AI Santa and Four Other Simple Business Ideas (+ Vice Goes Bankrupt!) (#451)

Shaan Puri

This is such a good idea, by the way. This is a phenomenal idea. This is a 10 out of 10 opportunity.

Sam Parr

dude he pitched me to invest

Shaan Puri

Why have I not invested in this? Alright, what's up? We got a banger! We got a doozy! We got a two-man trio here, and it's just me and Sam. No guests today. Sam, what's up?

Sam Parr

nothing I've liked having guests actually normally I hate it lately I've enjoyed it

Shaan Puri

what's the difference

Sam Parr

but we should do more I like the people we've chatted with it's been better

Shaan Puri

yeah not like those other crusty guests in the past

Sam Parr

I have got a meaty topic. It looks like, I don't know if you have meaty ones, but you have four good ones that are smaller. Is that right?

Shaan Puri

Alright, I'm going to tell you about a business that I think is kind of interesting. Ben put this on my radar yesterday. He goes, "Dude, your sister should open a PlayStreet." I was like, "What the hell is a PlayStreet?" So I looked it up. Have you ever heard of this thing, Play Street Museum? Probably not, you know, you don't have little kids. But basically, imagine a good-for-you version of Chuck E. Cheese. Let's start with that as the analogy. Chuck E. Cheese is, you know, it's like... because I found the street that was like, "Come eat rat pizza at my child casino." So, dude...

Sam Parr

My parents used to say that I always thought the Chuck E. Cheese near my house had burnt down. But they just said, "No, it burnt down. We can't go anymore." I drove by there when I got my license, and it wasn't burnt down. I just thought it had burnt down; that was their excuse. They said it burnt.

Shaan Puri

Out, 16 years old, are just slamming the drive, the steering wheel, just like, "Goddamn it! It's been here the whole time!"

Sam Parr

It's like one of those facts your parents tell you when you're five, and you just believe it to be true. Like, totally. You know, I think I told you my father one time said, "Real men don't drink with straws," but he was referring to like a Jack and Coke. So for years, I was like, "Oh, we're not allowed to drink with straws." It's like the Chuck E. Cheese on Chippewa. It burnt down, you know? It's just not there anymore.

Shaan Puri

chuck e cheese on what chippewa

Sam Parr

that was the street chippewa

Shaan Puri

Too good! Alright, so this place, Play Street, is basically a nice, clean play area. It's like a dream playroom for your kids. They have a giant train set, some learning games, and the floor is all child-safe. You basically pay to enjoy it beautifully.

Sam Parr

done $15

Shaan Puri

beautifully done

Sam Parr

and you get to

Shaan Puri

Ben mentioned that he has been going to this place, and he sees that the one near him is doing **$50 a month**. I responded, "That's kind of a lot." He explained that they have, and I forgot the exact numbers, but it's like **7 sessions a day** at **$15 each**, with **25 kids** in the sessions at once. He said they are basically **75% full** in these sessions. If you do the math, that gets you to around **$40,000**. Additionally, you can host kids' birthday parties there on the nights and weekends, and some people do that. He estimated they probably make an extra **$8,000 to $10,000** in event revenue per month. Looking at the costs, he mentioned that rent is probably around **$5,000**. You also have your staff, like supervisors who oversee the play space and reset and clean it in between sessions. I think he is pretty sure this place is netting something like **$30,000 a month in profit**, maybe **$25,000 a month in profit**.

Sam Parr

they have tons of these locations yeah

Shaan Puri

So, it turns out they're franchising or something like that. I don't know if these numbers are true, by the way. This is like complete guesswork on my side, but I wouldn't be surprised. My sister owns some preschools in San Francisco, and the numbers are somewhat similar. Now, that's different; they pay a lot more for regular schooling. But it's interesting to me that these play spaces can do so well. It's like it's weatherproof. You know, with me, we go to Target three times a week. You might ask yourself, "Sean, what do you need from Target so much? Don't you know you can order online?" What I tell you is this is daycare for me. Like, I...

Sam Parr

Sean goes to Target so much that in his home, he has this like Target checkout play set and a Target grocery cart. You said you had to find it because it was like a collector's edition or it was all sold out everywhere, right? Did you, moms?

Shaan Puri

go crazy for this thing

Sam Parr

buy it on ebay and do a big markup

Shaan Puri

Yeah, exactly! These target mini grocery carts are loved by kids because they're used to seeing their parents do things. The whole mini grocery checkout and Target cart is in high demand. I go there often because you have to kill time. It's like, how do I kill 90 minutes? Ideally, I would do something that's enriching for them. You know, worst-case scenario, we just go to Starbucks or Target or whatever, and this would be better. I would gladly pay $15 for my kids to be able to go play in a place that's not a park, which is weather-dependent. So, I think these are really cool ideas. Other than that, I think this play street thing is a cool idea, and I could see this franchise doing decently well. Probably not the best franchise in the world, but I think it could do decently well.

Sam Parr

where are the locations

Shaan Puri

they're like texas there's like none in california none in new york it's like bunch of like

Sam Parr

not but what are they it's like a it's like a it's just a commercial space

Shaan Puri

So, like, you don't need any food stuff. It's just a blank retail space.

Sam Parr

yeah I mean their branding is pretty pretty good it's like it's

Shaan Puri

Kinda like how escape rooms work. Escape rooms operate because they require no specific real estate; they can function in a very small footprint and only take about two staff members to run at any given time. So, escape rooms are actually fairly good franchise businesses, or they were for a period of time. Now, unlike escape rooms, which are kind of uncertain—like, you don't know if they are a fad or if they're going to be popular three years from now—these businesses you kind of know are going to be popular because it's like, you know, every parent has this problem. Alright, let me tell you about another thing like this, another problem you haven't really thought about. There's a business called 260 Sample Sale. Have you ever heard of this?

