Just found out my neighbor’s business sold for $450M

Shaan Puri

I talk to my barber and he tells me this story that's pretty crazy about muscle milk so he's cut my hair and he knows I have the podcast so every time I go in for a haircut he just gives me research and it's great dude my handyman knows knows I have

Sam Parr

the podcast and he always asks me what stocks he should buy and I'm like that's not the. Bro

Shaan Puri

he thinks you're jim cramer

Sam Parr

yeah he's like so what stocks what stocks should I buy I'm like I I don't know I don't know don't ask me that just change the light bulb please

Shaan Puri

if he asked you like you know what's the best way to increase my testosterone right now using an illicit drug I feel like that is what he should be asking you

Sam Parr

yeah what like clearly he's not a listener

Shaan Puri

what can I buy from a forum that will make my tendons stronger like sam has answers to those types of things

Sam Parr

I'm like do you wanna know some really cool subreddits or an illegal place to download books I got you bro alright go ahead

Shaan Puri

I talk to my barber and he's like dude you know whose hair I was cutting he goes he's your neighbor I am my neighbor and he goes yeah the guy lives just down the street from you it's the family that started muscle milk so they started back in 1998 and it actually started because he bought a sub brand called from his employer and which is like who does that who who goes to their employer and is like hey can I buy this like asset that's kinda undervalued or whatever and it's a niche product and he has this idea which is he names it muscle milk because he wants to name it after mother's milk like after breast milk and he wanted to make a drink that had the nutritional profile of breast milk because he was convinced that breast milk was the most like nutritious food ever it's not ended up it's not what ended up working but I think it's a hilarious starting? Yeah it's sort of like how spacex started because he wanted to send like a a small plant to mars and now he's like you know built like a $1,000,000,000,000 company doing this

Sam Parr

you know what's the colostrum I get so many ads on on

Shaan Puri

colostrum good stuff

Sam Parr

dude I don't is it like from a animal or a human

Shaan Puri

it's from a cow yeah

Sam Parr

damn so I'm like depriving some newborn cow from you know like her fresh milk

Shaan Puri

well that's how all have you ever seen how milk is made it's pretty insane no no no it's made it's it's messed up

Sam Parr

is it just tons of devices that hook onto you like an alien

Shaan Puri

alright this is this is my wife's vegan so she's forced me to like go down this road to like acknowledge what what goes on here's how a lot of milk is made I can't say all but I think this is like the mainstream way they impregnate a cow artificially literally a dude sticks his hand in and like artificially inseminates a cow gets the cow pregnant cow has a baby baby is then ripped away from the cow but placed nearby so that the mom could hear the crying and will produce more milk and then they take the milk

Sam Parr

yeah I mean that's that's sad fucked up I hate that

Shaan Puri

what kind of podcast is this

Sam Parr

yeah dude I literally drink

Shaan Puri

a sad ass vegan podcast is this I drink

Sam Parr

a glass of whole milk just last night

Shaan Puri

and now I regret it what up youtube sean here you guys know that I have started a newsletter company and sold it sam has done it too sam built the hustle got it to 1,000,000 of subscribers sold it to hubspot I built a company called the milk road as a crypto newsletter and sold it for 1,000,000 of dollars 1 year later and we've both had success with this newsletter business model so the team at hubspot got together and they did a research project called the future of newsletters and they're trying to put together some research around where they see opportunities for the newsletter industry what are some of the you know sort of checklists some things you should pay attention to when it comes to newsletters and a bunch of other data and research that they're packaged together if you wanna check out what the hubspot team has put together go to the link below this video and and download it it's free and you could check it out and you could learn something about newsletters back to muscle milk yeah okay so muscle milk not actual milk it's a supplement and it starts out as powder you put in a drink and he's like cool I think bodybuilders are into this they're willing to drink this kind of chalky nasty drink and he buys in and basically it's a family business so it's greg pickett and his his kids are involved with it and what's cool about this business is years later muscle milk becomes a household brand they end up selling the thing for $450,000,000 this I'll make almost half a $1,000,000,000 off this mussel milk thing the guy lives down the street they basically started this as a cul de sac company meaning he lives in one house the son lives in another house the sister the the his daughter lives in another house and they all just live in 1 cul de sac sounds awesome the kids play together and then they just built this behemoth that way like isn't this insane

Sam Parr

that is badass

Shaan Puri

that is badass that was like inspiring to me it's just like a family like you've heard of a family business but dude just imagine the cul de sac business I'm kind of inspired by this very much in the vein of thinking of find the people you love and do life with them like so how okay how did it win must've wait

Sam Parr

really quick have you seen landman the oil show

Shaan Puri

hell yeah I've seen landman I might have wore a cowboy hat yesterday just feeling a little billy bob thornton myself

Sam Parr

I haven't seen it but this clip I just saw makes me wanna watch it but basically jerry jones comes on and jerry jones like gives this like amazing acting performance where he talks about the importance of working with his family and how he's proud of his wealth and his real estate and he's proud of his the the cowboys but you know what he's proud of most is that I got to spend time with my kids and we work together right and that's why they're here at my deathbed because they loved me and we got to spend a whole bunch of time together and I heard that speech and I was all in for 1 I was all in and 2 jerry jones who would have thought he like had tears in his eyes I did not think he could act like that

Shaan Puri

somebody was saying they're like I don't think I think this is such a good performance because he's not acting I think all of this is just true for him and he just said the truth which which is great by the way landman fantastic show

Sam Parr

yeah it was such a good scene alright so tell me about milk and muscles

Shaan Puri

milk and muscles alright so they start the business pretty humble plan they bought this like kinda supplement and it's powder you mix into drinks and they were like look if muscle bodybuilding enthusiasts drink this this would be great we think we can make this more mainstream but we don't really know how we just kind of are believers in the general idea and they were like look if this thing ever got to like 18,000,000 in sales that would be like imagine that that would be crazy and they that was like at the dinner table talk by the time they sell this thing is doing over 200,000,000 in revenue and about 60,000,000 a year in profit before they they sold so they they had built like a really sick really successful company how did they do it they eventually and and what I love about these stories is you hear about the story and you're like you nod your head you're like yeah yeah that makes sense how that happened but then you look at the timeline and sometimes I'll force myself to literally draw out the timeline so it'd be like alright 1998 they start the company and then I'll draw 99 2,000 2,001 2,002 2,003 2,004 it's like 2,004 is when they actually made the product that hit which is the ready to drink like we've all seen you know the muscle milk carton and so you when you hear that you're like okay cool 2004 then really took off and you just sort of read the numbers and the revenue ramp and it looks good but then you think you zoom in and you you force yourself to look at that like 5 or 6 year time.

