From $0 to $100 Million In 3 Years Selling Cold Plunges (#527)

Shaan Puri

Alright, today we're talking about an app that is taking off, and I think it might be the next TikTok. It's a Chinese app that you probably haven't heard of. Sam got all the numbers behind a cold plunge business that's doing over **$100,000,000** a year, including their ad numbers, which is rare. You almost never get to see that. Lastly, we talk about lessons that we learned from Jess Ma, a founder who has built a business up to **$900,000,000**. She shared one or two golden nuggets that we wanted to discuss. Enjoy this episode!

Sam Parr

Alright, let me give you an update on something. So, we had... you know, I take a lot of pride in the fact that we've had some people on here right before their fame arc really took off. We had Brian Johnson on here. You said that he mentioned, "Yeah, you guys are one of my first people." Another one is Andrew Huberman. We talked to Andrew Huberman, and I remember we talked to him when he was in this hallway at Stanford or something, doing an interview with us. After the pod, or during the pod, I told him that cold plunging is interesting to me. After the pod, he goes, "Hey, I wanna send you a cold plunge." I was like, "That's very kind of you. I would love that." So, he introduced me to this guy named Ryan... Ryan Dewey. Ryan sent me a cold plunge, and the company now... what's the URL actually? Is it plunge.com? Even know what it is? Plunge.com? Yeah, it's just called Plunge. He sent me this thing, and I started using it, and I loved it. I dug it. And by the way, this also sounds like an ad. This is not an ad; I have nothing to do with these guys.

Shaan Puri

but ryan I will take a free plunge I said no earlier I changed my mind

Sam Parr

did you say no when he offered you one

Shaan Puri

I said no I said no the first time

Sam Parr

that's crazy

Shaan Puri

And I was wrong. I'm man enough to admit it; I was wrong. I would like a plunge. Thank you.

Sam Parr

Yeah, they're awesome. But here's the deal: when he was selling them at the time, I think they were like $35,100. Now, I think they're like $55,100. I didn't know if I liked doing it, so I was like, "Yeah, I'll take one," because that's a lot of money to spend just to test something out. So, I got an update on these guys. I think they only launched in 2020, and in preparation for this podcast, I just went and talked to them and got a bunch of numbers this year. So, here, listen to their revenue in 2020. The way it started is Ryan and his partner Michael each separately owned brick-and-mortar businesses. One of them, Ryan, owned this thing called a float therapy center... or I don't know what.

Shaan Puri

a float tank

Sam Parr

Yeah, it's like a... I used to call it a deprivation tank. I used to do it in San Francisco every once in a while. You sit in this tanning bed that's filled with saltwater. You basically float, and it's completely dark with no noise. You feel funky; it's kind of cool. His other partner owned a place called Reboot, which was like a sauna that you could go to in LA. But then COVID happened, so both of those businesses got screwed. They were like, "Man, we gotta figure something out." They noticed that at their places, people were asking for cold plunges. They also saw that online, it was like $15 to get a cold plunge, as opposed to what a lot of people do. What I used to do in college was get a big trash can, go to 7-Eleven, buy ice, and fill my bucket with hose water. It takes forever! So they thought, "Alright, let's create our own." In 2020, they did $270,000 in revenue. In 2021, they did $8,000,000. In 2022, I think we got it in 2021 or 2022, whenever Andrew came on, they did $33,000,000 in revenue. This year, 2023, they're doing around $10,000,000 a month, and they're going to surpass $100,000,000 in revenue off cold plunges. Insane! It's wild! The way he told me they got started was by DMing Aubrey Marcus, who's this health guy on Instagram who owns Onnit. They said, "Hey man, we'll come to your house and just set up a cold plunge for free." So they got a U-Haul, filled it up with this homemade thing they created, using a bunch of parts from Home Depot, I'd imagine. I had an early version; it looked like something you could kind of hack together. They brought it to his place, set it up for him, and asked, "Is there anyone else you think we should talk to?" He said, "Yeah, Huberman. Talk to this guy." So they got a U-Haul, filled it up with five more, and started delivering it to these guys. I guess that's how it all got started.

Shaan Puri

they started it with like plunge tour they would go a plunge tour

Sam Parr

they would

Shaan Puri

Fill up 4 or 5 of these, go on a plunge tour, and they would Instagram while they were doing it. So people on IG would see it... like me, I would see it on IG and think, "Damn, this must be like some super successful company because they're only delivering to people that I know." Like, you know, influencers basically. Even though there were no other customers, it was only those customers.

Sam Parr

Yeah, and there were only a few of them. They threw this thing together, and I guess that's when Andrew... like, I guess they were like, "Andrew, you know, we have this many for you to give away. Do you want to give away to whoever?" They gave one to me, they gave one to Sahil. So far, they've given away 100 of these things, and they're killing it. Never in a million years would I have thought a cold plunge business would do north of $100 million in revenue.

Shaan Puri

by the way they've given away over a 1,000 plunges

Sam Parr

that's insane right

Shaan Puri

That's like the... that means influencer marketing was so important to them at the beginning.

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Shaan Puri

A couple of other fun facts. I'm going to say a couple of these that you have in your notes. Yeah, do it! They bought Plunge.com off of a New Orleans jazz band for $250,000, which is just hilarious.

Sam Parr

that's a that's wild

Shaan Puri

They basically are riding this wave. If you look on Google Trends, we'll put this up on the screen on YouTube. You can see that both "cold plunge" and "ice bath" are rising over time as the Huberman era kicks in here. So they're right in the back of that. But the insane thing is this ad spend. You gotta talk about this.

Sam Parr

You talk about it because this is in your wheelhouse. But basically, what they did was... Ryan. I've met Ryan. He's almost like... I don't know the best way to describe it, but he's one of those guys that was doing ayahuasca before it was cool. When I went and hung out with him, he had his toenails painted. There's something around that; I don't exactly know what it is, but he's eccentric. I don't think he probably knew anything about Google Ads or Facebook Ads. He said he hired a guy on Upwork to help run Google Ads for them, and that's how they started. He even sent me a screenshot.

Shaan Puri

Basically, it shows their revenue, it shows their ad spend, and it breaks it down on Google, Facebook, and even Bing a little bit. But just looking at their total paid media... that's... doesn't want to zoom in on this. These are kind of bonkers numbers. So this is... is this a month? What, what, what is this? I think this is...

Sam Parr

last month

Shaan Puri

I think this is monthly, which is crazy. So, last month—I don't know if it's last month, but one month—$860,000 in ad spend. So, $860K in a month, and then their ROAS (Return on Ad Spend) on that was 7.1. To put this in perspective, that's bananas! Nobody has 7 or 8x ROAS. They said they've had that basically from the beginning. They used to get over 10x, and now it's sort of between 7 and 10x. To get a 7x ROAS means you have a machine. They put a box in this guy's house, and it's a magic box. The box says, "If you put $1 into this box, you get $7 out." That's what that means. They have this box that they're able to put $800,000 in each month and get out, you know, $6,000,000 back. They're just doing that month after month after month. You see it on Google; their ROAS is 5.8. On Facebook, it's 10.7. I don't know why they're saying this, by the way. I would never reveal this information. If I found a magic box that does this, I would never share this with anybody. But they said to do it, so here you go. I think maybe they think they're pretty far ahead in terms of competition, but I don't know if they can get these numbers. Anyone can get these numbers on Facebook. They have no special sauce there that's going to be uncopyable, I guess. Why did they agree to share this?

Sam Parr

I just said, "I wanna talk about you in the pod. Let me interview you." I said, "Whatever we talk about, this is like on the record." So I guess if they change their mind, they'll let me know.