Sam Parr

no let me Google it

Shaan Puri

It's like kind of a cool New York thing. So, what they do is any e-commerce or fashion brand has a ton of photo samples or product samples that they get from their manufacturer. They use them in their photoshoots to create the pictures on the website or for advertisements or marketing, or whatever. Then, those samples don't live in the warehouse; they live where the photographer is or where their office is. You just end up piling up boxes and boxes of photo samples over time. Because, let's say, most fashion brands or apparel brands have thousands of SKUs. For each SKU, you had a sample made before you had the production one made. But you didn't just have one sample made; you had each of the sizes made because you needed it for the photoshoot to be able to show the range or to cast different types of models. So, what ends up happening is you get a ton of these samples over the years that you can't really get rid of because it's not worth your time. This business popped up again, like, you know, the markets are like water; water is going to just float everywhere. There's an empty crevice in this market here for getting rid of these samples. So, what they do is 260 Sample Sales. They say, "Send us your stuff, brand, and we will host a pop-up where we're going to sell you along with a bunch of other brands all at a great markdown." We have high-quality brands at a markdown because these are samples. So, you're not training your customer that, like, "Hey, this is like TJ Maxx discount" or something like that. It's a good story. These are samples that you're going to get for less. They'll just give the brand a commission back. They'll say, "You know, every time we sell something of yours, you get a small commission." It's better than nothing, and it takes it out of your space.

Sam Parr

How'd you find this? This is totally out of your... Dude, they're only based in LA, Miami, and New York. The pictures are like smoking hot women, and then it looks like a picture of a huge line out of a warehouse in Soho.

Shaan Puri

so hot women and women

Sam Parr

of those things

Shaan Puri

I don't do it you know your boy doesn't do it yeah so yeah

Sam Parr

none of this checks your box

Shaan Puri

Yeah, your boy's so married and so in the house that I did not go to this. You're right, but I'm in the e-commerce world. I have my own e-commerce brand, and I know and talk to a lot of other e-commerce people. I know about this problem, and I heard about this solution. I think it's very clever; I think it is a smart thing to do. I also think these guys are not that well known, and they're only doing it in certain areas, certain locations. I think this could be done many times over. I think an aspiring Chrysler could do this by vertical. You could go get a bunch of health and wellness, fitness brands, or beauty brands and say, "Hey beauty brands, send us your products, and we're going to have stations where you could demo them, sample them, and then buy them." I think you could do this for other verticals. You could just do this in other places. If these guys are doing it in New York and LA, I think their locations are like Beverly Hills and Brooklyn or something. Do this in Texas; do this in different parts of the country. I think you could have your own little farmers market; it's your own flea market that you get to stock and run, but you don't have to do it as a full-time job. You could do it every quarter or twice a year or something like that and still have it be successful. So, I thought this...

Sam Parr

Was it cool? Do you know Kingsford charcoal? You've seen it; it's like the most popular charcoal with the blue packaging. Do you know how that was created?

Shaan Puri

I think it's a byproduct of something else right what what was it a exactly product of

Sam Parr

wood ford

Shaan Puri

oh ford

Sam Parr

So, Ford, when they were making cars, had to have all these furnaces making metal. They took the leftover char and thought, "Why should we waste this?" So, they pushed it together and compacted it really tight, and that's how charcoal came to be. That's like a byproduct business, and I love byproduct stuff. You know, it's kind of like... it's tangentially related to the sharing economy. I love that stuff! I love byproduct innovations, and this is one of those. That's awesome! Their website is really challenging to use, which I think is actually a good sign because I can't tell—apparently, they do sell stuff online, right? But it's mostly... One thing I do hate is whenever I go to New York and see people waiting in line to buy Supreme clothing. Like, just put the gun in my mouth, man! I'm never doing that. I'm not going to wait in line and spend my valuable time to purchase a $1,000 item that should cost...

Shaan Puri

More than that is bottle service at a club. It's like the guys who are paying, you know, $7,000 for a table and paying $1,000 per bottle that they could literally walk across the street and buy for $40. It's literally the "chump tax." It's like, "Oh, you're a chump? Come to this line, please, please, please." Yeah, yeah, yeah, come right ahead, come right ahead. You walk through the chump line.

Sam Parr

I'm not a man of God, but when Jesus made the list of the seven deadly sins, the example of debauchery and gluttony was people waiting in line for five hours to go to a Supreme store. I mean, whatever. I see that stuff and I'm like, "This is the worst form of consumerism." I cannot stand this. So, they have these pictures here, and it turns me off.

Shaan Puri

but man but

Sam Parr

I would maybe buy this online, but I ain't standing in line. I'm not standing in line with a bunch of these people to buy this stuff. I can't stand that. Whenever I see that, it makes me want to throw away everything and go live in the year.

Shaan Puri

Here's an idea you're gonna like: **Host Share**. So, I got a DM from a guy named Michael Fisk, and he shows me this thing called hostshare.co. He goes, "Here's the situation: You have a short-term rental, right? A property." [To the audience] Shout it out so people can go stay at marathonranch.com. Marathon Ranch! Marathon Ranch!

Sam Parr

is it dotcom yeah or dotco I don't know yeah dotcom marathonranch.com

Shaan Puri

Sam comes by, has dinner with you, and gives you a massage. It's fantastic! So, you don't have 100% occupancy, right? You have some nights that are unused, is that correct?

Sam Parr

a 60% occupancy rate is is a profitable monthly

Shaan Puri

So, you got, let's say, 40% of unused nights. What are you doing with those nights? This is the sharing economy, bro. What are you doing with those nights?

