The Boys React: JPMorgan Gets Scammed, Crypto Rally, & Discord Buys Gas App (#409)

Shaan Puri

You got caught, okay? You got got. I think we should create a set of the Forbes 30 Under 30. I think we need like the Madoff 1,000 for all the grifters and con artists that are out there. Alright, we don't normally let Ben have ideas, but we let the man out of the cage. He's got an idea. Ben, what you texted us this morning, you want to try something? What do you want to try?

Ben Wilson

We're doing a new segment, fellas. We're just going to quickly go through the news and have you guys react. People want to know what the fellas think about what's happening, so we're going to find out.

Shaan Puri

We're gonna call it... I'm gonna call this "The Boys React." I've been trying to make this "The Boys" thing a *thing* for a little while now, and it hasn't happened. But as I taught my daughter yesterday, **we never give up**. So "The Boys React" is gonna be where we react to the news here. Ben, you have some news segments or news stories, I guess. And Sam... Sam actually likes the news. Sam is into the news. I'm like...

Sam Parr

dude I I read the news like crazy you don't read the news

Shaan Puri

I'm an anti newser

Sam Parr

I just love drama

Shaan Puri

You know how some people are preppers? I'm like, whatever. That is where you avoid the news at all costs.

Sam Parr

Yeah, I just like gossip. I'm a big fan of drama. My life's pretty boring, so I need drama. I love the comment sections too.

Shaan Puri

Somebody said this the other day. I think it was Naval or one of these smart guys. They said, "The goal of the media is to make every problem your problem." I was like, "Oh, that's pretty true." That's kind of like what the news is. It's like, "Oh, there's a flood in this county I don't live in." Shit! Let me watch this for 20 minutes. Why do I care about this? This has nothing to do with me. Alright, but anyway, sorry to hear that news.

Sam Parr

okay start with the the most interesting one ben

Ben Wilson

What is it? We're starting a little close to home. Your friend Nikita Bier, his social app Gas, was acquired by Discord for an undisclosed amount. What do you guys think about your buddy Nikita being acquired by Discord?

Sam Parr

Give the background, Sean, about this guy. It's a pretty... I call this a caper.

Shaan Puri

I don't even know what that mean a caper that's what

Sam Parr

I mean, what is that? What is that, a caper? It's like a scheme, but it's like when you would rob a bank. You know, you'd be like, "What's that caper?"

Shaan Puri

Fool me once, shame on you. Fool me twice, shame on me. He just fooled the tech industry twice. Dude, he sold the same app! So, he built an app called **tbh** that was, you know, for teenagers. It basically quizzed you about people in your school, your friends, and asked questions like, "Who's the most cute boy in your life?" and you're like, "Oh, Sam." Or, "Who's the most likely to be famous?" and you say, "Oh, it's Ben," right? And then it would text them.

Sam Parr

be like somebody said you're cute

Shaan Puri

Yeah, somebody said, "You're cute. Download my app." And of course, that worked. He did that, and it immediately went viral. Because it went viral, Facebook buys the thing. Facebook has a system internally that identifies a "viral teen app" and then it's like, "Must acquire! Must acquire viral teenage app!" You know, like, get that young blood in here. So they acquired it. People had said it was $100,000,000. I don't think it's $100,000,000, but I think something more like $30,000,000 or $40,000,000.

Sam Parr

and this was in 2017 that he did

Shaan Puri

He sells the app promptly. The app gets shut down within like a year because there was never any retention in this app. He then sits at Facebook for four years and vests out the entire... every cent of his earnout, which is just hilarious in its own right. All he did was just tweet all day. You know, he worked in the new products division and half-released some apps, I guess. Then he leaves... you know, what's it called? Recidivism. Sam, you're a person guy. He leaves the jail of Facebook and does the same goddamn thing again. He creates another teen app for compliments. He tells us this in advance. He goes, "Yeah, I'm just gonna make an app that makes like $10,000,000 in three months." We both kind of laughed it off and were like, "Is that even possible?" Then he pretty much did it. I think Gasapp has made $7,000,000 in gross sales in like three-ish months. So he pretty much called his shot, which we do respect. But also, we have to clarify one thing: Sam, Ben said he's our friend. Is he still our friend after how insufferable he is in the group chat?

