." Now, the grit score goes, I think it's 0 to 10. I want you to guess my grit score.

    7. SP

      10 is super gritty.

    8. SP

      Gritty as it gets.

    9. SP

      Who's, who's a 10?

    10. SP

      David Goggins is a 10. [laughs]

    11. SP

      Uh, I would say, I, I would put you 6, 6, 7. You're pretty gritty.

    12. SP

      I appreciate your faith in me. I scored a 2.5 on this grit test, bro. [laughs]

    13. SP

      [laughs] Dude, you should take it

  5. 17:00 – 24:00

    Sam takes the Grit Scale Test

    1. SP

      again.

    2. SP

      A two and a half out of 10. [laughs] I am, I am in the bottom ten percentile of grit. [laughs]

    3. SP

      So what were the questions? You sh-

    4. SP

      So check this out. I'm gonna read you some of the, uh, the test. And this is the, this is why I was like, "This is bullshit. Why is this bullshit?" Okay, so here's h- the claims. The, she writes this book, it becomes a bestseller. You see Keith Rabois, they'd be like, "Oh, grit's the most important thing," and all these CEOs are like, "Grit's the most important thing." And they're not wrong. It's just that, like many of these best-selling books, it's, like, pop science, right? Like, the principle's not wrong, but the, the depth of the evidence is actually quite shallow. And so here's what it says. So it says, [laughs] so she starts off by saying, "Well, showing up," you know, the, the, what's that old quote? "80% of success is just showing up." Uh, you know, and people realize, well, yeah, like, if, I guess if you give up, that almost guarantees failure if you give up. And they looked around and they said, "Well, 50% of soldiers quit the Army during the selection process. 50% of marriages end in divorce. 25% of students drop out of high school. Sales jobs, 50% of people will turn over every, every year in sales jobs." And, um- And they noticed that, like, uh, there were, there were... What's the counterpoint? The c- counterpoint is basically what they looked at was West Point. And I don't know if you know much about the school West Point, but it's got a pretty, like, th- uh, pretty high bar, right? It's, it's like being a guest on this podcast. It's a high bar. And so what they do is they say, "To get into West Point, you don't apply when you're a senior in high school. You apply when you're a junior. You apply in 11th grade." And you don't just apply with your test scores or whatnot, you have to be nominated by a member of Congress to get into West Point. [laughs]

    5. SP

      What?

    6. SP

      So you have to hustle your way to get a Congress member to vouch for you in order to do this. You have to do a leadership interview, you have to do a fitness test, and out of 14,000 applicants, they'll select, like, 1,000 people to come join this thing. And even outf- after they filter with all that, like, you have to run through walls to get here, 20% drop out during the o- the, the seven-week orientation period that's called the Beast.

    7. SP

      Is West Point free?

    8. SP

      I don't think so.

    9. SP

      So you gotta pay money to do all this and then go to the Army?

    10. SP

      Like all the best things in life.

    11. SP

      [laughs] All right, all right.

    12. SP

      Um, the Beast is a rotation of calisthenics, marching, classes, weapons training, athletics. You go 5:00 AM to 10:00 PM with no breaks, no weekends, no contact with family or friends, and you have to be subscribed to this YouTube channel in order to get in. And so even if you're not gonna do all the other things, you should go to YouTube right now, My First Million, and you should subscribe to our podcast. All right. So basically grit was a higher predictor, with this grit score, they said it was a higher predictor of West Point success than your SAT score, than your high school rank, than the leadership interview, than all the other things. And so anyways, I thought... Here's the grit test. I, I can even just give it to you. So here are some of the questions they ask on this thing. It says, "New ideas and projects sometimes distract me from previous ones." D- basically, do you get distracted by new ideas and projects from your current one? Uh, is that very much like me, mostly like me, somewhat like me, or not at all like me?

    13. SP

      That's like you.

    14. SP

      Guess what? It's very much like me. [laughs] Okay? Another one: "Setbacks don't discourage me. I don't give up easily." Okay, that one, I scored well on that one. "I set a goal but later choose to pursue a different one. I am a hard worker." Like, come on. This is not science. This is, this is what I call nothing. That's what this test is. [laughs] This test is nothing.

    15. SP

      No, there's some stuff here. I finish whatever I begin. So for example-

    16. SP

      Bro, do you trust people's self-assessment of this?

    17. SP

      No, here. Do you have any, uh, unfinished Lego sets in your home?