Sam Parr

sitting there

Shaan Puri

Michael Fiske has an answer for you. His answer is to **trade your unused nights** with other hosts who have unused nights. You stay for free at their place, and they stay for free at yours. I think this is a really smart idea. I don't know how many hosts there are... Let's Google this. How many hosts on Airbnb? I don't know how many properties they have or how many hosts... 4,000,000. Okay, so you have a market of **4,000,000 hosts** that you could create an inter-host network with. Basically, you say, "Hey, if you're a host, you get to travel for free." Now, I don't know how they make things equal. For example, if your property is way more desirable than somebody else's, how do you normalize the values across properties? We calculate how many shared nights you would be staying in exchange for 21 days of travel per year. The formula is established: higher value properties share fewer nights, while lower value properties share more nights. For instance, if your average night is **$500**, you'll share approximately **15 nights** in a year. Whereas, if your property is **$100**, you have to share **45 nights** in a year to take the same minimum. So, what's your property per night right now?

Sam Parr

$700 $700

Shaan Puri

So, you're going to basically... what they'll say is, "Hey, make your thing open for 12 days out of the year, and then in exchange, you get 21 days of free booking in this network." Would you take that deal?

Sam Parr

That's, yeah, in fact, I do. So go to **livekindred.com**. It's **kindred**: K-I-N-D-R-E-D, and then **live**.

Shaan Puri

oh okay that's how you exist

Sam Parr

So, I use this service. My dream situation is to find another couple that has a similar style or wants what I do, that lives in New York and wants to be in Austin. We could just swap. I've not found a good solution for that, but there's this thing called **Live Kindred** that I have used. With this service, someone will stay at my home when I'm not there, and then I get credits for the marketplace. For example, I'm going to Taos, New Mexico, and I have 8 credits because someone stayed at my house for 8 nights. So, I'm going to go and stay somewhere else for free, and it's actually pretty cool. I wish it was just a direct swap, so I could do 6 months here and we could just swap 6 months for 6 months. But I've been using services like these. I actually think that... I don't want to be bold enough to say this is the future, but I think there are a lot of people like me who split time. Finding a place for those who split time is really challenging. I'm always looking for a good solution.

Shaan Puri

Yeah, that's good. I didn't know that something like this exists. So, with this, do you...?

Sam Parr

it's hard and and I think they raised money by the way from andreessen wireless

Shaan Puri

Is that right? You give up your space in the network, but do you still have to pay, or is it free?

Sam Parr

I think there's some type of service fee. Frankly, I don't think it's a good business. I don't understand how they make money. When I signed up for it, I was like, "I'm getting a lot of value, and I'm not spending a lot." I don't know how you guys are doing this. So, like, that's it.

Shaan Puri

like vc subsidy right now you're getting that andreessen horowitz value exchange

Sam Parr

Yeah, so, we're trying to use our credits quickly because I think... I don't know if they're going to stay in business or not. I don't understand how it works, but it is awesome if it does work.

Shaan Puri

that's hilarious

Sam Parr

So, yeah, I like these types of businesses that solve this problem. Is Hostshare populous, or is it? I think...

Shaan Puri

the guy just created it

Sam Parr

yeah if you could pull it off it's pretty amazing

Shaan Puri

it's a smart model

Sam Parr

I think it's hard to pull off I because like I don't understand how hosea makes money

Shaan Puri

I think they have to charge a flat membership. So, I think they have to basically say it's $500 or $1,000 a year to be in the network. You know, you only pay if you use more than 5 nights or something like that. Make it a fair trade. I think, basically, they're trying to get a subscription. They're trying to say, "Can I get 50,000 people to pay us $1,000 a year on this subscription?"

Sam Parr

There are a few things like that. I forget what the big one is called, but there are things like luxury rentals where I'm almost certain that they just partnered with hotels. You pay like $5 a year. Do you know what I'm talking about? It's called Avanta.

Shaan Puri

yeah I don't

Sam Parr

know the name

Shaan Puri

of it but I know what you're talking about it's like you get access to this I can not work for boutique hotels

Sam Parr

Yeah, and I've looked into them. When I originally saw it, I didn't have enough money. I wasn't in the spot where I could do it. So, I've been looking for things like this. I actually really like these businesses. There's one company called the NerdWallet of England. I forget what it was called; it's called the Money Market Swap.

Shaan Puri

yeah yeah or

Sam Parr

There's a guy named Simon who started it. Basically, he started like the nerd; he began a blog that compared mortgage rates and things like that. If you bought or got a mortgage through him, he received an affiliate fee. I think it's called Super Money Market; it's publicly traded in England. Anyway, the guy sold all of his shares after he took it public 20 years later, and he now owns something called Simon's Resorts. So, it's this rich guy who went and bought around 50 really nice homes around the world. I actually don't know how they frame it up, but it seems like this is his personal stuff, and you can just use it when he's not there. I think it's pretty cool. I love these types of things because I think they're just neat to buy all this stuff and share it with everyone. I think it's really cool.

Shaan Puri

Yeah, I like that! Can I tell you about a little random experiment I'm going to do? So, I want to make, for this Christmas season, a deep fake Santa. Basically, you're going to be able to come on the site and pay $35. You type in your message; you could say, "Hey, wish my daughter Jessica a Merry Christmas. Tell her great job with the soccer thing and be nice to her brother."

Sam Parr

big sports fan

Shaan Puri

Great legs and soccer! And so you'll be able to type in that message, and then it'll basically create a video that's Santa saying this to you. So what I'm going to do is I'm going to try this thing that Replit has. Replit has this new feature where you could basically buy developer cycles. Have you seen this?

Sam Parr

no but say

Shaan Puri

Not can go. So, let's say you need something built. You can basically just go and buy it. You could put up a bounty. So you're like, "Alright, I want somebody to build me this deep fake Santa. It's gotta do A, B, and C." You put up a bounty, you put up the dollars, and then people will just build it for you. You basically have an award, so it's kind of like a...