Shaan Puri

And you're like there's not they don't even talk about what they were doing during that time because it's just like the forgotten the forgotten grinding out years of trying to make shit happen and staying in the game long enough to get lucky

Sam Parr

and what were they doing

Shaan Puri

they were just selling they were just trying to sell and they were selling to like really small niches but ever expanding out of that niche and eventually he has an insight the dad has an insight and the insight is basically like hey you know what flavor matters and he's like if more people are gonna drink this it's gonna be because I I can I get this to taste like dessert and he realized that the initial market they were looking at which was body builders they took pride in drinking nasty shit and so anytime you try to make like a fruity better tasting thing sweeter thing they almost kinda rejected it because it felt less hardcore and they were super hardcore and that's who the market was

Sam Parr

a lot of people who like take testosterone or steroids or ozempic and a lot of doctors will offer you a pill a cream or a syringe and I've asked the doctors and they go they all want the syringe because it feels more like this works better it's going through my veins I could feel it

Shaan Puri

right so exactly and and I think that's true for the early markets the hardcore markets you know ben is like this ben is an early adopter of every product as soon as a product gets popular his interest like completely drops in it right because the fun part was doing the hard thing getting the edge being ahead and so same thing for bodybuilders so what the the genius of the business is that they saw that hey okay the market we see today the people who are buying it today actually is different if we wanna reach this other market we gotta like ignore all the signals we're seeing today so he goes in the lab and he starts doing small batch production and everybody else was so big that they could only test flavors in basically bigger batches and so that meant slower cycles it meant kind of like getting less like tight feedback loops so what he did was he goes to la and he starts testing flavors in like 15 gallon increments and he pours it and he gives it to people and they're like too chalky then he gives them another one they're like too sweet he gives another one and he finally makes this vanilla flavor that they're like this tastes like dessert I love this and so he brings those flavors into the ready to drink beverage and it just takes off it goes nuts and eventually like walmart starts knocking and walmart's like hey we wanna carry this he's like dude we can't even fulfill walmart but he's like all the specialty stores the g and c's it's flying off the shelves and for like the 1st year they're like so inventory constrained because he nailed the flavors so what my barber was telling me which is fascinating what caught my attention about this he goes so this dude down the street they created muscle milk sold it for like $500,000,000 but the cool part is he goes he didn't sell the flavors I go what do you mean he goes yeah there's some story he goes it's not out there but the guy he's like cut my head yeah I've cut his hair he's telling me the story

Sam Parr

barber on blast

Shaan Puri

it's not like insider trading he's just telling me it's a really cool story but he's like you know when you go and research it's not this part's not as reported so maybe he got some of the details wrong that's my caveat but here's what he explained which was basically the when they did the sale they sell the brand muscle milk they sell the operating business they sell all the distribution and then the buyer was like cool and the flavors and they're like actually we have our own separate company that does flavors and we're not gonna sell you that company and they're like well we need the flavors like cool yeah we'll do a licensing deal like well we could provide flavors but we won't sell the flavor company and again this is where the details are not reported so either that's what happened or right after they sold they started a new flavor company because now this is what the family does they have this flavor house that they created and they were like we're not gonna do any brands anymore but we will do flavoring that's what made muscle milk successful and that's what we're gonna do now as a service and now they've got a bunch of customers for this flavor brand that this flavor house that they've created and if you look at their facility it's like this insane like you know huge facility with like a fucking vacuum sealed room and they're like oh we do this technology like spray flavoring where you can add flavor to things that doesn't add any calories and they're basically it's all about flavor tech and I'm just like fascinated by flavor houses and flavor technology

Sam Parr

it's called flavor insights it looks awesome and I see like the they have a video with the father and his son and on the about page it's the whole family this is my dream by the way this is something that I'm gonna do

Shaan Puri

why this is even more your dream while he's building muscle milk he's got a hobby and I know that you love a man with a real hobby and his hobby is racing cars and he has his own racing team that he created and then he himself races in I I don't know shit about racing but is it le mans le mans

Sam Parr

le mans

Shaan Puri

something like that

Sam Parr

it's like a a famous I guess

Shaan Puri

loulou lamont

Sam Parr

track but it's like a the famous thing is like it's a 24 hour race and so like ford versus ferrari and

Shaan Puri

all these other things I think he like won the race or he performed really well how impressive is that is this like just rich guys doing it or is he competing against like real racers

Sam Parr

I'm not a real race enthusiast so I could be wrong but yeah it's like dude like the story ford versus ferrari it was about the time that ford beat ferrari at le mans like it's like a big deal yeah it's like a movie worthy deal you know like rudy style movie of an underdog winning le mans

Shaan Puri

right so yeah dhh the guy that jason fried's cofounder

Sam Parr

he competes in that did he I don't think he won did he

Shaan Puri

he won yeah he won I think he I think he won the race and he said he's competed in it 11 times

Sam Parr

yeah it's sort of like and oftentimes like the company that wins they win for some innovative reason and then like 10 years down the line that car part that helped them win becomes like the norm

Shaan Puri

gotcha gotcha

Sam Parr

yeah so that's like a big deal

Shaan Puri

isn't this a it's it's a total like life goals story build a killer brand you stuck with the thing you built it with your family you do it in the cul de sac I just think it's it's amazing sell the thing for $100,000,000

Sam Parr

none of his kids are yoked right like these guys they don't look very yoked I'm looking at the family now

Shaan Puri

well as their public defender here's what I have to say about that one of the things they talked about with muscle milk is they go we wanted to build a product that everybody would look at it and see a different thing so they go women see it as a weight loss product men see it as a muscle building product some people see it as a snack some people see it as a meal replacement our goal was to build a product that you that would basically you know solve multiple problems for different people at once

