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EVERY SPOKEN WORD
50 min read · 9,868 words- 0:00 – 2:00
Intro
- SPShaan Puri
All right, Sam, I wanna play a game. I wanna start this with a game where I'm gonna read you the t- and you don't know this, by the way. You didn't know I was gonna do this. We have the t- I'm gonna read you the most trafficked websites in the United States, and it's a simple test. You're a business guy. You studied the, the business world. I want you to tell me do you know who's the owner or CEO of these businesses, okay?
- SPSam Parr
All right. I like this game.
- SPShaan Puri
Number one, Google.com.
- SPSam Parr
Sergey and Larry Page. Sergey something and Larry Page.
- SPShaan Puri
Correct. Uh, next one. YouTube.
- SPSam Parr
Um, Chad, uh, H and-
- SPShaan Puri
Chad Hurley, yep
- SPSam Parr
... and Jared and one other guy. Steve Chen.
- SPShaan Puri
Exactly. Correct. Um, Reddit.
- SPSam Parr
Hoffman and Ohanian.
- SPShaan Puri
Correct. Uh, Amazon.
- SPSam Parr
Bezos.
- SPShaan Puri
Okay, number five. Now we're getting, we're getting to the good stuff. Okay, so first, this is... I think you'll get this one easy. Facebook.
- SPSam Parr
Zuckerberg.
- SPShaan Puri
Okay. Number six. Pornhub.
- SPSam Parr
Uh, Bastian something. A German guy.
- SPShaan Puri
Incorrect, sir. [laughs] [upbeat music] So this is the number six most trafficked website in the United States. 3 billion visits, um, in, in, like, in a month.
- SPSam Parr
Is it called MindGeek or MindFreak or something?
- SPShaan Puri
MindGeek is a name of a company that owned it. Um, however, the founding story is pretty crazy. And I don't know if you're a sci-fi guy or a fantasy guy, but in, in many fantasy book series, there's this con- there's, like, this, this concept like in Lord of the Rings, there's the ring, or, um, in, uh, Harry Potter, there's the Elder Wand. And it's an idea that there's so- that, uh, there's these assets that are so powerful that people wanna own it, but whenever you own it, your ownership's gonna be very short-lived. Uh, it's almost that the, the, the item is too powerful. It sort of corrupts you and, uh,
- 2:00 – 17:00
Who's the new king of porn?
- SPShaan Puri
puts a target on your back and other people start coming for you.
- SPSam Parr
It's a real sticky situation, one might say.
- SPShaan Puri
[laughs] This is like... It's Game of Thrones, right? Everybody wants to sit on the Iron Throne, but when you're on the Iron Throne, you're not gonna last very long. And so this is a Game of Thrones style story for tech that I went down a rabbit hole. I wanna share with you, 'cause I didn't know this story. So let me tell you, let me tell you how it went down. Okay, so we're rewind the clock. We go back to 2005. Up until then, you know, internet's been out for rough- been, been ki- semi-mainstream for 10 years. And of course, porn was popular right away. But the way that all porn sites worked was it was like Yahoo. It was a directory of links. So you would go to, um, whatever, I don't know, jugworld.com-
- SPSam Parr
[laughs]
- SPShaan Puri
... and it would just, it would just show you 100 links to places where you could go watch videos.
- SPSam Parr
Not the videos, but to the other websites?
- SPShaan Puri
To links to other websites or links to other photos. It was mostly photos at the time. It wasn't even that much video. So 2005, a big milestone happens, which is that YouTube launches, and YouTube launches with a, a pretty simple proposition, which is we'll make it really easy to host a video online. You don't have to host it on your own servers. We'll host it on our servers. And then also, instead of just sending somebody that file, you send them a, just a link, and they can watch it here, and we'll just have all the videos here in one place.
- SPSam Parr
Which was mind-blowing.
- SPShaan Puri
Sounds so obvious now, but at the time was different. And if you haven't read it, go read the Sequoia memo of his investment, uh, Roloff, uh, both his investment in YouTube if you wanna see how, like, uncertain and how, like, small and non-obvious this was at the beginning. So YouTube launches, it starts to get popular. Now, there's copycats that come out in the porn version of this. RedTube, right? Just off of YouTube, RedTube. Um, YouPorn, whatever. A bunch of, bunch of these come out, and they're all flooded with pirated content, so they're just like, kinda like Limewire back in the day. They just take, you know, stuff that you're supposed to pay for, and they would just upload it for free on here. And they would have, you know, banner ads to make money. And even though these were, um, kind of sketchy websites, they were 10X better in every way, so it was more private, right? You didn't have to go anywhere. You could just have it in your bedroom. Um, it was instantaneous, right? The, the distance between the craving and the fulfillment of the craving were, were, you know, one click away. There was infinite variety, so you didn't have to pick and choose. You could just keep going till you find what you like. There was infinite niches, and so people discovered that people were into all kinds of weird stuff because now there was a long tail of content, and it was free, whereas most porn at the time was paid. Uh, because at the time, there was somebody who was called the king of porn. He's the guy who was sitting on the ga- on the Iron Throne at the time, and this was the CEO of Vivid Entertainment.