Shaan Puri

But I mean, it's cool that they get a big feature. That's cool. But also, this is crazy, and just props to them. These numbers are insane. So basically...

Sam Parr

They own the whole thing. They bootstrap and haven't taken any funding. By the way, this is 2020, so they're coming up in 4 years.

Shaan Puri

So on Facebook, in this snapshot here, this is accurate. The snake... this is the cash on Facebook. The cost to acquire a customer on Facebook for them is $387. They're selling this thing for $5,000. So you could see you're paying just under $400 to get somebody to pay you $5,000. Amazing trade on the ad spend. You could see why this thing is scaling so crazy well, you know. Over it's... [sentence trails off]

Sam Parr

wild right

Shaan Puri

$8,000,000, $33,000,000, and then now over $100,000,000. They bootstrapped it; this is profitable. They didn't raise any outside money, and now they're expanding into saunas and other things too. So that's pretty insane.

Sam Parr

What do you think this company could sell for? Let's say they get to... I have no idea what the profit is, but let's say they get to $100 million. So, in 2020 they started at $200,000 a quarter, $1,000,000 in 2020. In year 4, their 4th year of business, they're going to do $100,000,000. What could this sell for? Could this be a $200 or $300 million company? Definitely, definitely.

Shaan Puri

You know, I would... if you're getting, just to put this in perspective, if you're getting 8x ROAS (Return on Ad Spend) on your money, and let's say that continues. Let's say they can, if they said they're doing, you know, whatever, $8 to $10 million a month. So they're over $100 million, let's say $120 million in revenue. The minimum that they should be selling for is 1x revenue. So, $120 million in this case, let's say that because of their growth rate and the insane profitability on their ads, this company has to be, you know, making bank. Right? Normally, most people in e-commerce are breakeven or slightly losing money on the first order. That gets you... that's like you have a ROAS of like between 1.2. These guys are doing, you know, 6 or 7 times better than that. So, that's kind of insane. This company should be worth, you know, $250 to $300 million right now. You know, I don't know how big that Clearlight Sauna company is, but I'm pretty sure it's pretty big.

Sam Parr

Man, if I'm these guys, I might take that sale. To make that amount of money in 3 or 4 years... I don't know what their financial situation was before, but let's just assume that they were just getting by owning a brick-and-mortar business. That's wild! That is a crazy story. I would take advantage of that.

Shaan Puri

Or I would sell like $30,000,000 of secondary. I would sell like $30,000,000 at even like a $100,000,000 valuation and delete 30%. Only, but now you guys, you know, you put $15,000,000 in the bank and you can keep going. If you really want to keep going, that's what I would do in this case. Because you could bank that huge, life-changing sum. These e-commerce companies, let's say, you know, ad flips, competition flips, whatever, they don't retain that much value because the sale is already done in the past. You basically get no credit for past sales here because it's not recurring revenue. It's not like a network effect style business. So, you know, you're really only as good as your next year when it comes to e-commerce, I think at least. So yeah, I would definitely take some money off the table.

Sam Parr

It's crazy though. And by the way, I don't know what the science is behind cold plunging. I still... I've owned it for 2 or 3 years, and I still use it 3 days a week. I'm into it.

Shaan Puri

It's clinically proven to make you post on social media at least three times more. So, that's one proven effect.

Sam Parr

There was this one TikTok where these guys were joking. They were like, "You know, it's crazy to think about it, but for the first 20 minutes after the Titanic sank, the passengers were actually healthier... until they died."

Shaan Puri

They actually were increasing their lifespan by 20% during that first cold plunge until they suddenly died.

Sam Parr

they're like they're like too bad wim hof wasn't there to teach them how to breathe

Shaan Puri

right

Sam Parr

It reduced their risk of heart attack. They're like... imagine if Wim Hof was there: "This feels nice." But there was about 15 minutes with that... should do.

Shaan Puri

He should rebrand to the "Titanic Method." He should be like, "Oh, you don't do Titanic breathing? This would save you. You would live even if you're on the Titanic if you learn this stuff."

Sam Parr

It's about 15 minutes where they are at peak physical shape. Anyway, that's the update on Plunge. I finally got an update on them. I'm shocked at how they're doing... I guess I'm not that shocked. It's a $5,000 product. I guess I'm shocked at how many people would buy into this. Never in a million years would I have thought this many people would buy into this and want to get cold however many times a week. So that's my update on Plunge.

Shaan Puri

I got one thing I want to jump right into. It's something that's been on my mind, it's been grinding my gears, it's been a little... a little itch I need to scratch. And that is **supplement testing**. So, you're a big supplements guy?

Sam Parr

it sounds like you're setting up an ad by the way we have to say this is not an ad

Shaan Puri

No, no, this is not an ad. This is just me being corny. I've been thinking about this idea because I've been buying a ton of supplements. I don't know about you, but people are like, "Oh, you take that?" I'm like, "Yeah." Then they're like, "How? Is it working?" I'm like, "How the hell would I know? It's a supplement!" You never know if a supplement's working, right? I personally feel that way. I don't know if I'm just not in tune with my body. When you take stuff, do you have a clear sense of, "This is helping me" versus "This is not"?

Sam Parr

When it comes to actual supplements, there are basically only one or two that I've ever taken where I'm like, "This is working." I take either **melatonin** or **magnesium** at night, and those are the only two where I'm like, "Alright, it helps me go to sleep faster." Besides that, there's **protein**. Protein is a supplement, but it's also a nutrient. You want to eat more protein, whether it comes through a powder or not. I noticed my muscles get bigger. Besides that, I don't think I've noticed a difference in mostly anything.

Shaan Puri

Even protein for me, it's not even like I feel my muscles getting bigger. I just feel more full, so I'm like, "Okay, that did something." It's kind of like a meal replacement. I got it. But like even creatine... I started taking creatine and I thought that creatine would be... I thought creatine was gonna be the *hard* shit. I was like, "Oh okay, here we go. I've crossed the line. I'm doing the hard shit now. Now it's just gonna be like a little unfair, these gains that I'm about to be having." Can't feel anything with creatine.

Sam Parr

No, I don't feel anything. When I was taking testosterone, I felt that, but I don't know if that would be under the heading of supplements. Basically, if it's illegal or banned in sports, I've noticed a difference. Besides that, if I could buy it at Target, I don't know if I've noticed a difference.

Shaan Puri

Right, if you're not having to test a guy to get it, you're not gonna feel it. So I feel like with supplements, there's an opportunity. The opportunity with supplements is to be the most trusted source when it comes to supplements. So for you, where do you go when you want to find out: - Which brand you should be taking? - Which brand you should not be taking? - What's the most effective? - What's the cleanest? - What's the healthiest for you? Where do you go to get that information right now?

Sam Parr

So I use Examine.com to figure out which supplements are... like, which ones the science has shown that work. But Examine.com [is not a] brand.

Shaan Puri

right that's

Sam Parr

The website, **Examine.com**, in order to stay neutral, does not promote any brands. So, I go to Amazon and talk to friends. It's pretty challenging. It's also challenging because, do you remember the mattress review websites? The top one ended up being owned by Casper. Exactly. It was incredibly challenging to find reliable information. For example, some protein brands will say, "We have 25 grams of protein per scoop," and then you go to research it, and it's like, "No, this one actually only has 18." Or this has some certification, which means they had to jump through this hoop or that hoop. It's actually quite challenging to figure out who's clean and who to trust.