Sam Parr

So, he is insufferable, but I kind of like it a little bit. I think it's pretty hilarious. I love a good troll. I think that you're missing some of the data here. He sold the company to Discord. There's no release on price or anything like that, but some people can make guesses. Basically, between leaving Facebook and being at Discord, he creates this mystique. I call him the "Jewish Great Gatsby." He creates this kind of mystique where he's got this really lovely home in LA. He's single, or at least he's not married, and he hosts really fun parties. Then, he posts on Twitter about his opinion on going viral, and all these legends, likes, or quote legends start following him. They message him, and he's created this aura of sophistication, like he knows what he's doing with apps, which is true. It's all true; he's very talented. But it was pretty cool how it was kind of systematic. He has the talent, he has the skill, but he did a great job of also flexing that he had the talent and the skill. People start flocking to him, and he starts launching this thing.

Shaan Puri

And here's the analogy: he's like the guy who moved to a new high school as a sophomore and then didn't try to make a single friend. He just went to lunch and was totally content sitting by himself. He wasn't a loser; he was almost too cool to have to try. Because of that, everyone was like, "Who is this guy? Does he have a girlfriend in college? Oh my God!" He would just be like, you know, texting his college girlfriend. You don't know if they exist, but he just built this aura, this mystique around him by almost not trying. Whereas everybody else on Twitter is like, "Hey, follow me for more threads about how great I am," he's trying to do the exact opposite. He's just like only shitposting and, you know, hinting and posting little screenshots that make you think he's up to something big at all times.

Sam Parr

Yeah, you're like, "Who's this kid coming up to school as a 16-year-old on a motorcycle?" You know, like, this guy's got a neck tattoo. I can't confirm that he's a badass, but all signs point to it. That was his thing. He never denied it, nor did he confirm it, so it could be true or it could not be true. But the fact is, he created this app. Something happened with it; there was a crazy rumor that it was used for child sex trafficking, which wasn't true. He changed the name of the app, then he changed the name again a third time, and it takes off. He sells it. We're recording this on Wednesday. I believe it was announced yesterday. This is a wonderful caper. Not to say that Discord didn't get value; I have no idea what the truth is. The truth is probably that they're going to make something cool out of it. Who knows? But he pulled it off. He called the shot, he pulled it off, and he did it in such an obnoxious way. That's why I love him, you know?

Shaan Puri

I love guys like that. I love what he did, and honestly, I love the way he did it too. But the problem is, he's like a fart. A fart is amazing when you're more than 6 feet away, but you don't want to be too close to the fart. You know, the fart's not funny when you're right up against it. So that's the problem with this: we were too close to it. We had to hear him.

Sam Parr

and he loves smelling his own scent

Shaan Puri

He loves smelling his own fart too. So, you know, he will in our group chat just post every Twitter mention where somebody's like, "Oh my god, Nikita's done it again, blah blah blah, Nikita is the best." It's like, "Bro, I don't need your Twitter mentions posted here for me to see." It is completely... he's an insufferable fart, but I do respect what he's pulled off.

Sam Parr

Yeah, it's pretty funny. This is like an interesting thing. I can't believe he pulled it off, but he called his shot. I respect that. I think it's cool.

Shaan Puri

Also, he's done a thing like, you know, Mr. Beast does this thing where if you go talk to a pretty serious business person, they will reference a Mr. Beast, like a "Mr. Beast-ism," where they're like...

Sam Parr

well mister beast said

Shaan Puri

Yeah, yeah. Jimmy just says, "You know, we just try to make great videos," as if nobody else tries to make great videos. Or he'll be like, "You know, we're just willing to put more into our content and try to make the best content possible," blah blah blah. It's like, then if somebody goes and looks, they're like, "Bro, your video is put your hand on this car, and the last person to take their hand off keeps the car." Like, this is not, you know, you're not Steven Spielberg over here.

Sam Parr

But didn't we talk about this? Where we're like, "Look, we're gonna do this thing, and we're gonna send them a welcome letter. We're just gonna make it really delightful. It's just gonna be beautiful."

Shaan Puri

Fully well done, just beautifully done. If you do it like that, people start to buy in; they start to eat that little puppy chow. Similarly, Mr. Beast does this reality distortion where he makes you believe that he is the deepest thinker. He is creating the most epic, beautifully well-done content. He is a content author; it's just so thoughtful. Like, you know, "Watch me fart in people's ears." It's true that people... I'm on a fart kick today. People do like it; the content definitely works. But it creates this almost mystique around it. I feel like Nikita did the same thing where he'll tweet out stuff where he'll be like...

