Brainstorming Ideas with The $200M Man | ft. Patrick Campbell (#519)

Patrick Campbell

Like one of my goals... this is going to sound crazy, and this is the perfect audience to say this, but I get so jacked up about the idea of toppling a dictatorship one day. I get so excited by it, and I'm not even kidding.

Sam Parr

alright look at what I have on my head there we go

Shaan Puri

Oh, look at that! Look at this guy. Wow, you went from "dad" to "cool dad" in one episode with that hat!

Sam Parr

I'm hip I'm hip

Shaan Puri

it's so heavy the shirt too did you buy like a full uniform or are you actually just working there now or what

Sam Parr

Jonathan got the hookup. He received a swag bag from them and came over to my house the other day to give it to me.

Shaan Puri

and have you gotten any compliments or like do anybody under the age of like 25

Sam Parr

yes

Shaan Puri

recognize you now or something

Sam Parr

a few a few a few young people one young person called me cool guy

Patrick Campbell

that's all the affirmation you're looking for now as a dad

Shaan Puri

get away from me cool guy

Sam Parr

yeah hey why why staring at me cool guy

Shaan Puri

you need something

Sam Parr

that's how it was you wanna kick us off who do we got

Shaan Puri

Alright, we got Patrick in the house! Patrick's been on before, so the OG listeners know all about Patrick Campbell (PC, as he's in my phone). He created a company called ProfitWell and sold it for $200 million. He's got the background that we always talk about, where I notice that people with this background tend to be winners more often than not. He was a competitive debater—some would call him a "master debater." He was also in the NSA, the intelligence agency. Last time you were on, you were telling us about all the crazy things you did to gather intelligence in the startup world. So, how do you learn about what your competitors are doing and whatnot? Now, today he's back with a bunch of ideas, and I want to know what you've been doing since you sold your company for $200 million. You had a bunch of time on your hands, and that's a deadly combo! You sent us something, and I want to start with this thing you texted us about the "Bezos number." I don't know too much about it, so I want you to explain. Hugo, I've been working on it; I've been searching for my Bezos number. I don't even know what that means. Explain what the Bezos number is.

Patrick Campbell

yeah totally so here here's the thing as this started from a premise so sold the company basically working at paddle and also thinking about like what the next thing looks like and what I found in the ideation process like I haven't come up with ideas in like 10 years I've helped like companies come up with ideas but it's just one of those interesting aspects of the entrepreneurship journey and my big belief is your job as an operator is to basically know your customer and know your space better than anyone else and you need to do this before you start building because a lot of entrepreneurs fall into this trap where we're really good at willing stuff into existence because that's our job except it's relatively easy to do that today so this means that like basic ideas are cheap mostly indefensible and worse they waste a lot of our time and so the first step I come in terms of an ideation process is using this bezos number framework and basically when jeff bezos started amazon he noticed this like crazy stat you know this new thing called the internet was growing 27 100% per year so he knows he's gotta build something on it he didn't know what it was but he was starting from the trend because when you go where the water is flowing as they say and ride a wave you don't need to be like a genius to figure out what a really cool business looks like so I have this doc and I'm happy to share it with the audience where myself and a researcher basically call through industry reports trend and stat websites and then the hack that no one really probably uses but they should use is we use Google scholar and other academic kind of publishing sites to find all these trends because in academia you have a lot of like undergrads and grad students basically writing a bunch of papers about here's what's going on in the space here's all these numbers that are going up or down and then I put this into a spreadsheet and then basically label a couple of different you know categories 1 in particular is like what's the doubling time of this particular trend as well as like how long or how fast this trend is going what the causes are what the effects are and the basic idea is then I can find like hey the world needs something in this space or the world's going in this direction and partially I can figure out like oh this is something that I could get paid for kind of in that ikigai framework that you like sam I can basically take that by looking at these trends

Shaan Puri

So, let's describe this sheet. Basically, it's organized into categories. You have big categories like **social issues**, **health care**, and **energy**. Within each category, there is a trend. For example, a trend would be that **top college admissions rates are dropping**. It states that Stanford admissions went from **4.8% to 3.9%** in the last 5 years, and Harvard dropped from **6% to 4%** in the same time frame. Then it mentions the direction, indicating that it is **decreasing** over 5 years. It also asks, "What is the kind of rate that this is happening? What's the doubling time?" This means, how many years would it take for this trend to double based on the current rate? Finally, there are sources, possible causes, and possible effects listed. There are, I don't know, like **100** in here. Let's read a couple of these out. I want you to kind of riff on a couple of these. Or you can pick—maybe what does it mean when it's in **blue**? Does that mean you like that one or something? What does that mean?

Patrick Campbell

those are just some some interesting trends that we've gone deeper on basically alright

Shaan Puri

Let's do this random one. I want you to talk about this number: the number of coral bleaching events. I don't even really know what that means. What is a coral bleaching event and why does that matter?

Patrick Campbell

Basically, coral is, you know, dying out. Essentially, when there are stressful conditions, coral ends up bleaching. So this particular idea... I don't know what a business could look like in here. It's not necessarily about the Bezos numbers. I'm not necessarily trying to find one particular business; I'm trying to find an overall trend. Some downstream effects of this could be that there's more money from the government, from regulation, basically going into protecting international or national waters. There are a bunch of different things that are...

Sam Parr

why is coral bleaching bad

Patrick Campbell

Okay, well, let's go back to your high school biology class. I didn't know that's what I would be teaching today, but the basic idea is this: you're killing off ecosystems in the ocean. That's probably the most basic way I can say it. There's a lot of downstream effects when an entire ecosystem basically falls apart, and the coral is a major [component].

Sam Parr

Don't act like I should know this, man. 90% of people, or 95% of people listening to this, do not know if coral... coral.

Shaan Puri

It's beautiful coral. It's alive coral. It's part of the underwater ecosystem, and it's like the butterfly effect. You just take away a big part of the ecosystem, it's going to have all these secondary effects on the fish. Do you care about fish, Sam? Or do we need to explain why fish matter?

Patrick Campbell

not care about fish

Sam Parr

look you guys sean you know about core don't don't get get off your app but here's

Patrick Campbell

The. Your high horse. Here's the. Sam, Sam, here's the. The. We're looking for major trends. Those major trends, like you ran a basically a trend service or website, you understand the nature of trends. What I'm looking for in a particular idea is I'm basically looking for really, really fast-growing trends in one direction or another. Because that's where, essentially, as I was saying, like the water is going to continue this coral theme. If I can ride a particular wave, I'm hedging essentially all these business decisions that I might be making downstream from it.

Shaan Puri

Got it. So, pick another one on this sheet, Patrick, that you find interesting. One that you have kind of noodled on a little bit.

Patrick Campbell

Yeah, so there are the obvious ones, like interest in AI and these types of things. But some less obvious ones might be around social issues, right? So right now, a really sad topic to discuss is school shootings. I don't know if you've looked into this particular market—not obviously increasing school shootings, but there's an entire market that has been created around this due to the rise of that particular occurrence. Now, you can get into the government dynamics of gun control and stuff like that, but the fact remains that schools are looking to not only make their students feel safer but also their parents feel safer. There are things like bookcases that fly in front of doors and clear backpacks. There's an entire market that has popped up in response to this. When you see this particular trend, you can then think through the second and third order effects to essentially come up with whether this is something that, hopefully, you can help reduce the actual trend, but also ensure that you can build a good business around it.