Shaan Puri

Yeah, I think it was Casper that owned... Was it Casper or Purple that owned a bunch of the top mattress blogs? They were like normal blogs for 15 years, and then they bought them out and started promoting their own products. It's the same thing with supplements, you know? Like, what's rule number one if you create a protein brand? You go buy your brand name domain, and then you buy "thetruthaboutprotein.com" because you're gonna need that too in order to promote your own products.

Sam Parr

it's really hard it's really hard

Shaan Puri

The reality is that supplements and health and wellness are on the rise. People are becoming more and more accustomed to taking a wider variety of these products. There are more and more brands in the market because now you have direct-to-consumer (DTC) brands. Anyone can create a brand; you don't need to fight for shelf space because you can just be on the internet—the infinite shelf. I think the need has become bigger than ever for someone to become the trusted person around supplement testing. And have you seen this guy, FlavCity?

Sam Parr

no how do you spell it

Shaan Puri

FlavCity is this guy that my mom will always send me. His shtick is genius in terms of content creation. This is such a good niche, and it is so perfect. What he does is he presents himself as a trusted guy. He’s not some super expert or whatever, but he’s just a guy who knows things. He goes to a grocery store, and if you look at his Instagram, you'll see him at Costco. In the thumbnails, he’s holding up, let’s say, Parmesan cheese, and he’ll say, “Don’t buy this.” Then he’ll turn it around and explain, “See, it has Parmesan cheese, milk—that’s fine—but then it has artificial flavors. We don’t like artificial flavors because they’re going to be bad for blah blah blah.” Instead, he’ll recommend another product at Costco that’s better. He’ll say, “See, this one doesn’t have artificial flavors, doesn’t have this, it doesn’t have that, but it’s the best one you could find at Costco.”

Sam Parr

So he's doing it right now on Instagram. He's doing it for Veggie Straws, which are like those potato chips that are supposedly made out of vegetables. He goes: "This is bad for this reason. Here are some better ones for you: - Lesser Evil Power Curls - Siete Puffs - Jackson's Sweet Potato Chips" And he looks at the back of Veggie Straws and tells you what's wrong with it.

Shaan Puri

Right, and I'm giving this to my kids... "Veggie Straws! Oh, that's better than chips. It's veggies, right?" And it's like... so he just debunks a lot of things. He's got his whole thing, he's very high energy. He does mainstream products that are in shopping centers and stores, and he'll be like, "This one: Bobby approved!" He's got his own little shtick where he's like, "This is Bobby approved." He's basically Doug DeMuro, but for packaged goods instead of cars.

Sam Parr

2,500,000 followers that posted the veggie straw ones that I just said has 25,000 likes.

Shaan Puri

Exactly! Because it's super affordable. As soon as he says something, and you know somebody who eats that, you share it with them. Then he becomes a trusted source. He's not selling you anything; he's just telling you better and worse options. He's telling you what to avoid, or he's like, "Okay, it's the holiday." He's got one holiday booze haul, and it's like, "These are the things to buy and don't buy when it comes to booze." Or, "Is farmed salmon good or bad?" He just uses the thinker emoji, so you're like, "Oh shit, is there something I need to know about farmed salmon? Is that not healthy? I thought that was." He's got another one: "Ditch the Goldfish." So he's taking these popular products and doing this. I think this is genius! I think more people should literally just copy him because there's room for more here. You could differentiate by being, you know, a mom who's going to be trusted by moms and do more mom products than what he's doing. Or you could be a meathead who's doing more protein, gym bro type of content. That's kind of what More Place More Dates is doing. But I think this format is beautiful. So let me just tell you about this opportunity. Okay, here's how I'm thinking about this. Do you know Consumer Reports? They test like every product: ellipticals, coffee machines, and whatever else. Do you know about the company itself, Consumer Reports?

Sam Parr

I do. We brought them up. I'm not gonna steal your steam here, but it's wild. It's wild.

Shaan Puri

They're a nonprofit. Do you know that? Could you give me an accurate guess? You don't have to give me the homey guess where you guess low just to make me feel good. Give me what you think the real guess is. Do you know their revenue per year? It's $289 million a year, almost $300 million.

Sam Parr

That's insane! It's crazy, right? And it's all subscription revenue. What's that? It's all subscription revenue too, I think.

Shaan Puri

Yeah, I don't know the exact mix, but it's a nonprofit so you can actually go find a bunch of their stuff. They have like $250,000,000 of assets on their books, which... nonprofits are famous for having, you know, high revenue, high expenses, and then just a lot of assets on the books. And so you...

Sam Parr

you have to you have to spend a 100 doll $60 a year in order to get access to their articles

Shaan Puri

And it's old... it's old as hell. You go there and literally, the website looks old. You know, like when you see videos of people from the nineties or the eighties? It's just like the haircuts are old, the fashion is old... it's all old. These people have eighties haircuts. I just realized when I saw this, it's time for a new consumer report. JD Power does this for cars, right? JD Power... what is it? JD Power and Associates? I don't know who these people are or what they do, but they generate $240 million a year in revenue. So, I think there's an opportunity to create a new age consumer report or JD Power around supplements specifically. I would do it in the TikTok format, similar to what FlavCity is doing. I would test every single product in a scientific way that people can't. They claim that it has this many grams of protein per scoop? Let's find out! Truth or dare? I dare you to have the amount of protein you say. You could do a little 15-second or 30-second video talking about each one of these products. The beauty of short-form video is... Mr. Beast said this to me, and I kind of was like, "I never thought about this before." He goes, "For the first time ever, short-form video is the only content format that can be posted on every social network at the same time." I was like, "What?" He's like, "Yeah, basically, let's take Instagram. It's a single photo that's filtered. Cool, you could post that on Instagram. You could kind of post it on Facebook. You might be able to post it on Twitter, but it wasn't the native way of doing things. You can't post that on Snapchat the same way." But with short-form video, you can literally get on TikTok, YouTube, Instagram, Facebook, Snapchat... every single social network is compatible with short-form video. This means short-form video is now the dominant content format to be creating. I think if you do this, you could go across all of them.

Sam Parr

You can't monetize that. So typically, there are basically two ways... maybe there's three, but there are two main ways you monetize this: 1. There's affiliate, which is Wirecutter.com 2. I've got a... I know a guy named Dennis who started BestReviews.com. He sold it for **$110 million** to the worst-named company on Earth. It was called Tronc, which was... it's basically the company I think that owns LA Times. And he sold it for $110 million after Tronc [acquired it].

Shaan Puri

Should definitely be like a women's jeans brand that's all about your butt or something.

Sam Parr

yeah tronk is a

Shaan Puri

horrible name junk in the trunk you know what I'm saying

Sam Parr

It's a really bad name. It's one of those names that sounds like a noise. They sold the trunk, I think after 4 years, and they monetized it the same way as Wirecutter. So it was through affiliate [marketing]. Wirecutter's one of the few - I think NerdWallet does a good job too - where they do trust. For some reason, I still trust them even though I know they get paid per click.

Shaan Puri

right and

Sam Parr

Then the other one, which is harder to pull off but a way better business, is subscription. That's what Consumer Reports does.

Shaan Puri

You know why Wirecutter, I think, can have that trust even though they're clearly pushing... you know, they're clearly making money off the recommendations? I think it's two things: 1. It's like good design and copywriting, so it feels like a person is talking to you. 2. It feels right, like it's... clean.

Sam Parr

same with the points guy

Shaan Puri

They're not saying who's the best. What they do is say, "Best on a budget, this is the one we recommend." If price is no problem, this is the best one on the market. Then, kind of the most common popular option is this one. So instead of it being, "Here's our favorite," and "Yeah, it's the one we're getting the best kickback on," they kind of give you options depending on your situation. We think this is the best in that situation. I feel like for some reason that changes, and then it's like, "Yeah, we make money. You know, we get an affiliate on each one of these." But like, they're all equal. We're not saying one is better than the other; we're saying one is better in this situation. So I think that...