Sam Parr

just move the butt hole a little closer

Shaan Puri

He'll tweet out, like, "You know, the underrated metric in social networking is density. By far, it's more important than spread." And he's like, "If you're still measuring K-factor, you might as well still be using a BlackBerry." Right? And he would tweet out stuff that makes you think, "Damn, this motherfucker knows things that I don't know about social networking." Or he'd be like, "There are only five people on Earth that can tell you about building social networks. The problem is, they're all unhirable because their names are Mark Zuckerberg, Jack Dorsey, and Nikita Peer." And it's like... so, and by the way, I think...

Sam Parr

there's levels to this there's levels

Shaan Puri

So, I think he does a great job of creating. It's like, "Bro, you created an app that lets me say which girl in my high school is the cutest, and then it texts her, 'Somebody said you're cute.'" Right? Like, yeah, there's beauty in the simplicity for sure. But they almost make it sound more complicated and artistic than it really is. And trust me, it's not.

Sam Parr

We're not like every other social app you see. We're changing the world one popularity contest at a time. We are democratizing popularity.

Shaan Puri

He went on, like, CNBC or one of these news networks, and they were like, "We have here the founder of the hit teen app, the sensational app Jazz, Nikita. What inspired you to do this?" And he's like, "You know, we just believe that teens... the world needed a little more positivity and that we wanted to create a safe space for whatever."

Sam Parr

Dude, the only safe space he wanted was a vacation home in Tahoe. Exactly, exactly. You wanted to...

Shaan Puri

You know, you wanted to fly private. That's what you wanted. Hey, mission accomplished! I respect that. That is amazing.

Sam Parr

Yeah, his next app is going to be called **Pleeb**. But in all seriousness, he pulled it off. I think it's cool.

Shaan Puri

Yeah, I make fun of him because of how obnoxious he's been for four months in this group chat. But, you know, deep down, he's my kind of people. I respect what he's done, and I also respect the massive troll that he has played on everybody here. So, this is good.

Sam Parr

Speaking of trolls who didn't pull it off, Ben, we gotta get to the next story. Before we get to the next story, though, we do have to remind everyone we have a gentleman's agreement here. Everyone follows it, yes?

Shaan Puri

yes yes

Sam Parr

If you fall, if you listen to us, it doesn't matter what app you're using. You have to go to our YouTube page and click "subscribe." That's the gentleman's agreement.

Shaan Puri

I have my pen here am I gonna need this for the gentleman's agreement do I need to sign something or what do I do

Sam Parr

You actually don't see. All you have to do is go to our YouTube page and click "subscribe." You don't even need a pen; that's how easy it is. We made this gentleman's agreement incredibly simple. You go and subscribe, and then we work for you. We make this content for you, reveal our life, and dedicate our lives to you. It's simple. That's the gentleman's agreement.

Shaan Puri

I can't find this client info

Hubspot

Have you 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.

Shaan Puri

next topic then

Ben Wilson

From someone who pulled off a caper to someone who did not, JPMorgan Chase bought the college financial aid platform Frank for $175,000,000. It has now shut down the website and claims that they fabricated more than 4,000,000 accounts. In their first email to their customer list, they got a 70% bounce back. Founder Charlie Javice, I think it's pronounced, denies that this is fraud and claims that JPMorgan is just inventing reasons to not pay her. So, who do you believe?

Sam Parr

Well, JPMorgan... this lady was on, like, "That's easy." This lady was a Forbes 30 Under 30, and then just a couple of years later, she sells her app for 99 figures—$100,000,000+. It's pretty hilarious. They even found... they tracked it down. I believe they talked to the developers. It was like they hired one freelancer, I think, who they said, "Hey, can you make some test data to put in here?" He starts doing it, and the guy was like, "I think this is fraud. I'm out." So they found those emails, and then they did it again with another contractor who actually did do it. They convinced the contractor that it wasn't fraud. So they've kind of honed in on this. It seems quite clear that it's fraud. Bold move. Very bold move. Very easy to catch, though. Really stupid. Like, this seems like a really foolish mistake.