- SPSam Parr
What is Vi... And, and, and what was Vivid Entertainment?
- SPShaan Puri
They're like a Hollywood studio. They're making, like, you know-
- SPSam Parr
Porn or normal movies?
- SPShaan Puri
No, they're making m- porn, but they're making it, like, in the Hollywood way, where there's, like, an actress and there's a set and there's cameramen. There's, like-
- SPSam Parr
And people buy DVDs.
- SPShaan Puri
Yeah, buy, buy the DVD. And so Vivid at the time was the king. This guy was known as the king of porn. He was written up in all these articles. In fact, the year that he was written up in all these articles is the same year these new disruptive websites came out, and revenue starts to fall, and it falls 50%, then it falls 80%, and it just basically goes down the drain.
- SPSam Parr
How big was it?
- SPShaan Puri
Uh, it was doing tens of millions in revenue.
- SPSam Parr
Okay.
- SPShaan Puri
Um, uh, it... But there were many studios like this. So they were, they were the biggest one, but there was, like, you know, just like in Hollywood, there's many studios. All right. So I don't know if you remember, Google s- uh, Google bought YouTube because YouTube was getting a hu- had a huge lawsuit from Viacom. These are, like, parallel stories. YouTube was also flooded with pirated content. Because of that, they were getting sued like crazy, and because they were worried that they would go out of business, they sold to Google for, like, a billion and a half dollars. At the same time, Vivid copies that playbook. They look at what Viacom's doing to YouTube. They start suing the crap out of all the, the websites. And so the first owner of the throne, Vivid, goes down. Then the second owner of the throne, which was these, like, RedTube and whatever, they, they start getting hammered as well because they're getting sued. All right, so who's the third one to pick up the, the, the baton? Now, where does Pornhub come into this? Okay, so at the time, there's three college students in Canada And they realize that this is a, um, that, like, there's a lot of traffic, uh, to these websites. They meet of, out of all things, at a c- competitive foosball tournament. [laughs] And the guy who's the best foosball player, AKA Chief Nerd, uh, right, like Sir Dork, um, he happens to be the best programmer of the bunch, and he creates a live streaming video website to stream their foosball competitions. And there's not much of an audience for the foosball competitions, but he realizes as he's building all this video tech, he's like, "Hey, I think we could do the same thing for porn."
- SPSam Parr
Was the intention porn, or was the intention something else, and porn users usit- use it most?
- SPShaan Puri
So these guys made the link site, so that site I talk about, Jug World, that's their site. But they made, like, 100 of these. Um, they made, like, 100 directory sites, just links to other websites. Then they see the YouTube thing, and they pick up this guy, Ma- I think his name is Matthew Keezer or something. Keezer is the guy who built the video streaming site, and he's the best programmer. So he's like, "I think I can make a YouTube for, for this stuff, and we can, instead of having these directories where we send the traffic away, we can just keep the traffic." And, uh, at the time, they had already kinda like, you know, started to discover things. They're like, "Oh, people like, you know, people like this. People like this." They were just creating other directories, and eventually they looked at Vivid, who was the king at the time, and they were like, "We should make our own Vivid." And so in the same office, they created Pornhub, the website that was gonna host all this stuff, and they created a company called Brazzers, which is a-
- SPSam Parr
Oh, yeah
- SPShaan Puri
... producer of content. So they created a content producer, and they created the platform, the network at the same time.
- SPSam Parr
Like Netflix making their own shows.
- SPShaan Puri
Exactly. Or like, you know, um, FTX had the s- you know, sister company that... And by the way, nobody knew these companies were linked. So everybody thought these were two, uh, not only u- unlinked companies. They thought they were enemies, 'cause at the time, all of the studios were, hated the platforms that were giving away the content for free. People didn't know that one of the biggest studios be- you know, was actually the owner of one of the biggest websites at the time. And so in the same way that there was FTX and Alameda living in the same house, you know, kind of sharing funds, Brazzers and Pornhub were doing the same thing. People just didn't know. And in fact, the guy came out and was, like, quoted, uh, he was like, "That would be, that would make no sense. Why would we do that? That would be 100% against our core interest as Brazzers to do that. We hate the platforms." And meanwhile, he was also the owner. So these guys start this thing, and it takes off like a rocket. They, uh, they're like, "Dude, we have no idea what we fell into. We were sleeping in the office. We worked every single day, every, every weekend. We couldn't hire enough." This was now like 2007 or '08, I think. So they weren't the first mover, but they were, they ended up becoming the biggest mover, and here's why. So they basically scaled this thing better than anyone else could, and one of the keys was they had Brazzers. They had their own content that was not, uh, c- not pirated, or, like, it was pirated, but they owned it, so they didn't care, that they could use on the network. So even when other stuff got taken down, they still had more content than other people.