Sam Parr

And one of the reasons why I think they do that is I know the founders of NerdWallet. If I remember correctly, their whole business model was to make the page [nerdwallet.com/bestcreditcard] rank number one in Google when you search for "best credit card." For a long time, that one page was making like $40,000,000 of their $45,000,000 a year in sales. Then they were like, "Alright, now we need to do best credit card for students, best credit card for fixed income people, best credit card for your first time credit card." They had to diversify because [nerdwallet.com/bestcreditcard] was getting all of their sales. Their whole company strategy was to write articles that get linked back from high-quality sites like USA News or Business Insider. Then, in those articles, they would link back to [nerdwallet.com/bestcreditcard]. It was a pretty wild strategy, and it worked... or it's working.

Shaan Puri

Yeah, you basically want to write articles that get links so your overall domain authority goes up. But then you have one or two moneymaker pages. Those are the pages that you need to be the number one search result for. The way you do it is by creating all this goodwill around the other pages, the sort of SEO goodwill. So, I think you would think that short-form video is hard to monetize, but that's not what you're monetizing. You're not monetizing the short-form video; you're monetizing the trust. So today, who is both the most trusted voice in science and supplements and the man most likely to be in Sam's fantasies?

Sam Parr

yeah my husband andrew huberman exactly

Shaan Puri

yeah and as a what do they call them my my huberman husband or something like that yeah

Sam Parr

"What did they say?" So, I posted a shirtless picture of him and he's like... and I was like, "People were like, 'What did they say?'" They're like, "I'm Huber's man." Yeah, he posted his first shirtless video the other day, and men around the world were gasping.

Shaan Puri

"Clear the calendar, honey!" Yeah, alright. So Huberman makes money through his ads and his podcast, but remember when Rob Dyrdek was on the pod? He was talking about Momentous protein. He said: > "Yeah, Momentous was kind of dead in the water. We thought we had made the best, cleanest protein, but it really wasn't going anywhere. And then we did a deal with Andrew Huberman." And we were like, "How much did you pay him?" And he goes, "I don't know... whatever it was, it wasn't enough."

Sam Parr

it wasn't

Shaan Puri

Enough, and he was just laughing at how crazy that was. You know, I think the business model here is you build trust for a couple of years, and then you come out with your own branded supplement, right? You want to be in the supplements game. You don't want to be in the...

Sam Parr

your whole premise though of finding the most trusted

Shaan Puri

No, no, no, no. You are the most trusted. You build the trust by saying... and then finally you say: "Look, I've had it with these companies. I've had it with these... I am just gonna make the one that I wish existed. The one that is truly clean, that is gonna hold the utmost standard." Right? Derek from *More Plates More Dates*, that's exactly what he did. Somebody like Jessica Alba with *The Honest Company* kinda did the same thing. She builds up a bunch of fame and trust in one area, but then she comes out with The Honest Company, and she's like, "This is gonna be the honest brand, the product I wanna give to my kids."

Sam Parr

I buy Momentous protein in part because I trust Rob, and Rob was involved. I also buy VPN, which is Nick Bare, you know, the jack guy who runs fast. I was like, "Well, these guys both seem trustworthy. I'll buy their stuff." So, I spend all my money with them.

Shaan Puri

Right, because what else do you have to go on? You have nothing else to go on besides this packaging or that packaging. What else do you have to rely on besides the words of somebody you trust? I think that's the way you do this ultimately. You ultimately build your own supplement franchise around this, more like the Honest Company. But I think for a couple of years, you are just becoming the most viral, trusted source when it comes to the truth about [X]. You’ve got to pick things that are going to be very shareable, as well as establish your authority in that niche. You want to be able to say, "I'm the most knowledgeable, trusted source when it comes to what I should be taking."

Sam Parr

By the way, we've talked about the "Eat This, Not That" category, and we loved it. I think we talked about it a year and a half or 2 years ago. We love the "Eat This, Not That" category. It's the best... well, I love that stuff.

Shaan Puri

You say that because I remember talking about FlavCity. That's his thing, right? "Eat this, not that." He was doing... I thought I mentioned it maybe a year ago, but I really hadn't fully wrapped my head around it.

Sam Parr

My head around it... "Eat This, Not That" was a line of books I remember buying at Barnes & Noble. I don't even know how to say it. How do you say it? I used to call them "Barnes and Noble's." I remember buying at Barnes & Noble years ago when I was in 4th grade. It was "Eat This, Not That," and it would just show a picture of Doritos and then it would show an alternative. It would explain why it was a massive hit for a book series. I remember buying all of them, and I think we said, "We're fine for a book, but this has to be beyond that." We talked about it, I think with Steph, two years ago.

Shaan Puri

Yes, yes. So I think this is a clear content niche that could turn into a pretty monster business. There's a bunch of different angles depending on who you are: - Derek, for "More Plates More Dates," obviously hits the gym-bro market - FlavCity hits the mom/Costco shopper market You should just keep... there's a lot more niches than that.

Sam Parr

The New York Times did this article the other day, or a few weeks ago, titled "My Guru is Better Than Your Guru." They talked about how people like you and I, you know, we are Team Huberman. But then there's this other group who's Team Peter Attia. There's also another one whose followers include my father-in-law, who loves this guy named Mark Heinemann or something like that. It's like, "Well, my guru said this," and it's just crazy how we find these guys that we stick to. Whatever they say, we don't know. I can't tell you entirely why Huberman suggests X, Y, and Z, but I know he's suggested that. I will go to bat and fight other people whose guru said X, Y, and Z, and I don't even know why. I just know that I trust Andrew; that's my guy. I thought it was really interesting how it is turning into something like that.

Shaan Puri

have you ever heard this explanation of why gossip exists evolutionarily no it's sort of nerdy but it's it's kinda fascinating so everything has a value right like even like what we consider negative emotions like fear why does fear have value well you know if you're a hunter gatherer and there's a lion you know fear or paranoia can be a very useful survival tool and you needed to be super fearful and paranoid at a certain. Of time maybe less so today but we can see why that's evolutionarily baked in but that that applies to everything and so gossip is a good example gossip if you just talk to most people gossip negative thing right shouldn't do it bad you know poor form it's it's sort of a lowly thing to do and actually gossip is extremely useful so you think about humans live in tribes and we're in this society well it's impossible for me to know 1 by 1 with each person about their character and their reputation myself through only firsthand experiences and so how does a tribe function well gossip is actually a necessary thing I should know that if this person is untrustworthy because rumors should spread so that the tribe as a whole becomes almost immune to this charlatan through gossip and I don't have to myself go and have a firsthand bad experience so in that way gossip has saved me from getting my you know my hand burned off on the stove many times and so I kinda feel like the the same thing exists where it's sort of silly in a way that you just trust these online influencers these gurus don't you know they're just trying to sell you something well yeah and there's there's some amount of that but at the same time what am I gonna do go test all my supplements myself like the inefficiency that would be brought in if I didn't trust these people what am I gonna go read all the white papers myself about clinical studies no I'm not gonna do that I'm gonna we're all gonna outsource that task to somebody and we're gonna trust them until they burn our trust and then we're gonna move on to the next one but like almost like as a tribe it is the efficient way to do things even though it's kinda seen as this low iq move it's actually not a low iq move it is the like sort of like game theory optimal move to trust people or to trust gossip in certain situations where you're not gonna wanna do the firsthand work yourself

Sam Parr

Look, if George Foreman tells me what grill is best for my bratwurst, I listen to George. He looks like he eats a lot of bratwurst. No, I get it. Where did you just go and read a book on gossiping? Where'd you get this?

