3 Profitable Business Ideas You Should Start in 2022

Steph Smith

Okay, first thing, super quick. Have you guys heard of this Twitter account? It's called "New York Times First." You heard of it? No? Okay, so it's kind of just this fun little Twitter account where they track all of the articles being published by The New York Times. Then, they find words that are published for the first time. It's just kind of a fun thing. I'll send you guys this; I'll post it in the doc. This is a link to a couple of the ones that they publish. For example, "dead ass" was a word first found in The New York Times in March 2019. "Doomscrolling" was in May 2020, and "techbro" apparently was in January 2022. That surprises me! So, this is just kind of a fun thing, but I was thinking that this should exist for jobs. On Indeed or Glassdoor or something, there's a really quick transition these days between completely new jobs coming to market. I think there should be an account that tracks these. Like, "Oh, this is the first time I've seen..." I don't know where I saw this, but there's a job for "professional falconer." Like, who does that? How much do they get paid? I don't know, but I'm surprised to know it exists. I'm sure there are many more practical jobs out there that are coming to market that people should know about. So, someone should just create the equivalent of this. Instead of The New York Times, it should be for Indeed.

Shaan Puri

how do they do this it's great

Sam Parr

how do they

Shaan Puri

track this how do they track every word and check if it's ever been said before

Steph Smith

I think it's just a scraper I mean I don't know exactly how they set it up but I don't think it would actually be that way

Shaan Puri

This has 200,000 followers. So for that person out there who's just been grinding, trying to put out great content and has like 3,000 followers, just know you could have been tweeting out single-word things from The New York Times and gotten 200,000 followers.

Sam Parr

I actually think that's a great idea. Have you guys seen... remember how we talked about this kid that was tracking Elon Musk's private jet on Twitter? Now he's tracking all the private jets and private yachts of all the Russian oligarchs.

Shaan Puri

yes great

Sam Parr

pivot and shout out shout out to you kid

Shaan Puri

great pivot man

Steph Smith

Also, Elon offered him $5,000 and he turned it down. He's like, "No, I'm gonna keep doing my thing." But both of his accounts have a lot of followers: $5 for 1,000.

Shaan Puri

jett stop tracking him

Sam Parr

yeah

Steph Smith

to stop yeah because elon was like I don't want people to know where I am

Sam Parr

What a stupid thing! If you're going to come and offer someone money, do it right. Maybe $5,000.

Shaan Puri

you best not miss elon yeah that's how he should've replied

Sam Parr

5 grand I think this is cool stuff I actually think this is a wonderful idea

Steph Smith

I also think that companies would pay for this. Companies that have competitors want to know what their competitors are doing. So, we're launching something at HubSpot soon, and I've already gotten an email from someone who works at TechCrunch. They said, "Hey, I saw this on your site," or they basically dug something up that we published, and they're like, "What's going on here?" Imagine if you had the same thing where you're like, "Oh, I saw Salesforce is hiring for these roles," or "I didn't know that was a role at Netflix." I think companies would pay for that intel.

Sam Parr

That's actually crazy fascinating. If you could aggregate, like, let's say that you're in the... When I was at The Hustle, I cared about what, like, 30 companies were doing. It would be kind of interesting if I would have paid a monthly fee and received a daily email with updates on their movements and job listings.

Shaan Puri

Yeah, that's what I was going to say. I don't think it's so interesting, like the falconer or whatever. It's like, "Oh, whatever, someone made up a random job." But we see this a lot where it's like, "Oh, Netflix is hiring a Web 3 engineer." That means they're probably trying to explore something in that space. So you can kind of get a sense of what direction somebody's going. "Oh, they're hiring enterprise sales." Okay, they're trying to go upmarket, right? So there's a competitive intelligence that comes from these. I do think that exists. I've seen people tracking these. I don't know if they're just doing it for their own fun or if there's like a service that tracks that, but it is kind of interesting. I like that. Alright, what else you got, Steph? Oh, by the way, I should say one more thing.

Sam Parr

I love more thing about this

Shaan Puri

A hilarious story: I went into work one day, and my buddy Neil, who's like a programmer at our company, was sitting at the coffee machine making a coffee. It was around 10 AM, and I hadn't even said anything to him yet. We were just standing next to each other when he suddenly said, "These are my first words." I was taken aback and asked, "What?" He explained that he realized he hadn't spoken at all that day. He had gotten to work, made his way to the coffee machine, and started programming. During his commute, he didn't talk to anybody, and once he got to his desk, he didn't talk to anyone there either. He just started working, and then he said, "These are my first words." I thought that was so funny! When he said that, I realized how hilarious Neil is. We've even replaced our marketing person with Neil; he's now our iPhone programmer. He wrote all of the release notes for our apps because he is just so funny. He has this low-key humor that really stands out. "These are my first words" is a moment I'll never forget.