Shaan Puri

Yeah, this is like JPMorgan's got a little egg on their face for not noticing this because it's pretty easy to notice. I mean, the fact that they sent one email and 70% bounced back, right? That sounds like it wasn't this really sophisticated, you know, botnet that was simulating real users. It was just a bunch of fake emails in a database. So, you know, that sounds pretty easy. Also, there's an email where she's asking the professor who ended up doing this, "Will the fake emails look real with an eye check, or is it better to use a unique ID?" Right? So, like, "hand in the cookie jar," as we say around here. That means you got caught. Okay, I think we should create, instead of the Forbes 30 Under 30, I think we need like the Madoff 1,000 for all the grifters and con artists that are out there. You know, I think that maybe the "Caper 20" or something like that. We gotta come up with something here. I think we should just do a show annually where we rank the best cons of the year and give them their due. Let them put that on their bio.

Sam Parr

Dude, I'm down. And what's crazy is, when I sold The Hustle, we had, I think, 1,700,000 subscribers. We used this service, HubSpot, paid for it, and it was a service—I forget the name of it—but I believe it did two things. We uploaded our whole email list, and then I think HubSpot uploaded some of their emails. I don't remember exactly how it worked; I think they did it, and it showed the crossover—like how many we each shared. In a huge amount of emails, I imagine HubSpot has like 100 of 1,000,000. I have no idea, a lot of emails. And then I also think it checked for fraud. It took a couple of days to do this; it was pretty simple. There are just a few other services where they make fake data. The reason they do this is if you have a sensitive thing, like a bank startup, you put a whole bunch of fake data in it. It makes up people, and you can test your data because you can't use, like, you know, obviously real social security numbers when you're testing certain things. They would make up fake stuff just to test the software and make sure it all works.

Shaan Puri

Tonic, I think it's called Tonic.ai. It's the "fake data company." We talked about them on the pod. I love this idea; I've been trying...

Sam Parr

to invest

Shaan Puri

I forgot I need to invest in this

Sam Parr

Yeah, I think it's a cool thing. Also, with GPT-3, whatever it's called, I was thinking, "Dude, I should just..." I'm not going to do this, but maybe I should just make up fake reviews for all of my products. You could just make up fake reviews, or you could make up negative reviews for all your competitors' products. But I was like...

Shaan Puri

Are you looking for a nomination to the Beta 1,000? We would be happy to have you, but you do need to formally submit the application.

Sam Parr

Flip my app. Let me get you in. Yeah, and we have to make everyone pay a $500 application fee too, right?

Shaan Puri

but if there's no con going on on our side what what are we doing here

Sam Parr

yeah yeah yeah yeah well don't you wanna win the award it's an award

Shaan Puri

Yeah, we did a thing with Milk Road where we had this philosophy: we should bank on the future where we're going to cut out all advertisers and be our own advertiser. I mean, we only want to promote our own product and our own service in this newsletter. That's the only way to hold yourself accountable and not just acquire, like, **shitty** subscribers. So, we started this new growth channel. We were like, "Oh, let's try this thing out." We heard the rates are pretty good, so we tried it for about a week. The numbers looked pretty good; we were getting cheap sign-ups and they were opening the emails. That sounds great! I was like, "Hey Ben, just to double-check here, why don't you email all those people that signed up and just ask them a simple question? Like, you know, ask them a one-line question: 'What city...'"

Sam Parr

you're in

Shaan Puri

For them to answer, I just wanted to say, "Hey, I just wanted to know blah blah blah. I'm the founder of this thing and I just wanted to know blank." Because they're opening the thing daily, it looks like, "Okay, fantastic! Surely they would reply to an email from the owner of the thing they read every day," right? And he was like, "Dude, guess how many..." I forgot how many there were, like a couple thousand people on this thing. He was like, "Guess how many people replied." I was like, "Well, you didn't say percentage, so man, this is a number of people who replied." I was like, "I don't know, like 4, 100, 500?" And he was like, "2. We had 2 replies. Turned off the channel."

Sam Parr

oh my god

Shaan Puri

I was like, "Wow!" I know a bunch of other people that are still buying from this trap, this marketing player, this traffic source. I'm like, well, they're just dumping money down the drain if they're doing that.

