The Real Story Behind Shaan's Best Investment (Bought For $52M?!)

Shaan Puri

Okay, so the news is this: If you've been listening to this podcast, you know that Shepherd is a business that I'm a part owner in. I've been talking about it on the podcast, and it's a great business. Last week, news broke that there was a private buyout of a majority stake in the company for **$52,000,000** at a **$52,000,000** valuation. It was done by Nick Huber. I had the opportunity to sell my shares, but I decided not to—**not a single share**. I'm holding every single share. So today, we're going to talk about, I guess, the story of how Shepherd even grew in **4 years** to be a **$52,000,000** company, how I ended up getting involved with it and becoming an owner in the business, and why one of the owners in the business did this buyout. They took **$29,000,000** and bought the majority controlling stake in the company. So that's the news. Now, here's the backstory.

Sam Parr

Alright, Sean. Last week, you guys had a big announcement. So, you and Nick bought Shepherd, and that's amazing! I...

Shaan Puri

Didn't I? I didn't do it. Nick did it, not me.

Sam Parr

Yeah, but you're a part of it. You're one of the partners. I guess maybe I'm going to interview you, at least for this first segment, because I want to learn all about it.

Shaan Puri

Sure.

Sam Parr

I think it's amazing what Nick has done. So, let's start with the beginning. Explain what Shepherd is, and then I guess we'll start in like 2020 when it began. We can explain how it grew and what happened last.

Shaan Puri

Week... Yeah, so there's a guy named **Marshall Haas** who is an entrepreneur. He has done a bunch of different things. I think he owns a hotel in **Saint Louis**. He had a bunch of e-commerce companies, including some goofy one like "Emoji Something Something." Then he had **Peel**, which was a thin phone case. So, he was in e-commerce, and one of the common things with e-commerce is that it’s like a real business, but it’s also like a lemonade stand business. Every margin matters. What a lot of e-commerce operators do—and I did this too with my e-commerce brand—is that I think 60% of our staff is offshore. This is because margins matter. You have to figure out a specific problem: how do I get great talent without paying the full cost of hiring **Stanford** grads and **Harvard** grads, or even just a normal median worker in the States? So, a lot of us go to talent hotbeds like **Latin America**, where you can find great programmers or data analysts, or the **Philippines**, where you can find a great customer support team that will do the job at a fraction of the cost—usually about five times less than it costs in the States. So, five times less is pretty massive. Marshall is running **Peel**, and he starts hiring more and more people overseas. He decides to start a company called **Support Cheaper**.

Sam Parr

Which at the time was ridiculous. I saw... I'm friends with Marshall on Facebook. I've been friends with Marshall since 16 or 14. When he told me he was doing this, I was like, "This is silly." But then I saw the branding. The website pretty much looked the way it does now from the beginning.

Shaan Puri

Well, he uses your favorite color of green as well. He creates his brand, and you're right; the idea of hiring talent overseas is not new. This has been going on for a long time. I remember my dad once bought this book called *The World is Flat*. I was a little kid when I read this book, and it was all about the globalization of talent. It was something that big companies were doing, but more and more small companies, especially startups, have been doing it too, particularly for specific roles. So, anyway, he starts his company, and it starts doing decently well. He's promoted on Twitter and starts to grow. So now, Nick comes along.

Sam Parr

Nick Huber from Sweaty Startup.

Shaan Puri

Exactly. Nick's got a storage company; he's in the real estate space. What people don't know is that Nick has certain companies. For example, he has a cost segregation business. Cost segregation, or "cost seg," is basically when you buy a property and do a cost seg study. This study allows you to accelerate your depreciation. Instead of depreciating something over 30 years, you might be able to accelerate the schedule to 7 years. This saves you a bunch of money in year one, so it's well worth the trade to pay for a cost seg study in order to save that money. Most people who do a cost seg hire us. All of his talent is in Colombia, and they do it on an iPad. You walk around with an iPad, right?

Sam Parr

How it works... So, the way it works is, and I'm far from an expert, the way that I understand it is basically, typically, real estate has something like a 30-year lifespan. But they came in and said, "Look, the rules actually say that your windows can depreciate in 10 years, and your roof is actually only 15 years." So, what I need you to do is do a video tour with one of our people on the phone. I have a checklist of things I need you to show me in the home. You gotta walk through and spend about 30 minutes just walking through the house. I did that, and the person was... I knew he was... I mean, he spoke perfect English, but I thought he was overseas. I was like, "I actually don't know where you are." For some reason, I thought he was in Europe. I had no idea where he was. And there was a guy on the other line as I'm looking through the house, and he's marking down what type of windows I have and things like that.

Shaan Puri

Right, and so it's pretty crazy that it used to be something where somebody would walk on foot through the building with a clipboard and a piece of paper. Now, you've got low-cost talent in Colombia that are getting it done for you. So anyway, he builds that business and he's using Shithepherd a lot. He ends up going to Marshall and cuts an affiliate deal. I think initially it was an affiliate deal, which was just, "Hey, if I send you traffic, if I tell people, 'Hey, I'm using Jeopardy, it's great,' give me a cut of the fees that you generate, the revenue that you generate." Marshall says yes, and Nick starts sending traffic. Along the way, Nick goes back and he says, "You know what? Affiliate's great, but my beak's not wet enough. I need a little more skin in the game." So he cuts a deal with Marshall to become a part owner of the business. The business continues to grow. Last year, almost a year to the day, I become a partner in the business. I approach Marshall and say, "Hey, same story. I'm a power user of the product, I have a big audience, and I think I can help grow your business."

Sam Parr

What did this all come from? The place of, "It'd be cool to grow a company based off of your influence."