Sam Parr

how does that relate relate to this

Shaan Puri

Because it's like a word tracker. You know, the first time The New York Times said this word, oh, so that's how I thought of that.

Steph Smith

first time neil's done

Shaan Puri

It's interesting to think about what your first words are every day. Right? Like, what's coming out of your mouth for the first time each day?

Sam Parr

mine's usually like like a grump it's like a fuck when I say a no

Steph Smith

you know

Sam Parr

what I mean I

Shaan Puri

feel passionately

Steph Smith

sam yours is always just sup to everyone sup

Sam Parr

I mean, no conversation. I always say, "Sup?" Yep, or I just like, am sore from exercise or something, and I'm like...

Shaan Puri

oh fuck

Sam Parr

it's usually my first word

Shaan Puri

Well, that explains a lot. Alright, and then I forgot to tell you this, but this is the most important thing. I can't believe we didn't talk about this earlier, to be honest with you. If you're listening to this and you like what you're hearing right now, and you haven't gone and subscribed to the *My First Million* podcast wherever you get your podcasts, then that's the thing you've got to do. There's nothing more important than doing that right now. And don't do it because I said to do it. Do it because you want to do it. Do it because that's who you are. Alright, what else are you going to say?

Steph Smith

I guess related to companies hiring, so you guys are no mischief, right? It's this company that does these crazy stunts. They're on, I think, stunt number 70. Their latest stunt I thought was really interesting and relates to this idea of just like creative hiring. So if you scroll down...

Sam Parr

Tell me about what Mischief is. I don't entirely get it because they raise funding, but when you explain what they are, I'm like, "Who, what grown adult would trust this child with money?"

Shaan Puri

It's like *South Park* or *Saturday Night Live*. It's a weekly show; it's like a weekly sketch, but it's just done through code. They make a website instead of a video to make a joke. That's a joke.

Sam Parr

yeah but is it exactly does it make money

Steph Smith

I think it does. I don't know how much they've made, but they've raised $3.5 million. So, I don't know, like you're saying, I don't know who those investors are or what they're looking for from Mischief. But just to give two examples, one of them recently was, I think it's called Tuntine. I don't know why it's called that, but basically it's called "The Game of Death" online. You sign up, get an account, and pay $10 to join the game. All you have to do is log in daily to stay alive, and the last person who stays alive gets all of the money. So, it's just kind of like these silly, quirky games. The last one they did was they also provided commentary through their game. In this case, it was commentary on the MSAT. They got people to pay $50 to take the MSAT, and the highest score won. It's basically their version of the SATs, and the person who got the highest score won the entire pot. They didn't actually have that many people participate; they had 500 people who did it. But it reminded me of something you guys talk about on the pod, which is the power of crowdsourcing. For example, SpaceX, if they want to develop some new technology, they put out some competition. That tends to attract more interesting people than if they hire a bunch of recruiters to go find the people they’re theoretically looking for.

Sam Parr

The example I think you're thinking about is they were trying to figure out something, like were they trying to decode some protein or something that helped with this AIDS medication? They turned it into a video game, and they'd spent 10 years trying to solve it. Then, a bunch of video gamers got it done in like 3 weeks.

Steph Smith

yeah well there's the spacex what's what's the spacex challenge the one that everyone knows

Shaan Puri

what about xprize

Steph Smith

it's just like the

Shaan Puri

that's not from spacex

Steph Smith

yeah but there's also

Shaan Puri

Yeah, that's like a version of that where they basically just put out the bounty and then let people, let anybody sort of enter to try to win. Okay.

Steph Smith

There's a... I feel like there's another one that SpaceX does. But in any case, what I'm getting at is that we work for HubSpot. There are all these companies that are trying to attract, like, "top talent," and they're doing it in a way that, in most cases, true top talent... are you going to want to be DM'ed on LinkedIn and go through a traditional interview process? In most cases, no. So my question is, why isn't there a really "mischief-style" recruiting agency that puts out these challenges that the smartest people on the internet are stoked to solve? Just out of sheer pride, they could then be funneled into these companies. Maybe it's the case that these people just would never want to work for these larger companies, but I just wonder why there isn't a more creative route to recruiting.

Sam Parr

I have something for you. This is one of the very first articles The Hustle ever wrote. I don't even know if you can Google it anymore. We literally wrote it about two weeks after starting, and it was about my friend named Max. If you go Google "Ben The Hustle Google interview" or "The Hustle secret Google interview," you'll find it. My friend Max was teaching himself some... I gotta remember all the details; this was like six years ago. He was learning some type of coding language, and it was a rare language. He was typing in all these things on Google, like "What does blank mean?" and "How do you do blank?" After a while, his Chrome browser looked like the Matrix. It said, "You look like you might belong to one of us." It continued, "We've noticed that you've been Googling a lot about this type of language, and we are hiring for that. Would you be interested in applying here?"