Shaan Puri

I have a random question: Why don't they just put a certain thing in guns that... you know, for example, we have metal detectors which are trying to find a gun, but there might be other metal there. Shouldn't there just be a thing in every gun that's like a detectable thing? If you're a security [professional], it's like, "Oh, we're always looking for this certain compound of lead because that's intentionally put... chipped into every gun that's sold." So that we can easily identify, "Hey, a gun just walked through this door."

Patrick Campbell

so a metal detector is that basically what you're saying or

Shaan Puri

But not metal. I'm saying metal will catch all kinds of metal. I'm saying they should put something that's unique in every gun, in the mold of every gun, so that it can be detected easier than looking for all metals and slowing everybody down for like keys in your pocket. Got it?

Sam Parr

sean your your your california is showing yeah it's coming out yeah you you

Patrick Campbell

I thought you were gonna say something that they can remotely turn off all the guns in case something happens

Shaan Puri

Like the gun, hey, it could not even be a status symbol. Like, it beeps. It's like, "Hell yeah, I'm packing!" Right? Who knows? I'm not judging, I'm just saying.

Patrick Campbell

we're covering the environmental global warming debate and guns that's what makes my first impression

Shaan Puri

Flying... So, I went through TSA like three times. I went through Disneyland security. I've just been thinking about how we can make this faster because it's a very slow process.

Patrick Campbell

Yeah, imaging is actually getting really, really good. I can't find this client info.

Shaan Puri

have you

Hubspot

Heard of HubSpot? HubSpot is a CRM platform. It shares its data across every application, so every team can stay aligned. No out-of-sync spreadsheets or dueling databases. HubSpot: grow better.

Sam Parr

You have another thing on here that is interesting, and I think Scott Galloway talked about it. I had never seen the stat until just now: teenagers not having sex. You said that it's doubling every 9 years. It rose from 11% to 21% of teens that do not have sex, or that haven't had sex in the last year. That's kind of interesting. I think that Japan, I mean, you looked into this more than I have, has suffered from this. Isn't there an idea that in the next 10 or 20 years, Japan's population is really, really going to be hurting due to this lack of procreation?

Patrick Campbell

Yeah, well, there are a lot of countries where that's going to happen. Even China, they're talking about a pretty big collapse. There are a lot of causes for where this is at, and I'm not an expert on population design or anything like that. But I do think that this is something that's really big, not only among teens in general but also among young men who are basically checking out of the ecosystem. This is a pretty big problem for the economy in general, let alone procreation and fertility. So, this is kind of an interesting space where you have a social issue or a cultural issue that's driving things in one direction. Are there private solutions to kind of "solve" this particular problem? Because at least in America, we're not going to do what China has been rumored to be doing, you know, with kind of the reverse of a two-child policy and these types of things. So, yeah, this is one of those trends that's worth going deeper on to see what's going on—not only to make the world a better place but also to see where business can be.

Sam Parr

and this cost of cyber crime one that's one of your fastest growing ones what's that

Patrick Campbell

Yeah, so basically, the amount of damages from cybercrime is significant. This includes not only targeting older people for fraud but also incidents like DDoS attacks on specific websites or companies. Cybercrime is exploding, and it's probably going to accelerate even further with AI, beyond this 7x5 year magnitude that I have in the spreadsheet. That's something really interesting because we don't really have good solutions for it. You have everything from products like Aura and some of these VPN/identity protection services, but on the corporate side, there's been a lot of money that has sloshed in there. I don't want to say it's obsolete, but it has changed dramatically with the birth of AI and all the kind of fear, uncertainty, and doubt (FUD) that's happening in that market.

Shaan Puri

There was one... there are a couple on here that we've seen people come on this podcast and talk about specific businesses they created off of these trends. For example, you have sports betting revenue, and the doubling time you have on here is less than one year. You said it was legalized in 2018, and it's already at $4,300,000,000 in the U.S. right now. So, in a five-year span, it's projected to reach about $5,000,000,000 in revenue from U.S. legal sports betting. However, it's still only legal in a couple of states, right? Patrick, I don't know if you know the details, but it's not like... yeah.

Patrick Campbell

It's there are more states, I believe, that have legal marijuana than those that have sports betting. But it's getting a little bit easier. The rumor is, and again, I'm not an expert on this in particular, but the rumor is that there will be a lot more states that come on board with this before the other states legalize marijuana. So, those are both markets that are really interesting because it gets into all the vice market dynamics that you see with a lot of those different types of companies.

Shaan Puri

we the guy we sold the milk road to is 2 guys 1 of the guys had this interesting backstory because they bought it with their own money and not they're not like a company they didn't raise money and so we were like where where are you getting the funds to make this size purchase and they were like well you know here's our backgrounds and one of the guys had a fascinating background so he was a a affiliate marketer so he basically would make like content sites for online poker and online poker was legal for a while then black friday came online poker is no longer legal in the united states so it was like business died overnight and so what every he was in a really competitive space of all night poker affiliates because it was like a a just absolute cash cow to be a poker affiliate because somebody's gonna immediately go deposit money and you would get your your fee for that and so yeah when they killed it in the united states out of the 100 competitors 99 said well I guess we'll optimize for international traffic now that's the only answer yeah he just took a different approach he sat there and he looked he's like well okay it's illegal right now in the states but is it gonna be illegal forever probably not and he's kinda waited and he's like he was just patient and he saw a a little trend pick up where new jersey was rumored to be be the first state that was gonna legalize it again or he was gonna legalize online gambling only for if you lived in new jersey and and I think the way it worked was like there was like local casinos that could have online portals to for you to gamble on and so with everybody else went international he's like I will now be the new jersey betting affiliate and he created his website it was like I don't know what it was it's like betting in new jersey.com or something like that like very hyper targeted sounded so niche it sounded almost like a step down but what he realized was if one state's gonna do it and then the 2nd state started to get rumored to do it he's like oh this is a trend I just wanna surf I'm gonna start now and make all the content for this for the states that are rumored and I will be in the best position when the time comes as this as this accelerates and so he did the new jersey one he sells it for I think it's publicly out there it's like 42 or $46,000,000 to a bigger betting company and mhmm then he just he's like oh cool minnesota's going next he does the exact same thing yep and does it for minnesota sells that one for another 40 something $1,000,000 and to the same company like within a like sort of 2 year time span and then that company was smart and then they're like hey okay now this covers like all states you can't just do this you can't just keep flipping these to us for 50,000,000 a pop and so he basically made like a $100,000,000 selling the same business just looking at the data and the trend and the news and realizing okay this is gonna happen it's just a matter of timing this this wave now and he was the only one that was really paying attention to that and it was him and one other guy and they just merged and so they became they they then owned all the supply so they could jack up the rates as an affiliate which normally is the other problem with affiliates they get put under pricing pressure but because him and the other guy merged they could go go demand whatever rate they wanted to anybody who wanted customers because they were the only only show in town the other one you have on here is popularity of french bulldogs so you say it's doubled in 5 years and bull french bulldogs are now the number one breed of an in the akc the american kennel club which is like a published database basically and so our friend ramon kind of did this with wiener dogs he was like oh like look at how popular these groups are how fast they're growing on facebook of people who own wiener dogs and he's like what's a then he started brainstorming like what's a problem in the wiener dog space and he found this company that was making ramps for wiener dogs to get on and off of beds and couches and because he saw the popularity of these groups and how avid the owners were how fast those groups were growing how big they were he knew there's a market for wiener dog ramps which like if you walk into harvard business school and you're like here's my big idea they'd be like you're nuts you know you get laughed out of the room but that business was doing you know whatever 20,000,000 a year because he was able to like correctly identify the right trend yeah

Sam Parr

He scaled it, I think, from $300,000 a year to $17,000,000 a year in like 20 months or something like that.