Sam Parr

Dude, seeing Billy McFarland and the Theranos lady go to jail is pretty crazy. This woman could potentially go to jail. It's wild to think, do they not think just like 8 months in advance? It's like, man, this isn't like internet play games; this is like "go to prison" games. You're really screwing up a $100 million acquisition, and 70% of the users were fake. That is crazy! You go to prison for that type of stuff. It's just crazy to think that no one's there, and they're like, "Charlie, you know, do you like generic Oreos and bologna sandwiches? If yes, then this is great because that's what you're going to be eating for like the next 9 months in prison."

Shaan Puri

it's great generic oreos that's that's nice

Sam Parr

Well, not when it's every day and watered down Kool-Aid. But like, it's just... it's pretty wild that people don't think ahead. This is such an obvious scam. Also, JPMorgan, you guys suck, man. You guys gotta be on top of the ball. This seems pretty easy to figure out.

Shaan Puri

yeah fair enough alright what's what's next

Ben Wilson

Alright, Bitcoin and Ethereum are up 23% over the last week. Crypto is rallying. One major cause is the continued rise in inflation, which is at 6.5% annualized in December. The question for you fellas is: **Is crypto back?**

Sam Parr

no

Shaan Puri

you wanna just end it there

Sam Parr

I don't well I will give you that's

Shaan Puri

a great answer sam I will

Sam Parr

give you

Shaan Puri

A slightly good answer. Do I get to say, "I told you so"? No, I don't get to say, "I told you so." In fact, I might take the other side. Did I sell Bitcoin too early? Did I sell the bottom? No, I think that a lot of things are rallying right now. Why? Because people... I think it's just a simple answer. People did an end-of-year sell-off in December for tax loss harvesting, and a lot of people will reenter. That creates some upward momentum. When there's upward momentum, that makes people think, "Hey, is it coming back? Is this the rally? Did we hit the bottom? Is it time to buy back in?" So, people are buying back in. I don't think it's because of inflation in December. Because guess what? We had inflation in October, November, September, and now I guess too. Where was... you know, if inflation was driving crypto up, it should have been up all year last year, not down. So, I don't think that narrative holds. I think it's much more likely that, just like tech stocks are having a little brief rally, it's kind of like new year optimism. People are done with their... kind of like in crypto, there are no wash sale rules. So, you could sell, book the loss for tax purposes, and buy back in one minute later if you wanted to. I think people are just buying back in, and I think there's a little bit of people chasing momentum. That's my guess.

Sam Parr

Have you ever looked at the correlation between G-Wagon prices, the used Rolex market, and Miami penthouses, and how it relates to crypto? There's gotta be a correlation there.

Shaan Puri

I have

Sam Parr

not there's gotta be correlation there

Ben Wilson

we got

Shaan Puri

our best data people on it

Sam Parr

Did you see? Yeah, Ben, Google app. Did you see? I'm just going to start telling Ben to Google random stuff that are un-Googleable. Did you see that there was a guy in, you know how we have this Facebook group for MFM that we don't really check often? But there was a guy who was posting a bunch, and he created this website where you can sell your NFT at a loss for tax purposes. It's kind of interesting.

Shaan Puri

it was a great idea honestly

Sam Parr

what's it called

Shaan Puri

I forgot... I'm going to forget the name. Ben might actually know it. It was called... they advertised in the Milk Road. So, I remember seeing it there and being like, "Oh wow, this is actually a great idea." Hold on, Ben just had to chat. What did you say?

Sam Parr

it was like a really it was like a white a white guy with like blonde hair looks like unsellable

Shaan Puri

what is it unsellable nfts yeah

Sam Parr

yeah that's it

Shaan Puri

Unsellable NFTs. So basically, if you wanted to book a loss on your NFT, they would let you instantly get liquidity on it and get it right back. I think that is the idea, which is just a very useful, simple tool. So, you know, get on that guy for creating that. That was a smart, smart idea.

Sam Parr

so is this the segment dem boys dem boys react is that it

Shaan Puri

I think we're not ready for "dem boys" yet. I think we're still "the boys" until we get a little more street cred. Go to the YouTube comments and tell us: is "the boys" gonna stick? Can I make it a thing? Because I sure would like that.

Sam Parr

like just type

Shaan Puri

In just type a thing or not a thing in the comments. I just want to... I'll read the poll, and if it says "not a thing," I'll only continue for another 3 or 4 years. If it says "it's a thing," I'm totally validated.

Sam Parr

alright that's it