Sam Parr

I'm just saying that I wanna see some bigger buys and tries on this family photo they look great they look very healthy more importantly they look happy the founder's teeth are beautiful like he's got a really nice smile I just think that we should see a little thicker neck

Shaan Puri

can I tell you one other thing so this company that bought them originally I know they're owned by pepsi

Sam Parr

yeah

Shaan Puri

pepsi owns it now but before that they it was bought by something called hormel foods it's one of these companies that you've never heard of this company does $12,000,000,000 in revenue they do like a a 1000000000 and a half dollars of profit a year and if you go to their website they the like the the headline like tagline for them is like we sell more pepperonis than anyone on earth

Sam Parr

and they're

Shaan Puri

just like food holding company they own skippy peanut butter they own planters

Sam Parr

they own spam

Shaan Puri

they own spam and then they sell just a shit ton of ronis dude they just sell pepperonis worldwide

Sam Parr

they own applegate they own justin's they own planters skippy chi chi's I don't know what chi chi's is I don't know what

Shaan Puri

is that black label bacon they own a lot of I mean literally spam is like on their home page as like their like their their pride and joy like the way my parents pin like pictures of me up on the fridge that's what this company does with with spam

Sam Parr

which is like it's pretty pretty good horrible for you but oh dude yeah hormel pepperoni I know them that's one of my snacks one of my snacks is like 8 pepperoni with a little bit of mozzarella cheese on it microwaved

Shaan Puri

it's a pizza without the the pizza

Sam Parr

yeah I just call it like so

Shaan Puri

does pizza hold the dough just just pepperoni and mozzarella

Sam Parr

redneck fitness food

Shaan Puri

dude this should be your brand a line of of not that bad for you redneck snacks it's like it'll it'll make you farm strong

Sam Parr

yeah or do you know like pb dip you know your I call it dip

Shaan Puri

but you know pb powder the powder yeah

Sam Parr

yeah you get a spoon of that and you get straight and you chuck it up on your the top of your roof of your mouth and you suck on that thing for 60 minutes I call it like fitness dip so like instead of like having like a fat lipper in you just have a pb dip you're just and your tongue just rub it against that the the dehydrated nut

Shaan Puri

oh boy oh boy you wanna have

Sam Parr

a good time put a little pb dip on the roof of your mouth

Shaan Puri

alright we got our we got our cold open for the episode

Sam Parr

by the way let me show you one thing you said something that I do religiously I've just sent ari a document that I I just sent her one of the tabs I have dozens of tabs on this ari can you share your screen so whenever I read a book I have this Google doc that I've used since the year like 2010 alright so check this out whenever I read a book I do a few things 1 I make whenever there's like a year and a money term or some type of milestone I write it down in a sheet and the reason why I write it in a sheet is because a lot of times when you're building a company or doing anything that's like really challenging you you'll read about someone else and you're like that was easy and so I like to do timelines and you'll see like oh okay like they went 4 years with nothing happening so for those listening I have got a timeline of koch industries which is like the largest privately held company in america I read the biography of the family and I like did a timeline where every everything major happened in their life and then I converted the dollar amount into $2,019 which is when I made this particular one and it's really fun to do because you could see that things took like in this case like 30 years

Shaan Puri

right

Sam Parr

and so if you like if you scroll all the way to the left I did this with kirk kerkorian another one of the a guy who I love and I've I every biography I read I I create one of these

Shaan Puri

just another man you love can I just? Out a couple things about this what we're seeing jerry here that are just just fantastic this is it's just a peek into the mind first of all it's a Google sheet that's just called sheet which is just a great title okay scroll over alright here are some of the milestones that sam wrote down alright so it starts for for koch industries 19 1900 fred koch born 1924 so 24 year gap big break finds mentor okay so then it goes 1927 just a quick update still broke then it goes 20 1929 see success 1931 big success with 2 g's just a big double g success right here it's amazing

Sam Parr

and then 1940 he buys a company and that company he buys it for $4,000,000

Shaan Puri

you also should just have pictures on here where it's them and the cavs and it's just your cavs just for reference and you're just comparing cavs because I feel like tell me that's not part of your research process is it looking at photos and judging their looks

Sam Parr

yeah particularly the koch brothers because they're like these tall waspy guys and I definitely am sizing myself up to them

Shaan Puri

yeah the the the total picture of success includes a picture

Sam Parr

for sure yeah it's like tennis sweaters it's like oh they're into tennis sweaters therefore I will wear tennis sweaters but yeah I definitely like 2 guys that are both 62 from the midwest with blonde hair blue eyes like we there's definitely like a there can only be one of us in this room

Shaan Puri

dude there's this girl who keeps going viral on twitter and it's the same tweet she does every time and she just goes my dad goes to a bar with his friends every friday and he makes a list of topics to discuss yes and then she she puts she has a photo of him holding a printed out agenda and I'll just read you one of them ted perry's fun capital story shown on fox news 6 next one what's going on with the bucks? Nfl overtime rules take ball first or second? Bahama breezes how close is too close to an alligator do you think people that throw garbage out of their car window are the same people that don't pick up their dog poop when walking through my subdivision and then it read at the bottom and goes please be on time as you can see we have another week of a packed agenda and it goes super viral every time it's like a 100,000 likes and I think everybody who sees this is like yeah that's part of the winning life I'd like to go to the bar with my friends every thursday and have like an agenda that we print out and we talk about while wearing our new balances

Sam Parr

do you know who does this and he's not joking

Shaan Puri

I already know because you're talking about a legend a social legend and I know it has to be nick ray tell me I'm wrong no I'm wrong is it not nick ray

Sam Parr

the second time I hung out with nick ray we went to a bar called lazarus sarah and I came and he goes hey guys I would love to hang out this is our second time hanging out I thought it'd be nice to have an agenda so we could stay on track and there was a 13. Agenda list where it was like ask sarah about her job figure out how that's going on explain my dating life and get opinions from it like it was a and we stuck to that agenda and he took notes and it