- SPSam Parr
All right, everyone. A quick break to tell you about HubSpot, and this one's really easy for me to talk about because I'm gonna show you a real-life example. So I've got this company called Hampton, joinhampton.com. It's a community for founders doing between 2 million all the way up to, like, $250 million a year in revenue, and one of the ways that we've grown is we've created these cool surveys. And so we have a lot of founders who have high net worths, and we'll ask them all types of questions that people typically are embarrassed to ask but provide a lot of value. So things like how much the founders pay themselves each month, how much money they're spending each month, what their payroll looks like, if they're optimistic about the next year and their business, all these questions that people are afraid to ask, but, well, we ask them anyway, and they tell us in this anonymous survey. And so what we do is we've created a landing page using HubSpot's landing page tool, and it basically has a landing page that says, "Here's all the questions we asked. Give us your email if you wanna access it." And then I shared this page on Twitter, and we were able to get thousands of people who gave us their email and told us they want this survey. And I could see, did they come from social media? I can see, did they come from Twitter, from LinkedIn? Basically everywhere [laughs] else that they could possibly come from. I'm able to track all of that, and then I'm able to see over the next handful of weeks how many of those people actually signed up and became a member of Hampton. In other words, I can see how much revenue came from this survey, how much revenue came from each traffic source, things like that. But the best part is I can see how much revenue came from it, and a lot of times it, it takes a ton of work to make that happen. HubSpot made that super, super easy. If you're interested in doing this, you can check it out, hubspot.com. The link's in the description. And I'll also put the link to the survey that I did so you can actually see the landing page and how it worked and everything like that. [beep] I'm just gonna do that call to action then. And it's free. [beep] Check it out in the description. All right, now back to MFM.
- SPShaan Puri
And so they scaled up. They, they go from basically, like, just three friends to, like, 80 people, 150 people, 250 people, and they're hiring friends and family, and they're like, "Dude," uh, they're like, "Where do we... We have an office?" They're like, "No, no, no," just they started buying houses next to each other, just created a neighborhood, and they're all just working out of that, like, that one area.
- SPSam Parr
Bootstrapped?
- SPShaan Puri
Bootstrapped. No, no investors. No nothing.
- SPSam Parr
So just growing because w- word-of-mouth traffic, and obviously it's, uh, people love what they're, their product, and they're just coming back over and over again.
- 17:00 – 25:00
Bill Ackman vs Pornhub
- SPShaan Puri
So he goes to privates, and it turns out he raised from 125 secret lenders. They ne- their names have not been revealed, except for one group, their names have been revealed. It was a bunch of ex... I don't know if it was JPMorgan or Morgan Stanley, whatever. Some, some big bank. Two bankers from there spun out, created their own, like, lending firm specifically to lend just to this one play. They're like, "This is gonna be so lucrative that we have to just leave our jobs, quit our jobs, raise money, and just lend it to this guy." And they l- lent it at a 20% interest rate. And so even though he was growing and making all this money, he had huge, like, monthly commitments 'cause he raises 360 million at 20% interest.
- SPSam Parr
Yeah.
- SPShaan Puri
Right?
- SPSam Parr
So his, his, his, uh, his debt payment or his interest payment is 80 or $100 million a year.
- SPShaan Puri
60 million a year, exactly. And, and they're o- and they're also under attack. Like, the CEO, he owns a $16 million house. It gets burned down by arsonists. And, um-
- SPSam Parr
What?