Shaan Puri

that's amazing

Sam Parr

And very few people ever saw this, but we wrote an article about it. This article got seen by millions of people. What's it say, Ben? What was the language? "Google has a secret interview process, and it landed me a job." That's the headline. And he ended up working there. It worked. It worked, and it was wild.

Shaan Puri

That's dope! You know, only Google could do that because they own the browser and the search engine. But what if there was just an app that sat on your computer and basically tracked everything you did? I know it sounds great, but what if it gave you job opportunities based on your computer activity? For example, if it knows that Steph is in all these different subreddits and looking at Google Trends, that's a signal for what type of person you are. In theory, it's actually a much higher quality signal than any job interview where you're just trying to present yourself a certain way versus what you actually do on the internet. Like, if you spend a lot of time in Excel, we can see what your capabilities are. If you're doing macros in Excel, you could probably qualify for certain types of jobs. So I wonder if there's a way to help college students. It's like, "Hey, put this on your computer. Do you want your first job out of college? We'll help figure out what that job should be. We'll help get you a job opportunity just by putting this tracker on your computer."

Sam Parr

Quick interruption! Do me a favor: scroll down, and you're going to see a link to **The Hustle**. If you want to stay up to date on the tech and business news you need to know, check out **The Hustle**. It's a daily email. I used to help write it, and I love it! So, check it out. Scroll down below.

Shaan Puri

sounds very naughty

Steph Smith

Yeah, I mean, I know it's always like, "Oh, tracking everything on your computer," but the reason I thought of this is because I watched the QAnon documentary. In it, they have... have you guys heard of Cicada 3301? No? No, no, no. They covered it in the documentary, but basically, it was like the epitome of these crazy online puzzles. I think there's been three of them. The first two were solved, but the third one still has not been solved. There are like, you know, there's a picture online and there's a message encrypted in that message. There's a bunch of numbers, and then you have to know to go to another website and put it in there. A lot of people thought that this was actually a recruitment tool for either the NSA or the CIA. So I was like, "Man, there should be something, maybe not that crazy, but something like that online for companies." Did you...?

Shaan Puri

Guys, have you ever done one of those? I did this in college. We found this website, and it was like, you know, it said something vague. It was like, "The game has only begun, but have you realized that it's begun yet?" You have to right-click, view source, and in the source code, there's a URL. You go to that URL, and then it downloads an audio file. You listen to the audio file, and it sounds like nothing. But if you listen to it backwards, all of a sudden, it gives you coordinates. You go to those coordinates on a map. The map literally... and it was like a 50-part mystery game. Me and all my friends got totally obsessed with this. We spent hours and hours on it.

Sam Parr

and hours of this week

Shaan Puri

I don't remember the name of this from back in college; this was like 15 years ago. But I remember that at the end, the last puzzle we could never solve. I think the guy just made an unsolvable puzzle. I just think there was no solution. His name was Mister Wiggles or Mister Squiggles or some variation of that. He had this puzzle that was like the unsolvable thing at the end, but it was so much fun. Actually, now that I think about it, that is a great filter and barometer for who might be good at certain types of work. The type of person that would do that for fun and solve that problem? I would love to hire that person, right? Because I know what...

Sam Parr

that took

Shaan Puri

could you

Sam Parr

Could you be like, "There's this game maker, Mr. Wiggles, or whatever"? Could you do that as a service for a variety of companies and make these games? Like, "Hey, we're going to try and find you, but I bet it's like, 'Hey, I bet we're going to do this thing, this, and this thing, and I bet you we're going to get you 20 new applicants every month.'"

Shaan Puri

yeah absolutely

Sam Parr

To these silly games, but they're going to be high, high quality. Steph, what's Nuuly?

Steph Smith

so nuuly have either of you guys heard

Shaan Puri

no

Steph Smith

Of Nuuly (N-U-U-L-Y). I think this is just a quick one, but basically, it's a company that is part of the Urban Outfitters subsidiary. Urban owns Urban Outfitters, Anthropologie, Free People, and Nuuly. Nuuly is a different take. All of those other businesses sell clothes in a very traditional way. What Nuuly is, is a rental business. Every month, they send you six items. You choose those six items on your own, they send them to you, and you get to rent them for a month. At the end of the month, you have the option to keep them at honestly a pretty discounted rate, somewhere between 15% to sometimes up to 60%. They have a ton of brands in there, including their own brands. The reason I thought this was interesting is that there are other rental clothing services out there, but this is tacked on to existing businesses.

Shaan Puri

that weren't renting clothes and it spoke to me because it

Steph Smith

Was kind of similar to what Amazon's done: turning a cost center into something that maybe, in this case, isn't a profit center but is way more profitable, I think, than the traditional clothing business that they have. So, if you guys remember, I think it was Mark Lohr or one of your guests who talked about just how many returns there are for clothing. Let me just pull up a stat right here.