Shaan Puri

was thrilling because I think I'm gonna absolutely start doing this

Sam Parr

it was thrilling you know how like you know how like

Shaan Puri

was it the agenda that was great or the fact that he had an agenda that was great which which of the 2

Sam Parr

was great here's why so look in a world everyone wants to be a tough guy it feels good to be a leader but you wanna know something everyone likes getting led and like we'd like the assertive person

Shaan Puri

I'm just a leader who loves being led that's me like that's on my linkedin

Sam Parr

I I like leading some stuff but then there's other times where it's like just tell me what to do and small talk is one of those things that no one just like tells you what to do and when there's an assigned leader who has something outlined for small talk I'm just like yes sir I'll do whatever you like me to do and thank you may I have another sir like it's like the best way to go about doing stuff and that's what nick ray does

Shaan Puri

okay and by the way that's how we do this podcast actually we both bring some agenda items and then we discuss in bullet. Form

Sam Parr

yeah I think it's good I and he's done that for years and it's awesome alright

Shaan Puri

we're gonna normalize having conversational hangouts with an agenda okay let's do more I have a business that's pretty cool can I tell you about it here's my here's my opening for this business sam I found the business that you should have started instead of wasting your goddamn time with the hustle

Sam Parr

okay I like that

Shaan Puri

so you built the hustle and if you recall one time you came to me hat in hand absolutely begging for an investment you needed the money and you got that on your knees and you said please sir invest in my company and I looked at it I I flipped through the business plan like it was a flip book and I just said no thanks

Sam Parr

no that's not what you said you said look sam you're coming to a knife fight with a knife I don't even want you to come to this knife fight with a gun I want you to come to this knife fight with a magic fucking wand and and that

Shaan Puri

clearly turned away on my heel with a dramatic spin and I left through and and then you tried

Sam Parr

to pull the door to open but it was really a push door

Shaan Puri

exactly totally blew it at the end did not stick the landing

Sam Parr

like you clearly had just read that on a whatever the equivalent was of twitter and you're like that is now my line

Shaan Puri

yeah exactly this is back when I was like I had it written on the inside of my palm and I was like peter thiel says this magic wand they say that somebody totally owns them no matter what they're doing so but you know the reality was I looked at the business and you were like here's what I'm doing I am creating a media company so every day we're gonna write the news so every every day you had to recreate your product

Sam Parr

yeah it sucks

Shaan Puri

oh that sucks

Sam Parr

what did they did

Shaan Puri

you get any is there any benefit of all the work you did in the last 3 months it's like not really we gotta recreate it again we gotta bake that cake every morning okay sounds good and then you said and then I was like cool so then people pay you certainly for the service that you're doing no it's free oh okay but then the advert then we have to do a separate business basically to a separate customer selling advertisers and they're like okay but certainly they're on retainer and it's gonna be recurring revenue that's gonna stack up you're like no no no they're just gonna if they feel like advertising they will if they don't they don't every month we're gonna start back at 0 yep and I thought damn this is a tough business to win and that's when I hit you with the knife and the knife fight and blah blah blah

Sam Parr

which it is tough ish to to do well

Shaan Puri

yeah and by the way the best pun story of the whole thing is 5 years later after you successfully sold the business and got rich doing it I then copied your business model and did the same thing for crypto and was like came back to you basically being like what was the business plan again how do you do this so so that's the the end of that story now here's a better business that somebody created 5 years ago that has the following profile they don't recreate the product every day people pay them for the product on a subscription it's in a hobby that you love doing and it's a thing you were doing anyways for free so I think you would have been great at it and also it uses your gift which is making things simple summarizing things making them easier to understand saving somebody time doing it and this person has bootstrapped this business to 200,000,000 in revenue with 30% profit barges

Sam Parr

I have no idea what is this

Shaan Puri

it's called headway app and it is a book summary app so this guy in the ukraine created this company where he takes popular books and he summarizes them and the promise is basically instead of reading the book I already read it I summarized it I could tell you main? 1 I could tell you main. 2 I could tell you the main. 3 and in under 15 minutes you can get the gist of what's in this book you'll get you know the the big ideas and you'll get them explained to you you could either read it or we have ai that turns it into audio and you can list listen to like a 15 minute summary of this book and we've done it for 1500 of the most popular books and people pay a simple 12 $13 a month for this and this has become an absolute juggernaut so I did not think that these book summary apps could get this big but damn if that's impressive 200,000,000 in arr 30% profit built this thing out of the ukraine

Sam Parr

they just raised funding at a $2,300,000,000 valuation

Shaan Puri

right right

Sam Parr

holy crap

Shaan Puri

so like you could've done that instead and I think you would've been great at this by the way you know here's why I said that this this like you could've done this because when I went and looked at their ads right the bay the way this business grows they run ads on tiktok on facebook whatever and the hook of their ads tell me if this sounds familiar my boss thinks I'm a genius but and thinks I read a 150 books a year but actually I just use headway

Sam Parr

that's their ad

Shaan Puri

it's not word for word I just wanted to really bait you with that one but it's basically the it's basically the gist of their ads it's it's the same way we post the same quote

Sam Parr

ad I invented that ad I stole it from someone else and I invented that ad that's my ad

Shaan Puri

that's the ad that's my ad that I took

Sam Parr

yes I stole that from the scim and I invented that ad

Shaan Puri

their ad is a little bit more like it'll be the average ceo reads 52 books a year how many do you read right so they're basically making you feel like a shitty ceo or it'll say everyone thinks I went to harvard with the amount of books that I know but actually I just use headway or it'll be meet the app that all the intellectuals are using stuff like that and so those are the sort of hooks that they use to get people to do this where they're not saying here's a book summary they're basically saying be a smarter person and be seen as a smart person because you seem so well read and here's your hack to seeming so well read

Sam Parr

so what's interesting is thrive thrive

Shaan Puri

we should do this for the podcast it's like my boss thinks I'm kind of retarded but know a lot about business the secret is I just listen to my first million

Sam Parr

but I still sound a little retarded

Shaan Puri

my boss is so impressed that I know all these numbers but then he wonders

Sam Parr

but then he fact checks me

Shaan Puri

my boss is wondering why I have pepperoni in my mouth

Sam Parr

this is ridiculous these guys so they raised money from thryv which thryv is a big vc investor in chat gpt are they not worried that chat gpt just does all this