- SPShaan Puri
... Bill Ackman comes into the fray. Do you wanna know how Bill Ackman comes into this-
- SPSam Parr
Yes
- SPShaan Puri
... into this, uh, story? So in the Game of Thrones now, Bill Ackman comes in from Westeros, and he's like, he's reading an article one day. This is the story. I don't know how true this is, but the story is he's reading an article in The New York Times, and it's about a girl, a y- a teenage girl who's sent nude photos to her boyfriend. The boyfriend then leaked it onto one of these websites, and Ackman's like, "That's so wrong." And she couldn't get it taken down. And he, and she's felt so bullied and whatever. He's got daughters. He's like, "This is terrible." And so he's like, h- he's, and so you know how right now he's on a crusade to take down Harvard, take down Business Insider? He goes on a crusade to take down Pornhub. And so he's, he tries to find him. He's like, "Dude, this is like some offshore company by this German, you know, single owner. I can't pressure him. He's not a public stock. I can't become an activist. What can I do?" He's like, so he thinks about it. He's, first he's stumped. Then he's like, "Wait a minute, what if I..." Like, you know, w- when the US government sanctions Russia, he's like, "What if I sanction Pornhub by cutting off their flow of money?" So he's like, "Hey, they need payment processors." And so what Bill Ackman does is he goes and he ta- he immediately texts the CEO of Visa, and he sends him the article, and he's like, "Your company is enabling this. These guys are making money off of this. You better do something, uh, about this." And the CEO of Visa's like, "Dude, I don't want any trouble from Bill Ackman," agrees that it's the wrong, you know, it's wrong. It's not a huge portion of Visa's revenue, and he texts him back, "I'm on it." Like within five minutes, "I'm on it." One day later, Visa cuts off, uh, Pornhub. So does MasterCard. So does... You know, so they, they lose their ability to actually process payments until they later w- like, you know, um, had to change all their policies and they, like, now verify everybody with their license and shit like that in order to use their website.
- SPSam Parr
And he's actually, Bill Ackman has this whole tweet. He goes, "If you've been victimized by Pornhub or any of their affiliates, you may be eligible for a large amount of compensation, and I encourage you to email this person who consults 70 plus victims who can help you pursue your claim." So he, like, puts all his weight behind this thing. This is, this is pre-Israel, pre-Harvard, pre-Business Insider.
- SPShaan Puri
Yeah.
- SPSam Parr
I- uh, Pornhub is his, is, is who he's going after.
- SPShaan Puri
Hell hath no fury like Bill Ackman scorned, right? Like, you know, the, the, he is cr- he is... He goes after you. So the crazy part is the story doesn't end there. So you, I thought, and you thought that Pornhub is owned by a company called MindGeek, and MindGeek is run by this guy, Fabian Thylmann. However, a few years ago, uh, or sorry, three, three or four years into owning it, he's grown the company like crazy. However, he gets in tubbl- trouble for tax, uh, tax fraud, or tax, like, evasion or something like that.
- SPSam Parr
He, and he's in Germany?
- SPShaan Puri
I don't know all the details around the tax thing, but I know that he gets in trouble around taxes. He's forced to sell in a fire sale. He sells it for $77 million.
- SPSam Parr
Oh, wow.
- SPShaan Puri
So the value has gone down somehow. I- I mean, the sixth most trafficked website in America sells for $77 million. That's how much Morning Brew sold for. [laughs] Like, come on, dude, this is crazy.
- SPSam Parr
This is the only time where I'm allowed to go on Pornhub on my work computer so I can look at their stats.
- SPShaan Puri
[laughs]
- SPSam Parr
So according to Similarweb, Pornhub gets two billion visits a month. Average, uh, visit duration 10 minutes, which is a lot, and 10 pages per visit. So they just get a ton of traffic, so it's just huge.
- SPShaan Puri
And by the way, now let me tell you, w- so this is a choose-your-own-adventure story. Aren't you curious what happened to those original founders who sold it for the 140 million? What are they doing now?
- SPSam Parr
I'm, I'm curious about them, and I'm curious about who, who bought Pornhub to, for $77 million.
- SPShaan Puri
Wh- so which one do you want? Do you wanna know about the shadowy businessman who bought it, or do you wanna know about the original founders? Choose your own adventure.
- SPSam Parr
Let's, I wanna go with both, but I wanna go with the original for, for now.
- SPShaan Puri
So if you go look at their LinkedIns now, which I did-
- SPSam Parr
What's their name? Can you, can you spell it?
- SPShaan Puri
[laughs] So-
- SPSam Parr
Spell one of their names
- SPShaan Puri
... so one guy's name, I mean, Dese- so one is Stefan Manos. Another one is Usam Youssef, and then there's the guy, Keser. Um, all of them, if you go to their LinkedIns now, there is, uh, no mention of, uh, of any of this. [laughs] They, they're like, "Yeah, we..." Uh, it's all about their philanthropy. It's whatever. But here's the interesting thing. So the guy, Youssef, he sells, and he's like, "Okay, I just wanna get away from all this. That was too stressful, too sketchy. It became way bigger than we started. Like, we didn't intend to do that. It just sort of one thing led to another. I need to reset." And in his reset year, he's like, "Well, what do I, how do I invest all this money I have?" And so he starts reading, and he reads 150 books about investing, and he comes away a Warren Buffett disciple. [laughs] And he's like, "You know what? I'm gonna go into value investing." And he creates a [laughs] Berkshire Hathaway for internet companies called Valsef. And Valsef is basically like Constellation Software. Uh, they're just buying up profitable, cash-flowing, uh, internet companies.