    18. SP

      I don't even have a Lego set, no. But I w- if I did, I would. I got a box of un- un-set up furniture right over here. I have a, a half, half-written book over there. Yes, of course, yes. I, I do fail this test.

    19. SP

      And so do you-

    20. SP

      But the thing is-

    21. SP

      Does this insult you?

    22. SP

      ... I can think of 10 examples where I'm not like that. I can think of 10 examples where I am like that. This is j- you know what? I'm low in grit, I'm high in honesty. And it, to somebody who's like, "I'm really high on the grit score," I'm like, "Is this real?" Like, is this, is this honest? Is this an honest assessment?

    23. SP

      I think you're butthurt. I think that you gotta-

    24. SP

      [laughs]

    25. SP

      I think change comes from within, brother. I think that you gotta be [laughs] you gotta, you-

    26. SP

      What's the stages? I'm in denial right now.

    27. SP

      Yeah. [laughs]

    28. SP

      And I'm bargaining. [laughs]

    29. SP

      Yeah. Is there, like, Grits Anonymous? You need to, like, go and go through the, the 12 steps, my friend.

    30. SP

      [laughs]

  6. 24:00 – 35:00

    Cognition Labs, a math nerd's wet dream

    1. SP

      know it. Trust me. [laughs]

    2. SP

      Yeah.

    3. SP

      That's not o- the way we would do it.

    4. SP

      I wanna tell you about someone who would score a five out of five on the grit score.

    5. SP

      Okay.

    6. SP

      Can I tell you about this person?

    7. SP

      Tell me.

    8. SP

      Do you remember a few years ago, in '16 or '17 I think, there was this company called Lunchclub? It was basically, like, this social platform where you, I guess, meet up with people for lunch. I thought it was really dumb.

    9. SP

      I used to do that. I used to... When I moved to San Francisco, that's how I made friends. I, I joined the Lunchclub and I would go get lunch with random stranger tech bros.

    10. SP

      I thought that that was a stupid idea. I thought it was very stupid. I never used it. But not, I, I was alone on that one. I think that a lot-

    11. SP

      Is this like when you didn't have setbacks? You're like, "I always have friends, and I never have setbacks." [laughs]

    12. SP

      Yeah. [laughs] Yeah. I scored low on this one as well.

    13. SP

      It's relatable.

    14. SP

      Uh, but here's the thing: not everyone else thought it was, uh, a dumb idea. In fact, they raised $30 million from Andreessen Horowitz and all these, like, really smart people. And I don't think it ever became that big of a company, but they raised $30 million at a $100 million valuation. I have no idea what happened to it today, uh, because it's not really relevant anymore. However, the guy who started it is amazing. And this is just proof that smart people sometimes do, like, they-

    15. SP

      [laughs]

    16. SP

      They've got silly things that are just stepping stones until the real thing. And so the guy who started it, his name is Scott Wu. And recently, I think yesterday it was, he launched something that's pretty amazing. And we're gonna do another episode where we talk in depth about what he's launched. But basically, what it is, is it's called Cognition Labs. That's the name of the company. The product is called Devin. The summary of it is you just tell Devin, "Make me a website that looks like Yelp, except it's just for, uh, agencies or something," or, "Make me a website that's like Airbnb, but for cars." And what Devin does is it gives you a checklist of all the things it's going to do, and then it does it, and it builds the website for you. And this is like game-changing technology because it basically makes coders obsolete.

    17. SP

      It's an AI software engi- engineer or a programmer.

    18. SP

      Yes. And many, uh, really smart people, Patrick Collison, the CEO of Stripe, they're basically saying, "All right. This is the first time I've ever seen anything like this actually be as good or better than a human," and it's amazing. Whatever. The product's awesome. We're gonna talk all about it. But what's more interesting to me is Bloomberg [laughs] did this article on the three... It's basically three co-founders, and then they have a, the main CEO. His brother also works there. They did this amazing profile on the 10-person company that created this, and they are magnificent.

    19. SP

      [laughs]

    20. SP

      Everything about these guys are beautiful. And it's-

    21. SP

      The Magnificent 10, should we call them?