Shaan Puri

well they're themselves using ai for a bunch of stuff like if you go look at a bunch of their ads they're all like ai generated ads I think you know businesses like this that are like super laser focused on one thing you know even if you can use chat gpt to generate a summary that's not the same thing and I think you know

Sam Parr

dude they're not even old they started in 2019

Shaan Puri

I know right super impressive they also have done this other app so there's this one ad that was like so frustratingly good it made me pissed that I didn't think of this it's this simple looking puzzle tell me if you've seen this I don't know I don't know how much you use these like it's like in a lot a lot of games this ad pops up or tiktok it's this like it's like a maze imagine a maze and it's like you're you start on this dot and you have to get across without picking up your pen and it just shows somebody's trying to do it and they're messing up

Sam Parr

yeah yeah yeah

Shaan Puri

and it's like try see if you can solve this only 5% of people you know can solve this but 50% of 5th graders can do it or whatever and you're like I gotta see if I could do this so you download the app by the way that puzzle is actually impossible if you there's there is no solution to it they just put it in they put a thing that looks simple but you can't figure it out you can't figure it out because it is actually an optical illusion it's actually impossible

Sam Parr

but it that

Shaan Puri

use it to get to the game yeah they have this other other app called impulse that's done like 70,000,000 downloads and it's a brain training app and the the framing of that is basically keep your brain sharp with these little like mini mini mind games and like you know my mom likes a lot of these things because she feels like oh I'm getting older I should I should have these little things on my phone that you know keep me sharp so she plays sudoku and crossword and she she downloads apps like this

Sam Parr

so they're still set they're just like crazy good inter marketers internet marketers and really good like creating apps that retain

Shaan Puri

apps that first and foremost get you to convert and become a subscriber and then yeah obviously you know the retention helps and you know this guy talks about it he frames it as microlearning he's like microlearning is this how do you get somebody to spend 5 to 15 minutes a day getting smarter what if you use your phones to get smarter instead of just to waste your time and so he makes it sound like this grand noble mission and at the same time on the back end it's just this ruthless funnel that is like run it

Sam Parr

buy now buy now

Shaan Puri

get the download convert convert convert convert convert and like that's the game that's what you gotta

Sam Parr

be focused we talked about was it remember the. App or flow were they flow yeah were they ukrainian as well

Shaan Puri

yeah so we did this call have like a a cruise flow eastern european app makers where they have these family of apps and you go look at their website and they're like no raise no funding and then they'll have like 300 employees and then their apps will do like you know a 100,000,000 downloads a year and it's like based out of kyiv or whatever right like this just seems to be a pattern I think there's like a just a very high density of talent that knows how to build this specific type of company

Sam Parr

yeah they're just like all homies and they all have this like I don't know this idea of like it feels fun to get one over on someone but then they're like alright if we're gonna have that attitude we should also like provide value so we stick around for a long time which is like what every internet marketer ever has they're like I'm gonna do something shady and they win and they're like oh but it'd be a lot cooler if the customers came back to us or if we didn't have to refund people constantly so let's just like do the shady stuff I'll do it for something

Shaan Puri

like if I could tell my mom what I do without shame

Sam Parr

which is like what every internet marketer ever has done but this is badass how'd you find this

Shaan Puri

how did I find this actually that's another good story have you seen this twitter account arthur rock

Sam Parr

well arthur rock I know that arthur rock was

Shaan Puri

no it's a it's like a parody account it's arfurock is his his account have you not seen this this thing is amazing alright so how do you spell arfuro bro just you try to spell arthur and naturally and just see what happens you'll land exactly at the right thing it's a r f u r got it rucker okay so it's this guy who's this like anonymous he's like this anonymous vc and what he did is he just created this twitter account where he just tweets out numbers from companies that are raising money or trying to sell and he just like leaks information and so he's just just this giant leak and so he tweeted out the numbers for headway app but if you just look at his feed his feed is like pure signal because it'll literally just be like it'll be like post hog 13,000,000 in arr growing 2 x year over year they're currently

Sam Parr

raising crazy

Shaan Puri

it'll be like or like somebody will be like you know the the founder will be like we're we're pleased to announce that we've raised our series c from excel it's a huge milestone and we feel so validated and then he'll just tweet out he'll read a quote tweet it'll just go 50,000,000 arr as of november up 1.8x year to date congrats

Sam Parr

or there's like another one that like they raised that $400,000,000 post they did $6,000,000 in 2024 congrats

Shaan Puri

yeah exactly exactly like how amazing is this this is like the best twitter account right

Sam Parr

this is really good and you know what's funny and we've seen this again and again and again these meme people anonymous meme jokers are like right a lot you know what I mean it's sort of like how esquire or what was it called american what what was the tabloid that like is in the grocery store enquirer national enquirer

Shaan Puri

yeah the national enquirer

Sam Parr

like they say a lot of bullshit but they also like predicted that the bill clinton scam or bill clinton stuff before everyone or like the john edwards affair and so like I do love following these anand accounts this guy is great yeah like he he says hollow a catholic prayer app doing 60,000,000 arr growing 3.5x a year

Shaan Puri

yeah like he did in he'll also post updates so in may he'll be like suno the ai music app just closed around 15,000,000 arr in the 1st year lightspeed invest that 500,000,000 post congrats and then he'll then you know that was may and then in october right so like you know 5 months later he just wrote at 40,000,000 arr now right this guy's just providing I don't know you're not you're not as big of a like a basketball fan but like in basketball there's these 2 guys who were like famous on twitter for just like they just have sources everywhere so it'd be like shams and it'd be woj and they would just always have intel and there's all their entire twitter feed is literally just inside info it'd be like you know sources say jimmy butler wants trade his list of teams that he wants to go to are these 4 or it'd be like like during the nba draft like you know 45 seconds before every pick they just say they're taking this guy it would just spoil the draft

Sam Parr

if I'm one of these ukrainian guys like I don't have the skill set to do this I'm not technical but I wonder if you like do you ever wonder why aren't there more people just copying fast growing companies like we'll just

