This Profitable Business Model Might Make You A Billionaire | My First Million Podcast
Information Wants To Be Free - May 9, 2020 (almost 5 years ago) • 11:20
Transcript:
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Shaan Puri | What a **fucking baller**! I was gonna save this guy for next week, but we're going to do a **double billionaire of the week**. So, we're doing a **double Billy special**. Get your Billy's right now: **Richard Burton**.
Okay, so have you heard of this guy, Richard Burton? Is it Burton's Millboards? No? So, this guy started a couple of different companies. Just Google **Richard Burton**.
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Sam Parr | I did earlier and nothing came up | |
Shaan Puri | did I am I saying his name wrong | |
Sam Parr | I think you got it wrong because I did return okay | |
Shaan Puri | Richard Barton... Sorry, Barton, not Burton.
Okay, so Richard Barton, this guy started Zillow. He also started one of your favorite sites, Glassdoor. He has three major companies: Zillow, Glassdoor, and what's his other one? I was going to research this for next week, so we're just going to do this live here. Alright, and he did Expedia.
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Sam Parr | he did expedia board of directors on netflix | |
Shaan Puri | He did Expedia, Zillow, and Glassdoor. What a **fucking baller**!
So, okay, how did this happen? I listened to an interview with this guy about five years ago, before this podcast even started. Before this podcast was even a little, you know, sperm in my balls.
When I looked at this guy, the one thing that stood out to me was he had a very simple thesis that he used to start all these companies, which was: **"Information wants to be free."**
So, what does "information wants to be free" mean? He was basically saying, **"I'm going to bring transparency to industries that are not transparent."**
Let's take Zillow, for example. Before Zillow and the sort of online house search companies existed, like Trulia and Redfin, the MLS listings were something that only the agents and brokers had access to. They were the gatekeepers. They would say, **"Oh, you want to know what's on the market? Let me literally print out the MLS papers and I'll show you these."** And then they would tour you through these companies.
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Sam Parr | that's a great line dude information that information wants you got them | |
Shaan Puri | Information wants to be free. So, they did the same thing in travel, right? We had travel agents who were the brokers. You had to call and say, "Hey, I'd like to get a flight, and I don't want to pay too much." You just had to trust them. Hopefully, this agent is going to do their job. They're going to know all the different options, different times, different airports, and they're going to find something that fits my needs.
Expedia was just a search bar that would tell you, "Here are all the flights. You decide." You don't need to go to a travel agent anymore.
Glassdoor is the same thing. You wanted to know, "What's it really like to work there?" Employers have no desire to put that information out there. They don't want anyone to know about the bad things that happen in the working environment of the company. Employees were often scared to speak up because they would sign things like non-disclosure agreements or non-disparagement clauses.
So, Glassdoor was unleashing the information about what it's like to work at a specific company. I love how this guy literally started three multibillion-dollar companies off that one premise. When I did what you were talking about, I reverse-engineered how this guy did it. It wasn't about how he built Expedia or how he built Zillow; it was about how he even got this idea.
I thought, "Okay, what other industries today lack transparency where I can open them up?"
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Sam Parr | okay what are they | |
Shaan Puri | dude well if now that's a $1,000,000,000 idea I need to to have | |
Sam Parr | So, I think the... let's think of some. One of them is pricing for enterprise software.
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Shaan Puri | right | |
Sam Parr | What they do is find out how much money your company makes, and then they go, "Okay, we're gonna charge you this."
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Shaan Puri | right I like that I like that a lot | |
Sam Parr | I hate the call for pricing model. I mean, I hate it, but it works. We do it.
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Shaan Puri |
So AngelList did this in a way as well. When you were able to figure out who's invested in what, that used to be sort of not easy to find information. It wasn't totally guarded, but...
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Sam Parr | crunchbase as well | |
Shaan Puri |
I'm literally just looking at the tabs that I have open right now. Like Yelp... Yelp was something like that too, you know? How is it? What is it like to eat there? The review system organized and made public information that people wanted that was not super transparent before this.
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Sam Parr | Yeah, I mean housing... he did that. There's a lot of... like, there are so many good ones. Salaries, he did that with Glassdoor.
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Shaan Puri |
Does Glassdoor do salaries? Yeah, so there's one that I use that's in the tech world called Levels. I think we talked about it once before, but they do it with just the kind of tech companies. It's like, "What do people at tech companies make?"
A lot of people have been doing this inside companies. So inside Microsoft, for example, they created an anonymous Google doc where you could just put your:
- Level
- Job category (like engineer, designer, product person, whatever)
- Salary
- Pay
And then you...
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Sam Parr | could start that's that yeah | |
Shaan Puri | You could figure out, "Am I underpaid?" But this was even more specific. It was like in a company. These are people now. It's not just Glassdoor; it's like just a few who kind of go and post this stuff.
But they're getting like these companies having all these really rich documents with thousands of people contributing. Right now, those are just Excel docs.
I wonder if you could take just the salary component of maybe what's in Glassdoor and do it in a better way inside companies. This way, people can make sure they're not getting the short end of the stick within their own company right now.
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Sam Parr | that's interesting another one is freelancers | |
Shaan Puri | so freelancers what | |
Sam Parr |
Freelancers and agencies... The problem with a lot of this stuff is when we're trying to hire some agencies for WordPress development, I have to back-channel and go find out from people who work with them what they were like. But once I sign up to a degree with them, I can't... I won't find out unless I'm on a project if they suck or not.