Shaan Puri

I had a lesson, which was to **invest in your P&L**. This was a lesson I learned the hard way when I was running my startup studio. For six years, I was trying to make a successful startup and make money. What I learned in the end was that I would have made a hundred times more money had I simply looked at our expenses in our P&L and just knocked on their door. I could have said, "Hey, can I invest? I'm a big fan of your product. I'm an early user of this product. I really understand this product, and whatever you're raising your next round at, whatever valuation, do that. Maybe I can help you out in some small way." We were one of the first, I don't know, 200 companies using Slack, Elasticsearch, PagerDuty. We were using Figma early on, and there were tons of them—like 20 apps. I learned this lesson the hard way: you should always try to invest in your P&L. Look at your expenses and figure out which expense is meaningful. It's a line item that you notice but don't regret. An **unregretted expense** means it was worth more than the cost. I looked at mine and realized that overseas recruiting was one because I was getting great talent. So, I went to Marshall and said, "Hey, I love the product. I love this category too. I'm not for sure gonna invest in your business, but you're my first pick. I use your products; let's talk." We ended up working out a deal, and it was a great deal for me. What I thought at the time was a great deal for me turned out to be an even better deal for Marshall. He had a lot of wisdom in making that deal because I thought I was getting a very favorable deal, but he understood the power of the audience and what we could bring to the table. He listened to MFM; he saw what we were doing on Twitter. Nick had come on MFM before and mentioned it, and it was like their biggest day in a year or something like that. He had enough validation to take a leap of faith, but to be clear, it was still a leap of faith. It turned out better than we expected. We had forecasted how much we thought we could grow the business, and I always try to under-promise and over-deliver. I said, "Look, I think we can grow maybe 50% or 75%." We basically grew it by **300%**. So, the business has tripled in the last year, and the valuation grew. Along the way, different acquisition offers came up. I went to Nick one day and said, "Hey, look, there's an acquisition offer. I think this thing still has a lot of runway." Actually, the initial idea was, "Nick, why don't we buy it? What if we raised the money and bought this thing?" Most people don't know that was the initial conversation. Nick said, "I'm thinking the exact same thing. Let's talk to Marshall." Within an hour, I thought, "Too much work, never mind. Nick, I don't want to do this. This is too much effort for me. It'd be a huge transaction to buy this business." What actually ended up happening is Nick announced, "Big news yesterday: I acquired a controlling interest in Support Shepherd for **$29,700,000**." So, he paid $29,700,000 to buy enough to become a controlling owner of the business.

Sam Parr

I think he said the valuation.

Shaan Puri

I think, yeah, maybe they did in another form. $52,000,000 was the valuation.

Sam Parr

They said **$52,000,000**.

Shaan Puri

And so, which is pretty amazing because from the time—one, literally one year ago, I think it was April or May—that we did my deal, that means the value of the company had more than tripled in a year. So, you know, just tremendous value growth. A win for everybody involved. My stake grew, Nick's stake grew, Marshall did obviously phenomenally well. Nick goes and he basically raises the money. He raises the money to go and buy, you know, basically for $30,000,000, he buys a controlling stake in the business. Hey, real quick, as you know, we're big on ideas here. We love bringing new ideas, business ideas, brainstorming ideas for the podcast. Well, a lot of people ask, "What do you do with all those ideas? Can we go find them? Is there a list somewhere?" The great people at HubSpot have put together a business ideas database. It's totally free! If you just click the link in the description below, you can go download a collection of over 50+ business ideas that are from the archive, listed out for you, curated. So, what are you waiting for? Go download it! It's free! Check it out, it's in the description below. Alright, back to the show.

Sam Parr

My little crew, we threw in a little bit.

Shaan Puri

Welcome to the team, finally!

Sam Parr

Yeah, we're very, very, very small stakeholders among this thing.

Shaan Puri

It was hurting me to get rich without you. I gotta be honest, it kept me up at night for a few days.

Sam Parr

That's alright. We have a very small taste of it. Okay, so here's what I wanted to bring up. About 2 or 3 years ago, you and I did a podcast where we said, "Look, there are all these people who have created $1,000,000,000 companies off of Instagram. They've done it off of YouTube and they've done it off of Facebook." There's not really been any breakout hits off of Twitter yet because Twitter's audience is a bit small. But I was like, I think it's good. I think we both said it's great because it's text-based. You get to know people, whatever. And it's a B2B crowd a little bit more so than...

Shaan Puri

Value crowd.

Sam Parr

Yeah, more so than the other places. It hasn't happened yet, but I think it is happening right now. I don't know if this is going to be a $1,000,000,000 company, but I think the fact that Huber went out and raised this money to do this is a big swing. It took a lot of courage for him to do that, and our prediction could be coming true as we speak.

Shaan Puri

Very ballsy move, I gotta say. A very ballsy move to do this. I tweeted, "This is a ballsy move. I can't wait to see how this plays out." People thought that was a negative thing, but to me, I literally just meant, "Oh my god, I can't wait to see how this ends. What is the story? What is the story gonna be?" I think it's gonna end really well.

Sam Parr

It's not ballsy the way it's ballsy that he took the ball in his court and he's like trying to do this thing. By the way, what I tell everyone is I don't want to bet against Nick. Nick is a really good entrepreneur, and if someone could pull it off, I have faith that he can pull it off.

Shaan Puri

You know, when you watch somebody play sports, you learn a lot about them. I played basketball with Nick Huber. He is a workhorse; he's an incredibly physical player. He comes to the pickup games with a mouthpiece in. It's like, "Bro, I don't know how much contact you're planning for, but it's more than I was ready for today." So, you learn how he operates. Let me tell you a couple of things about this. Nick could have been on cruise control. The guy owns self-storage facilities. Self-storage is literally a closet you lock. It's the least operational thing you could possibly do; you just put your objects in this door and lock it forever.

Sam Parr

That's all.

Shaan Puri

It is.

Sam Parr

I think it's **$100,000,000** worth of self-storage units that he owns, so it's a significant amount. My being is he's kind of financially...

Shaan Puri

He could've been... he could've been spot on. Yeah, he loves to hunt. He's got little kids, loves to do outdoors, and loves to play sports. He could've just been chilling. Then he has a Twitter audience, so he starts... he could've done affiliate deals. He started launching all these agencies. He's like, "I got an SEO agency. I got a hiring agency. I got a... you know, I don't... I forgot what else he has." He's got like seven different agencies he started, and each of those would have brought in, I don't know, $50 a month. Enough for him to be totally chill. He chose violence. He chose to not chill. He chose to bet his entire career, put his entire network and net worth on the line basically to say, "This is to take this bold bet." And you love to see it. I love to see it.