    22. SP

      Yes, the Magnificent 10. Everything about this company is the greatest thing I've ever seen in my life. So check this out. It's 10 employees. They've raised $21 million. Amongst the 11 employees, they have 10 gold medals, uh, that they've won from top coding competitions. And many of the people [laughs] on Twitter, when they, when they came out with this, they go, "I remembered Scott. Scott was the guy who was winning all of the math competitions that I used to go to as I sat in the crowd wondering how on earth this guy did this." And this one guy named Bai, Bai Fan his name, he tweeted out this thing. He goes, "I wanna show you all some tiger mom porn."

    23. SP

      [laughs]

    24. SP

      And it's basically, [laughs] and it's basically this young guy, I, I g- judging off his name, I guess Scott Wu. I, I guess he's Chinese. He, there's this video of him when he's i- uh, like 12 or 13 years old, and he's at a math competition. And the-

    25. SP

      Sam, we gotta do this, we gotta do this test. All right. P- Uh, I have the thing. Here's the question. The question says, "If the pattern continues, what is the letter in the 2,010th position?" [laughs] And it just says, "Mathlete, mathlete, mathlete, mathlete," and it, and it says, "Dot, dot, dot. What letter will be the 2,010th letter in this sequence?" And he goes, "Bum. A." [laughs] It's just like what?

    26. SP

      Dude, you know how-

    27. SP

      [laughs]

    28. SP

      You know how, like, in Jeopardy!, how they sh-

    29. SP

      And by the way, he looks like he's, like, 12 years old in this video, by the way.

    30. SP

      Yes. He's, he's-

  7. 35:00 – 40:50

    Be willing to walk backwards

    1. SP

      to this for years and, you know, you're cool, do this.

    2. SP

      That's so funny. Uh, [laughs] "This costs me a lot of money, so please only do it if you really care about it."

    3. SP

      Only, like, 1,000 people do this. Uh- [laughs]

    4. SP

      [laughs]

    5. SP

      I don't really want more than that to do this 'cause it's quite expensive. But, you know-

    6. SP

      Tell me-

    7. SP

      ... whatever. Uh, leave it to me to cut it off at a certain point.

    8. SP

      Tell me about your friend walking back... You have on here walking backwards and speedrunning. Isn't speedrunning just sprinting?

    9. SP

      No. [laughs]

    10. SP

      [laughs]

    11. SP

      So, uh, we did a pod with Gary Vee yesterday, and it's not gonna come out for a couple of months. Two months, I think. It's gonna come out when his book comes out or whatever. But he said something very interesting. I don't know if this stood out to you, but you had asked him a great question. You go, "Gary, you started with, like, a, like, family business, mom and pop." Or actually even before that you were just flipping, you know, baseball cards as a teen. Then you joined your family business and it was, like, a w- a, a family shop. And then as you started to grow your brand, now, like, you have all these business owners who listen to you. But also your brand has grown so much, you now get to, you know, rub shoulders... Is it rub should- elbows? I don't know what people rub. [laughs]

    12. SP

      Fr- You, you rub against.

    13. SP

      You rub-

    14. SP

      You rub.

    15. SP

      You're rubbing chest to chest with a bunch of billionaires.

    16. SP

      Yeah. [laughs]

    17. SP

      And you were like-

    18. SP

      Yeah. [laughs]

    19. SP

      ... "What I wanna know is have you observed any difference between the guys who end up, uh, guys and gals who end up making it to the, to the highest tier of the, the, of winning in business, the billion dollar club, let's say, versus the, the, the small business owner, the convenience store owner versus the, the, the solopreneur, whatever? What do you notice in the, uh, is, is the biggest difference?" He instantly answered something that I thought was not what I would have expected. He goes The willingness to walk backwards. We're like, "What? What do you mean?" And he said it and it ki- he didn't fully explain it, but he explained two things. He goes, "Number one, the great ones always reinvent themselves." Uh, you know, uh, i- you can look at Elon Musk. Elon Musk starts out doing Zip2, and he, he, then he creates PayPal, and he's like, he's like this internet entrepreneur. And then a- after that, he was willing to walk backwards and go back to zero, and he was basically like, "Cool, I'm gonna now try hardware," which is a ver- completely different game. It would've been easier for him to just stay with PayPal, keep growing that, or do another software company, internet company. But he was willing to walk backwards, and so he started a, a rocket company, something he didn't know anything about at the time. But he's like, "I'm gonna start from zero. Today I can't tell you how to build a rocket." And then fast-forward to today, he's got self-landing rockets that can go up and come back and, and land on themselves, right? It's kind of amazing. He was also willing to walk backwards financially, so he invested everything that he made from Zip2 and PayPal into Tesla and SpaceX, to the point where it would've gone to zero if those companies had failed, which they almost did. So the willingness to walk backwards both in terms of, um, where you're at in the mountain, can you go back to being a beginner? And the second thing is can you go back, can you, are you willing to risk it? Gary told us that his, i- he has a safety net. You were like, "I have a safety net, some amount of money that I just don't touch. And if everything else goes to zero, I always got that." He's like, "Me too." And you're like, "How much is it?" And he... I don't, what did you expect that he would say, and what did he say?