Shaan Puri

yeah it was insane

Patrick Campbell

But this is why, like again, **ideation** is treated a little bit more like a science than just this random act of listening to podcasts, watching YouTube videos, and having a notebook. There are a lot of these ideas that I couldn't tell you what a good business idea is in them, but if I start to think about it further and further, that's where really good ideas come from. Right? So, the French Bulldogs. I don't know what the pain points of French Bulldogs are, but similar to Ramon's story, there's something very interesting there, either directly or sitting around that particular idea that could be really, really interesting.

Shaan Puri

So basically, we've all seen with AI that people can now use generative AI to create an image or a video from just a prompt. You could even deep fake a video really easily. Crypto gets a lot of criticism for having, like, "Oh, there's no use case for this," even though money is the main use case. But they're like, "What are the other use cases for blockchain?" There's a really interesting company that's doing something in this space. They were like, "Hey, crypto has this really cool thing where you have a private key. You have your own address that only you own and control." What they normally do is say, "Hey, sign it to do a transaction." So if you want to send money, you sign it with your private key. That's how you authorize the transaction. These guys realized that there is now going to be so much video out there, and a big question will be: "Is this photoshopped? Is this deep faked? Is this real or is this fake?" They were like, "People and companies are going to need a way to authenticate or to sign a piece of content and say, 'This was real. I made this. This is actually me.'" Instead of putting the burden on the viewer to determine if something is real or fake, they proposed a solution. It's like, "Dude, I don't know. It's too hard." Misinformation is going to spread, so now there will be a watermark. Basically, the creator, the original owner, or the person in question can use their private key to sign and say, "Yep, that was real. That was me. That was my video, or that was my writing. I actually said that. That's my voice. I did say those words." It will soon become true that if there's a piece of content that's unsigned, people will think, "I don't know what this is. This isn't organic produce. I don't know where this came from. I don't trust this." I think that's going to be one of the consequences of the rise in generative AI as a trend. You might say, "Oh, that's great! People are going to create all kinds of content." But wait, that means we're not going to know what's real and what's been generated by AI. We need a solution for that, and I think those guys are going to do pretty well.

Sam Parr

What's interesting about this is not just the trends, but the fact that you're doing this. I think that kind of breaks a couple of rules, or at least rules that people think exist. A lot of people don't know Jeff Bezos' story, but basically, I think the exact quote was pretty good. It said something like, "I saw the internet was growing at 2,300% a year, and I realized nothing outside of a petri dish grows that fast." I just thought, "What can I sell?" Well, let's just start with books because they're easy to ship and there are a lot of them. I can just pack Amazon with almost every book I can find, and I think people will buy that. Whereas a lot of people think they have to start a company because they have some passion about it or some mission, I actually think your passion can develop once you start working on it and it starts succeeding. Have you thought about selling your research process? That's actually what I did with trends, and I made a bunch of mistakes with that. I should have charged more; maybe I shouldn't even have done it in the first place. But what's your end goal with this?

Shaan Puri

have you thought about making my mistake

Sam Parr

well that's

Patrick Campbell

what I heard

Sam Parr

It could've done better. I should've charged $30,000 instead of... or I should've charged way differently. That's where I screwed up. But have you thought about turning this into a business? The second question is: what is your outcome with your second business now that you have financial security? Do you have a legacy plan? Do you have a number that you're working back from? What are you doing to decide which one to actually go down?

Patrick Campbell

yeah so I think that to answer the first question I've been asked cause we've talked about research stuff a lot like either through dms or in the last pod like I think research companies they have they have a fatal flaw where they give people a dopamine rush of understanding something but people are pretty bad at then using that information in some particular way so like the retention ends up not being great unless you turn into like a mckinsey style like oh we trusted them to come in and do this research and kind of go from there so like even the competitive intel stuff like I I know how to use that because I've been taught how to use it and I've like developed it people really like the dopamine of like oh I can see exactly what's going on but they don't know how to like get to the next step so if I were to do it it would be some sort of you know almost do it for you not only in terms of the research but then connecting that to some sort of outcome where they can just hook it up and then it targets their ads or something to actually get an outcome so I can take the thought process out of the out of my customers you know particular evaluation of the product I think in terms of the second question for me I'm I'm like a cliche second time founder now right so I'm basically like either I'm going to go into like cash flowing lifestyle style points type businesses or I'm gonna go into like big ass you know innovation type business and I think the bezos numbers piece is really really powerful for the latter one because you know you're looking at some really big trends that probably have some social and cultural like implications but then you're also trying to build like a particularly big business which is what my intention is essentially and I've done a lot of work over the past year to kind of like come to that realization with like coaches and therapists and all that kind of fun stuff so for me what I do is I look at this and I don't know if the bezos number piece is is is necessarily like useful to folks who aren't trying to like build big I think it's really useful for folks who want to do like quick hits but I think like the next framework that I kind of put in there around like you know taking different product ideas and then spinning them in terms of different customer bases or different like differentiators that's what most people should be doing because innovation like a 10 x better product is almost impossible in this particular environment now like 10 15 years ago you could build an innovative 10 x better 10 x better product because you were the one that had the special relationship with the supplier in yemen for the coffee or something like that or you were the one that only could build this particular feature but now everyone and their mother can spin up a website features are no longer really defensible anymore and unless you have like some sort of patentable or some sort of scientific kind of breakthrough or regulatory kind of protection your best thing you're gonna do is like a 2 or 3 x better product and that's why I think it's just one of those things that you know innovation isn't something that you should be targeting unless you're really really going big is essentially what I'm getting at

Sam Parr

Why do you care about doing the cash flow thing? Because many of our friends—Sean and I, and I'm sure your buddies are like this—are quite wealthy. Many have tens of millions or even hundreds of millions. Yet, they say, "I would love to have $5,000,000 a year of income."

Patrick Campbell

I, for me, and this is like very personal—it's not for everybody—but I discovered, in going through this wave of massive wealth really quickly, that when the money hit the bank account, I felt nothing. I was obviously happy for the team, but the thing that went into the back of my head, and I didn't know how to express it in this particular way, was very much, "Well, if I did it, it must not have been that hard." This goes into childhood and a bunch of different things. So when I'm thinking about the next business, I look at those two paths. There's the more cash flow-oriented business, owning your own destiny, lifestyle points, those types of things. Then I think there’s spending your time going after something that's harder and harder, trying to pursue innovation. The perfect antithesis of how I view the world now is Nick Huber. Nick is like, "Why would you ever try to innovate? That's so much harder," etc. We've had many long night conversations about that. For me, I want to go after that bigger and bigger thing. It took a long time to realize that because I went after, "Oh, let's do this, let's do that, let's do this other thing, let's go after this quick buck."

Shaan Puri

that we've got gas stations

Patrick Campbell

I did buy 19 gas stations, but that's Jenny. That's Jenny, the wife. She handles the real estate portfolio. It doesn't mean I'm not going to do stuff, but my primary focus is going to be on one big thing. I don't want to be an investor. I don't want to come up with a bunch of cash-flowing, studio-style businesses. I respect the hell out of all those things; it's just that I found out it's not for me. Or at least, that's where I got to.