Sam Parr

so 20% right

Steph Smith

Yeah, exactly. A return with clothing can cost up to **66%** of the cost of an item. So actually, a lot of these clothing stores were just saying, "Look, you can just keep the stuff. You don't even have to send back the item." In this case, **Nuuly** not only doesn't have to send items to people and not have them return because it's so expensive, but I'm paying Nuuly to rent these clothes. So they're not losing money on the rental; they're now making money on the rental. They've structured it in a way where it's actually really compelling. I think Nuuly's... I don't know the exact size of it now, but at least where I live, I've run into, like, at my coworking space, all of the girls there are wearing Nuuly. I just wonder how this can be applied to other businesses. So, what are those cost centers that could actually be turned into a profit center?

Sam Parr

sean what's the return rate on the things that you're involved in through investments or whatever

Shaan Puri

This is way lower, way lower than the 20%. So, you know, more like... I don't know if that's what percentage of your orders get returned or what percentage of your revenue. What percentage of revenue is your cost of returns? I'm not sure exactly what that's meant to quote. But, you know, of course, any return is like a drain on the business. So, any way that you could turn returns into either a neutral or profitable thing would be kind of amazing.

Sam Parr

what do brands do with returned clothing or returned items

Shaan Puri

They kind of like... so typically, you sort of have a situation, right? The patient comes in and it's like, "Okay, it's a lost cause. You just gotta dump it." Or it's like, "Oh, this could be patched up." In that case, you just need to retag it. If it's in good condition, retag it, put it back in packaging, and it's all good to go. Sometimes you have to clean it, steam it, whatever. In fact, there's a guy named Sonny who follows us on Twitter and listens to the podcast. He has this thing called Rock Returns. I think he had an e-commerce brand, specifically a nice men's suit brand. Returns were kind of killing him because it's a heavy item to ship and it's an expensive product. He was like, "Well, what am I supposed to do with this?" His 3PL (third-party logistics) or warehouse wasn't willing to reprocess the suit, and he couldn't send out a questionable suit. So he had to ensure that if it did get sent back out, it was in good condition. He actually created his own returns warehouse and is now doing it for himself and a bunch of other brands, similar to the AWS model. He turned his cost center into a profit center, and I think this business is better than his e-commerce business overall. He's becoming an expert in handling returns efficiently. Now he's doing it for himself and a whole bunch of other e-commerce brands. He's really into it, saying, "Dude, I found this new way of steaming the suits that makes it so we get an extra 10% back into circulation because they're better now." Or like, "We could turn it around at this cost." They just charge a cost per return processed for the brands.

Sam Parr

damn that's bad

Shaan Puri

Because usually, what makes you good at processing returns is not the same thing as what makes you good at managing a general warehouse with a bunch of pallets, boxes, and shipping orders out. It takes a different skill set in a way. Mhmm.

Steph Smith

can we talk about one other idea

Sam Parr

yeah

Steph Smith

So, what you talked about, Sean, reminded me of something. There's all this real estate, and I'm sure this is an overdone idea, but there are many ways people can utilize it that not everyone knows about. For instance, maybe it could be used for a fulfillment center. Perhaps your garage could be rented out. There are a couple of examples that I came across that I thought were interesting. I wonder if someone could aggregate all of these different ways that real estate, or parts of real estate, can be used to gain some income. Let me give you a couple of examples. A lot of people have heard of solar panels. Companies will pay you to install solar panels on your roof. You'll enter into a licensing agreement, and they'll make money off of that. That's why they'll often install it for free. Another example is churches. Apparently, due to the height of churches, specifically the steeples, different telecom companies will pay these churches for access to their steeples. For instance, the National Cathedral in Washington is paid—guess how much? Actually, guess how much they're paid by Motorola every single year.

Sam Parr

I would have thought like a1000 a month

Steph Smith

So, $100,000 a year just for access to their 234-foot tower. Some churches are even building steeples; they don't even have a steeple, but they're like, "Look, I heard this other church is getting $100,000 a year. We want that!" That's another example. One final example I'll share is Surfline. My partner, he surfs all the time and uses these surf cams to check how the waves are every day. Well, where are these surf cams? Apparently, they're actually in people's backyards. So, if you have a backyard that is in a strategic area to see the surf, you can either sign up yourself or recommend or refer people to be a surf cam house. They'll come, install it, and then I believe you get... I'm not actually sure in this case how much, but you get paid a certain amount to have that surf cam in your backyard. So, those are three examples. I'm sure there are many more, but I feel like there should be a site that says, "Oh, you've got a house in this area. You have a roof that gets this much sunlight, or it's this tall, or it's this much square footage."