Shaan Puri

I heard this a long time ago and you know my brain was just connecting the dots just now

Sam Parr

I want to tell you about another health company that's related to all this. But before we do, we have a quick segment called "Thrill of the Shill." It's a time where we're each going to take a turn. Your turn is now to promote whatever you want. But it's the thrill to shill because you're going to shill something, but you're going to thrill me a little bit. So, about 8 months ago, you invested in a company called Shepherd. You sent me a graph, and I get updates every once in a while. I try not to get too much information because I don't ever want to reveal something I'm not supposed to reveal. But you sent me a graph, and things are going more than good. I think you could say how many times it's multiplied. But now, it's your 60-second "Thrill the Shill" moment.

Shaan Puri

Oh, amazing! The pressure is on to thrill with this shill. Listen, the way that I'm going to make this thrilling is I'm going to share a little info, alright? Share a little info, not about the business and the internal numbers necessarily, but about what's working. So I can... what I can say high level is we... the business, we're already...

Sam Parr

doing before we joined yeah

Shaan Puri

that's a great company shepherd and what they do is they basically make it easy to hire so I was using them to hire for my ecommerce company because I wanted to hire more people but I didn't have the budget so I was like alright shepherd has talent in the philippines in latam so like we need a shopify developer alright I can either pay an expensive agency or hire some guy but I found a guy for 25100 a month who's awesome and I did the same thing with customer support I did the same thing with a whole bunch of these roles and so I was using them and I was like this is a great business and I'm gonna buy into it so I bought into it and since then the business have basically tripled so we've tripled the business in 8 months and the business was already doing well to begin with so that was kind of like way exceeded expectations now what actually worked well when I joined I thought alright boys I'm coming in hot I got ideas I don't know if you heard I got a business podcast I think I know a thing or 2 about business why don't you listen to my ideas and I had all these like exotic ways that I thought we could you know make things better and the reality was though that the big lesson the big takeaway here was a lesson that I had heard early on in the podcast there was a guy who came on this podcast I don't remember his name but he made this he has a bag come to peak design I forgot his his first name sorry but at peak design and I was like dude you sell like $80,000,000 worth of this like camera bag what the hell man like what's your what was your growth hack what's your secret and he's like oh dude I used to listen to all these business gurus they talk about this like advanced planning and like you know like long long term thinking and super strategic stuff he goes to me business is the 6 inches right in front of your face and I was like what and I was like this is also the speech from any given sunday and he's like yes business is the 6 inches in front of your face and you just gotta keep knocking out the 6 inches and so when we were talking about shepherd it was like alright well you know cool ideas sean but like what's the 6 inches right in front of our face and we basically did one thing one thing that really really worked and the one thing that really worked that was not expected for me was they just did a very simple analysis they go how do we get more of our best companies customers and less of our worst customers which I think an exercise anybody should do like did you ever do this with either advertisers at the hustle or like for hampton like did you ever define like buck it out like who are the best customers who are the worst customers because the worst customers take up 80% of your time

Sam Parr

Basically, what happens is you get into this habit where you're just like, "I'll take any amount. I'll take any customer and take any money. Whatever, I'll just do whatever." And then you get all these terrible people, and then you're like, "Oh my God, this sucks!" This guy takes so much time, and I don't even make that much money from them. I have to learn: - Who do I fire? - Who do I go after instead?

Shaan Puri

Exactly. What most people do is they start at the beginning, which I think is the wrong move. At the beginning, you don't really know, and you do need to be just a little bit desperate and kind of brute force things. But there's a point where you have to check in. You know, if after nine months you haven't checked in, do this check-in, which is basically to draw a little piece of paper and write out our top 10 to 20% of customers and our bottom 10 to 20% of customers. The bottom is like dragging out your time, lowest profit, you know, the most headache, and the most support required. The top is the opposite. So we did this little exercise, and the thing we realized was we thought the business was about people hiring virtual assistants because that was the most common thing people would come in for. Right? You come in, you need a VA just to do some tasks, or maybe it's a personal assistant for you, handling travel booking, meeting scheduling, that stuff. And it does do that; that's fine. But then we were like, "Yo, who's this group of customers that hire twice as much as everybody else?" The lifetime value (LTV) of these customers is also, you know, 40 to 50% higher.

Sam Parr

so who was it

Shaan Puri

And it was people who needed bookkeepers. I was like, "What?" And they're like, "Yeah, bookkeepers." They explained that the reason we didn't see it is because it's all concentrated in certain spikes. Basically, everybody hires bookkeepers after tax season. It's like you go through the pain of tax season, and then you're like, "Alright, never again am I going to feel that." So companies will basically hire a bookkeeper, saying, "Dude, it was such a mess, such a time suck this year. We just need a bookkeeper." And we're like, "We're a small business; we don't need a fancy bookkeeper. Let's hire an overseas bookkeeper." They do that, or accounting firms or any tax company that needs more bookkeepers, or bookkeeping firms that need more bookkeepers. They would hire lots of the same talent, and that talent is priced a little bit more, so there's more profit on that hire. So, anyway, just by identifying one little thing—there were like three things like that that we did—those were the tweaks that weren't very sexy but made a big difference. So, kind of, that's my little thrill of the shield today: to remind you to do that little 80/20 exercise on your best and worst customers once you're about a year into the business, because it will refocus you.

Sam Parr

a good way you gotta give the url

Shaan Puri

Oh yeah, so go to support.shepherd.com for whatever you need to hire for, whether it's bookkeepers, virtual assistants, developers, designers... They've got basically the top 1% of talent in these countries. They have boots on the ground there, literally interviewing people, and then you can find the elite talent for basically 80% less than if you hire people in the States.

Sam Parr

Alright, that's the **thrill of the shill**. That's pretty good, pretty good. First thrill of the shill. Yeah, I was thrilled.

Shaan Puri

Alright, so let's do another one. I got one thing for you. Did you see Trung tweeted this out? I found this kind of interesting. He tweeted about this Chinese Quibi. Did you ever see this tweet?

Sam Parr

no but is it working

Shaan Puri

so yeah I think it is which is the funny part

Sam Parr

So, is it Chinese as in from China, or for Chinese Americans, but Chinese content?

Shaan Puri

It's Chinese. Like, TikTok is Chinese; it's made by a Chinese company. But it's at the top of the U.S. charts. It's a company called RealShort.

Sam Parr

realshort it's called realshort

Shaan Puri

So basically, here's what he says: it's bite-sized English scripted video content. It's like Quibi, but instead of paying for Hollywood hitters, it's cheesy D-grade soap operas and Hallmark films. The shows are all about affairs, scandals, marital intrigue, and absurd plots. For example, "Son-in-Law's Revenge," "I'm Getting Married Without You," or "Never Divorce a Secret Billionaire Heiress." Let me just pause here. I'm in on real short. Okay, that was all I needed to hear. This smells like a winner to me. Alright, so I like this general concept: short, scripted videos versus just people's TikToks. But it's like junk food... it's junk food content. It's like, you know, Maury Povich, Hallmark films. It's just stuff that’s not highbrow; it just appeals to people. People have to turn their heads to look at this stuff. It's like Hallmark, right? So, he goes on to say a show is typically 50 episodes, and each episode's only 90 to 120 seconds long. They started off by adapting a bunch of Chinese romance soap operas for Western audiences. It's free to watch, but you watch ads to unlock more episodes, or you could pay coins to unlock them faster. TechCrunch estimates that this app has been downloaded 11 million times already across iOS and Android and generated over $22 million in revenue since August 2022. So, $22 million in year one—not bad. It's owned by this Chinese company, COL Group, and they're expanding their audience because the shows were so kind of addictive and, you know, bad that they were banned in China. So where do you go? America—the Las Vegas of the world, where anything goes. And so they brought it here. Pretty crazy. So, what do you think of this concept?