Shaan Puri

like by by the way could you tell us the gas station thing real quick

Sam Parr

did would you meet syed and he told you about his gas station portfolio

Patrick Campbell

So, okay, here's what happened. I bought 19 gas stations. They're in North and South Carolina.

Shaan Puri

jason laster (zero zero four:fifty six) you bought them all at once are you looking one at a time like you bought a chain jason laster (zero zero four:fifty six) all

Patrick Campbell

In one pot, there was a kind of patriarch of a family who had built up a portfolio of about 120 properties. He passed away, and then, basically, I think it was the trust or the estate—I don't know which—but they were selling them off in blocks. They didn't want to sell off just one at a time because of the 120 properties. The kids had a tax bill coming up because of the inheritance, yada yada yada. So, this actually started with Nick Huber and Mitchell Balbridge from the cost segregation world. They began talking to me about some tax implications. If your partner, your wife, or your husband is a real estate professional, your passive losses on real estate become active losses, and they offset active gains. I've got a big pile of gains from the sale of the company, and then all of a sudden, I can offset those with depreciation of the gas stations. I can do that with bonus depreciation in one year. To use some round numbers, if I buy $10,000,000 worth of gas stations, I can essentially take $8,000,000 of depreciation, which can offset some of those particular gains. In October or September, Nick starts telling me about this. I start telling Tim Mitchell, trying to figure it out. I begin talking to tax lawyers, and all of a sudden, we got introduced to someone who saw this deal. These 120 properties—Jenny has been in the real estate game for like 10 years. It's one of those things where we were able to kind of like... we weren't starting from zero, but it was still a big purchase. We closed, I think, on December 23rd or something like that—right at the edge of the end of the year. We not only got a good deal because we looked at the real estate deal independent of the tax implications, but the tax implications kind of put it over the top to be really, really good.

Shaan Puri

And has there been any feedback? Is it just like, "Wow, this was a great asset, great smooth sailing," or is it more like, "Oh my God, I have 19 pain in the asses now"? What's the situation? What's the verdict from a guy who didn't own real estate and gas stations? Like, a tech entrepreneur does this thing that has clear benefits on the tax side. Yeah, it might be a nice diversifying part of my portfolio. It might provide good cash flow, but it might also be a headache. What's your answer now that you've come out the other side?

Patrick Campbell

So, they're triple net leases. That basically means we don't manage or handle any operations, anything like that. They're owned by a big flag, a big company, so they're corporate-backed, which may or may not mean anything depending on who you ask in the real estate world. We've had very little headaches. We also have a partner on the deal who's, you know, we provided the money, and they're handling most of the analysis and all that kind of fun stuff. So, it's been pretty smooth sailing. I mean, there haven't been any issues... that's famous last words. I think there's a way to basically manage these into more investments and things like that. That's where it can get a little tricky. But, yeah, we got at least, knock on wood, pretty lucky in terms of what's going on.

Sam Parr

But you gotta... can you give any numbers? I mean, how much income is that bringing in? How much did it cost? Can you give any numbers on that? Do you feel comfortable?

Patrick Campbell

I can give you some numbers so well

Shaan Puri

I don't know

Patrick Campbell

my wife runs it so well

Shaan Puri

If you don't want to share the specifics on yours, you could just say, "I think about this like a business is a box." For example, a restaurant will typically cost you, let's say, half a million dollars to open. Then, your goal is to net $150,000 a year per location. You want to get to 20 locations; that's how you achieve scale.

Sam Parr

like

Patrick Campbell

It's simpler than that. So, it's 30,000,000 gas stations, I believe. I can't remember the exact cap rate, basically what we're getting out of it, but I believe the caps are at like 5.5%. We're not getting an immense amount of income from that, but we are getting income, basically from it. The leases on this particular deal are what made it so great. All of the rent increases were based off of CPI [Consumer Price Index], and they were written in like the early 2000s. So, basically what's happening is, as you've seen all the inflation data, when these rent increases go into effect, the increase in rent is pretty significant. That's what made the deal really, really good. But, yeah, we're cash flowing. I don't know, it's definitely over $1,000,000 a year on these. I don't know the exact numbers, which I feel good about because it's one of those things where I trust my wife to figure it out.

Shaan Puri

And you also said that there was, like, you sold the company and you went through this wandering phase for about a year. You said there are five phases. What are the five phases of "I just sold my company for a bunch of money"?

Patrick Campbell

yeah this is like the the champagne problem cycle I think and it's it it's just this crazy roller coaster and I don't know sam sean if you guys went through this but for me like I was pretty even keeled emotionally before the actual sale what I mean by that is like something bad would happen to the business I'd be like oh that sucks okay let's figure it out something good I'd be like oh great but we have all these other problems when the sale goes through especially if it's like announced like everyone kinda starts treating you like a god for like a hot second and then that leads you to go like wait am I a god right you have this little bit of this like almost this like imposter like I don't know what reverse imposter syndrome is and like I never got like I have good friends around me who are like yeah you your your shit still stinks but like it was one of those funny things where you're just like oh my god I can do anything and then like you go through the second phase which is like oh my god I fear death I'm gonna screw this up I'm gonna like I don't know how to rich how does one rich correctly I'm gonna lose it all and this is when you're like tax lawyers accountants other lawyers how do I evaluate how they're good or not like all these crazy thing what is a wealth manager like oh my god the wealth managers every single one of them tells you just put it in index funds and then you ask them well then what's your job and then they're like oh we just advise you and you're like okay what does that mean and they can't answer the question so do you get one do you not get one right and then you start to get a handle on things you start to kinda like get your feet under you you buy a bunch of gas stations you do this type of a thing and then like phase 3 is like or like part of the phase 3 is like I call this the delusional peak of cocaine energy and this is like you have all this energy and you're like I'm gonna do everything right this is what I was getting into with sam before it's like I'm gonna hire 19 people or not 19 17 people it's 19 gas agents 17 people to do research to look into things to go look at this deal to go look at that deal and just like do all of these things and I'm gonna build this and I'm gonna build that because you just have this all this energy and this optionality and that leads to just a full blown identity crisis and so I hired a couple of shrinks to basically help because you know it was a major change in my life and you know just kind of a major thing where like it's kinda like you know figuring out like who you are what you want which I kind of talked about a little bit before and starting to realize like oh like I don't have to do these things I can do these things what do I want to do what does that look like and then you know then you kinda even out and you go back to the grind so that was like my last year of just up down down even further and then kind of back up to figuring out like hey this is what I want and kinda going from there

Sam Parr

You even did this cool study or this survey where you talked to... didn't you survey a bunch of people who are wealthy? You asked them about happiness and things like that?

Patrick Campbell

Yeah, this is how I cope with things: research, as you clearly can see. I spent $50 on a study, basically running research studies. This is one of our products at ProfitWell. I spent $50 trying to get in front of as many wealthy individuals as possible. Then, I conducted a bunch of qualitative conversations with a number of billionaires and several centimillionaires, etc. I was just trying to figure out, "Okay, what makes them happy? What makes them unhappy?" so that I can take some of those lessons for myself personally.