Sam Parr

I don't think it's going to fail. I think that even in the worst case, it's a very survivable thing. The best case is quite huge; it could be a very big outcome for him. I think it's so cool that he's doing this.

Shaan Puri

Yeah, it is. And look, I thought we were taking a big bet. When I put my name on something, or Nick puts their name on something, it's gotta be good. We're spending all this time—years building up a reputation and years building up a loyal, trusted audience. At the end of the day, you gotta turn over your cards. If you don't have the hand, you know, you were just bluffing the whole time, and you can't do that. Nick took it to a whole new level, which is to basically say, "Forget all my other stuff. I'm going all in on this." I think that's really awesome. Okay, so now let me tell you the big picture take. Forget Shepard for a second. This is part of a general idea I've had for a couple of years now, which is the idea of an **audience cofounder**. When I started my first companies, I knew I needed to do part of what was needed to succeed. You need to build a great product. You need to identify a gap and build a product that fills that gap. You have to have maybe a technical team in order to build the product. You need money; you need a bunch of things. As a founder, you try to do all the things. You try to identify the gap, raise the money, and recruit a team, but it's hard to do by yourself. It's very common in Silicon Valley to have a technical cofounder. A technical cofounder is the person who's going to do the engineering, the building, and you rely on them to do that. You just say, "I'm gonna do the other components of this business." Well, now I think there's a more common playbook, which is the idea of an **audience cofounder**. What an audience cofounder is, is you partner with somebody who has a cheat code in go-to-market. They have an advantage, an unfair advantage that is non-fungible and not easy to recreate yourself. What they do is essentially lower your cost of customer acquisition. Sometimes to the...

Shaan Puri

Of being 0, sometimes negative, but it definitely lowers it.

Sam Parr

Which isn't new. This isn't new, you know. George Foreman, and then since the beginning of time, we've talked about celebrity partnerships.

Shaan Puri

Exactly. So, they've evolved. What I want to bring up is the evolution of these endorsements. For example, you have the Foreman Grill. It used to be that you hire a celebrity, they hold your product, smile, and say, "Buy this product," right? That was an endorsement. Then, the audience got a little bit wiser. They said, "Oh, instead of just taking cash for this, I'll take some equity too. Thank you very much." So, celebrities started taking equity as well. If you're going to put my name and face on it, then that means I'm going to have to own a piece of this. You get the Foreman Grill, all of these celebrity alcohol brands, and Conor McGregor doing Proper Whiskey. I think McGregor owns about 15 to 20% of Proper Whiskey. You have Logan Paul and Prime; I don't know, but I think it's something on the order of magnitude of 20 to 30%. You've got Clooney doing his tequila, The Rock doing his tequila, and Ryan Reynolds doing his gin. There are a bunch of people involved in the celebrity alcohol and cosmetics brands, like Rihanna with Fenty Beauty. Each time, it's getting more and more tied in with the co-founder. You go from just holding up the product and playing the jingle to putting my name and face on it, to actually having it named after me. I'm going to be the one creating the media that we use to market this thing. Instead of you paying me twice a year to come to some commercial shoot, I'm going to be posting every day. I'm Kylie Jenner; I'm going to be posting every day on my Instagram stories about this. I'm with Conor McGregor; I'm going to be reposting tons of material on this. I'm going to take a bottle to the press conference. I'm Logan Paul; I'm going to take a bottle of Prime with me to WrestleMania, and I'm going to crush one right before I go in the ring. The celebrities become more and more involved. Now, what's happening is this is transitioning out of major celebrities doing major consumer products to more and more happening in the software space, which is relatively new. You have Russell Brunson doing this with ClickFunnels. You have Hormozi, who just bought a chunk of a school, and now he's wearing a school hat and a school wife beater everywhere he goes because he's trying to promote that product. You see what Nick and I did with Shepherd. These brands are almost like private equity brands. We build a consumer-facing brand and then do private equity. The beautiful thing is that the private equity guys don't know anything about branding, and the brand guys don't know anything about private equity. If you happen to be someone who knows about both, you're a pretty unique proposition in the market. I think we're going to see more and more of these audience co-founders. People are realizing that they can either just take a bet that their product will get off the ground, or they can get out of the muck of similar products at the subscale and try to break through. They're going to use their cap table as a tool to do this. I narrowed it down into three things that I think you need in order to make this work. I believe there will be a lot of people who try this, and many will fail. Here are the three essential things you need in an audience co-founder: 1. A large, trusted audience. Trust is the keyword here. There are a lot of people with an audience, but they have low trust. Meaning, if they go tell people, "Hey, you should go try this," or "You should read this book," or "You should try this lotion," or "You should show up at this event," or "You should watch this movie," how many people actually go do it? I'm not going to name names because there are a lot of people we know who have audiences but lack trust, or they have audiences but their audience is broke. So, the only thing...

Sam Parr

They could sell them as very cheap things for broke people, basically. You have to find the right person to trust, someone with a trusted audience. So, trust is quite challenging to measure, but large numbers are easier. I could tell you about our podcast, the MFM. If you measure YouTube, including shorts—which you could argue, and I would agree, that shorts are nonsense—we had something like 90 million impressions last year across the podcast. If I had to guess, your Twitter handle probably had another 10 to 20 million impressions a month. And then your newsletter, I don't know how often you said it, but you mentioned it once a week. Let's say, to keep a round number, about 100,000. So, you're talking to tens of millions of people a month. Would you say that's accurate?

Shaan Puri

No, to be honest, I think the number of people is a lot less than the number of impressions.

Sam Parr

Sorry, so it's for sure tens of millions of impressions. I don't know how many people—maybe a million, maybe more.