    20. SP

      I expected, I mean, he seems pretty wealthy. I expected 10 or 20. He said one million. So he said his safety net-

    21. SP

      He said $1 million

    22. SP

      ... he said his safety net was $1 million, which if I had to guess, that would cover his life expenses for, like, s- less than six months.

    23. SP

      [laughs] Right. At, at his current lifestyle, yeah, exactly. I was like, safety net? That's a, that's a safety floss, my friend.

    24. SP

      Yeah. [laughs]

    25. SP

      That's a thin thread you're, [laughs] you're gonna land on there. Uh, ob- obviously it's a lot of money in the grand scheme of things, but, like, relative to w- his level of success and wealth, that's a lot less than I would've expected. But he's like, "That's all I need." And he's like, "That's all I need in safety. I'm willing to roll everything else." And I thought that was very fascinating. And then I've seen... So I, I thought that was cool, and, uh, Naval has said a very similar thing. He goes, "One of the hardest things to do is you start to climb the mountain. And when you're, in your 20s, you don't, you know, you don't know anything, so you just start going up the tr- whatever the trail that you see is, and you start going up. The problem is let's say your ambition, your dream is to get to the top of the mountain. But halfway up you learn that the trail you're on is not the path that gets you there. And so w- what do you do?" And he's like, "The reality is that most people, you're now 33 years old, you've realized that the path you're currently on is not the lifestyle or the path that you want, but it is very hard to say, 'I'm gonna walk back to the bottom of the mountain and pick a different path.' And what most people do is they just settle. They say, 'I guess, like, I guess I don't need to get to the top. I'll just, this is high enough.' And, um, they're not saying it because they actually want that. They're saying it because the thought of starting over is so hard mentally. But the great musicians, the great actors, the great entrepreneurs, the great scientists, they reinvent themselves. They go into new fields, new b- new studies, new beginnings, and they start again." And so I find that pretty inspiring. That, and I've seen that so many times in the people in my life, that people who aren't willing to walk backwards, aren't willing to go back to being a beginner again, um, it's really tough.

    26. SP

      I've met multiple people who have started something and sold it and then went back to s- went back to college, Dharmesh being one of them, that he started HubSpot in college after he had already made-

    27. SP

      Say the name. Say the name

    28. SP

      ... uh-

    29. SP

      Say the name you wanna say.

    30. SP

      Yeah.

  8. 40:50 – 43:00

    Speedrunning: 3 Founders Who Repeated the Playbook

    1. SP

      So-

    2. SP

      So what about these guys?

    3. SP

      Then the, then there's the opposite, speedrunner. So I'm gonna tell you about th... Uh, I saw this story and I wanna tell you about three friends. So the story I saw was that the founder of RXBAR-

    4. SP

      Dude, speedrunning is such a better term for sprinting. [laughs]

    5. SP

      [laughs] For running.

    6. SP

      Yeah. [laughs]

    7. SP

      So speedrunning. What is speedrunning? Speedrunning is the opposite. Speedrunning is where you don't go back to that beginner's mind, you don't go back to the bottom of the mountain, you literally hike the same trail again, and now you know that trail so well you can do it so much faster. And you do it faster and faster. It's a video gaming term. I don't know if you've, you've seen it, but, like, there's people that they don't play the new video game, they don't buy the new, the new, the new, uh, you know, the next, the next edition of whatever, Fortnite or whatever. They play Mario that was released in, whatever, 1985. They play the first level, and they play it over and over and over again to where they can flawlessly sprint through the level, hopping on all the Goomba's heads, and they can finish the level perfectly in, like, 32 seconds. And that is, like, the actual fastest that a human being could do this, and they do it. And they're, they're called speedrunners, and people love to watch them, 'cause you, you're watching absolute mastery over something that, you know, has been around for a while that they can just keep replaying until they absolutely master it.