Sam Parr

what what were the lessons one of

Patrick Campbell

the biggest lessons that I think is most helpful and I don't know if everyone's gonna be able to like hear it they'll or they'll hear it but I don't know if they'll actually like internalize it is when you look at the stack of like how money can actually bring happiness there are some really really obvious things like people who spend money on stuff they are happier than people who don't spend money on stuff but they're not as happy as the people who spend money on like a particular hobby or a particular like narrowing of stuff so buying a birkin bag that you guys talked about I think last episode like that brings some joy it actually does it's not something that it's like completely joyless but if you're really into f one and you buy your own car that you go race in the track that brings you more happiness right and then one layer above that in terms of increasing even more happiness is experiences so this is something that we've all heard about like buying experience actually does bring more happiness and what was really interesting were the top 2 1 is really really obvious so above experiences was like giving money away in like a targeted way not just like general like here you go this organization or this nonprofit but like actually giving it to a cause that you really cared about but the top one was kind of fascinating like the things that we coded that built or brought the most happiness were what I kinda labeled freedom inducing events or freedom inducing items so things like a jet if you can afford a jet and you can fly private it's not the nature of the jet it's that it brings you so much freedom and so we saw this kinda coded in all the responses and so things like I know sam you've been a little hesitant to it things like getting a personal assistant things like getting someone to take care of stuff at the home those things actually bring a lot more happiness because unless you really really like buying the groceries or doing something like that that brings more freedom and that that actually increases happiness levels even more than all the other things that we talked about the other big thing that was really interesting is that the the happiness scales that you see kind of online in those studies for both income and net worth like typically they can't

Sam Parr

they're bullshit

Patrick Campbell

I I I they're limited that's what I would say like meaning like they basically are like oh 75,000 your happiness doesn't increase and then there was another study that found enough people you know up to about a half million where happiness increased well I took it all the way to I think it's like 3 to 4000000 a year and the happiness just continues to increase it's not at the same rate but like more income and more net worth does bring more happiness like I'm not sure where it's gonna like level off but right now in my data on net worth I have a good enough sample that I can actually map it from 0 to about 50,000,000 in net worth but the one really interesting thing was no matter the net worth particularly for the folks who have more than 5 to 10,000,000 in net worth no matter what it was if it was higher and some of the billionaires qualitatively this was also the case you would see that if the net worth went up they got happier if the net worth stayed the same they were a little bit happier if the net worth went down even just like a minuscule amount that the like the the reduction in happiness was considerable and so it's one of those things where it's like when you get wealthy it's like all about protect protect protect that's you know for a lot of obvious mathematical reasons but also from a happiness perspective that's where a lot of like the anxiety was coming from from some of the more wealthier folks there's a couple other things oh like this was really fascinating because this was like a little more personable of wealthy folks let's just say I think it was like folks over 5,000,000 in net worth but it continued to trend even higher there were only a couple of like trends that everyone did like almost every single person not a 100% but like you know let's just say 90 ish% + lists was a big thing like lists or like a to do list of some sort wealthy folks almost to a tee had some sort of system where every day they were like here's what I'm gonna do for some it was like I got one big thing each day for others it was like some hardcore like to do list app and all this other fun stuff that was organized but that was a really big thing everyone's still in the game meaning still building a business still trying to build their wealth worked out or had some sort of fitness regularly folks out of the game they started to kind of like fall off on that particular fitness but like 90% of people like it wasn't they're all doing crossfit or all doing anything crazy but a lot of them were doing at least something consistently every single week so that was really really fascinating to see as well there were a couple other things that were like pretty consistent but those were the really really big ones that stood out that would be most helpful I think to folks

Shaan Puri

I have a nerdy question about the happiness thing. How do you... what is the actual measure of happiness? How do you know how happy somebody is? How do they know how happy they are? So, are you just saying, "How happy are you?" Did you get happier when you got more money? Is it like a self-reported scale, like one to ten? Or is there a better way to ask that question?

Patrick Campbell

yeah totally so my instinct is to like teach stats right now so I'm gonna try to avoid that as much as humanly possible but that you don't when we look at like temperature just trust me for a second like we can get very very accurate readings on like how cold it is in your apartment right now or your house right now right and we can be very very confident in that particular like measurement right now we can also get the temperature measurement by like maybe measuring the outside temperature and subtracting what we think the insulation is of your house and trying to figure out like in a backwards way that would be less accurate than like measuring the actual temperature but still more accurate than if I went and I asked you what you thought the temperature was right and there's different ways that I can ask you temperature right if I just straight up ask you what's the temperature it's like it's actually kind of a difficult question for you to answer but if I ask you do you think it's more than 68 degrees it's a little bit easier for you to answer so there's different ways to answer these questions now now what that means is and the way the reason I gave that little metaphor is like there's we're not looking at measuring temperature like the way that we would in a very scientific way like we just can't do that because like happiness it is relative there's a bunch of different factors but that doesn't mean we can't like measure it purely right so what I did and I'll try to like keep this as as helpful as possible is I looked at how the $75,000 study does and and there is a happiness kind of research center there's a number of different actually the first undergrad research I ever did was how do tax rates impact happiness in the economics department in school and so there's different ways to ask it so the way that this was asked there's a number of different ways there was a scoring system there was this happened how does that affect your happiness so there's a composite score that we kind of put together based on those different inputs to come up with essentially here's what their happiness level is comparatively and then you keep that consistent across the board and there's ways you can adjust the model but long story short like it's it's the way I describe temperature it's a little bit closer to like hey what do you think your temperature is so it's not dude I

Sam Parr

**I think that's just fascinating.** I think it's incredibly fascinating, and I think it's amazing that you're doing this. I like seeing your nerd come out. I think this is very cool.

Patrick Campbell

yeah yeah I got really excited I felt my heart rate just go up there sorry

Shaan Puri

I think Sam hit the nail on the head when he said, "These things you said are interesting, but what's more interesting is that you did this." You know, you were just describing how people spend on stuff, but they're happier if they spend on a targeted set of things. That's you spending $50 on a study about wealth, right? You don't have a model train hobby; you have a research hobby. You were like, "Oh, how do I use these funds to scratch my itch in a way that I haven't done before?" I'm sure that it wasn't just the takeaways from the study; it was doing the study that actually made you happier and felt like a good use of your time. I'll also say that a lot of people who listen to this podcast will probably make this mistake, and I'll say it out loud because I made the mistake too. I thought my goal was, "Oh, I don't want to be rich; I want to be free." I think that's a common thing people say to make themselves feel a little bit better than just saying, "I'm chasing money." But no, I'm chasing freedom. And it's true; it is better to chase freedom than money. However, I thought there was a number. I remember thinking when I was maybe 26 or 27, I was like, "Oh, shit."

Sam Parr

me it was 6,000,000 right

Shaan Puri

Yeah, I was like, **$6,000,000** is my freedom number. I was focused on **6** as my freedom number. I even had it in my passwords; there would be a **6** in there because I was like, "Every time I log in, I want to be thinking about that number." Then, I passed that number and I was like, "Well, alright, was my math wrong or is this concept of a freedom number wrong?" I had a very simple realization, which was that being financially free doesn't mean you have a certain amount of money in your bank account. It means you are now free from money owning you, and that is a decision you make. For example, the simple test is: how much of what you do is because of money? Somebody who's truly financially free does not make a choice based on money. So, that could be, "Why did you buy something?" or "Why do you shop at this grocery store? It's more expensive." Well, because I'm not making my decision based on money. It could be a job. "Why are you working on this?" Oh, because I think it's going to have a big payoff or I think the salary is too good to pass up. Well, you're making a decision based on money. The true financial freedom isn't some number; it's when you can get to the...

Shaan Puri

Where you stop making choices that are based on money, which is half mindset—at least 50% mindset, if not 80% mindset. Maybe the remainder is an actual financial reality of how much money you have in your bank account.