Shaan Puri

Than a million. I think we reach somewhere between half a billion people, truthfully. Right? And there's a lot of people that will exaggerate these numbers. Truthfully, I think that's the absolute ceiling of what we reach. But then the trusted audience is a fraction of that. But it doesn't matter; it's the depth of trust that matters. This is the total mispriced asset in the market because the easy thing to measure is the number of followers, the number of views, and the number of impressions that something gets. A little bit better might be likes or replies, but then even better is bookmarks. Even better is how many people click the link, and then the ultimate source of truth is revenue. There are other tests that I like to think about. So another trust test is... I talked to a guy who's getting millions and millions of views on shorts. I said, "Hey, if you tweeted out tomorrow that you are hanging out at this coffee shop in Austin and you said, 'Hey, I'm hanging out from 10 to 2 tomorrow' or '10 to noon, 2 hours, I'm hanging out, stop by,' how many people would show up?" There are some people that would have a line out the door, and then there are some people that nobody would show up for because they have a very fleeting, transactional, impression-based thing. They are not the focus of it. Maybe they're putting up meme content or they're putting up, you know, like canned videos that are highly animated, but they're not even involved in it. There's no trust being associated with them. Another trust test: if I email my list tomorrow and I said, "Tomorrow I'm putting out something that I've been working really hard on, that it's fucking good, trust me," and I said, "It's gonna be available at 5 AM tomorrow and it's gonna be available to the first 1,000 people that try it," that's it. How many people would set their alarm?

Sam Parr

Right.

Shaan Puri

Right, there are certain companies and products that get people to set their alarm. Apple gets people to set their alarm and come camp out to get their new product. It's **trust**. At the end of the day, that's the measurable value of a brand: trust. So, I think that's the number one variable. Number two is **product to audience fit**. Basically, if I came on here and started telling you about cologne, it's not going to work. It's just the wrong product for the wrong audience. It's not what my audience wants; it's not what they trust me on; it's not the right price. Given the size of my audience, I sell products that are worth tens of thousands each. Logan Paul sells products that are worth $4 each, but he's got a much bigger audience. You’ve got to find an equation that works. A great example was the episode we did with Dani Austin on this podcast. Dani Austin was a woman who struggled with postpartum hair loss and was really insecure about her hair. She wore wigs for like a year. Then she took the wig off and told her Instagram audience, "This is what I've been going through. I feel a little bit silly; I felt insecure about it, but I'm trying some things, and let's see what works." Eventually, she ends up creating her own line of hair care called **Divvy**, which is a product to cure this pain.

Shaan Puri

That she authentically had that many people in her audience and trusted her for it. The highest version of product-audience fit is when you genuinely experience a problem and can tell a story about it. That story resonates with your audience because they also have that problem and they believe your story. The third one is content creativity. So, how good is this person at creating an ongoing stream of content that plugs the product?

Sam Parr

Dude, that's shockingly hard, by the way.

Shaan Puri

It's very hard to do. I'm good at it.

Sam Parr

I think you're good at it. I think Nick is exceptionally good at it as well. Nick is fantastic at it. He posts probably, I think, 100 times a week on Twitter. I looked it up, and he's good. He makes hits.

Shaan Puri

And you see this everywhere. When Logan Paul and KSI launched Prime, they did a photoshoot of them drinking the product. Then, there’s this viral image that goes super viral. It’s basically Logan Paul drinking a Prime and KSI drinking Prime, but KSI was kind of bent down on one knee. Somebody photoshopped them together so it kind of looked like KSI was, you know, going down on Logan Paul. They printed a cardboard cutout of that and put it in the aisle of, I forgot what Walmart or wherever they were launching. The news was, "We're launching in Walmart." Now, what does a creator do normally? They might say, "Hey guys, I'm so excited! I can't believe it, we launched in Walmart. Good for me! Please go check it out and buy our product from Walmart." What Logan Paul does is smart. He knows how to go viral around his product. He understands that it’s not about patting yourself on the back or making a generic announcement that doesn’t mean anything to the audience. He gave them a reason to share the news, which was putting him and KSI in a compromising situation, making a joke out of it. That image then gets 100 million views. It’s the same story, but he knew how to package it to go viral. He’ll also create content like, "I’m going to try to make this drink using these three flavors of Prime." It’s kind of like those "Will it blend?" type of commercials, but he’s using his product. For us, Nick and I would do a workshop where we did a delegation workshop. I was like, "Look..."

Sam Parr

Is that what most people call those things?

Shaan Puri

I mean, haters will call them webinars. Yeah, but they're called haters. You call it a webinar, I call you a hater.

Sam Parr

I knew it was a "w" word. I couldn't think of it. It was "workshop" or something like that. Yeah, it's on the web. I forget. It's kind of like a seminar.

Shaan Puri

But we would do these things, and they would drive so much business for the company. We would come up with what is a value-add thing we could do that delivers so much value in 45 minutes. At the end, we just say, "By the way, if you want to do this, Sheprit's a great tool." But you've delivered so much goodwill and so much value that you can do that anyway. There's a whole bunch of stuff around content creativity. How do you, on an ongoing basis, create native content that is going to continue to bring the brand front and center? For example, we created "The Thrill of the Shill" to give ourselves an excuse to talk about our products. There are creators that are better at that, and there are creators that are worse at that. We're good, but there are people who are incredible at this.

Sam Parr

Who do you think is the best? Like, who do you look to besides some of the maybe non-popular ones? Is there any non-popular ones you look at and you're like, "That's really great"?

Shaan Puri

There's a guy on Twitch named **Doctor Disrespect** that I first noticed is incredible at this. I noticed it because the majority of Twitch streamers get a ton of blowback if they ever mention a product or service. The chat immediately responds with "sell out, sell out, sell out, oh my god!" However, Doctor Disrespect created a brand that almost allowed for it. He infused so much humor and content into his streams that it changed the dynamic. It's like you don't want to be in the middle. You either never sell out, or you try to sell a product but avoid coming off as a sellout. If you're hedging, the audience can sniff that out in a second, and they will pounce on you. Alternatively, you can go full sellout. At Twitch, we even faced this when Amazon wanted the company to promote Prime Day. We thought, "Oh, how are we going to do this?" Our community is very sensitive to us promoting something, especially a big corporation like Amazon. So, they created a campaign called **Twitch Sells Out** and made that Facebook page.

Sam Parr

You gotta make a joke out of it.