    8. SP

      Like that Jiro guy who just, like, packed sushi for, like, 50 years and, like, didn't change, right? [laughs]

    9. SP

      [laughs] Right. Ex- exactly. He's not trying to make the new shit, he's like, "Spicy tuna roll."

    10. SP

      Yeah.

    11. SP

      "This is what we're gonna do." [laughs] And so I, I've noticed that I have friends that are the beginners, and I have friends that are the speedrunners. So let me tell you about, uh, the speedrunners. So first I noticed that the RXBAR founder who built RXBAR ended up selling it for $600 million, came out with a new bar, and it's called the David Bar. Did you see this?

    12. SP

      No, but that, that must mean that his non-compete ended, like, right then.

    13. SP

      [laughs] Yeah, yeah, e- exactly. He sold his company in 2017, and so now it's, um- You know, whatever f- yeah, I don't know how, how many years. Uh, what, I don't know what year it is. It's been eight years or something like that. It's, uh, i- he could start a new bar. So he started this thing called the David Bar. It's this, like, epic protein bar that he's doing. Okay

    14. SP

      davidprotein.com. Looks sick, by the way. It looks awesome.

    15. SP

      Looks sick. Sick name, and the macros are also pretty insane. Like, look, just look at the macros. Do you,

  9. 43:00 – 50:00

    Don't explore, exploit

    1. SP

      do you, do you see it on there?

    2. SP

      No. Uh, 160 calories, 28 grams of protein, sugar-free. That's amazing.

    3. SP

      Pretty impressive.

    4. SP

      I'm in. Uh, yeah.

    5. SP

      I'm in. So I wanna tell you a couple things about this before we finish. Uh, actually, I'll finish the speedrunning point, then I wanna tell you about some RxBar story. So anyways, speedrunning. We have three friends, right? I think you know, I think you know at least two of the three people. I can't say their names, but let's just call them Ecommerce Friend Number 1, 2, and 3. Ecommerce Friend Number 1 sold their first ecom- sold an ecommerce company. So the, the company, let's, let's say one, the first time they played the level, um, for hundreds of millions of dollars. Almost $500 million. And then they decide they're gonna start a new company. Do they go into AI? Do they create a space company, a satellite company? No. They're like, "I'm gonna start another ecommerce company in almost the same niche, [laughs] and I'm gonna do it again. I'm gonna speedrun this same level, 'cause the first time I was an idiot. I didn't know what I was doing. I figured it out along the way. But now that I've figured all this knowledge out, why not just do it again?" And so they, they say they're gonna start a new company. They are talking to somebody and th- that, and they go, "Yeah, I think if I..." They go, "I think if..." And actually, they weren't even planning to do it. They go, "I think if I started one today, I could hit a million dollars a month in revenue in three months." And the other person goes, "No way. No chance-

    6. SP

      Bullshit

    7. SP

      ... dude. Bullshit. Like, you think that, but that's not true." Challenge accepted. Only for that reason, this person starts a new company [laughs] and they-

    8. SP

      And how big are they now?

    9. SP

      Month two hit a million dollars a month in revenue. Uh-

    10. SP

      Oh, my God

    11. SP

      ... you know, they're, they're, you know, a couple months in, and, you know, they're gonna do probably 2 to $3 million this month in revenue, and l- it's less than six months old.

    12. SP

      Can, you can't re- can you even say the category?

    13. SP

      Nothing. I, I can't say a word. I might even, I might get shot just for saying what I said already, so, so-

    14. SP

      All right

    15. SP

      ... that's the first person.

    16. SP

      And who's, who's person two?

    17. SP

      Person two, Ecommerce Two, uh, c- Person Two. Sold another company, also for nine figures. Nine figures means $100 million or more. Doing literally the same company again. [laughs] Doing the same company in the same category. Obviously, there's, like, a, you know, 10% twist, but, like, back to ecommerce, back to the same category, back to the same playbook.

    18. SP

      How big are they now?