Sam Parr

like 99 design code

Shaan Puri

Yeah, exactly. You do it in their currency, which is called cycles. They kind of help you estimate roughly how many cycles this should be for this to work out. But I haven't used it yet. I really want to try this bounty thing. I think it's great because...

Sam Parr

So, you're going to pull an Emerson? You're going to be this smart guy who just does a money grab.

Shaan Puri

No, I'm going to bring... I'm going to pull Justin Mears. I'm going to bring the joy of a Christmas... of belief, really. Of the belief in magic to millions of kids around the world this Christmas. What are you doing for the children this year, Sam?

Sam Parr

Is that your... you're going to do the Justin Beiber pitch? So, we had a problem. We wanted to bring joy to children, but we thought, "What better way to do that than a $50 card?"

Shaan Puri

To do full of war and divisiveness, joy is all we have left. It is what they call the last refuge. People say that magic is magic, but the magic is getting people to believe in the magic. And how do you get people to believe? Using deep fake technology, and that's what we...

Sam Parr

At Deepsnap, how do you get people to believe in your lie? We're going to create a fake cartoon about it.

Shaan Puri

a fake person we're gonna charge real money and it's gonna be a fantastic

Sam Parr

result are you really gonna do this yeah

Shaan Puri

because I really wanna try this bounty thing oh I wanna play with this I think this could be called

Sam Parr

what's the url gonna be

Shaan Puri

I think it's gonna be called "Santa's Real," you know, give it a .org.

Sam Parr

yeah let's make all of our businesses dotorg just so we could like

Shaan Puri

just so we can be familiar to other

Sam Parr

People, yeah, for a long time I wanted to make my business .NET so people would think that I've been around for a long time.

Shaan Puri

But, your personal website has to be a .net, and then your business should be a .org.

Sam Parr

Yeah, but .org is way better. I'm going to do a .org; that's way better than that stupid ass .xyz crypto bullshit. I want a .org. Is that what they are? Or like .ai, .io? If you have a .io, like I'm not into that. I want a .org.

Shaan Puri

we are a for profit dotorg it's fantastic

Sam Parr

is that what dotorg means it's a nonprofit I think

Shaan Puri

you have to be a nonprofit for taking a dotorg

Sam Parr

but who makes that decision is there like a governing body

Shaan Puri

To present your EIN for your 501(c)(3) or something like that, I have no idea. I've never done this. To be clear, I've always been firmly in the dot-com camp, but I'm ready to... I made my nut and I'm ready to go and get my dot-org on for the rest.

Sam Parr

Of my life, that's like on stage. Andrew, or backstage, we were like, "So what are you doing?" and he used the P word.

Shaan Puri

I know philanthropy slandered us with the philanthropy

Sam Parr

Yeah, it's like, "Dude, if you don't say that word around me... Don't say 'philanthropy', don't flex with me, bro." And so now, instead of "philanthropy," it's "dot org," you know? A Wilkinson.org.

Shaan Puri

go ahead and email me there I can find this client info

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Sam Parr

Today, I want to talk about **Vice.com**. The reason I'm discussing them is because they are about to declare bankruptcy.

Shaan Puri

Right, cue the Michael Scott clip where he just walks out and declares bankruptcy. I was thinking about that. I love that clip.

Sam Parr

Now, yeah, I agree. Most every joke I’ve said on this podcast, I’ve stolen from that show. The reason I want to talk about them is not because of Vice, but because of the story of the founder, Shane Smith. If you’re under the age of 26, Vice probably means nothing to you. They’ve actually very quickly lost relevancy. To give you some background on what Vice is: Vice originally was a punk rock magazine based out of Montreal. It was three Canadian guys, one of those guys being Gavin McKinnon. Do you know who Gavin McKinnon is?

Shaan Puri

no who's that

Sam Parr

have you have you heard of proud boys

Shaan Puri

proud boys like the political thing

Sam Parr

yeah he started proud boys

Shaan Puri

okay

Sam Parr

Which a lot of people don't realize. So, it was like these three punk rocker guys, and Gavin McKenna was one of them. Shane Smith, who I'm going to talk about today, was the other one. Basically, the way it started was they got a grant from the government, which allowed them to launch this magazine. It started as a skateboarding punk rock magazine, and they would write these amazing articles, like "Vice's Guide to Drugs." They would write all these stories about drugs and use the N-word all the time. They would like... wow, it's kind of like, you know how in the punk rock community, they sometimes talk about Nazis and use racist language? They do it as a shock factor because they want to be in your face. That’s what Vice was all about. I don't know if you remember the old school covers of these magazines, but it would be like a tab of LSD on a hot chick's tongue. Do you remember it? You don't remember it?

Shaan Puri

I remember reading something in Vice magazine. They called it just "zines." Is there a difference between a zine and a magazine? Because that's what I heard.

Sam Parr

Just the culture... If it's someone's zine, it's typically more of a punk rock thing. Whereas if it's a magazine, it could be like GQ. Okay, gotcha. So you've never seen these, but it started out as hardcore punk rock where they would write articles about doing drugs, having sex, like just rock and roll stuff. That started getting picked up, and so they started this company in '94. But in '99, they moved to New York, and that was like where things changed. That's right where the internet just got started. What looks like you're looking at something funny?

Shaan Puri

I'm looking at the magazine covers, and you're saying "rock and roll." I was just thinking about how this is what cool is. Basically, influential people, like musicians, are the ones who do this stuff. It's like the tongue with the LSD on it. It's like someone just biting a tuft of hair. I don't know why there's a bunch of hair in someone's mouth. I was also thinking about "pod and roll" and how it would be just like someone entering a cold plunge or someone meditating. So it's like, yeah, we're part of that pod.