Patrick Campbell

I would edit that very slightly, and it's almost semantic. I think it's a function of force rather than choice. What I mean by that is there are a lot of people, myself included, who are still making decisions with money in mind. To me, there are certain goals that I have that are probably going to change as I get nearer to them. Not just for a number's sake—I'm not one of those people who, which I don't judge, just want the number to continue to go up. There are other folks, and I count myself as one of them, who want ever-increasing waves of freedom—the ability to do stuff. Money unlocks that ability. So, I still make decisions based off of it, but I don't have to. I can rationalize why I don't want to. I just found that there are still a lot of people who have... there’s this billionaire I was talking to about this, and we were basically having coffee.

Shaan Puri

you know

Patrick Campbell

He's going through it like he's still in the game. He sounds just like us. He's still like, "Oh yeah, I'm gonna go do this. I'm gonna go do this." The stakes are different, the numbers are different, and some of the moves are very different. But I asked him, "So why? You don't need to do any of this, right?" It seems like you don't want to make this decision, but it's going to net the most money for you in this particular situation. So, why do you want to do this? His answer was basically what I was just saying, which is, "Well, if I get another billion, I can go do this thing." His thing was a nonprofit project that he kind of wanted to pursue. So, does he actually believe that? I have no idea, right? I can't read his mind. But for me, the idea of, "Okay, I can buy 19 gas stations. I'd like to buy a skyscraper next." Do I need a skyscraper? No. Do I want a skyscraper? Not really. But I like the idea that I can.

Shaan Puri

well you realize that sounds totally ridiculous right like if I'm I

Patrick Campbell

Understand, it sounds ridiculous, right? Like, one of my goals—this is going to sound crazy—and this is the perfect audience to say this, but I get so jacked up about the idea of toppling a dictatorship one day. I get so excited by it, and I'm not even kidding. I'm like, okay, well, if we go after Cuba, it's going to cost this much because I have this idea and this idea that...

Sam Parr

have you done research you've done research on this you have spreadsheets

Patrick Campbell

for that 100%

Sam Parr

yeah well how much does it cost and which order of countries do you put like what's like your top 3

Shaan Puri

of like

Sam Parr

yeah I don't wanna name

Patrick Campbell

I don't want to name countries quite yet because I think that could get me in a little bit of trouble. Also, again, my question is more like, "Will I ever actually do this?" I have no idea, but it gets me so jacked.

Shaan Puri

but maybe

Sam Parr

I think there's but maybe

Patrick Campbell

I think that there are certain countries that are in really, really dire straits. I think they are like $300 to $400 billion in debt. You could really immediately make a dent, and it wouldn't involve doing anything crazy illegal or anything like that. It would involve, basically, if you think about it... If you really want to nerd out on this, which I don't think you want to, it's like countries breathe with their GDP, right? The money coming in, the money going out, etc. So when you look at that as an access that you can attack, there's so much you can do. And that doesn't even get into the stuff you can do with social media and with the actual...

Shaan Puri

you know people we haven't even mentioned murder yet

Sam Parr

No, no, no... Yeah, yeah. You're the second successful entrepreneur I've met who has researched this and has serious... Not that they've seriously considered it because they're not there yet, but they're like, "You know, I think I could take over Bangladesh." Like, I...

Patrick Campbell

I don't want to take it over. I'm not going to install myself as a leader or anything. I just want to genuinely help, right? Like you.

Shaan Puri

want us to better the place

Patrick Campbell

Like, look at Cuba. You know, it's one of those things where it's been in a problematic state for a long time. Part of that's our fault as the United States; another part of that's just, you know, the people who governed it. But I think it'd be really cool to, like, basically free Cuba.

Shaan Puri

People can't even free the city of San Francisco right now. They're trying to get the mayor to actually enforce punishment on crimes. They're trying to recall Gavin Newsom. I think it is a lot tougher than you think, but it's surprising how many... I guess the game from wealth to status to power, it's interesting to see how many people end up in the power game.

Patrick Campbell

It's not a... I want to be clear, it's not a... it's actually more of a social entrepreneurship thing than it is anything else.

Sam Parr

yeah no that's not true dude that is not true

Patrick Campbell

it is I okay I've done the work I've done the introspection

Sam Parr

Yeah, well, like the debate you're having in your head. It's basically like if you are Marc Benioff and you create the Benioff Hospital in San Francisco, what ratio is it? Is it because you want the Marc Benioff Hospital, or because you want to cure cancer? I don't think it's wrong that it's higher on the "I want my name on it." It's not wrong.

Shaan Puri

If there was a pie chart, right? There's the challenge of it, the intellectual stimulation, and the challenge—that's definitely one. There's the impact and the wanting to do good in the world—that's two. Then, there's the bragging rights or power game of like, "Yeah, I did that shit." You know, like, "I helped do that. That's what I did with my time, my talents, my money." I think there's some combination. Whatever the combination is, I don't think it's zero on all the other things.

Patrick Campbell

But there's a really big difference, right? There's a really big difference. So, like, I'm as close to a nihilist as I think one can get without being a full-blown nihilist. Just from the way my brain's wired, if I were a nihilist, I would be like, "Well, I don't know if I'm going to be a net positive; therefore, nothing matters," etc. To me, it's like you get to design the game, right? You get to design the game that you want. When I look at spending money to put your name on something, it does feel kind of like a waste. Personally, I haven't had my name on anything, and I don't really get excited about that. What I do get excited about is the challenge part. If I could be the person who did "X," that is really, really interesting. But it's not this... I want to name a journalist who has a very cynical view of our industry. It's not like this cynical view, or it's not this "Oh, I need to have a dick measuring contest" or something like that. That's not how I think about it. That's why I think that doing stuff in San Francisco, some of the worst days in San Francisco are still better than some of the other stuff that's happening in the world. Looking globally, I think it's really, really fascinating.

Sam Parr

I think after this podcast you're gonna be adding a 3rd shrink to the payroll

Shaan Puri

yeah probably

Patrick Campbell

probably just based on this yeah

Shaan Puri

Yeah, you have two other really interesting things that you said about that I want to hit. One is you had this **remix framework** that you kind of talked about earlier, but I want to double down on it. We should put the slide up on YouTube because it's hard to describe; it's too much to describe, but the slide makes it really easy. So you basically were like, "Look, innovation... maybe you're not all about innovation, nor are you Nick Hubert. You know, innovation is a waste of time." You're kind of like, your goal is to... I don't know, you could say this, but you want to take a product and you want to **remix** it. That's one way to think about how to come up with a novel business opportunity: to remix an existing one. You had these remixes. I thought a good example was when you took consumer products and you said, "If you take it and you make it cheaper, that's a way to differentiate through a better supply chain." You could take it and say, "I'm going to align it with a celebrity." That's a differentiator. Then you have the example here of **Feastables** with Mr. Beast. You get alignment with a lifestyle, like keto or Christian or hunting, and you have examples like **YETI coolers** here.

Patrick Campbell

yeah

Shaan Puri

Science-backed... You have another one that's like you align it with an identity, like a political party or LGBT. You have here as the example Black Rifle Coffee. So, let's first talk about this. Then, is this only for consumer products, or does this work across the board in your opinion?