Shaan Puri

there are that happens a lot

Sam Parr

it doesn't

Shaan Puri

but I think your I think your answer is actually pretty good which is why aren't there more so actually I think I answered your question wrong I was like no some people do do that and I think your question is actually correct which is why aren't more people doing this because I think

Sam Parr

I don't wanna do this because I kinda have a reputation and I don't really want to do it but if I was a little bit younger and if I had the skill set which I don't like if I see a company that's going at like 400 x a year which this guy does he's like here's some app that was only doing 5,000,000 in revenue but they're set to grow 4 x I'm like yeah just go to their website and copy that

Shaan Puri

yeah I mean it's not so easy right like you could copy a product that doesn't get you to the customers and so you have to not only copy the product you have to figure out how they grow and be as good at growth

Sam Parr

as them figure that out you you can use all this technology like here's what their ad say I'm just gonna do that exact same ad

Shaan Puri

you can but you know most people who have that ability if you're if you're that good you're also able to create new things from scratch and I think also what ends up happening is that a lot of things look similar but they're you know they're 80% the same and they're 20% different but that 20% difference is actually a huge difference right it's just like if you've ever looked at we were talking about flavors earlier it's like the difference between 2 flavors is like a 0.1% change in a certain you know certain chemical but it'll change you know from vanilla that's that's the difference between you know vanilla and and you know orange soda or whatever right it's like there's it's not that big of a difference on the on the whole right you're doing 80% the same but it's 20% that's different and so you know I actually advise this and and talk a lot about this which is if you see something that's working not as a company maybe but like let's say a trend or a business model like you know let's say ecommerce or whatever try to figure out what's working better or worse in a category and then you know if you're gonna go into that category you're probably gonna end up even if you're trying to be super original you're probably gonna end up with 80% of the things the same because that's how business is you're not a 100% different but the key is to figure out what is your 20% difference gonna be and how how well can you execute on that 20% innovation and I think that's a more humble honest way of going about things versus I think most people believe they're doing everything a 100% original and unique and that's just not true right like even this is also for content or wisdom right like how many truly original wise thing you know I love naval but how many of naval's things are a 100% homegrown not inspired by anything not not not similar to anything else that was out there which is very rare right like that's not how anybody does things tony robbins talks about this he's like yeah I I learned under jim rohn and jim learned learned under zig ziglar or whatever and like it's the same school of thought but like me putting my twist on it is the is what makes all the difference then you have people like rocket internet which are literally like pixel for pixel clones but even they operate in different markets so they'll be like cool we're building

Sam Parr

amazon and thailand amazon for

Shaan Puri

for brazil or thailand or whatever and turns out once you try to do that you're gonna like over time a a lot of things are gonna end up different

Sam Parr

alright let me tell you a story really quick about some investment thing that I heard about that I would never do you would do but it's a thrilling story

Shaan Puri

okay let me guess it's obscure overly complicated doesn't really make a whole lot of sense too much risk and we'll end up netting less than the s and p 500 in the long run

Sam Parr

no this one he came out on top actually so the story is this first of all like I was just listening to Scott galloway's podcast while I was driving somewhere I think it was like over christmas break and something happened at the very end of the podcast and I was with sarah and I literally pulled over to the side of the highway and I was like are you listening to this and she's like shut up no but I'm like alright but this is actually amazing

Shaan Puri

can we get an instant replay on youtube of your wheel diagram you just did how big is your wheel dude you're like literally driving a school bus what was that

Sam Parr

it's like a ship

Shaan Puri

armed ship fully out loud it's like a tractor that you're driving

Sam Parr

it's a ship I pull the ship over and I literally had to sit down because she yells at me when I use my phone and I had to like type this out so I had this note I remembered it but Scott galloway had michael lewis on so Scott galloway is an investor and podcasters michael lewis is an amazing author wrote about ftx's downfall and he was with sam bankman fried when this all happened and so he he you know he has a unique perspective in the 45 minute part of this like 50 or 55 minute episode Scott galloway just mentioned something where he's like yeah I bought some of the the the bankruptcy claims against ftx and michael lewis started talking about something else and then michael lewis goes wait wait wait wait wait what you made a good investment where you bought the ftx claims what was that about and Scott like just casually throws this out there but the story is actually pretty amazing so the background is this so in 2022 ftx goes bankrupt because sorry ftx goes bankrupt because sbf sam bankman fried he's overleveraged and he spent all the money and whatever it didn't work out because of a bunch of different reasons and because of that $10,000,000,000 in customer funds are lost you know they're just gone and people are distraught they're freaking out but when a bankruptcy happens one major thing happens which is the person who had the money in ftx so let's say I stored $1,000,000 in ftx I now am I'm gonna have a claim against that company for $1,000,000 so it's gonna go to court and we're gonna figure out how do I get my money back somehow and in a lot of cases you get no money back and so what happens is these kind of vultures I mean I don't know what you wanna call them but they come along and they go hey ftx owes you a $1,000,000 you're probably not gonna get that back you might get that back but I'll tell you what you have a $1,000,000 claim I will buy that claim from you for a $100 so you get the $100 today whereas the other outcomes are potentially you eventually get nothing or maybe you'll get a little bit more like a $100 200 300 300 grand but it's gonna be in like 4 or 5 years and you don't even know for sure so just let me buy your claim and so sure you could do that so it creates a market when that happens but Scott galloway he's kind of a he's kind of a strange guy and he had this quote on this podcast where he's like when I see fire I run towards it because when because I've known enough seeing a lot of bankruptcies that when there's when a bankruptcy happens there's opportunity and so Scott galloway he reads the paperwork about the claim or about the bankruptcy and what he notices is that sam bankman fried unlike a lot of different ponzi schemes a lot of times with ponzi schemes they're spending this money on coke hookers planes like party shit spf maybe did a little bit of that but you wanna know what he was a real degenerate about venture investing he loved investing in companies and one of the companies he invested in a few and I think a lot of them didn't work but one of the big ones that he invested in was he invested in anthropic which is like the number 2 or the number 3 best ai company and Scott looks at the numbers and they don't actually say what the valuation was of what s of what the they didn't they don't say the valuation of anthropic when sam bankman fried invests in them but what they say is that he invested $500,000,000 and Scott does a little math and he's like I think the valuation was around $5,000,000,000 meaning spf owns 10% of this company and this was happening 2 years ago he's like I think anthropic is going to raise money at a $10,000,000,000 valuation and then eventually one day at a $60,000,000,000 valuation which by the way as of today there are rumors that that's happening and because of that I think I can buy a claim for 20% so a $1,000,000 claim for $200,000 and if you do all the math I think I could actually triple or quadruple my money based just off this venture return let alone if we ever are going to claw back any of the crypto that was lost well turns out a few things happened 1 bitcoin exploded and because of that well not because of that but they were able to recap or claw back a lot of the money and bitcoin exploded and so a lot of these people are going to be getting back a lot more money than they actually had in there because the money you know the bitcoin was just sitting there growing and also sam bankman's freed investments one of them killed it knocked it out the park and so I think now the people who lost money they're getting something like a 125% of their money back which is not bad for a ponzi scheme that you are a victim of Scott said the numbers he goes I bought $250,000 worth and I sold I bought 2 a $1,000,000 claim for 2.50 and I sold it for 90% of the 1,000,000 so he like tripled his money and Scott like goes through the story and he explains like his reasoning on this podcast and it was amazing to be honest like how on earth you could find value in this way