Sam Parr

roll movement

Shaan Puri

Yeah, we're the famous five casters. You know what I mean? They're all just sauna, cold, hot, cold. Man, it's crazy! The temperature variance is insane.

Sam Parr

things have changed

Shaan Puri

have changed

Sam Parr

things have changed

Shaan Puri

cool has changed

Sam Parr

yeah the definition of cool has changed which is actually part of the thing I'm gonna discuss but so the internet starts coming around in the late nineties they raise a little bit of money like $2,000,000 they moved down to they moved down to new york and that's where they like really get going and so they create the website vice.com originally was a magazine it was a free magazine that they would just hand out and they would make money off ads and it would be the 3 of them writing articles and they would do something that I used to do all the time where they would have like fake authors so it would be like someone who wasn't real just fucking making up stories is really what it was which is you know it was an entertainment magazine so that's fine but they start growing and it takes off after a handful of years and so they kinda created this thing at the time now we just know it as like branded content where it was now sometimes people call them advertorials things like that but basically their whole shtick was we're gonna make awesome content and we're gonna get the eyeballs of millennials which back then millennials were like the gen z today you know it was like the elusive hard to reach audience and they said we're gonna reach these millennials and we're gonna make the best content and we're just gonna plaster your logo on there and that's gonna be good enough for you and this is like pre facebook so like performance advertising wasn't really much of a thing and so it was like the way to advertise and eventually they blow up and the important part of the story isn't exactly that they blew up because they did but the story is like the antics that they went along and and and built this thing with and so they raised money from rupert murdoch who's you know the founder of fox they raised money from all these amazing people viacom eventually they raised money at a $6,000,000,000 valuation today they're nothing but they still make $600,000,000 a year in revenue and so I wanna talk about some of the crazy stuff that the founder did as well as how their business model works and so have you ever heard of the the guy shane smith who was the ceo and kind of the main man never alright so he had a whole bunch of interesting things that he did so if you Google shane smith you'll probably see like pictures of him like it's a it's a a guy who almost looks like a punk rock santa claus where he's kinda like a bigger guy and he like you'll see like he's got sleeve tattoos and you'll see him shirtless all the time and smoking a cigar do you like see any pictures like that

Shaan Puri

He looks a little bit like the guy who's the number two guy in *Billions*. I forgot what the guy's name is, like, not Axe, but his right-hand man.

Sam Parr

he looks

Shaan Puri

A lot like that guy. If that guy had just like chest tattoos, if he just had a tattoo around his nipple, there'd be this guy.

Sam Parr

dude so he's just like crazy and so vice originally the way that they became respected is they would do all this crazy stuff but it was him doing it shane the ceo and so he would go to liberia during when they're having a civil war and he would just bring a camera and just get dropped in liberia and figure it out in 2013 he traveled to north korea because he organized a basketball game between the harlem globetrotters and the national team of north korea and that was like the big shtick and then eventually do you remember hearing about dennis rodman going to north korea that was for a vice documentary and they would make these like free documentaries and they would post them on it was originally their site and then they moved to youtube and they would get lots of views and they would like put like an intel logo on there and that's how they made money and so they and so he was known for walking around his office of like vice and I've been to the office it's like as magnificent as you would think it's like the coolest of the cool and he would walk around shirtless and he would just like say crazy stuff he was known for just being like this wild guy and so one time when he hired a ceo her name was nancy this was recently he said we're the monitored we're the modern day bonnie and clyde and we're here to take all your money and he would just say stuff like that all the time there was another time when they were just getting started and I believe it was intuit they came was it intuit or ibm one of those they came to the office in order to pitch or vice was gonna pitch intuit and so what they did was there was a really shitty office at the time 24 hours before the meeting he built like a glass conference room so it looked legit and so you could see your employees and then he went and hired a bunch of like actors and got a tons of friends to come and work in the office to make it look like they're important because he always like said something like we don't want them to think that we're or what did he say we want them to think that we're rich like they're like he was like we're gonna act as it right and he did and they eventually got a $25,000,000 deal from this company and it worked out and there was another time where there was this in 2003 vice made their documentary on themselves and he tells a story about when they started the company how he got arrested in bangkok bangkok and he said something like a few years later they're like yeah remember that story you talked about being imprisoned in bangkok and he was like yeah yeah I remember that and he goes tell me more about that he goes well I made it all up we needed a story on how the we needed a story on how the company started and I'd heard the story from someone else so I just took it over and we needed and I just had to take make it mine

Shaan Puri

he's like I watched the hangover 3 and decided that was my life

Sam Parr

Dude, he would do crazy stuff like that all the time. There was another time when I was reading this interview with him. There was this headline about how he spent $300,000 at dinner in Vegas. A reporter asked, "Did you really spend $300,000 for dinner?" He replied, "No, it was $380,000 plus tip, and it was barely dinner; it was mostly wine." So, he's just... the guy is wild. He even tells crazier stories. He said, "I would be at the party and would just go get wasted, take coke, have sex with girls in the bathroom, and then afterwards mail my advertisers drugs because I knew if I sent them a bunch of drugs in the mail, they would keep buying ads with us." He admits all this stuff. It's crazy, man.

Shaan Puri

this guy's been gone bankrupt I just don't get it

Sam Parr

well so check this out

Shaan Puri

Did we go wrong? Was it when we mailed our customers drugs, or when I did drugs during the day while working with my shirt off and having sex in the bathroom?

Sam Parr

Dude, he tells a story about him and his co-founders having threesomes with people who are going to buy ads from them. He says that they were like mobsters who accidentally clanked shovels together while they were burying a body. If that analogy makes sense. So when someone asked, "What's it feel like having sex with your co-founder? Do you guys ever touch?" He goes, "Yeah, but it's just like two mafia guys whose shovels accidentally clank while we're preparing the body." Wow, this guy is a showman. He's a total showman. Of course, it didn't work out well.