Patrick Campbell

so here here's where this comes from so we had 50,000 different there's subscription companies but 50,000 companies using our financial analytics and we were helping them with pricing their churn and and giving them this this data and they were from across the map b to b saas subscription nonprofits d to c was one of our big segments and I started to notice that like for just under 10,000 of these d to c brands the playbook was almost the same over and over and over again right like it wasn't like there was some innovation in creating mattresses it was literally like we will be cheaper through better supply chain and we will help the environment and maybe we donate money to people who don't have beds right like it was just over and over and over again so I wanted to create essentially a unified theory of like creating products right and so I I shared the consumer one because that's probably the easiest one to talk about but there's just there's only 10 things that these brands differentiate on and there's number of the things that you talked about and my. Around innovation is that like don't try to necessarily innovate maybe don't even try to like raise money for any of these types of like consumer ideas because all you really need to do is take a particular product and then remix it with some of these differentiators right so for example like you've mentioned black rifle coffee that's basically aligning with an identity right so black rifle you know it's guns it's right wing it's veterans it's all these other fun things well identity based products increase willingness to pay by about 20 to 40% so if I just had regular coffee and I had regular or I had regular coffee that was built particularly for this like we'll just say like conservative but I don't think they necessarily claim that party all of a sudden that coffee is worth 20 to 40% because you're niching down into that particular group so I put together these ten things and also the the data around increased willingness to pay but for example if I was a you know particular entrepreneur who didn't necessarily like want to necessarily innovate which most people shouldn't I might go and be like cool well I like coffee I think coffee is great I think I get really excited about that what's a what's another lifestyle right so creating woke roast right coffee for the left basically where all of a sudden you can have coffee you know basically for that particular identity and people flock in your retention is typically much much higher when you do this as well it's something that really works right I had a friend a really good friend who wanted to create a business he's involved in the lgbt community so we talked about kombucha specifically for the gay community calling it bubbles for bottoms which was kind of a fun name and so it's just one of those things where it's like creating this like product remix and you can do this in a bunch different ways like you could be the premium version of whatever you're actually selling you know shinola right it's watches it's notebooks etcetera but they're premium versus you know some of the other stuff that's out there

Sam Parr

You have here: - Health + Lifestyle - Athletic Greens for Dogs - Condoms - Organic Materials

Patrick Campbell

sold last week

Sam Parr

Yeah, organic condoms. They're just going to sell you a package with nothing in it. That's the organic condom. That's basically it. Yeah, yeah, yeah, yeah. All that, I don't even think of that.

Shaan Puri

that's good

Sam Parr

made out of air I love that

Shaan Puri

Honestly, I bet you could sell that. That's Liquid Death, right? Liquid Death is water in a can. I think you could probably sell like an all-natural condom that's just... nothing. You could literally sell, "Let's do it the natural way."

Patrick Campbell

Yeah, yeah, yeah. There's a way. You gotta look at it as **sustainable**, right? I don't know a lot about the sexual wellness market, but it's like... long story short, it doesn't have to be complicated. The effort and the execution are really, really hard, but the ideation doesn't have to be that hard.

Sam Parr

did you make this chart this is really good this is great where did this come from

Patrick Campbell

Yeah, so this is based on probably collecting... I don't know the number, but it's hundreds of thousands of willingness-to-pay data points. Because we did the pricing... I don't know if you guys even know that. We've never talked about pricing. That was like my core thing; that's what I was most well-known for in the SaaS community. So we did the pricing for like Blue Bottle Coffee, we did Lyft's pricing, we did a bunch of other B2B style pricing. So we have a lot of data in the pricing space. And when I say we did it, it's like we might have done it or we might have helped them too. It depends on the company.

Sam Parr

If you had to summarize your learnings with pricing, are there like 2 or 3 bullet points where you'd be like, "Just do these three things and you're 90% there?"

Patrick Campbell

Sort of, but with a little bit more bulleting. You should be changing something about your price every three months. That does not mean raise your price every three months, but it means changing up your packaging, going upmarket or downmarket, changing up an add-on, or changing up your discounting strategy. It's this forgotten growth lever in most businesses. You acquire customers, monetize them, and retain them. We focus probably 60% of most budgets—more so in D2C, less so in B2B—on basically acquiring customers. We spend a little bit of time on retention, but we spend like no time on pricing. So, change something every three months. One of the biggest hacks that's easy to talk about on a podcast is add-ons. They're the most underrated, underutilized aspect of all pricing, whether it's consumer, B2B, or enterprise. They boost lifetime value by about 20% to 50%. Just to make sure this is clear: hey, they bought your core product, which is a fitness shirt. We'll add a white t-shirt for $10—stuff like that. Those are like add-ons. Hey, they bought your SaaS app? Add priority support for whatever 10% of your list price is for the software. Most high-growth companies, at least in the subscription space, typically have 12 or more add-ons. The customer never sees all 12 of them, but they'll see one or two of them. One other really quick hack is localization. This doesn't work for every company, but like internationalizing your pricing. For example, the Nordics know that when we take into account exchange rates and stuff like that, they're still willing to pay about 30% higher than the U.S. for the exact same product. Folks in Southeast Asia pay about 40% less. There's a really large variance on that, but that's a really quick thing where you can boost your revenue per customer by about 15% to 20% literally by just changing what the pricing looks like depending on where they come from across the world.

Sam Parr

dude you're insightful as shit

Shaan Puri

Fascinating! Yeah, that was good. You also said a really good thing in the sheet here that you didn't mention, which was: **How do you measure if your pricing changes are a good change or a bad change?** Right? How do you know? How do you know if you did it right? What's the metric you choose?

Patrick Campbell

Yeah, it's revenue per customer, which is going to be different for every company. So in your business, if you're doing pricing properly, that revenue per customer number should be going up and to the right. So, like ARPU, ARPA, ACV—however you're measuring it—that should be going up. Now, it's not going up as fast as your sales or some of your other numbers, but if you're changing something about your pricing every three months, you should basically be seeing that number go up. I don't know, it's hard to give a benchmark because later stage it goes up slower, but it should just be going up every single year, if not every six months.

Shaan Puri

Is that assuming you have free and paid as a mix? Because, for example, if I'm an e-commerce store, I could quadruple my prices. I would make more money per customer, but I would just have less customers and less money overall if I did that, right? Because, yeah, is it e-commerce? Like, you know, for example, what we use is revenue per visitor, which is like, for if somebody hits the site, how much do we make? $2 off them? A dollar off them for every average customer? Because that takes into account conversion rate and how much they spend when they convert.

Patrick Campbell

Yeah, so I would say you can get into things like average cart value and those types of metrics. I think that as you get more sophisticated in how you think about, for example, the e-commerce world, I would probably want to look at maybe lifetime value—like dollars in and that average number going up. Because what that means, theoretically, is assuming revenue is going up and all those numbers are great, it means I'm monetizing better. It's not necessarily in a vacuum. If my revenue per customer goes up, you know, a thousand times, but I don't have any other customers, obviously that's not great. But it's one of those things where most people, again, they don't like... like the average. It's kind of crazy. When we looked at how often people raise their prices, you should be raising your price at least once per year. There are some top outs and exceptions to this particular rule, but everything about your price is basically this exchange rate on your value. You've created this value, and because we don't trade goat for wheat anymore, you're basically saying this value is worth this much in dollars. It's that exchange rate, and there are a bunch of things that influence that, like your brand, the quality of the product, and which customer you're going after. Some customers will value your product higher. So if your product is improving every single year and your brand's improving, you should be able to demand higher prices. But most people, I think the average amount of time they take between pricing changes—like actual price increases—is about three years. I've seen so...