Shaan Puri

Twitch sells out, and that was the whole campaign. Well, today, Twitch sells out. They basically leaned into it. Doctor Disrespect would do this; he would do a promo with Old Spice and then create a full content series around this thing, around Old Spice. He would do it in such a way that by the end of it, the whole chat was looking forward to the next Old Spice... I forgot what he called it, like the Champions Club or something like that. He would create all these little things around it because he was a total character. He knew how to do it. I could see how much money he was making; he was making way more money per viewer than the average Twitch streamer because he knew how to monetize that audience.

Sam Parr

Do you remember we had Justin Mayers come on and he told us about his new company called, is it Trumed or Trumedicine? Trumed.

Shaan Puri

Yeah, trumed.

Sam Parr

So, to explain it... Is it HSA spending? It's a kind of a boring topic, but basically, you could spend your insurance money anyway. His co-founder is this guy named Kaele Means. I guess he's a... I think he's a doctor or a former doctor, but he's obsessed with metabolic health. I followed him on Twitter, and he is indoctrinating me on healthy eating.

Shaan Puri

I bookmarked his thing yesterday.

Sam Parr

Same.

Shaan Puri

It was like the four points thing. You know, basically he's like, "America has, you know, a 20% obesity rate or something like that in young kids, and like other countries have 4%. Here's the 4 things we should do effective immediately to turn this around." And I was like, "Sir, yes sir!" You know? Yes, completely impressed. I've never met this guy, but goddamn, he's convincing.

Sam Parr

He is so convincing, and his company does it in such a good way because his company is very specific: HSA spending. You could buy healthy stuff, like an 8 Sleep mattress or whatever, using your insurance—something like that. But anyway, his whole crusade is on processed foods, being overweight, and things like that. He’s like a renegade and a champion for healthiness. It just so happens I have this thing that you could actually use to buy some of these items. So, like, he tweeted out the other day, "America's super obese. Here are four points: you shouldn't be able to use food stamps on soda, or a pharmaceutical company should not be allowed to advertise on TV." He had like two or three more points. I get obsessed with it, and he started to change my opinion. I'm slowly starting to think about TruMed, his competition.

Shaan Puri

Him? Come on. By the way, because I've seen him now do a couple of these rants, and each time I am *so* convinced. I am *so* convinced that I actually schedule time on my calendar to look up opposing evidence because I'm like, "Before I just fully bathe in this Kool-Aid... I need to create some firewall where I go see if this guy's full of shit." Because he is *very* convincing.

Sam Parr

He's very convincing, and this is a really good example. I asked you for a non-popular example... I guess I had one. Kaley Means is a non-popular example, or well, I guess he's... I mean, he's not like mainstream popular, but he's somewhat popular in our little circle of B2B products. And he is selling it wonderfully.

Shaan Puri

Absolutely! Yeah, I think it's amazing. There are a bunch of these, by the way: Liver King, McBaire... a lot of guys do this. I think the interesting thing now is that it used to be celebrities holding up the product and endorsing it, or it would be the celebrity creating the company themselves. What I'm finding now is this interesting new variant of this, the new strain, which is that a company that already exists finds an audience co-founder to accelerate growth. And by the way, if you're trying to do this, come to me! I want to do this again. I want to do this one more time. The Shepherd thing went so well, and I tweeted this out: "If you have a cash-flowing product that is genuinely a great product"—like, it has to be a great product, otherwise I'm not going to put my name on it—and you are bootstrapped, you are not on the venture path, hit me up at [email protected]. I want to do this one more time.

Sam Parr

You have this thing on here about the **curse of family riches**, and I want to talk about that. But before we dive into that, I want to tell you a story about someone I spoke with recently. So, there's this company called **Simple Modern**. Have you heard of Simple Modern? Of course! Simple Modern is a website that sells basically mugs, but I think they sell a ton of stuff, like **Stanley mug** competitors and tumblers. They sell a lot of products. I talked to him the other day, and he gave me his annual revenue since they started the business, along with the profit from some of the recent years. He said I could talk about it, and so I listed it here in this document.

Shaan Puri

When people give you their revenue, do you just go, "You're just like an evil laugh," or what do you do?

Sam Parr

Well, whenever I talk to people, I'm like, "Hey, before we even have a conversation, just so you know, I'm not saying any of this." And then I'll ask.

Shaan Puri

In our twenties, we try to get girls' numbers. In our thirties, we try to get guys' numbers.

Sam Parr

Yeah, I'm one of those people who’s interested in income. But then at the end of the conversation, I was like, "Dude, this is so fascinating! Can I share this or not?" And he was like, "Yeah, dude, I don't care. You can share." So anyway, he started this company in 2015. In 2017, they had $10,000,000 in revenue. In 2018, they had $20,000,000. They grew it, and I'll skip a few years. By 2021, they got to $80,000,000. In 2022, it was $95,000,000, and in 2023, this most recent year, they did $180,000,000. This year, they're expected to do $225,000,000 selling these tumblers. It's mostly tumblers, and he started the company with like $200,000 in his thirties. It's a bootstrap company, and he owns half of the business because he gave away a lot of the business to employees. I was asking him about it, and by the way, in 2023, they did $180,000,000 in revenue and $45,000,000 in EBITDA and profits. So he's been able to make a significant amount of money. But the reason why Mike was so fascinating to me is that he's based in Oklahoma. He's just a real soft, sweet, wonderful, nice guy. I'm sure he's aggressive in business, but when you're just hanging out with him, he's like a sweet man. He said, "I started this company because I wanted to do two things: 1. I wanted to build a business that I could hire people I admire being around. 2. I just wanted to give away a lot of money. I feel like it's my mission to give away money." Since the beginning of the company, they have pledged to give 7 to 10% of their profits away to charities, and the people within the company vote on where the charity goes. He actually doesn't have control; he set it up so everyone is allowed to vote. In the meantime, he's been giving away all his money. He's giving away something like $100,000 a month of the Beckham family money. He said, "I've been able to save up like $4,000,000, but I'm still giving away something like $1,000,000 a year right now. I don't know if my $5,000,000 liquid net worth is going to go up significantly because I intend to give as I go." He's been giving since the beginning. He said, "When I started, I was giving away $5,000 a month when I was making $200,000 a year. My intention is to continue giving so when I die, I don't have a lot left. I've given it away as I've gone." He was like, "I kind of wanted to be generous when I was alive, not when I was dead," which is what a lot of people do. I don't know if I'm going to leave any money for my family or not. Maybe I'll leave them enough that they have a little bit of something, but we're going to give away most of this. He said, "My net worth right now is probably $200,000,000 based on the value of the business. I'm giving it all away." I was so fascinated by this, and it really inspired me—not enough to take action because honestly, it's still...