Shaan Puri

but in all seriousness didn't totally blew it

Sam Parr

It didn't work out well for the company, but it worked out for him. So, Google "Shane Smith house."

Shaan Puri

I see a $50,000,000 house I I'm I'm 2 steps ahead he already googled it

Sam Parr

So, there's this amazing article that came out in 2008 about Shane Smith. It says, "Shane Smith's Living Large," and it documents his new house that he purchased for **$30,000,000**. I think it's this beautiful mansion up in LA somewhere. Well, he recently sold it for **$50,000,000**. So, like, this guy has totally come out on top of this whole thing. It's just really fascinating that he basically spent about 15 to 20 years doing his thing, right before the tide changed. These guys were the opposite of woke, and now Vice is like the wokest of the woke. But right before that change happened, he got his money, he got out, and he bounced. He hired a CEO, and his story is super, super fascinating. So, you've never heard of him?

Shaan Puri

I've never heard of him. I briefly knew that Vice started as a zine or magazine. What's your main takeaway? Because this is entertaining. This guy's like Felix Dennis, just like reincarnated. So, what's your takeaway? You're a media guy; you're a bit of a wild man. What's your take on this?

Sam Parr

not that

Shaan Puri

Wild! I mean, this guy makes you look like a... you know, choir boy or something. But what are your takeaways from this story?

Sam Parr

I have a bunch of takeaways and so but first let me tell you how their business model works because that's part of my takeaways so a lot of people don't realize how they make money they're going bankrupt now but they still make 600,000,000 a year in revenue but it's just like wildly unprofitable so they their company it's basically like I consider it like a mortgage backed security for media and so do you remember like the mortgage backed securities of 2008 where it was basically like banks would buy like tens of thousands of mortgages in one tranche turns out like 4,000 of the 10,000 were shit that's exactly what vice does and so they they got famous because they only had like 20 or 30,000,000 monthly visits to their website vice.com which isn't a ton that's not a ton for 100 of millions in revenue what they did was they did they partnered with omgfax.com distractify.com and all these other clickbait websites and they would roll that up and so they would call them part of the vice network and so they would tell people you know like intel or whoever the big advertisers are look we we reach all of millennials and we have a 100,000,000 200,000,000 monthly uniques to our network in reality it was on like shit sites like you know all those other things and that was like once that came out it was kinda frowned upon and then the other way they made money was they had a agency called virtu like vice and virtu which is pretty clever but their whole company is basically a creative agency so they would make content for snapchat facebook and then eventually hbo and they would get paid like a service fee basically for it and it was basically one big agency and that's how they made money which brings me to the takeaways takeaway 1 if you're going to be a company that makes money from multiple different streams of revenue you got to nail 1 first they didn't even nail 1 like stream of revenue they had like 5 other things that added up to a lot but not one of them worked wonderfully at least not enough to be profitable so that's one major takeaway the second major takeaway is they'd always say they're gonna be the next disney they go we're gonna be a mini disney shane once said we're worth 10,000,000,000 right now but conservatively I think we're gonna be worth 40 or 50,000,000,000 in a couple of years that couple of years would have been like in 2,020 or something never worked out he goes we're going to be just like disney except with like cocaine didn't work out why because no one likes them if you're going to build the next disney you got to be like people got to love you you know people love mickey mouse they don't really love like shane smith you know and all that stuff you know they like them they don't they don't really love them so if you're gonna be a media company like that you have to have something that people love the next thing is news if you're gonna be in the news business that's really really hard because you have to stay relevant and I actually think that you should be something that typically people don't grow out of but they grow into meaning a wall street journal a new york times if you're gonna be like one of these publications economist financial times things like that you wanna grow into it meaning like as you get older you want to like aspire to be able to read it and like it and understand it and brag about it whereas with vice it was like I'm no longer 28 years old reading about this stuff is not exactly cool and + the people working there you kinda look silly I've always thought about this about bar barstool sports I'm like dude dave portnoy is getting older like some of these antics are kinda not gonna be cool anymore they're more so like pathetic do you know what I mean and that's kinda happened with vice

Shaan Puri

Yeah, you basically either stay with the shtick and just start to look like a clown as you get older, or you have to sell, get out, and change your life. You know, change your lifestyle. It's pretty interesting because it's very hard to let go. Because, if you weren't such a nut, you wouldn't have achieved this level of success in the first place. So, it's kind of like a self-fulfilling prophecy. On the second part of it, you know, it's very easy to get addicted to the character, the fame, the money that comes with acting a certain way. You're being rewarded, rewarded, rewarded. Then now you're 57, and you're, you know, you're Vince McMahon now, or you're Hugh Hefner now, or you're whoever, right? It's hard to leave the character, even though you might actually, maybe you actually should grow out of it. Anyways, I'm glad that these guys don't grow out of it. It's for our entertainment. Thank you, thank you for your service, Shane Smith.

Sam Parr

It is. And the last two things: if you're going to build a media company, avoid New York City. When you're a creative services business, you need talent arbitrage, and it's really hard to do that when you're in a high cost of living city like New York. Also, you saw that they became this "woke" company, which I don't entirely believe in. The saying "go woke, go broke" comes to mind. I do think that there's a niche where you can make money in any area; it doesn't matter if you're woke or not. But they changed that approach when that wasn't originally what they did. I think they changed because they moved to Williamsburg and everything like that, and they totally altered their shtick. But the last thing is actually a compliment. You texted me the other day right before you were about to speak at this conference, and you said, "What did you say? About to drop some showmanship on these bitches?" Is that what you said?

Shaan Puri

show these bitches some showmanship

Sam Parr

Yeah, and that is totally true. That is what he did. Frankly, even though it seems as though he conned a lot of people, he kind of got the last laugh. He had showmanship throughout the entire thing, and had it worked out, it would have been a lot cooler. But having showmanship... it totally works. By the way, there are like stories.