- SPSam Parr
Dude, and they're killing it. They're killing it.
- 25:00 – 30:30
Pornhub's $77M exit
- SPSam Parr
the other founders, right?
- SPShaan Puri
Yeah, yeah.
- SPSam Parr
Like, it looks like this-
- SPShaan Puri
It, it was two... I think two or three of them that w- I know it was, uh, the two of them, Yousif and, uh, the Manos one because I don't know what the Kezer guy does now.
- SPSam Parr
They don't even mention Pornhub on... So if you go to valsoft.com-
- SPShaan Puri
Never
- SPSam Parr
... r history. It... Like, that, that, that word's not even mentioned anywhere.
- SPShaan Puri
Yeah. [laughs] There's parts of my history I don't mention either, right? Like [laughs] we all, we get it. Um, these guys are planning to go IPO, which is pretty, pretty crazy. So that's where these guys went, which is insane. Now, what happened to the site? Who bought it? So the story that came out was that the, you know, who's the next person on the throne? They said that actually the employees bought it out for $77 million, like the two executives, uh, bought it out. But that didn't smell quite right. Where do these ex- where do these employees get $77 million to buy this, right? Like, how much were these employees making? And it turns out that there was actually somebody who was the money behind it that didn't want their name associated with it, and it was this guy, I don't even know how you say his name. It's like the word Bernard, but it's missing some letters. It's just Bernd Bergemeier.
- SPSam Parr
Okay.
- SPShaan Puri
And he's an Austrian businessman, which is just already sounds fucking, like, sick. And he's, uh-
- SPSam Parr
[laughs]
- SPShaan Puri
So now he, he owns the majority of this. He, he owns the majority of this. He worked in kind of, like, finance for a long time, Goldman Sachs. He worked at Hong Kong and London and blah, blah, blah. He bought RedTube in 2013. He sold it to MindGeek originally, and then now he bought the whole company back. And so he is the principal owner of this thing, and nobody saw it. And most people kinda thought it's a, kind of a dead asset because when you look at the reported financials, Pornhub makes almost no profit. And they're like, "Geez, how are these guys making hundreds of millions of dollars in revenue but no profit?" One of the reasons why is this guy basically lends money to the company and takes out $2 million a month in just debt payments himself. Plus, they shift revenue around all these subsidiaries, so there's all these shell companies. So you don't actually... They, they've completely obfuscated how much money this, this entity makes. And so that's who currently owns it, but even he's going down. Now he's getting a divorce. His wife has came out and is like, she wants him to cut ties with the company, blah, blah, blah, and I think it's about to exchange hands again because now a private equity group bought it. And do you wanna know the name of the private equity group that bought Pornhub?
- SPSam Parr
Yes, I do.
- SPShaan Puri
Ethical Capital Partners. [laughs]
- SPSam Parr
What? Dude.
- SPShaan Puri
Do you wanna know how many companies they own? One. [laughs] This is the on- They formed just to buy this. They named it, like, Ethical Capital Partners is... I mean, that's the, uh, the Subway Eat Fresh of, uh, [laughs] of, uh, of private equity. And so these guys are, uh, now the owners of this thing, and who knows where it'll go next.
- SPSam Parr
First of all, [clapping] great story. That was a great story. I was enthralled the whole time. Second, look up this guy Bernard. It, it, it's... He has a r- r- really weird spelling. There is only one photo of him that I could find, and he's smoking a cig.
- SPShaan Puri
Badass photo. [laughs]
- SPSam Parr
Yeah, he's just smoking a cig. He looks like... Like, if you told me that he was part of the mob, I'd believe it.
- SPShaan Puri
He looks like either a mob guy or, like, a soccer co- like a, you know, the Manchester United coach after a loss.
- SPSam Parr
Yeah.
- SPShaan Puri
[laughs] It's, like, one of the two.
- SPSam Parr
Uh, e- yeah, he's just, he's just, just ripping a cig, uh, in this, in this photo. And he, uh, worked at Goldman, so he's also, uh, uh, an acquisitions guy. Like, he's a deal maker. That's what he does. This is insane. First of all, I, I would never trade places with any of these people. Maybe the original owners. That is kinda cool.