Shaan Puri

yeah that's that's super impressive I actually happened to hear this segment too and had the same you know I wasn't driving a bus but I had the same sort of like next snap reaction where I was like what what's funny is you said a couple of things but I don't think so a couple of things but I think we have to correct a couple of things 1 it wasn't a ponzi scheme

Sam Parr

no I meant like

Shaan Puri

a lot he stole customer funds

Sam Parr

I I guess I wasn't mean that this was a ponzi scheme but it's in that category of like schemes where you know a lot of people are like how do I get my money back

Shaan Puri

scammed you lost your money yeah exactly the other thing is that he was saying you know I valued ftx's stake in anthropic at 4,000,000,000 but that's not really what happened so they sold their stake for 800,000,000 so I think he put in 400 or 500,000,000 and they sold it for 800 or 900,000,000 in the liquidation and so it wasn't the anthropic investment that really paid off

Sam Parr

he was using the anthropic investment as a downside protection where he was like doing the math where he was like alright that gets me that gets my investment up just a little bit to like a safe zone but then what else can there be

Shaan Puri

yeah exactly so I but I I think his math was wrong so he said in the thing he goes I valued the anthropic based based on the anthropic stake I thought it was worth 4,000,000,000 the total claims were 9,000,000,000 so I thought anthropic was giving me 44¢ on the dollar for every dollar of claims that I would buy claims were selling for 22¢ on the dollar so he says to me that was the easiest trade I ever made but the reality is that the anthropic stake ended up being worth less than 1,000,000,000 right so it would have been 10¢ so he got it right even though his logic was wrong and we had sheila on the other day and he basically said his 2 best investments kinda worked out the same way he's like I bought nvidia in 2017 because I thought that crypto mining was gonna take off and nvidia took off but not because of crypto mining at all it turned out it was ai and it you know kind of like I was wrong but I was I got massively right you know same thing with bitcoin he's like I bought bitcoin early on because I thought it was gonna be this fast peer to peer transfer thing turns out that was all wrong but bitcoin went up anyways because of this other store value gold you know digital gold use case and so I think what ended up happening is that he made a great investment but I think his underwriting was wrong I think that's one of the hard things about doing this like what up you know the smart money investing is that when you're right you feel like such a goddamn genius and when you're wrong you chalk it up to you know whatever you sort of either mentally block it out you either say you were wrong or or you think maybe one of your assumptions got got a little off but this there's also this weird state where you can end up right even though your underwriting was wrong and you conflate kind of like luck and skill and I guess the question is I guess that's one of my my observations I've had in this process of of like as I do my own investing and get something's right get something wrong I talk to other people it's very humbling to realize how much of this even your wins aren't your aren't yours they're not your wins because you got so much of it wrong

Sam Parr

well and there's an another learning that I had which is finding value in crap like this story like this was the worst the the like this was the worst asset the worst company like you don't wanna touch this because a it's like a scam so like there's a no go there and b it's like a reputational ruiner like who wants to be involved in this guy and then it's like I have so much better things to do why would I waste my time with this pile of shit and what was interesting was seeing Scott walk through his reasoning on how he can still capture value from a horrible situation and I thought that that was really intriguing because that is not how I tend to do things like what did they say try to trying to catch a falling knife like yeah when something's bad it's just going to get worse and just stay away but that's not always the case

Shaan Puri

dude when I went to monish prabhay's house and we've recorded that podcast together we did the podcast and then at the end he's kinda just like touring me around and I go to his desk where he works I like seeing like literally where you sit when you work I I think the environment kinda tells a lot and he has this placard on his desk like the way you would have a like if you walk into a bank or whatever it would be like the name tag of the of the bank manager or something like that but instead of a name on it it just said trouble is opportunity and literally he was reminding him that he wanted this on his desk because in those moments where there's panic where there's trouble he wanted the reminder that trouble is opportunity and not all trouble is opportunity right like one of his isms that he had took from charlie munger and buffett is he puts things in what he calls the too hard pile so he's like yeah you know I look at a 100 opportunities I could probably tell you the 3 obviously good ones and I could tell you the 10 obviously terrible ones but then the other whatever 77 I'm I just put in the too hard pile and I'm sure some of them are really good but I just throw things in the too hard pile when they're too hard and so for example you know I was asked him like what's your thoughts on crypto and he was like well I think there's a case for it I think there's a case against he's like but I just don't do anything because I put it in the too hard pile so I I I don't need to win in that it's too hard for me to figure out so I'm not gonna bother and I think this the concept of the too hard pile is so valuable because I used to be very black and white about everything like either it's good or it's bad and if if I thought it could be good I would smash my head against the wall trying to like make it work and if it was bad it had to like stand out as bad for me to like to to throw it away