Shaan Puri

Ask me, "Oh, do you get nervous before public speaking?" It's like, I don't know, man. If I was nervous, I probably wouldn't be thinking, "I'm about to drop some showmanship on these bitches." It's a different attitude, exactly, versus "I hope I don't mess up."

Sam Parr

Dude, throughout his career, there are so many crazy stories about this guy. It's all about showmanship. He does the wildest stuff where he tells stories. The way he tells stories captures your attention. Some of his employees were like, "When I'm with Shane, I feel like I'm going to war, and I'll go to any war with him."

Shaan Puri

right

Sam Parr

Or there's like, Johnny Knoxville did an interview and he was talking about Shane. He goes, "He's the greatest leader you could ever have, also the greatest drinking buddy." But... and like he...

Shaan Puri

does this what a bio

Sam Parr

Yeah, he has all of these amazing one-liners, even if they are full of shit. But whenever I hear him talk, I'm like, "Oh my God, I believe everything you said." For example, have you ever heard me say, "The best way to circumvent someone's bullshit detector is to not bullshit"? I've used that line a couple of times; I stole it from him. He has all these amazing one-liners, and that showmanship is absolutely captivating. There's a story about him with Rupert Murdoch. Rupert Murdoch and Shane are walking, and Rupert Murdoch is like, you know, if you see the movie or TV show *Succession*, he's like that guy. He's like a mean old man. Shane sits down with them and says, "You don't have millennials, but I do. I have everything you don't have." And he's talking to this billionaire.

Shaan Puri

Is it testosterone the value of my youth? What are the things I don't have? Alright.

Sam Parr

But he just totally swings above his weight, and I think it's really fascinating to learn from this guy. So if you're listening to this, Google "Shane Smith." There are some crazy stories about this guy.

Shaan Puri

Good segment by you! Good job! I like that one. I actually have a spin-off of that. You mentioned a company in there that I was like, "That sounds familiar. I kind of remember this name." So you said "OMG Fax." Do you know who started OMG Fax?

Sam Parr

I do I forget his name but he's an oddball right

Shaan Puri

This guy, Emerson Sparks, and I met Emerson Sparks maybe 10 years ago. He was building OMG Fax and a network called Dose Media.

Sam Parr

he's like a genius right like

Shaan Puri

I met him and I was like, "Wow, this guy is super smart." I actually think that if he had just applied himself to some other areas, he would have totally done some absolutely amazing things. Everybody would know his name versus just kind of me and half of you knowing his name. So, I'm going to tell you a couple of things about Emerson Sports. When he was 12 years old, he built a website called MuggleNet. I don't know if you're a Harry Potter fan, but I am, and I was on MuggleNet all the time. I used to love this site because it was the number one Harry Potter fan site in the world, with tons and tons of traffic. At that time, Harry Potter was like Justin Bieber; it was super, super famous. In between the books, people wanted a place to discuss, to post theories, to post fan fiction, to debate what should have happened, and so on. MuggleNet, when he was 12, became this super popular site, getting millions and millions of visitors. When he was 18, he published a bestselling book. His bestselling book is called, I think, "Harry Potter Should Have Died: Controversial Views from the Number 1 Fan Site." Basically, it's like, "Harry survived, but should he have?" You know, I run the world's biggest fan site for Harry Potter, and here are some of the controversial viewpoints that people have about it. You can already see this guy's got the certain "je ne sais quoi" that comes with the sandwich. He's got the sauce and he's got the showmanship. I met him when he was maybe 22 or something like that.

Shaan Puri

And where'd you meet him I don't even remember man I was I remember being on a call with him a video call and it was him and I think his girlfriend at the time and they were creating something called dose media and I go so what is it he goes well we're gonna make like really viral content so they had omg facts that was one of their companies they had like 4 or 5 websites like that one that was like science facts ones that was funny things one that was whatever controversial or pop culture stuff like references to tv shows and things that were hot right now and they had these websites and I go okay so how do you like at the time in my mind I was like going viral is getting you know lightning strikes you you know it's just not something you try to do it's just something that happens or it doesn't happen and it usually doesn't happen he's like no no no and he had built a 4 part system and this is the first guy he's like yeah we're a different type of technology company we have 18 engineers and we have 4 writers and we reach millions and millions of people a month and I was like no no no it was actually good I was like so what do what do the engineers do he's like well basically all the viral content on in the world starts either in one of 3 places reddit imgur or 4chan and he's like basically I built a detector that would find stuff that's going that's getting hot on those on those three platforms first before it hits instagram before it hits facebook before it hits twitter it's gonna get popular there first and he goes so we built a detector then we built a like a then the writer basically would would build like like write a summary and then we built a ab tester that would basically create headlines headlines and and and like different like frames of that same story and it would test them really quickly we had a tester that would spray that out we would pay to get that in front of like you know 5 1000 10000 people we would find what what's the winning angle and then we would have the post and then distribution right and then we would actually distribute that to our audience and so we could engineer a higher degree of virality in every piece of content why because we're finding the best stuff we're packaging it quickly with our writer then we're remixing it with our automated ab tester that's gonna juice up the headlines and then the images then we're spraying it out getting data feedback telling us which of these 15 variations is the winner and then we post the winner and I was like dude this is amazing and over the few years I saw him build this up and he his traffic kept going up and up now the problem was his traffic wasn't that valuable it was kind of fly by traffic it was kind of like the lowest common denominator of the internet

Sam Parr

and from facebook I think right

Shaan Puri

It was very dependent on social networks. Then Facebook changed. For a while, Facebook was rewarding the hell out of anybody that could post viral content. Then it got too clickbaity on Facebook, and they manually went and unplugged the viral engines for these companies. As a result, about 10 companies died during that transition. I don't think they totally died, but I think it definitely slowed down. I also think he grew up and was sort of like, "What else do I want to do with my life?" So now I just went to...