Sam Parr

many companies because they're fearful because the ceo is fearful

Patrick Campbell

they're scared

Sam Parr

is that the numb that's probably is that like 80% of the issue they're just scared

Patrick Campbell

It's just fear. We tried to fill this gap with our pricing product, and we still do, because it gives them confidence. We're like, "Alright, here's data that says you sat in a room when you founded the company and said Basecamp does $50; let's just do $50 too." Then you never revisited that for years. We have this data that says you can actually charge this customer $500, this customer $100, and we're going to roll it out in a nice way just for new customers first. All of a sudden, your conversion goes up, your revenue per customer goes up, and you're really excited. Then, all of a sudden, you're confident enough to basically apply that to your existing customers as well. So, yeah, I think it's just a lot of fear. I've been in so many executive teams with this product where it's like the smartest people I've ever met just sitting there. If I give them any other problem in their business, they're like, "Okay, I'm not an engineer, but let's figure it out. What's a stack? What is this?" They'll go and attack it. You give them pricing, and they're all like, "Oh, what do you think? What do you think?" Because it touches every area of the business, and they just lack that confidence in looking at it. I think starting off with, "Let's introduce an add-on," or "Let's introduce some of this stuff," is typically the gateway to, "Oh, this pricing stuff works. Let's raise our prices." I have an email that I've cultivated over the past decade for changing prices. I'm happy to share it, and we can put it in the show notes or I'll throw it on Twitter. It's literally like, "Just steal the template." T-Mobile used it; they stole it from the website, and they used it, which was kind of fun to see. It basically goes through how to communicate a price increase. The TL;DR is: don't make it about you; make it about them. They don't care about your costs or whatever; they care about their costs. That's the biggest mistake most people make. But yeah, I'll share that.

Sam Parr

You're... this is very insightful. You're very fascinating. Thanks, man! You have a lot of really interesting insights, and I think you approach things in a really cool way. You have a good amount of self-deprecating humor, but also academic rigor. You're a fascinating person.

Patrick Campbell

So, are we going to... does that mean we're going to do the skin-to-skin bonding now, or is that later? It's later in the podcast.

Sam Parr

Is that, bro? When I told Sean the same thing, "Pop the top, baby! Come on, let's go! Let's go, check the top!"

Patrick Campbell

losing weight so I don't I don't feel uncomfortable taking my shirt off

Sam Parr

yeah you you've lost £40 right

Patrick Campbell

Yeah, yeah, I'm down like probably about 90 total, but 40 since I saw you guys. Wow! And as Gucci Mane once said, "Money makes you handsome." So, like all cliched post-exit founders, I have to get healthier and basically take it seriously.

Sam Parr

what what's been the the number one driver just eating less or what

Patrick Campbell

I use my body tutor so I know you're a big fan of that I don't know if sean you're still using it

Sam Parr

sean you're using it yeah

Shaan Puri

I went back to it and I'm having such a good time. The key was doing the call, the daily call.

Patrick Campbell

I do the daily call yeah

Sam Parr

basic we have to tell people it's my body tutor so basically it's like the simplest thing ever we by

Shaan Puri

the way we don't get paid for this there's no I don't know at least miss sam maybe you do but I I don't get paid for this

Sam Parr

I remember I talked about the accident. They said eventually, if I tweeted about it, I sent a bunch of people, and they're like, "Hey, we'll give you a little bit of money." But I don't care. Don't even mention me when you use them; I don't give a shit. But basically, it's $6.50 a month, and they call you daily. It's like a 5-minute call, and they're like, "Why did you eat this?"

Shaan Puri

you're too fit let the fat guys talk for a second here alright

Sam Parr

go ahead

Patrick Campbell

yeah here's the service thank you

Sam Parr

here's the deal

Patrick Campbell

thank you sean I didn't wanna say anything

Shaan Puri

but nobody wants to hear the shredded guy talk about this

Sam Parr

alright yeah yeah yeah

Patrick Campbell

I'm down to like 2% body fat I'm still experimenting with ozempic it's not a

Shaan Puri

Big deal! If you're in a spot where you feel a little **shitty** about yourself, you're like, "Alright, I'm overweight, and I know this was completely in my control." You've done all the things. You've listened to the podcast. Andrew Huberman has got you injecting sunlight into your eyes in the morning. You've tried keto, you tried paleo, you did all the shit right, and none of it's working. Or it all kind of worked, and actually, the problem was not in the plans; it was all you to begin with. What my body tutor did was smart. They realized it's not the diet that's the problem; it's you sticking to the diet that's the problem, as we all actually know deep down inside. So, they help you with that root cause, which is how do they hold you accountable and help you actually stick to the thing you want. They do give you some strategy along the way. They provide helpful ways to think about things. I'll give you a very simple example: Haley was like, "Hey, when you eat, I want you to just take note for a second, like on a scale of 1 to 5, one being like..."

Sam Parr

I'm

Shaan Puri

Totally satisfied is a 5, but I'm like ravenously hungry right now. Where are you when you sat down for that meal? If you're eating sitting down at a 5, the problem was like we spaced out these meals the wrong way or we're not getting the right meals in. You're not expected to have good willpower when you're just completely ravenously hungry. We want to be eating at a 3, and we want to leave the meal not completely stuffed. You want to leave it at about a 2 or 3. You want to get in and just get your meal that way you're fueling up versus going into this feeding frenzy. So there are little mindset tips, but more than anything, you get a call in the morning and she's like, "So what's the plan for today eating-wise?" You're like, "I don't know, I'm just going to eat everything I see, I guess." Oh wait, no, that's not the right answer. Hold on, I'll eat at these times, I'll eat these meals.

Patrick Campbell

No, I think the only thing I would ask is, or also add, is that health is in your control. If you're listening to this, you know, unless you have an obvious disability or something like that, health is very much in your control. What I love about My Body Tutor is that it kind of cuts through the BS. I asked Hailey about all these esoteric things, like, "Hey, I read about this cold plunging movement," and she is just like, "Fitness, strength training."

Sam Parr

which country should I take over hailey

Patrick Campbell

Hailey and I don't have that relationship, but no, I think it's one of those things where we're bombarded with a lot of quick fixes or very marginal stuff. I'm a big Huberman fan. Sam, you tweeted recently, and I also would like to say that he's a very, very awesome guy. But I think it's one of those things where a lot of that stuff, unless you have the basics in place, it doesn't matter. So, Hailey has helped keep me accountable. I'm like, "No, no, no, no. We're going to do Peloton today, and we're going to do this and we're going to do that."

Shaan Puri

It's not even anything she says that keeps you accountable. It's just saying the stuff out loud and you're like, "Actually, what exactly am I talking about?" Never mind, sorry. I apologize.

Patrick Campbell

Well, for me, it's been a year-long journey. It started off with, you know, basically breaking all of these conventions. Like Sean, you were saying, "Oh, I can't BS myself out of doing the right thing here." Because I'm going to have to talk to Haley tomorrow about it, and she's not going to be sympathetic. She's going to be like, "Why'd you do that?" and "You shouldn't do that." I'm like, "Yeah, I know." So, it's cool. Let's not do it tomorrow, which is, you know, obviously really helpful.

Sam Parr

We appreciate you coming on, man. You're super insightful and always fun to talk to. I don't remember the last time you came, but I feel like this time definitely kicked its ass because this was the 10th.

Patrick Campbell

Awesome! That's my goal in life. I'm not Jesse, I'm not all these fancy people. I gotta bring the noise. That's the goal.

Shaan Puri

alright go follow him on twitter he's at atpatticus

Sam Parr

yeah we appreciate you that's the pod