Sam Parr

Would you go as far as to put this into cars too? One time, years ago, Sean and I listened to this pitch from a guy who created a... you know how cabbies have advertising on top of their cars? He was doing that for Uber drivers. I don't actually know... I see him everywhere, but I don't know what happened with the business.

Shaan Puri

It raised a huge valuation, so they definitely got some traction. I think it's like a multi-hundred-million-dollar company now. It's called Firefly. Wow, wow!

Steph Smith

Yeah, and there's another one that has screens. Have you guys been in Ubers where it's like on the back of the car seat and it's just playing ads? Those ones, I feel like the execution on that has been terrible. But like, that's another example where it's like, "Oh, you actually have valuable real estate," which is the back of this car seat because you have people's attention. I have an...

Shaan Puri

**Idea for your new side project:** It's called the **Side Hustle Generator**. I will put it on the *My First Million* podcast website. It's a side hustle generator; it's just a giant quiz that leads you into a list of potential side hustles you could be applicable for. So, you're like, "Do you own a church? Do you live by the surf? Do you have a car that you don't use all the time?" There are all these different ways to explore opportunities. I think people don't realize the number of opportunities that are literally at their fingertips. For example, "Do you own a phone? Did you know you could get paid to test websites for companies?" All you have to do is go to the website and talk out loud as you try to use it. Check out usertesting.com. My mom didn't know that, and when she found out, it kind of changed her life a little bit. She suddenly had this thing she could do every day that kept her busy, made her some money, and she enjoyed it. Then there's Airbnb. I remember telling my parents about Airbnb. It took some education, but now they make six figures a year renting out their home on Airbnb. So, how many of these opportunities exist?

Sam Parr

your parents do yeah where do they go

Shaan Puri

They'll just go, like, you know, to a hotel. They'll go on vacation. They'll just leave the city. They'll come to my house; they'll go anywhere. They don't care because they can get, like, $700 to $800 a night for their home. Then, they'll go rent a hotel, you know, 40 minutes away or an hour away. They'll go to wine country or whatever and rent a hotel for $200, and they pocket the difference.

Sam Parr

Did you guys remember the company "I Bet Stuff"? You do? The Penny Hoarder? Yeah, so The Penny Hoarder started as a blog. It was founded by a guy named Kyle, who spoke at one of our events. He's a cool dude. His business partner is a friend of mine. Anyway, he started it in 2012, where he would just talk about all the side hustles he was doing. For example, he would go on TaskRabbit and get people's groceries. He would talk about how much money he was making. He became an Instacart driver and shared how much he was earning. He also did Uber driving and discussed his earnings there as well. He got really good at driving traffic to his site. Eventually, Uber said, "Hey, for every new driver you refer to us, we'll give you $2,000." Instacart did the same thing, TaskRabbit did the same thing, and UserTesting did the same thing. Then, there was a service where you needed to answer surveys, and that's what he did. He built this digital ad business. When he came to the event, he brought his dog, and I asked, "Oh, how'd you get your dog on the plane?" He replied, "Oh, I fly private." I was like, "What? You're crushing it that hard?" He said, "Yeah, we bootstrapped it, and we'll do about $70 million in revenue this year." He owned 100% of the company and recently sold it for, I forget the exact number, but it's in the hundreds of millions of dollars. The whole premise was just about talking about ways that people can make money, mostly targeting lower-income individuals. For example, a mom who's just trying to make ends meet with the 10 hours she has available instead of taking care of her kids. He killed it; this business crushed it. You never heard of The Penny Hoarder, Sean?

Shaan Puri

I heard I've heard it from you but I never went to it so I never like used it

Sam Parr

it's just a wordpress blog that's all it is

Shaan Puri

Sorry, I was looking at Steph's document and realizing how many interesting ideas there are in here. Steph, we have to do a two-parter. So, let's... let's... let's.

Sam Parr

let's let's let's out a couple more

Shaan Puri

let's give give us one more

Steph Smith

I'll come back anytime I mean

Shaan Puri

was the worst ideas and the middle of the list was the best ideas so that's my feedback to you

Steph Smith

well why don't you tell me what what's an interesting one that you you have your eye on

Shaan Puri

I'm looking at some of these trend success stories. I think those are pretty interesting. That's one I was kind of looking at just at the moment. Which one of those is your favorite? Oh, well, I...