Shaan Puri

Oh no.

Sam Parr

It's still a bit fearful, if I'm being honest. I'm still quite fearful of it. But he seemed so freaking happy talking about this. Do you give away any money at all like this?

Shaan Puri

A little bit, yeah. Not like this sounds like he's giving away 20% of his liquid net worth per year.

Sam Parr

Something like that, yeah. It's a significant sum, and his liquid net worth is growing because he was like, "This is the first year that the business... we're going to do $45,000,000 in EBITDA." It's the first year where we don't have any new ideas within the business, so we're going to take a big fat dividend. I'm going to end up giving most of that away, and I'm just going to give it away as I go.

Shaan Puri

Two parts of this are impressive: 1. **Money where your mouth is**: There's a lot of people that talk about, "Oh yeah, I want to be able to give things away," and then they live their whole life and... it's like the Sam Bankman-Frieds of the world where it's, "Did you give any of it away? What happened? What happened to that?" 2. He was giving as he goes. I think that's really, really, really great. Some of the happiest people I've met in life are the people that give the most.

Sam Parr

Same, some.

Shaan Puri

Of the most successful people I know in life, they are people that give the most. The more interesting thing is that of the people who give the most, they've been giving from the beginning. I think that's the real takeaway: the fallacy that when I have enough, then I'm going to give. It just creates this internal fear of, you know, giving away. Last year, when we had Scott Harrison on, I did the thing where I gave away my birthday. I basically said, "I'm turning 35, and I'm going to give $35,000 to Charity: Water." I set it live on the podcast, so I can say that out loud here. Then I encouraged people, "Hey, if you want to give me a gift, go to the Charity: Water page and donate the gift there."

Sam Parr

Do you know how much that raised?

Shaan Puri

And I think it raised about another $30,000. So in total, this pod gave, you know, audience people gave $30,000, I gave $35,000. It was an uncomfortable give. Not that it didn't change anything in our life, but when I went downstairs, I told my wife, "Yeah, on the pod, I got kind of inspired and I committed to giving away $35,000." And she was...

Sam Parr

Like she's going to punch you in the stomach really hard.

Shaan Puri

Yeah, she was like, "What are you doing?" I was like, "I'm helping people." And she's like, "Help me." I was like, "What?" And she's like, "Take out the trash." I was like, "Okay, sorry." But, you know, just in general, it was unfamiliar territory to, on a whim, commit an amount of money that's meaningful. That's a car, you know? That's like something. I really like the feeling, and every year I try to give away in a way that's meaningful to me. So the other thing we did was when Tony Robbins came on, we pledged to give away, I think it was 40 or 50 tickets. Each ticket's, you know, $50 to $500 to $1,000 basically. So that's another, you know, sort of $25 to $50 that we'll give. But I'm like giving away an experience that was really meaningful to me, that I think could help a lot of people. And by the way, I need to go pick the winners for that. That reminds me, so if you've been waiting, you didn't miss out. I didn't pick the winners yet. There's like 1,000 people to go through, and I just left that pile of, you know, 2,000 applications. I was like, "I'll get to that when I have some free time," but I will do it. But the idea is to give an amount that's slightly uncomfortable for you. I think that's a good practice that I'm just now doing. The last three years, I think I've done that, and I probably should have been doing it earlier, to be honest.

Sam Parr

Not I need to do it. The reason it kind of interests me is that I was like, "Mike, is it okay to be selfish about this?" He's like, "Well, yeah." So I was like, "Do you get tax advantages?" He's like, "Yeah, like it... we... you could like... you can like... there is some stuff I can capture."

Shaan Puri

You try to send the other reason to do it.

Sam Parr

Well, he was like, "I'm not gonna not take advantage of something." But that's not the reason why I do it. It is a nice, like, cherry on top that I could take. I was talking to him and I was like, "You know what's crazy to me?" So he's religious, but not in a way where we disagree on anything. He's very kind about his beliefs. I was like, "Dude, if you're telling me that you're put here on earth to please God by giving away money, I never want to bet against you." That's like the best motivation on earth, you know what I mean? Like, who wants to bet against that person? If I don't want to go against you, you're gonna destroy everyone. You get the best motivation. So, what's this thing on here about the curse of... oh, was it? It was familiar riches?

Shaan Puri

I read it wrong. I said "family." I didn't know when to break it to you that you thought I was saying "family riches," but it says "familiar riches." What's riches?

Sam Parr

No, don't ask me. Here's the transition you talked about.

Shaan Puri

Giving away money... this is the greed side of it. This is about making money. Okay, so I have noticed a pattern in myself and in many others, and I call it the **curse of familiar riches**. Here's how the curse goes: you grow up thinking a certain amount of money means you're rich. For me, that was always **$1,000,000**. That's why this podcast is called *My First Million*. I used to play games with, you know, my sister or whoever it would be. "Would you rather... would you cut off your pinky for $1,000,000?" It was just like escalating "what if" scenarios.

Sam Parr

That's an easy "yeah."

Shaan Puri

Yeah, exactly. That was a starter. I never even asked about $10,000,000. I never thought about $1,000,000,000. Honestly, I never heard the word "billionaire." I never even heard people talk about billionaires. I never knew a billionaire when I was growing up. It wasn't even on my radar as a thing. I thought $1,000,000 was like all the money. So, you have this idea of what a ton of money feels like, but even $1,000,000 wasn't my goal. It's not like $1,000,000 was what the rich people have; that wasn't what I thought I would have. I thought making six figures, $100,000, was like the goal. That was the "you've made it" line.

Sam Parr

When I met you and you were making six figures, I thought you were the wealthiest person I knew.

Shaan Puri

It was a great feeling. I enjoyed being the wealthiest person you knew.

Sam Parr

Yeah, I was like $150 a year. Oh my God, you ever drive that?