Sam Parr

I'm... this is insane to me. So, the actors and actresses, they're white people. So, is it white? Is it like, are they appealing to Americans, Asians...?

Shaan Puri

For Americans, it's like everything else: made in China, made for Americans. So, who's who?

Sam Parr

Who's buying? I mean, this is just blowing my mind. So, you know Hallmark, right? You know, the cards and the channel?

Shaan Puri

familiar yeah

Sam Parr

So, that company still does about **$5,000,000,000** in revenue. I think it's a family-owned business, so it's still a huge thing for Hallmark.

Shaan Puri

is it the shops + the tv or are they separate businesses

Sam Parr

It's so... the whole company does $5,000,000,000 in sales. But I think a significant amount of the revenue is not from cards; I think it's from the channel. So, it says worldwide, Hallmark has 27,000 employees. Holy crap! Hallmark Channel is like a big line of their business, which I think they sold part of to Liberty Media. It's still a huge company, and I think it's family-owned, based out of Missouri.

Shaan Puri

Yeah, that's great. Okay, so Hallmark's great. So you're in it? Just tell me you're in.

Sam Parr

So, a few years ago, I've told this before. My friend Ramon and I ran a test where we created this book called *Captivating Claire*. I think that's what it was called—*Captivating Claire*. Basically, Ramon ran a soap opera website, and he had this guy on his staff who loved to write short stories, and they were erotic short stories. What we did was create a WordPress blog, and I think we called it *shortbutromantic.com*. Over the weekend, he wrote a story on a Friday night. The WordPress blog was made, and at the very bottom of the blog post, it was basically just one page. It said, "We hope you enjoyed this first iteration of *Captivating Claire* from *Short but Romantic*. If you want to see part 2, here's a PayPal link. It's $10 a month to sign up, and we will mail you part 2 of the story next week when it comes out." We used Fiverr and got a narrator to do it. This whole project took $400. We drove traffic for it, and the next day, on Saturday, we had like $300 in sales. We were like, "Holy crap!" If you look up the blog, you might have to use the Wayback Machine to do it because I think we took it down or the domain expired.

Shaan Puri

I remember reading it

Sam Parr

If you look at the blog and go to the comment section, you'll see that these people were obsessed with this. They were like, "Oh my God, I cleared this! I can't wait to read part 2!" It was mind-boggling. Then, on Sunday, we were like, "We don't really want to be in this business. This doesn't really fit our interests." I think he still should have done it.

Shaan Puri

Well, he... Ramon was going to do this business. We had both invested in him. He was about to start this business, then one of his other businesses kind of took off. So, that... yeah.

Sam Parr

Dog ramps took off, but he was really dead set on this. I was like, "I don't know, it seems like it could be pretty great." This reel/short is proof that... that idea, I think, was onto something. It's... I was amazed at young women and what they wanted to buy.

Shaan Puri

Me and you were undoubtedly trying hard with this channel. We go every week and work on this channel. We have our YouTube, and it's growing. We're doing great—small and mighty. We've been climbing up the charts, and in about a year, we got to about **350,000 subscribers**. When we really knock it out of the park with a great episode, we might get a few hundred thousand views. Well, just go look at "Real Short" on YouTube. Somebody started uploading the "Real Short" episodes, like episodes 1 through 20 together. "Real Short Romance" has **330,000 subscribers**. They posted a video about two months ago, and it has **3,700,000 views**. Go look at the comments; it's exactly what you're talking about. Christine Joy says, "I hope there will be more videos from these two. The chemistry they have!" [heart emoji] [prayer emoji]

Sam Parr

Dude, and they're not even optimized. They have a really short watermark on them, and it's vertical video.

Shaan Puri

yeah exactly and then the other person's you know jolenebongo 9 6996 says oh I watched this on facebook reels I got hooked by it I love the story and the cast good job guys I can't wait for the next episodes and there are thousands of comments in this comment thread that are all about I can't wait for the next episodes I love the story line this is better than hollywood oh my god I'm hooked this is working and this is you know what is my take here so my take is number 1 interesting business that I'd never heard of good job trung I'd I'd never heard about this so I'm glad he put this on my radar second thing the difference between a good idea and a bad idea is just a few small decisions quibi gets made fun of as a classic silicon valley idiotic startup it's like oh man remember quibi it's like a it's like the butt of a joke in silicon valley yeah this will be as successful as quibi quibi I think was the right idea small micro content like you know tv shows shrank down I think can be really successful the problem was they raised $2,000,000,000 and spent it all on like really high production quality stuff that wasn't that juicy and never got people hooked whereas real short is basically like starting with getting people hooked and then figuring out you know the rest as it goes the third thing is the third takeaway is why do I have so much faith in the chinese like when I even started to read his tweet I was like oh a chinese company is trying to do quibi but better and I was like probably gonna work I would bet more on this random chinese company that I've never heard of than jeffrey katzenberg the guy who created quibi that was like the creator of dreamworks and why is that I don't know may maybe it's because through my ecom brand I like do business with you know chinese companies and the way they run their businesses I mean like that's my real mba is when I talk to like the factory owner in china about how he's running his business and I watch how he moves and he came out here to meet us and we're talking to him and you know just the the way they conduct themselves is awesome the way they work is awesome they're like level of complexity they can like handle is awesome and it used to just be with manufacturing only and then tiktok came and was a total narrative violation it was like oh you think they could just you know make cheap plastic toys no no no watch this we'll make the hit social app that's all about cool and culture we'll appeal to the us team better than an american startup could

Sam Parr

that's what it is

Shaan Puri

to me

Sam Parr

It's a lack of ego, is what it is. So, Quibi was this cool LA company. I think they even reached out to you and me, saying, "You guys want to make content for this show?"

Shaan Puri

business talk selected

Sam Parr

Yeah, I was like... I don't know, but not that we're "quote cool guys," but we are based in San Francisco and we lived, on paper, what seemed like an interesting life. Like people building startups, whereas...

Shaan Puri

I'm just saying if you're gonna spend money on us to start your platform your platform's gonna fucking fail

Sam Parr

alright obviously but we

Shaan Puri

we should not be part of your platform

Sam Parr

But they went after cool people. You know, I imagine they have big-time celebrities and stuff like that. Whereas I think a lot of people in Silicon Valley and LA do the same thing. If you look at a lot of the D2C brands, it's like they spend most of their money on branding—some overpriced agency with lowercase letters based out of Brooklyn. In reality, there's this whole middle America. I think particularly since a lot of entrepreneurs in the tech space are young men, they forget that there are about 150 million people at home who just want to goof around and watch something like this. Their ego prevents them from creating something that's "low quality," which exactly fits that bill. You would see this and think, "This is stupid. No one will watch this." Whereas someone else who's just like, "Yeah dude, I just want to win. I just want to do whatever it says. I'm going to follow the numbers." I think a lot of people would be embarrassed to create this thing, and I don't think they should be, but I think they feel that way. Whereas whoever we're talking about—these Chinese folks—they're just like, "Yeah, but we're just setting out to build a great company." Right? Supply... you know?