Sam Parr

By the way, really quick, before you go on to him, did I tell you about my partner at Hampton, Joe? He had a company called Little Things, which was the same thing as that. It was a content... yep, like a clickbait website. He started it in New York and then he had multiple floors in an office building. It was killing it; they were at $100 million in revenue. He had a deal to sell, they went through due diligence, and the deal was going to close in two weeks. That change that you just referred to happened to Little Things. At the time, Little Things was the most trafficked website from Facebook in the world. So it was like Little Things, and then it was like HuffPost, and then BuzzFeed.

Shaan Puri

buzzfeed yeah

Sam Parr

The deal was about to close, I think for $100 and something million. He was going to walk away with $50 million after taxes. Two weeks before the money was supposed to go through, that change happened. He lost the deal, and weeks or months... only a couple months later, they had to shut down the company. It was all because they built everything on top of Facebook.

Shaan Puri

That's a Mike Tyson gut punch, right? Like birds fly, fish swim, and deals fall through. That is the sad part about deals; that is too common.

Sam Parr

yes and that's very common that's what happened to this guy emmett smart emmett sparks so what happened to him afterwards

Shaan Puri

Emerson Sparks... Emerson Sparks... Sorry, yes, but here's his bio. Now, his thing says he focuses on AI, history, complex systems, and Bitcoin. Then he goes, "My goal is to be number one on the leaderboard of people who change the world." What he's doing now is something called Nonlinear. Nonlinear is basically a company that funds people working on AI to ensure that it's safe. They fund basically nonlinear entrepreneurs—people who are trying to work on these exponential technologies. So, yeah, they incubate "x-risk" nonprofits. I don't even know what "x-risk" nonprofits means, but they connect founders with ideas, funding, and mentorship. That's what he's working on now. This guy is always going to do interesting things. He can't be uninteresting.

Sam Parr

Dude, when I read about him, I was like, "Why are you doing this, dude? You're doing this Dose Media thing. You seem like a genius, and you're just absolutely wasting it." This is a... what do you say? It's a high effort, low... or what do you say?

Shaan Puri

Had a good one for this. It's a **10 out of 10** entrepreneur going at a **4 out of 10** opportunity. That's how I felt when I met him. I remember, literally, this is now **10+ years later** and I've not spoken to this guy. You mentioned, "OMG, facts!" and in my mind, I'm like, "That guy's smart. Follow up with that guy," right? Because he left such an impression on me where I was like, "This guy is really, really clever. He's really smart." Also, he was really wholesome. Even at the time, he was working on something that, typically, I would say almost everybody I know that's in this kind of viral media is actually just lame. There are kind of shitheads, and I mean that in an endearing way. You know, some people are shitheads, so it's alright. You're just like, "Yeah, I'm trying to find this arbitrage. I'm making it happen." So he was not that. He was really soft-spoken, really, really nice guy. Ben says, "Extra risk is the risk that something could end the world. It's an existential risk." Okay, yeah, good. So he's going to save the planet, which is good.

Sam Parr

dude and his website is a is a dot org yeah noble vision dot org type of guy

Shaan Puri

I had a... when I was in Austin, a friend of mine was hanging out with Justin Mayers, who's been on the pod before. I think I can quote this because I think it's a good quote. He said, "Here's Justin. The best thing he goes, it doesn't matter how you make your first nut. You just gotta make your first nut. But after you do that, then you want to work on a noble mission." He's like, "Dude, I like that. You know, do whatever you gotta do to make your first nut," which is, you know, get that first few $1,000,000 where you're financially free. You don't have to have a job; you can work on whatever the hell you want. But then after that, don't go chase the second nut. Go after something that's a noble mission. Go after something that's awesome. And yeah, very few people actually do that. In fact, I don't even think Justin is doing that at the moment. But I love the quote. Isn't he doing like an FSA spending store? That's like the most opportunistic thing I could think of.

Sam Parr

The way that he pitched it was pretty awesome. He said something like, "Obesity in America is like an epidemic, and 60% of people are overweight. We want to make you eat healthier by making it easier to acquire these types of food and this type of health care." And then he like... that's where the pitch comes in. Alright, well, let's go look.

Shaan Puri

so his site

Sam Parr

I think it's called true medicine truemed

Shaan Puri

So, Trumed says, "Food is medicine, exercise is medicine, sleep is medicine." We don't mean this in a theoretical sense. Food, exercise, and sleep are all scientifically proven to prevent or alleviate physical and mental illness. In short, these are all medicine. Trumed is a payment integration that enables qualified customers to use pretax HSA and FSA funds to purchase health-promoting products and services from their favorite merchants. Soon, it will be available in the checkout flow for all merchants who sell healthy food, supplements, exercise equipment, and other health and wellness products. This is such a good idea, by the way. This is a phenomenal idea. This is a 10 out of 10 opportunity.

Sam Parr

dude he pitched me to invest why have

Shaan Puri

I not invested in this

Sam Parr

I didn't invest because I was just saying no to everything, and I deeply regret it. I deeply regret it because, by the way, this is the best way to pitch a business. You paint this dreary picture, like, "The world is obese." Did you know that if you add up all the terrorist attacks, all the guns, and all the car accidents, it would only be one-tenth of the people who die from being obese? You know, that type of fact. Then you say, "If we continue this, this is what the outcome is going to be." And so, we need to solve this. The way that we happen to be trying to solve this is by doing X, Y, and Z. I'm like, "Alright, that's a great pitch."

Shaan Puri

Yeah, this is... wow! I am so jealous that I'm not invested in this. I'm messaging him right now. Alright, yeah, that's it. That's the pod. We're out of here.