Shaan Puri

So anyways, the curse of familiar riches is that you start with this amount of money that you think is a ton of money. And it is a ton of money to you at the time; it's all relative. Then you do it right. I graduated from college, and my first thing was a startup where we were paying ourselves nothing. We lived off of $25,000 of prize money from a Visible Ink contest. There were three of us, so we were living off about $8,000 a year or something. But then we got kind of Apple hired, and I ended up getting a job that was paying me $120,000 a year. I was laughing; I couldn't believe they were paying me that much money. Once I was making $125,000, or $120,000, my brain—this is why it's called familiar riches—could think of many other ways to make that same amount. I could get another job doing this, or maybe hear about an opportunity. I could realize that I could stitch these two things together, and if I did those two things, it could be like $125,000. So, once you get to a certain level, whatever that level is, it's quite easy and familiar to come up with one or two other ways that you could make that same amount of money.

Sam Parr

And by the way, that exists at every level.

Shaan Puri

At every level, this is the problem. This is why this is the curse. The easy thing to do then is, when you get to $100, you realize, "Oh, I can go get this other job that would pay me $100, or even $120, or $150 grand." But it's basically between a 1x and 2x of where you're at. So, you could figure out how to make about 50% more or just double. But your brain breaks after you say, "Awesome! How do you make 5 times more?"

Sam Parr

Yeah, and...

Shaan Puri

I remember hearing at the time about a guy who makes $500,000 a year in salary. It was stunning to me. I thought, "He's stealing the money from the company. There's no way anybody could create that much value to earn half a million dollars per year." If you asked me, "Sean, what's the path? You're at $120,000 now. How do you get to $500,000?" my brain would short circuit and break. For many years, I did things that were very familiar, and I found a way to 1 to 2x my earnings. Then, when we got acquired by Twitch, I received my package—the upfront cash. I sent it to my dad. I think the most he ever made was $300,000 in his life as a salary. So, I sent him the offer, and he called me, saying, "It just keeps going!" I asked, "What do you mean?" He said, "I thought the first line was the total amount, and I was so excited. That was the signing bonus!" Then he asked, "What is the RSU? What are these things? What are they giving you?" He couldn't believe it. He emailed me again three days later, saying, "I just read it again. I still can't believe it."

Sam Parr

He thought it was like a menu where you pick one of the options. Turns out...

Shaan Puri

It turns out.

Sam Parr

It's more like... it added all up.

Shaan Puri

And so, my brain broke too. So, what am I getting at here? After that, I started to ask questions. I sort of realized, wow, there are people who make $500,000 a year. There are people that make $2,000,000 a year. There are people that make $5,000,000 a year. I started to use this as a thought exercise: how would I make 10 times more than I'm making today? At first, again, the brain broke. There was no answer. I sat down again the next day and asked, "How do I make 10 times more than I'm currently making?" Well, I guess if I was going to do that, I would... and then you start to get creative. You're like, "Is there anybody who makes that?" Of course, there are! What do they do? How do they do it? You start to reverse engineer some things, and then you add time into the equation. I remember we came on this podcast because I had a brain-breaking conversation with Nikita Bier. We were like, "Nikita, what are you up to, man? You're just sitting at Facebook, you've just been there for four years, you're just rotting away over there. What's going on?" He goes, "Yeah, I'm thinking about, for the summer, how do I make $10,000,000 in 90 days?" I was like, "What? I never even heard somebody ask a question like that." Oh no, was it $10,000,000? It wasn't that. It was more like, "How do I make $1,000,000 in 90 days?" I was like, "I don't even know. What do you...?" That time scale breaks all the existing answers I have. But sure enough, there are answers. That summer, he created that app called Gas, and I think he made $7,000,000 in revenue. Then they got acquired by Discord. The son of a bitch did it! I was like, "What the hell is that?" So, I started asking myself better questions. I've just noticed this, and it's just a prompt for the world. Anybody who's out there, you don't have to do this. It is absolutely wonderful to be completely content with where you're at and to focus your energies on other things besides making money. That's probably healthier, and if you're doing that, more power to you. But if you're slightly broken inside like me, and you don't go to therapy, and you think that money's going to cure your problems, this is a good exercise to actually do. You have to absolutely refuse any option that's going to make you 1 to 2 times your money. You have to completely say no to anything that is a 1 or 2 times increase from where you're currently at. Only think about what would it be to achieve a 10 times increase. Then, let your brain short circuit every day until your brain starts to come up with answers. It will! It just takes about 5 to 6 days of doing that every single day to start generating some answers.

Sam Parr

So, I want to give two points to that. **1. Good News:** I actually think there's good news. You know how they say money doesn't make you happy? I actually think it does make you happier. The good news is that there is a threshold. I don't know what that threshold is; it's different for everyone. It could be tens of millions or a certain amount per year. But that $70,000 study? That's bullshit. If you zoom in on that graph, it continues going up; it just doesn't go up as steeply. And that study is also like 20 years old, so it's totally outdated. However, there is some number where I think it will make you happier. **2. Bad News:** I know a lot of rich people. You and I know a lot of the same wealthy people. We know people who are billionaires and people who are millionaires. I am just about 100% positive, and I can tell you that this is based on my personal experience: it's never enough. It is never enough. You and I have a couple of friends for whom it is enough, but for 8 out of 10 people, it's never enough. That whole "2x" idea always exists. So, it is a challenge, but it's imperative that we figure out how to be happy and present, regardless of whether we're making $100 a year, $500, or $50 million a year. We have to enjoy ourselves along the way because once you automatically get that outcome or whatever you get, it doesn't change a significant amount from where you were the months or years prior.

Shaan Puri

What's the Jim Carrey quote? He goes, "I wish everybody could be rich and famous so they would know that that's not the answer."

Sam Parr

It's absolutely not the answer.

Shaan Puri

It.

Sam Parr

Think it can make you happier, but it doesn't necessarily make you happy. Let me tell you one thing for all the finance and personal finance nerds out there. What I used to do is... money is kind of a weird thing. Because when you sell your company or something like that, for the first few weeks, the only major change is when you log in to Chase.com. The number, like the digit, looks different. If you think about it, that's like the old... and that is awesome. But it's kind of weird that that's like... there's some weird psychological thing where that's the only meaningful difference: that number is different.