Sam Parr

the so you said a 100 ideas

Shaan Puri

the story is the story is this he's at the he's at lunch with warren buffett and he goes warren you I think one of your great gifts is you're a great judge of people he was talking about like you know warren buffett hired that guy ajit who like runs their insurance business he's like I just think you're a great reader reader of people judge of people how do you do it what's your secret and he goes I don't think I'm a great reader of people and he's like but I'm not trying to be humble he goes I just approach it differently he goes it pays to be a harsh grader when it comes to people meaning the cost of being optimistic about somebody who turns out to not be great to let them into your circle of friends or to do business with somebody who turns out to not be great is so costly that I just rule a bunch of people out he goes if you put me in a cocktail party and you let me have 5 minutes with a 100 people in that 5 minutes I could probably tell you the 5 people who are really outstanding I could tell you the 5 people who are really lousy and I just don't want anything to do with them they just obviously came off super bad like in in a 5 minute interaction but then there's 90 people that I just can't make a judgment on in 5 minutes and I he goes so I just put them all in the bad pile they're all in the too hard to know pile and so I just rule them out because it's not worth the brain damage to try to figure it out on a case by case basis just so you don't miss a good one because the cost of a bad thing is worth way cost me much more than missing out on a good thing because there are more good things that I could just filter for and I'll find those good things like over time it'll be obviously good I'll just focus on the obviously good things and he does this with investing he does this with people and it's just a very useful heuristic because I think most of us try to be if there's a 100 we try to be accurate at the 100 level it's like I wanna have an accurate grade on all 100 and I'll spend all my time on the hard to judge things and I'll get a lot of them wrong but I'm trying to get them right and therefore I'm taking too much risk whereas his take is don't take too much risk take the obviously good and act on it obviously bad throw them away and everybody else put them in the too hard pile and ignore it

Sam Parr

can I dumb this down let me explain why I'm a genius when I go to a restaurant there's like 2 columns of entrees I start at the top and I skim down and the first one that I see that's a 7 out of 10 I go oh that's it menu over I don't look at the menu for the rest of the meal I don't second guess it I just say the first one that's a 7 that's that that's done and I'm able to do that right away

Shaan Puri

does this apply to everything is this marriage advice is this what what other things does this apply to where does this not apply

Sam Parr

I mean yeah I think like it could apply to marriage like the idea of like settling is like good like you settle for something that's pretty good and you can like make it great I don't know like is there any like data on like indian couples who have been

Shaan Puri

yeah like arranged marriages have like the same quote unquote success rate as like american marriages which are like involve dating and selection and courtship and then eventually you know engagement and then marriage versus like the way that indian couples do it is very much the menu that you you scan the the listing

Sam Parr

that'll do

Shaan Puri

engineer good family full set of teeth 7 out of 10 let's go yeah I will see you at the altar for the first time yeah yeah and then do high five

Sam Parr

no I I I just think that's how I order like I've done that for years it's just I just don't want I I want less choice and I think what warren buffett is actually saying similar which is like I know for certain that these 3 are fine enough therefore I don't care about the rest

Shaan Puri

yeah you you know that book the mark manson book settle art of not giving an f like I think that book it got so popular that it sort of got written off you know what I mean like do you ever hear a smart person being like man I learned so much from this book the subtle art like it's not like it's not like a cool intellectual thing to reference because it's pop it's like pop

Sam Parr

so popular

Shaan Puri

it's made of shame it's like if I'm like oh I really like justin bieber's music it's like okay what that's like a low status thing to to sort of say but there you know he brings up one good? In the book the book is basically around one. Which is life is not about caring about everything or not caring about everything it's about choose you know assume you have a limited set of you know f's to give in your pocket like you got 5 to give choose wisely choose the things you're gonna care about so like you know the menu you you just don't have to care to get that right and that's kinda like the warren buffett like you could just throw a bunch of things in this too hard pile and ignore them and then like there may be a few decisions where actually getting it right really really matters and then you have enough bandwidth to actually care about those things because you're not caring about everything

Sam Parr

yeah I think that's good shit what do you wanna do now

Shaan Puri

I wanna give you one other story have you heard this bill ackman story of his running into the fire when everybody else is running out story the his his 4 hour investment decision

Sam Parr

do you

Shaan Puri

know this one

Sam Parr

oh man I thought it was like literally a fire

Shaan Puri

well kind of it was the o eight crisis which I think to people on wall street felt like you know the the giant fire

Sam Parr

oh you mean bill ackman the famous twitter influencer he invests wait he he he's an investor

Shaan Puri

we're joking I hope you're still coming on later alright so he tells the story of it's 0 8 the financial crisis happening banks are failing the bear stearns fails and then this other bay bank is gonna fail people don't know what's gonna happen widespread panic and the bank wachovia was on the brink and basically what he did was he did a 4 he's like I had 4 hours I I spent 4 hours just looking at the business of wachovia and came to a decision in 4 hours that the panic was overblown and that wachovia would be saved and that wells fargo which ended up buying wachovia was you know far healthier than the market believed in that moment of panic and so he made a huge investment and it was like you know one of his most lucrative investments ever it was a 4 hour decision and it was made at a time of extreme panic when trouble was opportunity and when everybody else was just running out you know screaming he was calm and basically looked at the situation and assessed the risk return differently which is sort of like what you're talking about with the Scott galloway when when ftx just feels taboo in every way and it feels like you know the worst possible situation and he's like cool it's the worst possible situation at a price and there's a price for everything and the price you know for him to buy those claims at 22¢ on the dollar turned out to be the right price

Sam Parr

dude bill ackman's also like 64 I think yeah which is pretty cool we should create an index for ceos above 62 and I bet it'd be I bet it'd do alright

Shaan Puri

alright so he bought let's see a 178,000,000 shares at $3.15 a share so he spent $560,000,000 after 4 hours of thinking and his estimate was that it was gonna be worth more than double that and the next week wachovia bought it at about $7 a share so he basically doubled 500,000,000 in a week

Sam Parr

that's insane alright well that's cool bill ackman's great alright great story

Shaan Puri

great story alright

Sam Parr

I think that's a pretty good podcast what do you say

Shaan Puri

I think that was alright huge huge alright that's it

Sam Parr

that's the pod