- SPShaan Puri
[laughs]
- SPSam Parr
But the last two and the new owner, I would not trade places with any of them for any amount of money. I would not wanna go through this. If you Google this guy's name, it's pictures of his wife and them fighting over this stuff. This sounds miserable. Can you imagine being married to someone who runs this company? What I wanna know is what is it like to work there? How do you stay professional, like, and be, try to be objective about certain stuff? Like, you know, when you're talking about, um, uh, at, uh, Shepherd or one of your companies, and you're like, "Hey, this SKU is doing a little bit better. Maybe we should try it in red and blue. You know, we have black. Let's just do it in red and blue as well," what are the conversations like at, at Pornhub or, or MindGeek when they're, like, talking about, like, "Oh, this category's doing well. Let's explore that one a little bit further." Do you know what I mean? It-
- SPShaan Puri
You know what they do, right? It's, uh, it's the Chuck E. Cheese tokens thing. So, like, if you ever just had to take cash out of your wallet and keep putting it into Chuck E. Cheese machines, you'd be like, "What am I doing? This is terrible." But what they do is when you walk in, they exchange money for these fake tokens, and then they rename everything, and it feels like it's all, like, you know, fake. You know, it's just this... It's, like, abstracted away. That's what happens 'cause I felt this even when we were at Twitch, and Twitch is a lot more reputable than this obviously. But at the end of the day, we were in these meetings that felt like life or death, high stakes, everything is on the line. Like, the world is gonna end, and I'm like, "Th- this is, like, 21-year-olds playing video games in their bedroom. Like, who cares? Like, none, none of this matters." [laughs] And, like, you, you hire people from Harvard and MIT, like, the brightest of the bright, and they're optimizing, like, you know, the, the mid-roll ad pop-up of, you know, [laughs] some stupid energy drink in the middle of this stupid video game stream. But none of it st- feels stupid once you're in there 'cause it becomes abstracted away, and you're playing with the data, the numbers, and the revenue and it, and it... And you come up with all these terms for community and content and whatever. And nobody, uh, is... I feel like nobody looks at the fact that we're all just making hot dogs anymore.
- SPSam Parr
Well-
- SPShaan Puri
Like, you, you lose sense of it
- SPSam Parr
... I, uh, my wife worked at Facebook out of college. So she went to this Ivy League school, was a smart woman. She had all these ama- job, job offers, whatever.
- 30:30 – 36:30
The reality distortion of entertainment businesses
- SPSam Parr
And she starts working at Facebook, and I'm like, "Oh, Sarah, what are you working on?" And she started explaining it to me in a really complex way. I'm like, "Oh, you're just trying to come up... You're just... You guys just created, like, a little sticker emoji that you could put on photos so more people share photos."
- SPShaan Puri
Exactly. [laughs]
- SPSam Parr
And it was like [laughs] it was like looking down. It was like Yeah. Yeah, that's it. [laughs] You know what I mean? Like, you, you go to that moment where you think of, like, Facebook as this amazing thing, of which it is, but then you, like, start talking to individual people. It's like, "Oh, you create a thing that when I stick my tongue out, like, the cartoon's tongue goes out. That's cool." Uh, and in reality-
- SPShaan Puri
[laughs]
- SPSam Parr
... you're doing it just to get people addicted more to posting and sharing stuff. Yeah, you know, that's all right.
- SPShaan Puri
Dude, it happens. When we were at Camp MFM and we're talking to MrBeast's team and he's giving us a tour of the facilities, and our group is, like, billionaires and philanthropists and, and we're walking through and we're like, "Wow, this is, this is incredible. These people are geniuses. Tell me, how do you get people to click the thumbnail?" And they're like, "You know, we increase brightness and saturation by 14%, and look at how many thumbnail tests we did." And we're like, "Ah, incredible work." And we're so wrapped up in it, and it all feels so real. And then you come home and you click on his video and it'll be like-
- SPSam Parr
[laughs]
- SPShaan Puri
... train versus pit. And it's like, this train is gonna drive into this hole, or is it gonna jump over? We don't know. It's like, oh wait, dude, I had a friend named Ty who used to do this [laughs] shit in his backyard.
- SPSam Parr
[laughs]
- SPShaan Puri
That... Ty, like... Oh, you're locking yourself in a room for seven days? Like, I actually know an idiot named Jake who did that without YouTube.
- SPSam Parr
[laughs]
- SPShaan Puri
Like, he just did that. And we were like, "Dude, is fucking Jake still in his room?" And he's like, "Yeah, that's what he's doing."
- SPSam Parr
[laughs]
- SPShaan Puri
But, like, when you're in it, y- you can get in this reality distortion field where you feel like you're doing God's work out there. And that's what happens at all these companies, dude.
- SPSam Parr
It is still cool. Like, like I remember-
- SPShaan Puri
It is. Yeah
- SPSam Parr
... Elon Mus- Elon Musk gave this talk and he's like, "You know, you're doing..." S- someone was like, "You're doing all these amazing things. Uh, you're sending people to Mars, you're building cars, saving the planet, whatever." And he's like, "Yeah, but it's also cool just to make a game that, like, entertains people. Like, that's cool, too." So I don't wanna dis- discount this stuff, but it is fun to put perspective on this and be like-
- SPShaan Puri
I think you just can't take yourself-
- SPSam Parr
... "We're not fucking around"
- SPShaan Puri
... too seriously, right?