Shaan Puri

...that have come on the podcast and said they used to just go to the ATM and click "print receipt" to do a random withdrawal. "$10, print receipt please," just so they could see the number.

Sam Parr

So, I'm going to explain if...

Shaan Puri

I'll get.

Sam Parr

They told me that I heard that as well. About two years before my exit, I used to use this thing called PersonalCapital.com, which is basically like Mint.com. Whatever you're using could work. You can create a manual account where you can add in numbers manually, without it being connected to your bank account. I put in like $15,000,000 in the manual account, so it said that my net worth on paper was at least $15,000,000. I saw that number, and then I sold my company and got the money. I went and deleted the $15,000,000, and then I saw the real number. I was like, "Well, I've already seen this for the last two years; this isn't really that different." You know what I mean? It did a shocking amount of stuff to my brain to see that number leading up. You almost get used to it; it's very strange. It kind of ruined that initial deposit because I was like, "These numbers are kind of like the same."

Shaan Puri

But by the way, I gotta be the counterbalance to this because I've heard, I've listened to many podcasts and YouTube videos, and I've heard many people say similar things, that you know, money doesn't make you happy. There's never enough. You know, that day after it happened, nothing really changed. I just kind of felt a little... I didn't know what to do. I kind of actually almost had a little bit of a depression after this. And I'm not saying that they're lying; I'm sure that's true for many people. I had a very different experience. I had exactly what I would have hoped for: the more money I got, the happier I got. The more free time I had, the less bullshit I had to deal with. Sure, I had some new problems, but they were way better than money problems. Then, when I saw the number in the bank account, I said, "Fuck yes!" I was so excited. I had such a great day, and I took my parents to dinner that night. I was so excited, and they were so excited for me. I bought a bunch of socks, and I was like, "These socks make me happy," because I got a bunch of matching socks with the highest quality and the highest kind. Then I felt amazing. I felt better, and the money made me feel better. So, there are people out there for whom this happened.

Sam Parr

Don't misunderstand me. I said it makes you happier; it made me happier. But we still want more, right? We're still having the conversation of how do we 2, 3, 5, or even 10x this? Because if we were truly content, we wouldn't be asking that question. So what I'm saying is, we still want more. It does make you happier, but in itself, it's not always the answer. It is potentially part of the equation.

Shaan Puri

Right, and I guess the thing that I'm talking about right now is really just a question of leverage. Meaning, for the same inputs, can I get more outputs? All I'm saying is that if you just change your brain to say, "You know what? I am familiar with many ways to get this amount of rich now because I've done it. I know other people have done this. I've been doing this for a little while now. I am comfortable at this level, and there are more levels that I would love to be at." You know, without 10x-ing my input, can I 10x my output? I'm always interested in that. If I could get 10 times more people listening to this podcast without having to record 10 times more or prep 10 times more...

Sam Parr

Be awesome. You do it.

Shaan Puri

That'd be awesome! I would do that any day. I think even you did this when we were talking about growth for the podcast. It was like, "Here's some low-hanging fruit." Then you were like, "Is there anything we could do that would just get like a million views per video?" This is like, shouldn't we just ask that question at least in case there's an interesting answer? That's kind of what I'm saying. You want to ask that question because it fries your brain for a second and forces you to think a little differently. You may decide you may never come up with a great answer, or you may decide, "I don't want to do any of those things," or "I'm totally comfortable with where I'm at." But I just think that there is a curse of familiar riches. Whatever level you're at, if you're making $10 million a year, you probably now know a bunch of ways to make $10 million a year. But you'll have very few ways to make $100 million in a year. As a thought exercise, I think it is very valuable to say, "Let me say no to all things that are at the level I'm familiar with, and let me only think about and consider options that would 10x where I'm at." Then you could decide afterwards whether you want to take any action on that or not.

Sam Parr

Let me ask one question as we wrap up.

Shaan Puri

Yeah.

Sam Parr

You're talking about earning. Would you spend 10 times what you're spending now in order to get used to that life?

Shaan Puri

In order to get used to it, yeah.

Sam Parr

In order, like, you know, they act as if. So I've got friends who will say, "This is gonna work; therefore, I'm gonna just behave as if it works." I'm gonna spend because I like burning the boats and feeling this, and I have to make it work.

Shaan Puri

I am totally into "act as if," but not by spending. I don't think that perverts the spirit of "act as if" or living from the end. The way I do it is that "act as if" means to me I'm in decision-making. I'm willing to say no to certain things that come from a scarcity mindset. For example, maybe I would have said yes to some speaking gig because it gives me money. But if I had $100,000,000, I wouldn't say yes to that. I wouldn't go travel, leave my family, and go to this speaking gig in Duluth. I would just say no. So, I use it to put myself in a more abundant mindset in order to make decisions that are more aligned with who I really want to be. Those decisions aren't like, "Oh, let me go buy a tiger in order to increase my burn rate and add pressure to me." I just think that's a completely unhealthy way to go about it. The other version is how a lot of people walk around with a lot of anxiety, stress, or in a big rush. They rush through their day, constantly feeling a lack of time, living again in a scarcity mindset—lack of time, lack of ease. So, the "act as if" that I try to do is to put myself in a place where I ask, "What if it was all figured out? What if I knew what I was doing? What if I had already done it? What if X was already done?" It allows me to walk through my day with a greater sense of presence, ease, joy, and less stress, less anxiety, and less of a rush. I will never use it to be like, "Hey, how about I just increase my burn just to see how it feels?" It's like, you know, aren't people into dripping hot wax on themselves before they do stuff? Not me, I'm good. Don't even do that.

Sam Parr

And if you live in Duluth, you can kiss my ass.

Shaan Puri

Is Duluth even a place? I just said that.

Sam Parr

I had a... yeah, there's a Duluth in Minnesota, but there's probably a Duluth in a lot of places.

Shaan Puri

Shout out to the listener who just caught an absolute stray in Duluth! That is your lucky day.

Sam Parr

If you live in Duluth, just comment on YouTube and let us know. But you could still kiss our ass. Alright, that's odd.