Steph Smith

feel like okay so let's call out a couple of them real quick so last time I was on I talked about like this idea of like your listicle is my opportunity couple people have actually taken action on that they've created these sites that identify the healthiest versions of not very healthy things so one guy started a tiktok it got 100 of thousands of views in the 1st few days and then someone else tweeted about this actually just just last night let me see what they did they're called fast food cravings where basically the headline says eat what you want not what you can and it lets you like put in a specific restaurant and find the healthiest version of the food at that restaurant we talked about insider trading at on one of the very first episodes I was on and this guy after that episode I think this actually existed before the episode but connor dm'd me and he was like so there are these sites that track insider trades but there are specific types of insider trades that are more interesting than others and specifically it's stock grants to executives it's not obviously a sure thing but he said he was like typically what that signals is the company trying to you know invest in a particular thing if the executives hit certain targets it's it's generally a good sign obviously not investment advice but he created this community called spring loading and what he does is he started a scraper that looks for all the insider trades but then specifically vets them for this particular aspect like is the company granting a buttload of stock to a group of executives and he just he's he basically shares these and then he I show shared an example in the chat but he basically he sends the financial report he sends the grant details then he summarizes it he says look these people are getting this grant this is what I have you know what additional information I have and then he gives a conviction rating so some of his conviction ratings are like 1 like guys this is probably nothing maybe something if you wanna take a bet go for it some of them he's like this is a 5 so I I shared 1 again not investment advice but he shared 1 for example for cloudflare a little bit ago obviously cloudflare with all the other tech companies has tanked recently but he was like this is one of the biggest performance grants I've ever seen with pretty massive price targets I don't think there's any news in the near future but I do believe that cloudflare has massive potential and the stock is down 35% over the last month and then he shares again the the exact grant values what targets they need to hit so for example these execs have different price targets similar to you know you guys discussed like elon musk's like crazy price targets if they hit I think cloudflare today is at $95 or something like that their first price target is $156 and it goes all the way up to $979 so this is what these execs internally are tracking towards so I don't know I thought that was like another interesting example I think he's I think this community is pretty successful he's charging people a monthly fee

Shaan Puri

intrigued by this idea did you bet on this

Steph Smith

I haven't called my partner. He's been in the community. He did actually, I mean, again, not financial advice, but he bet on one... I can't remember what company it was, but it did one day like go up to us.

Shaan Puri

I need but

Steph Smith

this was obviously also in the

Shaan Puri

Don't... don't even tell me more. Actually, just leave it bigger. And the kids... I don't even need anything else.

Steph Smith

Well, I was going to say I definitely don't want people to be going and gambling their money on that one anecdote. But it is interesting to even just be in there. What I found, because I’ll just dabble in the community, is that I haven't placed any bets. However, I’m learning about a bunch of different companies that I've never heard of. I'm seeing how these different companies are structuring stock grants and why. Someone is commenting on it, and then, of course, there are just a bunch of people commenting like, "Are you betting? Oh shit, I'm 50% down! How are you doing?" So, it's kind of like a fun community as well.

Shaan Puri

do you guys have a

Sam Parr

this is awesome have a

Shaan Puri

Like a degenerate budget or like a learner budget where it's like, "Okay, this is my *mess around* with money that I can try different things." Or do you guys not do that? Sam, you're shaking your head no.

Sam Parr

I don't but but do you it sounds like you do

Shaan Puri

I do yeah

Sam Parr

how much

Shaan Puri

Well, let's talk about it in percentage terms. So, it's like, you know, what would that be? It's like...

Sam Parr

close do percentage terms like literally how much like are you like $50,000

Shaan Puri

no more than that wow yeah for sure

Sam Parr

And so, what will you do with that? What's an example of a dumb or risky thing that you've done?

Shaan Puri

Like I think I've told this story before, but I remember watching... So, the idea with these is I'll just tell the story first. I watched a YouTube video of this guy. I have no idea who this guy is—some Wall Street, some hedge fund guy. Basically, he's a prolific short trader. That's kind of the vibe I got from this video. I couldn't tell you...

Sam Parr

how tall was it

Shaan Puri

Tell you his name? I couldn't tell you what his track record was. He was a white guy, looked reasonable enough, and he basically said, "Yeah, my short pick of the year is Tootsie Roll." I was listening and thought, "What? Tootsie Roll? I didn't even realize that's a public stock." He continued, "First of all, who the hell eats Tootsie Rolls? Do you think Tootsie Roll is growing? No! The people who eat Tootsie Rolls are like, you know, 50 and up. They're a dying market. Kids don't want Tootsie Rolls nowadays; they want all these other candies." He said, "Tootsie Roll has zero innovation. They refuse to change their product and they don't come out with anything new. And then it's also poorly run and not going to be sold. It was owned by some woman who was like..."