    19. SP

      Doing phenomenal again, right off the bat. I don't have all their exact revenue numbers, but I know it's, like, tracking faster than it was the first time. Friend number three. Friend number three was friends with person one and two. Saw them run the levels. Helped them a little bit along the way. And then friend number three had an experience that triggered them also. A little chip-on-the-shoulder moment. So they were invited by a very successful company to come to their annual, like, "Come check out the office. Come to our annual retreat." And they go, and they are watch- they, they go through the office. They're like, "Wow, this is really impressive." They go to the annual, like, company, uh, conference or something like that, and they're like, "Wow, this is really impressive." But the problem was that the, the people that invited them, you know, there's, like, a good faith way to invite someone, which is like, "Hey, check this out. You'll really, like, you'll enjoy it. I'd love to show you what we're doing," blah, blah, blah. And then there's, "Hey, you wanna see my car collection?"

    20. SP

      Oh, my God.

    21. SP

      And that's what was going on. It was, "You wanna... Can I brag to you real quick?" And they were arrogant. They were incredibly arrogant the whole time. And my friend told me, they said, uh, friend number three told me, they go, "You know that scene in, um, The Big Short where these bankers are, are talking about how they're giving loans and they don't have to do any, uh, they, like, don't have to do much, much of a, a credit check, and they, they're able to do no-look-

    22. SP

      We're talking about giving strippers, like, five houses.

    23. SP

      Yeah, exactly. And they, and the guy, the, the main character's like, "Why are they, um, why are they, uh, confessing?" And then his friend goes, "They're not confessing. They're bragging." [laughs] And, and he re- and he goes and he's like, "Short this." Like, "We need to short mortgage-backed securities," or whatever. My friend says, "Same feeling." Walked out and was just like, "Why are they, why are they bragging about all this?" And it's like, and, and he's just got turned off, and he's like, "Okay, you showed me, you showed me exactly how big this market is. You showed me exactly how lucrative this is. You showed me how arrogant you are. You showed me how bloated your company is. I will come out with a lean, mean, fighting machine doing the same thing." That company gives him 10 million-plus in profit a year, personally. Just 10 million in profit in your bank account every year. Um, w- and this is less than five years, raised no cap- but raised no external capital, all that stuff, right? Amazing, amazing story. And when I was talking to this person, I was like, I was talking to one of the friends, and I said, "This is amazing, number one, but it's also kinda lame." And they're like, "What do you mean?" And I was like, "You're playing the same level of the game again. Like, yeah, you're so talented. Like, you could do anything. And, like, it's fun to win, and I get that, but it's also fun to grow. And, like, I feel like you opted into fun to win with no growth, but you're so talented that you could get the growth and win." That was, like, kinda my argument. But I might a- also just be... Then they're like, "Cool, my broker friend. Thank you for the advice." [laughs] You know, like... And so I wanted to get your take. Are you a walk-backwards guy, or are you a speedrun guy, and where do you land in the philosophy of this? And I'm curious a- actually for all the listeners, I really wanna know, 'cause both ways can win, but there's, like, a, almost like a, a, a political opinion on this. I have a political opinion and a belief that walking backwards is the w- is the way. It's the right way to, to do it in your life. Not the speedrun the same level again.

    24. SP

      For years, I thought you owe it, if you have talent, you owe it to the world to, like, almost be a steward of that talent. Like, you, you owe it to the rest of us because you're so special to exploit your ability to the max. Now that I'm a little bit older and I have a family, I think, "Fuck everyone. Do what makes you happy." Uh, like, make your kids proud of you, and, like, just whatever you think is exciting and fun, do that. You don't owe anyone anything.

    25. SP

      So not explore, exploit. Basically, like, y- you're not, uh, don't wander out

    26. SP

      No. What I, what I think is if it, if you... So like for example, I will name drop him again, Brett Adcock. I was like, "Brett, why are you doing all this complicated shit? You don't have to." And he's like, "I just think this needs to get done and I should do it." I love that attitude. I also love the attitude of, "Well, I'm just gonna do the same thing over and over again because I get joy out of it, and this is awesome and I just love it." I think that is also a, a total win. I think both are wins and I don't think that you owe it to the world to do anything unless you choose to owe it to the world.

    27. SP

      Okay. So let's say we're not telling other people what they should do. What do you, how do you, where do you land on that? Let's say you could've started another newsletter right after The Hustle.

    28. SP

      But it's not like I'm starting like huge like world... I'm just starting things that are-

    29. SP

      But you're doing new things.

    30. SP

      I'm doing new things because I do, I have a chip on my shoulder to prove myself in multiple industries or multiple business models, but I don't want to risk everything and I'm not willing to-

  10. 50:00 – 54:03

    $600M protein bar in 4 years

    1. SP

      Um, so for me personally, I would say that I, I don't feel like I owe, I don't owe it to the world to explore and I don't owe it to someone who's less talented. Not that I'm partic- I mean, I'm, I think I'm mildly talented, but when I see someone who's really talented I'm like, "You owe it to me because you were gifted this."