- SPSam Parr
Right.
- SPShaan Puri
It's cool to do, do a, do your best. It's cool to try to win a game. How many people are gonna watch the Super Bowl next Sunday and it's, you know, a bunch of guys chasing around a ball and an arbitrary set of rules, right? Like, if you, if you look, like, it's cool to be into it, it's cool to be great at it, but let's also not take ourselves too seriously. Let's remember, like, you know, what this, what this is. It's a game, or it's something fun, or it's something lighthearted.
- SPSam Parr
I've met three guys who run porn sites. Some are popular, some aren't popular. One of them is very popular.
- SPShaan Puri
Dude.
- SPSam Parr
Um-
- SPShaan Puri
Imagine running a not popular porn site. [laughs]
- SPSam Parr
[laughs]
- SPShaan Puri
All, all of the downside but none of the upside.
- SPSam Parr
You love that joke that you just made.
- SPShaan Puri
Whoever is your friend who's running the unpopular porn site, imagine how bad you have to be at execution. [laughs]
- 36:30 – 39:00
Sam shrinks Shaan
- SPShaan Puri
And I think that was, like, his big takeaway was, like, he didn't say it but it was, like, the implied thing is like, kinda like, what a waste. Like-
- SPSam Parr
Yeah
- SPShaan Puri
... be careful because everything can, every knob can get optimized to infinity.
- SPSam Parr
He, he became, like, the best pogo stick player in the world.
- SPShaan Puri
[laughs] Yeah, like, and I've felt this many times in my life, and I, I don't really even know how to deal with it, to be honest, 'cause when you have the realization you're like, "Shit, should I just stop or..." I don't know, 'cause I don't wanna stop. This is, like, my job. This is a succ- successful business. Should I... Like, with my e-com store I feel this. Like- You know, you change the color of this and then you run this AB test and you do... And it's like, dude, what are we doing? Like, is this, like... Is this what we should be doing with our time and our life and our creative energy? A- and I do have that, like, kind of existential crisis, you know, every few years just thinking about this quote.
- SPSam Parr
L- let me be your therapist for a minute as well as anyone else who's in this situation-
- SPShaan Puri
Please
- SPSam Parr
... which is your product doesn't have to change the world. Your product actually as a CEO or owner could be, I create jobs for wonderful people and I give them a great place to work. And, like, most people just want a 9:00 to 5:00 and they wanna play softball on the weekends, and they wanna make sure they've got good health insurance, and they wanna see their kids raised and be healthy. You don't need a life-changing thing all the time to have a badass thing, and I don't think that it's fair to compare all these products to the Teslas or whatever, or, like, these existential crisis things because, like, just having a piece of clothing item or an, an item of clothing that you can give to someone or that, uh, makes you feel good about yourself, or a game just to play time. I mean, we just have a podcast that, like, you could say, oh, we inspire people. Uh, sometimes we, we just jerk around and it's just funny. Like, that is also awesome. It's not the right thing to say this compared to this other thing is so stupid when it's like, no, you can have all of those things. And, like, I get inspired listening to music, and then there's a lot of music that's just silly, dumb stuff, and there's some music that actually changes me. There's some movies that change me, and then there's stupid Vine skits. Like, it's all in the same category, and that's okay. We can have all of that. And my product could be creating a workplace that people love coming and I inspire them, or it could be, uh, I just have created a future for my daughter. You know what I mean? Like, it... So I don't think that your product necessarily has to be the thing you're selling, but the thing you're building.
- SPShaan Puri
I'm... Okay. I feel better. Thank you. That was good. Uh, I feel better now. I'm creating jobs out here, dude. [laughs]
- SPSam Parr
No, but, but that is the truth. Or, like, you know what I mean? Or you're providing for your family.
- SPShaan Puri
I might run for office with the number of jobs I've created. This is great. [laughs]
- SPSam Parr
Yeah. Yeah. [laughs] We have created literally half a dozen jobs this last quarter. [laughs]
- SPShaan Puri
I might have to become the governor of the Philippines because-
- SPSam Parr
[laughs]
- SPShaan Puri
... I've created all my jobs in Ph- [laughs] in the Philippines, but that's all right. Um, can I just show you one thing off this list, though? 'Cause I had this list pulled up of the internet
- 39:00 – 43:30
DuckDuckGo in the top 10?!?
- SPShaan Puri
sites. Dude, look at this list. Just tell me the first thing that stands out to you, and I bet you it's the same thing that stands out to me. I'm looking at the list of the 20 most popular, most visited, most used websites in the United States.