Sam Parr

I think it's owned by like a 92 year old lady

Shaan Puri

She passed away now, but at the time, this was like five years ago or something like that. I don't know when this was; this is a while back. I remember watching that video and I was like, "Oh, this guy's totally right. Tootsie Roll's fucking dead." I went that day and I bet against Tootsie Roll. I made a bunch of money just on this, like, zero thought process, zero diligence. It was just like taking a punt and doing something on a whim. So that was the first time I realized, like, actually, I want a designated budget. With crypto, this has become like, you know, kind of a necessity. With crypto, you basically have so many new things that are all interesting, and you can't get to high conviction because they're new. It's rapidly evolving. The opportunity is in front of you today, and so you don't have time to diligence all these. You don't have time to get to high conviction, but you do know where you can sort of sense certain signals. For example, if a bunch of smart people are looking at it, if you see developer activity in that space, or if the premise is interesting, it might hit or it might not hit. Whatever. You can basically take punts on things in crypto, and you get paid off, unlike the stock market. I think on the Tootsie Roll thing, I made like, I don't know, 20-35%. In crypto, you can make like 20x when you're right on these things. The odds just shift in your favor. Yeah, it's super fast-moving and things can go to zero, but the upside when you hit is so high that it pays for all of your other bad bets. So I basically created a budget because I was like, "I can't overthink this. I need to intentionally underthink this." What does that mean? In the last five years, there have been so many examples of things that have come across my radar in crypto.

Sam Parr

that I don't take action

Shaan Puri

On because I feel like I don't have enough information to make an educated decision. Actually, if I had just made uneducated decisions, I would have done far better than my educated decisions turned out to be. The space is just where there's a lot of progress being made, and you can't keep up with all the different projects and tokens. So, I basically set out a budget where I said if somebody tells me something that's interesting, I have money that I could just dump into that. It's a small amount of money; I don't care if that money goes to $0. I'm not putting it all into one, so I'm taking a portfolio of these and saying, "Let's just see what happens." In doing so, I get to actually learn how these things work. For example, I did one the other day and I put it in the Milk Road, explaining literally step by step what this project was, why I'm going into it, and how I have no idea if this is a great idea or a bad idea. I didn't audit the security of the project; I don't have time for all that. I'm just trying to learn how these things work, and I'm putting small bets in a bunch of different areas with money that I can afford to lose.

Sam Parr

do you do that stuff

Steph Smith

So, I don't... I think it's smart though because, like Sean is saying, these are the type of investments where, if you don't have money sequestered for this, it's going to capture your psychology. That's actually why I don't dabble in these things. But he's done that a lot for NFTs, right? So at first, he was like, "Steph, I'm just gonna buy one." Obviously, he's bought more since then, but he has a certain amount, and that's all he's willing to invest. If it goes to zero, he's happy with it. But he's also probably sold a lot too early because he has a concentrated amount. So he's like, "Oh, I gotta sell this to buy another thing." Sean, did you get into Proof? I feel like that was a big no.

Shaan Puri

I didn't I didn't do proof I should that's a that's a great example of one where I'm like oh interesting kevin rose is doing this nft thing I should I should you know I should take a punt right like it's I I'm seeing this before most people I should go in and like again like with these things it's not gonna it's not like gonna go to 0 quote unquote it's like you know so I can trade out of that thing if I want to in you know 3 months from now but like to weigh each I don't want every decision to be heavy and and I have you guys seen this meme that's like the it's like the curve I think it's called like the midwitt meme it's basically like there's an idiot on one side there's a genius like a so on one side is the idiot he looks like a troll he looks like you know like whatever shrek and on the other side there's like a jedi master and then the middle which is like the top of the curve is like the average person and it's like you know like for example like oh like the idiot would be like oh that monkey looks like that's a cool looking monkey I'll buy right the the genius is like oh this you know this has a chance to be an iconic you know like like whatever iconic nft buy I didn't think about it more than that and then they're like middle guy is like you know but why would anybody buy this picture of a monkey and like how how do the tokenomics work and they like try to like analyze the whole fucking thing and they're a they're just paralyzed there's some sort of analysis paralysis where they don't they don't take action on anything and then they overthink things so they miss the like the big simple opportunities that are in front of them a lot times and I heard the guy from yc who michael seibel talking about this he goes he goes this is often the case with startup ideas he goes a beginner like you know you out of college when you don't know anything about anything you just think it's all like you don't you don't know how hard it's gonna be you don't know what a good you don't know how to vet opportunities you just be like oh that sounds cool like let me try that and then same thing with the jedi master the jedi master's like oh like you know wouldn't it be cool if we could take a rocket to mars let's try that you know like that's also the like you don't need to analyze it beyond that at the beginning it's like the this fundamental decision is is very simple and then like the person he's like the person I hate talk to talking to is like the 2nd time founder who's trying to like over optimize their cap table and like try to get like really complicated about the like the valuation and this and then that and then they're trying to do like this lean start validation about every single thing and it's like that's the hardest person to deal with because they're they know too much but not enough to know how to keep it simple and he was talking about like the best ideas the best startup ideas they go to like that that idiot genius category where it's like you know like we should make cars that are electric you know like we should make

Steph Smith

we should sell books online yeah we should buy yeah

Shaan Puri

What if we could buy a book online and it's like, that's it, right? You don't need to go too much further than that.