    2. SP

      Well, let me ask you this. Would you run it back? Let's say you were the RXBar guy, would you run it back and do another bar company?

    3. SP

      So I think would I run back newsletters? No, 'cause that bores me. Uh, the RXBar I think is pretty dope. I think it was great for the world. Uh, I think that... So yeah, if I'm, if I'm him I would. And there was actually an article written about him, how he was retired and he was bored and he had nothing to do. And they had a picture of him, but they made this photo the article of the, of him really great where it was him by himself on a lawn chair like in front of his mansion and he was lonely. And they talked about his-

    4. SP

      [laughs]

    5. SP

      Like you know what I'm talking about? That famous article that, that was-

    6. SP

      Caption, rock bottom.

    7. SP

      Yeah. It was like-

    8. SP

      A guy in a recliner in front of a mansion. [laughs]

    9. SP

      Well, and it was like in the middle of the day and he was just like by himself and the whole article was like he's looking for his next thing. And so for someone like that I'm like, "Just do it again, man. That was exciting. That was cool. I think that's awesome." And I think R's o- So if I'm David, uh, would I redo it? Yeah, I think I would. Also-

    10. SP

      By the way, I don't even know if his name is David. Um, the, I think his name's Peter. So by the way, the RXBar story, so he's obsessed with CrossFit. Do you know what, do you know this story or no?

    11. SP

      No.

    12. SP

      So he's obsessed with CrossFit. He's like, "They don't sell any sl- snacks that are like paleo," um, at the time. This is 2013. And he goes to his dad, and this is the best part. This is the whole reason. I only wanted to tell the story just to drop this one line. He goes to his dad and he's like, "Dad, do you know any investors? I wanna start this like bar company." And his dad literally says, "You need to shut the fuck up and go sell some bars if you wanna start a bar company." [laughs]

    13. SP

      [laughs]

    14. SP

      He told him, "You need to shut the fuck up and go sell 1,000 bars." And so he's like, "Okay." Um, and so he's like [laughs] and he talks about like, you know, he was in school, he was not very good at school and he's like, "You know, so when I, um, when I was failing with this business I was comfortable. I was used to eating shit. I had been a failure. It was not foreign to me. I had been a failure already at school, so oh, okay, great. I'm bad at that, I'm bad at this." He's like, "I just kept going. I didn't like doubt myself. I didn't like second-guess it 'cause I was like so comfortable in that like the, the failure mode that every company starts with." Um, his first, first business was in high school selling weed by the way. Um, all right, let's see the next one. So his next thing was like he's like, "I, um, I thought raising money would solve my problems, but actually it was such a blessing that they didn't raise any money." So they sold for $600 million and I don't think they raised any money. They bootstrapped the whole way. And he's like, "It was so good that because we were so forced on the one important thing, selling the bars. That was the only way to continue the business." And so he's like, "We would just sell. I would email, I would call, and I would give bars out on consignment. We would do anything to try, just try to sell more bars." So in the first nine months they did 600K. Then the first, in the first year they did two million. Year two, six million. Uh, year three I think they did 36 million.

    15. SP

      Wow.

    16. SP

      And then year four they did 161 million, and then they sold to Kellogg for 600 million at that point.

    17. SP

      Wow.

    18. SP

      Isn't that amazing?

    19. SP

      And then there's, there's, there's an article... That's amazing. There's an article making fun of the article I ref- referenced and it says, "Michigan company pays guy $600 million, but he's kinda bored now." Uh. [laughs] This guy is awesome. The article was called What Happens When You Become a Millionaire Overnight.

    20. SP

      Who, who wrote that second headline? That's amazing.

    21. SP

      Uh, it was just like a shitty radio, a local radio station 'cause the, I guess David or whoever this guy is, he lives in Chicago and so, uh, like a local radio station like made fun of him. Uh, it's pretty funny. Uh, that's a good... Um, dude, this guy's awesome. We should, um, we should get him on the pod, right?

    22. SP

      Yeah. Peter, come on the pod. Tell the story.

    23. SP

      Um, all right. I gotta run. That's the episode. Good one. [upbeat music]

Episode duration: 54:03

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