Shaan Puri

What I mean is, what is their demand for? We can be supply versus... you know, if your company has 20% of people that wear non-prescription glasses, you're not gonna make it in this game. Because you just have too much, you know, sort of like hipster in you that's not actually gonna focus on what the market wants. You're gonna try to sell them what they *should* want rather than what they actually *do* want.

Sam Parr

someone tagged us in this picture of a thai restaurant and it was called thai near me

Shaan Puri

thai food near me

Sam Parr

Yeah, Thai food near me. It was clearly someone just naming the restaurant, you know, "Triple A Locksmith," in order to rank high on Yelp.

Shaan Puri

yeah

Sam Parr

And that's that immigrant hustle that I appreciate and respect. They actually made their branding cute; it was like a cute sign, and it was clearly a joke. But that is lacking, I think, in a lot of our circles. This app... [pause] Really short, they don't have "near me." Yeah, it's "Haifu near me." They've got... they just own a store, and they're like, "Oh, looks like people buy a lot of vapes. Looks like we're in the vape business."

Shaan Puri

yeah you know

Sam Parr

What I mean, and I appreciate that, like, "Man, these kids love this grape-flavored smoke." We're gonna start selling more of that. Even though I don't always agree with it, I appreciate the mentality.

Shaan Puri

so you you weren't there for this one but I did an episode with jess ma I don't know if you heard it heard it yet

Sam Parr

yeah I started watching this morning I love jess ma

Shaan Puri

do you know her besides like the episode like had you met her because she's friends with

Sam Parr

Her... Jess Ma. I was going to ask you all about her. Jess Ma, I know her as like, she was the prodigy. She was on the cover of magazines at the age of 19 or 20 for starting Intuit Neuro, an accounting software.

Shaan Puri

like the the person on the cover of inc before right the month before me was elizabeth holmes

Sam Parr

Well, yeah, and so she was like the "it" person for a minute, but then over the last 6 years or so, she's gone silent. In my head, that either means you've done something bad or you're just quietly killing it and you just don't want to talk about it. It sounds like the second one was definitely the answer. Indiegogo has been crushing it, and she's been taking the profits or money from that and doing more things. Is that right?

Shaan Puri

Yeah, pretty much exactly. So she was like, "Alright, Indianura is a good business. It's not gonna be a monster business." She had a crazy life experience where her boyfriend died suddenly, and then she was just kind of depressed. She didn't want to even go into work and was just like, "Alright, what do I wanna do with my life?" You know, [it was a] reminder [that] life is short, nothing is guaranteed.

Sam Parr

but she didn't say how big indianura was though did she

Shaan Puri

It's over 9... it's 9 figures and it's profitable, is what she had said. Wow! So it's over $100,000,000 in revenue and profitable. She was like, "Alright, I don't want to run this company anymore. I'm hiring somebody to run that, and I'm going to do whatever is most interesting to me." So her bets were kind of like, "What if I wasn't afraid of failure? What would I go do?" She had a couple of things in the episode that I think are going to get lost in there, but the big thing that I took away is that after every episode, I send a voice memo to Ben about the three things that really stood out to me from this episode.

Sam Parr

dude I I keep my notebook right here

Shaan Puri

But basically, the thing I wrote was that she had like 3 or 4 golden questions. One of them was, "What would I do if I wasn't afraid to fail?" The other one was... what was the other one?

Sam Parr

wasn't it like

Shaan Puri

what would

Sam Parr

I do if I was a billionaire

Shaan Puri

Yeah, if I had, you know, if I had $500,000,000 in the bank, what would I do with my time? She had another question, which was, "How will I deal with being an absolute beginner?" Because if I'm going to go do something new, by definition, I'm going to be a beginner and suck at it. I know I'm scared of that feeling, and I know that feeling is uncomfortable. Especially now that I have a little bit of an ego—I've been on the cover of magazines, and people think highly of me. How will I deal with being at the bottom again? Just asking that sort of acknowledges it, and then it kind of takes the power away from that insecurity. I thought she had some golden questions. One of them was, "Yeah, because I was like, dude, you're building these biotech companies. You're telling me about these technologies that I can barely even understand. Do you even understand these? Is this your background? Are you just a science genius?" She was like, "No, I was a C student in biology, you know? And now I have a biology company that's valued over $100,000,000." There's some irony there. I was like, "So what is it? Are you just faking it till you make it, or did you get really good really fast?" She's like, "Well, no. I partnered with people who are experts, and I do the stuff that they're not experts at, like commercializing it. But also, I just started as a beginner. I literally hired a biology tutor, and I started watching podcasts and TED Talks. I would go meet the people and ask them like a thousand questions. Then I would do research after they answered those, and I would ask them ten more questions after that. I would just keep doing that until I felt like I had a handle on things."

Sam Parr

it's amazing

Shaan Puri

I was like, "Oh well, it's simple when you say it like that." And so similarly, I don't know about you, but every day I go on Twitter and I see AI magic in my feed. AI is the best magic trick, like awesome cool demo product, that I've ever seen in my life. It's just like an endless supply of awesome, cool 10-second demos. I don't know if those will all become big companies, but they're amazing demos.

Sam Parr

and you did a tutor thing

Shaan Puri

And so, I did a tutor thing. I was like, "Oh yeah, I should just hire somebody." Because I was like, either I'm going to drop everything that I'm doing and go learn about AI as a beginner, or I'm just going to sit this one out. I don't know, it's just this fast-moving thing that the kids are doing, and I guess I'll just kind of catch up later. That doesn't feel right either. So, I was like, why don't I do this? I put out a tweet that said, "Well, if you're somebody who plays around with all these tools and knows how to use them, I will pay you $500 an hour. I'll pay you whatever, $500+ an hour, to just sit with me a couple of times a week and teach me about these tools to save me the kind of 10 hours of fumbling around I would be doing myself." How many emails did you get? I got over a hundred replies from really interesting people. So, it's going to be hard to kind of pick. I might pick a couple of people actually instead of just one because there are so many good ones. I might publish this, so I'm thinking about creating a side channel. This is like Sean's playground, my little YouTube channel. Well, I'll actually just publish the calls so that even if somebody's not paying $500 an hour for this, they can just get the benefit from it. I don't need to hold this close to my vest or anything, but I think this is great. I want to give myself a little pat on the back, but I really want to say it out loud because there are probably a lot of things like this. I know you're taking a finance course right now, and that's like the same version. That's like the same thing. Don't be afraid to go be a beginner. You're supposed to be Sam Parr, the business podcast guy who sold a business. You know, you're supposed to be the guy who knows a bunch of stuff, and you came out and said, "I feel like an idiot when it comes to finance, like corporate finance. I just really don't know what the hell I'm doing. What's the best course in this place, in this thing I could take?" And I think you spent like $5 on a course, right? How's that going?

Sam Parr

It's called the **4 Day MBA** with Keith Cunningham. I'm trying to learn how to do all this stuff. Coincidentally, someone did a video—some billionaire guy—and he's like, "Don't get an MBA, just go take this course."

Shaan Puri

I know, huge endorsement. I like, I saw it when you said, "I went to the website." The website sucks, and I was like, "This sucks! Why did Sam do this?"