- SPSam Parr
Well, the first thing, but this is not what you're referring to, DuckDuckGo is number seven? That's insane.
- SPShaan Puri
That's what I'm referring to, dude. That's insane.
- SPSam Parr
Is that what you're referring to, DuckDuckGo?
- SPShaan Puri
That's... What is... It's more popular than Yahoo and Wikipedia and Twitter.
- SPSam Parr
So here's the background on DuckDuckGo. So DuckDuckGo was started probably 20 years ago, I think. I mean, or maybe, maybe more, but, like, it's not new. Started by this guy named Gabe. I think Gabe was a s- a mildly successful entrepreneur. Successful by any means, but, like, amongst Silicon Valley it was all, like, a base hit. I think he wrote this book called Traction with Justin Mares, our friend, and then he had this whole premise of privacy search where he said privacy's gonna be important to people. We brought this up on the pod in the very first 50 episodes. We're like, this is so cool because what they used to do is DuckDuckGo.com/like stats. You could see all their web traffic, and it was small at first. It's basically Google, but you... But for some... It's, it's Google, but somehow they don't show you targeted ads. So I don't actually know how they make money or what the promise is entirely. Do you know?
- SPShaan Puri
Uh, it's, it's just ads that are targeted. I think it's ads that are either not targeted or it's ads that are targeted only on what you search, like the term you just searched for, but nothing to do with you as a person. So they're not-
- SPSam Parr
Got it
- SPShaan Puri
... cooking and collecting info on you and hyper-personalizing it to you. It's just, here's an ad 'cause you're searching, or here's an ad about... You know, you're searching for a car, here's a car ad. But we... It doesn't have to be Sam, you know, that, that we're tracking info on.
- SPSam Parr
And we talked about these guys a while ago 'cause i- it's kind of weird, which is like this is a significantly less good Google, or at least that's, like, what it appeared to be. And but we're like, their traffic's growing like crazy. What the hell is going on? And now apparently they're huge. I didn't realize they were this big. I knew the trajectory was really, really good. I had no idea that they would be the fifth. So it was started in 2008, by the way.
- SPShaan Puri
I am blown away by this. I, I might have to go read that damn book then.
- SPSam Parr
Wh- which book?
- SPShaan Puri
Traction. This is real traction, okay. I, I'm in. [laughs] I'm in. I believe you. Uh, this is crazy.
- SPSam Parr
Yeah. It, it is pretty wild, and I've been, I've been interested in DuckDuckGo, but I never, uh, fully got behind it 'cause I was like, this is just an inferior, uh, Google. But this is amazing. So they say DuckDuckGo is an independent privacy company for anyone who's tired of being tracked online and wants an easy solution. And actually recently they raised $100 million in funding, or maybe 200 million, but it was over 100 million, and I heard that none of the money actually went to the company. It was just simply early employees selling some of their stake, meaning the company does not need cash. They're very profitable, which makes sense 'cause Google is like... If, you know, I don't know how many employees Google has, uh, 100,000. They... But, like, if you fired everyone but 50 or 100 or 200 people, it probably could work pretty great. I mean, their main thing is, like, the most efficient, best business model of all time. So it makes sense why DuckDuckGo is so, uh, such a good business. But this is amazing that they're... What is it, number seven? Number seven most popular website.
- SPShaan Puri
10 years they went from .01% market share to now .63. [laughs] They're still-
- SPSam Parr
Is that insane?
- SPShaan Puri
They're still tiny according to their own, you know, uh, measurement of, of market share. Um, which I don't know exactly how they measure that 'cause if you look at the, the, uh, you know, Alexa rankings or the SEM rankings, they're getting 10 times less traffic than Google or l- a little bit less than 10. Uh, um, but they're saying they're only .6% of search, so I don't know.
- SPSam Parr
They had 100 billion searches in Q3 of 2022.
- SPShaan Puri
I'm gonna go on the street and I'm gonna ask 100 people, "Do you use DuckDuckGo?" I need to know what's going on here. This is crazy.
- SPSam Parr
I think we should... I'm not gonna go through my other topics. I think that this, this'll, the... You did a wonderful job. You had me in thrall the whole time. What's the title of this one gonna be? Like, uh, The Best-
- SPShaan Puri
Shaan Talks For 94 Minutes Straight. [laughs] 'Cause that's what it felt like.
- SPSam Parr
[laughs] That's every episode.
- SPShaan Puri
[laughs]
- SPSam Parr
This one's gonna be, uh, [laughs] this one's gonna be, uh, [laughs] The Story Behind the Fifth Most Popular Website in the World.
- SPShaan Puri
[laughs]
- SPSam Parr
Um, all right. That's the pod. [upbeat music]
Episode duration: 43:30
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Transcript of episode u5GKRX8-284