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Shaan Puri | right | |
Sam Parr |
And it's like, "Oh my God, I can't believe that! I can't believe I'm in!" That's the same thing with payroll software too. Like, Gusto looks good, but when you sign up for it, you don't realize what you like and what you don't like about it.
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Shaan Puri | So, we have a couple of friends who are doing things to try to make information freely available about what software companies use. A lot of people would want to know, "What does The Hustle use? What do you guys use to send emails? What do you use for analytics? What do you use for your paywall? What do you use for trends?"
I know Ryan at Product Hunt is doing something similar with a project called Stacks. They want to know, "What's your software stack that your company runs on?" It's an interesting idea. He's designing it kind of like a social network, but the value in the end, if you get there, is, "Oh cool! I can now go see, okay, if I'm building an Airbnb-type company, what do they use to run their company? What do they use for analytics?"
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Sam Parr | do you think that that is that working | |
Shaan Puri |
Well, it's really tough to build right because it's one of those things where it's really valuable if you get there, but really tough to get the information in. Because you have to get the incentives right:
- Later on, you have the incentive to come to the site because you want to see what other people use
- But what's the incentive to post?
So he's trying to make it fun and interesting and cool to post by making it very visual, sort of a...
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Sam Parr | they got it doing that | |
Shaan Puri |
A profile for your company, right? Like, "Yeah, we use this stuff." And so I don't know the numbers on how it's doing, but I do think it's an interesting experiment. And I think if they did it, it would be the most valuable thing that Product Hunt has built because it's... it's just inherently... Surely there's a great business model on top of that, if...
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Sam Parr | you can | |
Shaan Puri | show what software people use | |
Sam Parr | That's cool! I agree, that's interesting. I love this idea of information needs or information wants to be free.
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Shaan Puri | Yeah, and I let's think more about that. I think we'll come back with an example of information today that is either behind a walled garden or it's incomplete.
If you set it free, it would help people make better choices or save them money, or whatever it is. Maybe it's something in the insurance space. I don't know exactly what, but I'm going to think about this because I think this is a formula for building really big companies.
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Sam Parr | Yeah, for me, it's how much things cost. Like freelancers and lawyers and things like that. That's always bothered me. I don't like it. My lawyer could be like, "Yeah, we charge $700 an hour." When I was first getting going, I was like, "I have no idea, is that normal?"
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Shaan Puri | Right, and on the other side, it's also about how much companies make. You love it when you hear that a company is public or it's a nonprofit because you're like, "Yes! I'm going to get to their financials," because they have to report. But I'll tell...
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Sam Parr | you what it is pitchbook | |
Shaan Puri | for private companies | |
Sam Parr | Yeah, well, they do it in a really interesting way. They're owned by a publicly traded company and they do about $120 million a year in revenue.
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Shaan Puri | what they do like $25 for a pitchbook subscription right | |
Sam Parr | They are really expensive, and they do about 120. They're owned by, is it called Morningstar or is it a company called Brightstar?
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Shaan Puri | I think it is morningstar or morningstar is like the mutual fund thing | |
Sam Parr | It's owned by one of those things, and I just read their earnings report on Morningstar.
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Shaan Puri | it is morningstar and they are the mutual fund thing too | |
Sam Parr | They do a bunch of different things. The first thing they do is crawl the web to find SEC documents and all types of data. They have a team of about 300 people who just hit the phones all day, calling people to gather information. | |
Shaan Puri |
Right, and then the other one that's like that is... you know, even for podcasts, when we look at the top charts and we're like, "Alright, how do we become the number one business podcast?" We don't know how many downloads they get, right?
There's this idea of:
- How much something is being earned
- How much something is making
- How much something costs
I think that just generally would apply to a whole bunch of different spaces that you could use for this.
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Sam Parr | yeah that's why I use a similar web because they show me how much like traffic they guessed traffic | |
Shaan Puri | one of the dope ones of this do you use second measure | |
Sam Parr | yeah they're great | |
Shaan Puri | they're great I think they're a | |
Sam Parr | little bit expensive they are | |
Shaan Puri | Yeah, if you don't know what they are, Second Measure takes credit card spending data and can tell you essentially how much money something is making just by analyzing how many people are charging Spotify per month.
Then they're like, "Okay, cool." Right? Imagine Spotify was not a public company. You'd be able to see how much revenue they're making.
They do this with delivery companies as well. Which delivery company is winning? Well, they can just check this huge dataset of credit card spending and say, "Okay, it looks like Grubhub's in the lead and then second is DoorDash," or whatever.
So, Second Measure is super powerful, using the source of truth, which is credit card data. I don't know how they get that information.
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Sam Parr | All I want to do is just end the podcast and make my days 50 hours long and just start off.
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Shaan Puri | search everything | |
Sam Parr | This whole concept of "data or information wants to be free" is amazing.
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Shaan Puri |
That's the test. I want people to listen to this podcast and be *so excited*, and then I want you to feel anxious. I want you to feel stressed that you don't have 50 hours in your day to go do this. And that's how they should feel.
I've heard a bunch of people say like, "Yeah, I have to keep pausing the podcast to:
a) write shit down
b) take a breath
c) think about what's going on"
...and then I resume it. And yeah, that's what we want. It's that high value.
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