Sam Parr

and then I heard that clip and

Shaan Puri

I was like okay that's now 2 people that said this is awesome I will now go do this thing

Sam Parr

It's a great course. It's a great course, and I think... how do I say this without sounding like a huge douche? Once I got a little bit of success, I became way less nervous about hiring people to teach me how to do things. Additionally, I mean, we talked about it a ton—my body tutors or hiring a fitness coach. Hiring coaches and things like that kind of changed my perspective on the whole "coaching industry," which I used to think was bullshit. No, like, having people teach me how to do stuff has kind of changed my life a little bit. This course is awesome. I have nothing to do with it. I posted that link, and people thought that I had some sort of stake in it. I was like, "No, I just think it's cool." It's changed my life, to be honest. Going back to school and learning, and having people just teach me things, I think it's going to be really smart for you to do it this way. I also think that if you promote it, it will pay for itself, so that's always fun. But I think you're going to have a life-changing next two months if you follow through with this.

Shaan Puri

Yeah, yeah, yeah. I'm already... you know, the ROI is baked into this because of it. But I guess I want to say this because I wouldn't have thought to do it unless Jess mentioned it. She said, "I hired a biology tutor," and in my mind, I was like, "Tutors are something that end when you're 20 years old. There is no more tutoring after that." And it's like, why is that the case? Hold on, there's no rule about that. There are probably other people out there who could do something similar. So anyway, I said it out loud mostly because if you're one of the 1% of people who hadn't really thought about this but could benefit from it, like... do it.

Sam Parr

Do you know what I really want to do? What I wanted to do was take one of those 2-week MBA courses at Columbia or Stanford or something like that. That's my goal for next year. I went and looked at the list of topics they're going to cover, and I was like, "I don't even know what those topics mean." So I've got to go take this online one to prepare for the in-person one because I was so embarrassed to see this. I used to make fun of these people that would put like "Stanford, 2-week course" [on their resumes or profiles].

Shaan Puri

One warning though: I took a similar finance course last year, and it was good. There was nothing wrong with the course.

Sam Parr

what you did it in person

Shaan Puri

no it's a online online thing but I intended it and I paid attention like I was like if I'm doing this I'm gonna do it

Sam Parr

where'd you do it at what's what's cool

Shaan Puri

It was on Maven, so it was a Maven finance course. It was a really good course. There is one thing that I'll say out loud: before you go drop $1,000 because "oh, Sam Parr said this course is great," make sure that you have a hook. To me, the analogy is like this: these are all clothes on a hanger, but you need a hook to hang things on. If you don't have a hook, the hook would be like a business you're currently running or a place where you can apply these learnings. Otherwise, I think they can be kind of like fancy procrastination or just...

Sam Parr

for sure

Shaan Puri

Not worth the time or the money. You have to have enough either battle scars or like a place to go apply these that's actually going to be relevant for you. Otherwise, it's very easy to just intellectually sit there and be like, "Yeah, cool. Alright, well I hope I keep that in mind one day when this becomes relevant." You're better off building the business and then learning the things just-in-time that you need to know when you need to know them, versus trying to learn everything in advance and then be like, "Now I'm prepared to go do the sport of business."

Sam Parr

Well, the reason I'm doing it is because when I was selling The Hustle, this whole thing came at the end called networking capital. I was like, "I just don't know what this means," right? I optimized my business in one way, but then I didn't know what this term was. There were many things that I could have done differently that would have helped. I felt so emasculated and stupid when these people were talking to me about networking capital, and I was like, "I just can't figure this out." When you're explaining it to me, I don't want to experience that pain again. Also, I'm getting my balance sheet, my income statement, and cash flow statements every month from my accountant, but I'm like, "I don't know if this is good." Your accountants typically tell you facts, and I'm like, "But I don't know how to interpret it." I need to know how to interpret this to spot strengths and weaknesses. I just remember when I was selling my company, I thought, "Well, I kind of know how to make the money, but I don't know how to optimize any of these equations, and I don't know what they mean." I felt so stupid during that. It was just so challenging to figure out.

Shaan Puri

Can I tell you one lesson I learned from that experience? It was probably one thing I remember that I didn't know going in. I just never even thought about it, which was the course I think is called "Good Business, Bad Business" or something like that. One of the things it talks about when you differentiate between a good and bad business financially is your **reinvestment runway**. I don't know if you've ever heard this term or thought about it, but it's essentially the idea that every business will say, you know, "$100 comes in and you get $20 out of the bottom line." Right? You have $20 net profit. What do you do with that net profit? So, idiots like us, you know, I think you probably ran your business the same way I did. I don't know, it just sits in the bank account. I don't even think about it really. It's there, and I hope one day to take this out or maybe I'll use it to spend if we have some expense or a rainy day. I don't know, I just think... I won't even think about it. Then you start to realize that, okay, the best businesses can either reinvest into the business itself. So, when a dollar profit comes out, you can reinvest it back to the top and get more than another dollar out. He broke down some of Warren Buffett's businesses that had no reinvestment potential. So, basically, profit comes out, and that's why Buffett would take it to the headquarters, the holdco, and just say, "The best optimization he could do was when he bought a business. He's like, 'You're reinvesting capital poorly. I'll take that money, I'll reinvest it in a whole different business, and you will be a little cash cow, but I'm not gonna keep investing back for more organic growth into this business.'"

Sam Parr

Which in our case would be like a course business or maybe even this podcast. This podcast grows mostly organically; we don't need to spend more money in order to grow.

Shaan Puri

Correct. Spending more money is not going to create more money out of this business. The best thing we could do is take the profits from this bad business and invest them in a better business that actually can do that. What he talks about is that every business, over time, starts out being able to reinvest. However, you hit a certain dollar threshold where now you can't reinvest more than that into this business at an efficient rate. So, you have to identify that and know it. Then, you can judge the business based on that. Similarly, the best businesses, like Constellation Software or Berkshire, are famous for basically taking profits from one bad business. "Bad" is defined as a normal cash cow business, but you're not investing it back into that one. Instead, you're investing it to buy another one of those. You invest that to buy another one of those, and that...

Sam Parr

That's the whole point of this book, "Good Profit" or "Profit First." Andrew recommended I read it this weekend. He recommended the same thing: take money out of the business, at least, and put it into a different bank account. Then redeploy it into your fast-growing business if it warrants it.

Shaan Puri

Or if you have a business that can take the reinvestment, then you know that that business is actually even better than it looks on paper. It has this extra capability that most businesses don't have.

Sam Parr

which is what cold plunge is

Shaan Puri

All of us were pretty beginners, especially for anyone in private equity or whatever. That's not where we came from, right? We're basically like dorks on the internet. We then started creating internet companies, trying to get rich off those companies. Now, you know, we're starting to wrap our heads around a lot of the, like, one-on-one type of concepts.

Sam Parr

Which, by the way, I think it's better to go that route. I think it's harder to start things from scratch and then learn how to optimize eventually versus you optimize... You're a good optimizer, but you don't know how to start things from scratch. Like, just creating a widget that someone wants, I think, is more challenging.

Shaan Puri

100%! It makes me feel good that that's true. But like, YC [Y Combinator] did the same thing. He's like, "It's gonna be easier for me to take badass engineers and teach them the basics of fundraising and hiring and firing than to take an MBA who knows everything about fundraising and hiring and firing but can't build shit." And that was like the core bet of YC: we don't need to start these companies with MBAs, we could start these companies with engineers. It's easy to teach them that... it's impossible to teach the other way.

Sam Parr

Yeah, I completely agree with that. It makes me feel better that way, so therefore, it is.

Shaan Puri

true in summary we're the best

Sam Parr

Yeah, we brag a lot in this episode. Maybe we'll have another episode where we'll just make fun of each other.

Shaan Puri

No, the comments will do that for us. Here, let me move the microphone so you get a good look. Here's my face, here's my hair, here's my body. You can hear my voice. I... I... I stutter sometimes. Whatever you've got, go ahead, hit us in the comments.

Sam Parr

alright that's the pod