Sam Parr

what's that what's that video called

Shaan Puri

It's one of the Y Combinator videos. It's Michael Seibel and this guy Dalton Caldwell. They do a split screen, side by side, and they just talk about something for 30 minutes. This is one of them, but I don't remember the name of the title.

Steph Smith

do you

Sam Parr

know the name of the title I wanna listen find it

Shaan Puri

real quick while while you guys talking but I don't know what would do

Sam Parr

you guys believe

Steph Smith

in that

Shaan Puri

like this idea of the sort of like idiot genius like don't overthink it thing

Sam Parr

well I just did the id I I just did the id well go ahead steph

Steph Smith

Steph, I'll let you go first. Well, I was just gonna say quickly, like yes, I believe in it, and yes, I think it applies to different things. So I would say I'm the, like, would you call it, like, mid-twit or something?

Shaan Puri

mid twit

Steph Smith

Somewhere in the middle for like midwit in finance. That's why I don't dabble because I overanalyze things. I hear one piece of news, and I'm out. It's kind of a deal. But I think it applies to startups. I think I'm maybe not that way with other things. I certainly am just terrible, and so I think it...

Shaan Puri

Our friend Jack Fisher is a great example of this, right? He saw NFTs and was like, "Oh, that looks cool! I'm gonna buy one. I'm gonna make one. What should I make it of? I don't know, like this... what about this diagram I already have?" You know, that's like the simplest stuff. And the guy's made **$50,000,000** this year on a huge level. How much?

Sam Parr

Do you think he's made off those? How much do you think he's made on those? Do you think he's like wildly wealthy from those?

Shaan Puri

I don't know. You know, he's done well for sure. I think, you know, he bought apes. He bought, you know, he bought punk. I think he's bought some of the projects that went up from like...

Sam Parr

for sure

Steph Smith

You know, and plural, like you said, like apes. Not just one ape. He's bought multiple of all of them.

Shaan Puri

I think those were priced at about $1,000, you know, 18 months ago. Now, each one is worth like $250,000 to $500,000. I don't know if he held onto them; I don't know what it was. But even just the stuff he made, right? I know a lot of people are like, "Oh, Web 3, the metaverse, I need to create an NFT project. It needs to have this and that and utility, blah blah blah." He's like, "Hey, I minted a picture of a thing that says, 'Not like right-click save as.'" You know, it's kind of like just making fun of the space. He sold it for $50,000, right? He did that in an afternoon. Instead of being the midwitted, over-analyzing, logical processor of all things, he went to the kind of "idiot genius" zone and just took a punt. Because he's in the idiot genius zone, it's not heavy. It doesn't take a lot of time, energy, or money to try it. So, I specifically carved out a portion of my investing budget to say, "Look, this is my gamble. I'll get rid of my gambling energy. I'll learn by doing this because I'll do things I wouldn't otherwise do, and I'll have skin in the game." So, I'll actually pay attention to it. And like, who knows? Maybe I'll have some hits out of this. I honestly think that part of my portfolio is going to do better than the well-thought-through, quote-unquote, part of my portfolio.

Steph Smith

By the way, Sam, I think you do this really well. When people come to you and say, "Sam, I'm thinking of starting this business. I want to cover this topic and I want a blog," you're like, "Alright, what's your first step?" Or you'll say, "Just write," or something like that, which simplifies it to the core idea: just do the thing. It's not about over-analyzing the 50 startup articles.

Shaan Puri

A person said online, "Dog, you just needed to..." He goes Randy Jackson on him.

Sam Parr

Well, I get frustrated, I think, because I believe that building a business is like a scale from step 0 to 10. Step 10 is when you achieve your billionaire vision; you own all this property, whatever it is. It's good to have that number 10 in mind. A lot of people are like, "Alright, that's step number 10," and then they think they need to figure out steps 3, 4, 5, 6, 7, 8, and 9. In my mind, I'm like, "No, the only thing that's important is 1 and 10." After you get done with step 1, you'll figure out number 2. But until you get to number 2, don't even worry about number 3. It's not important.

Shaan Puri

Dude, I have the same exact thing. I call it A-B-Z, literally word for word your thing. I went on Jack's community; he asked me to give a talk to his Visualize Value community. This was the one thing I told him: "You have A, that's where you are. Z is the vision, that's the dream. It's good to have that; it's good to know what that is, right? That's like the North Star. Without that, you don't really have the motivation. I don't really understand what the hell you're trying to do." But where it gets paralyzed is they think they need to know steps B, C, D, E, F, G, H, I, J... and then they get paralyzed or they start thinking about step D when they haven't even done A to B yet. So I go A-B-Z; it's all you ever need. It's like, where you are, you gotta know that accurately. The next thing you need to do is know that, and then you need to know the vision. Everything else is irrelevant; just do that. So you just literally said the same thing with your own numbers, basically. It's awesome.

Sam Parr

Great, great minds think alike! I mean, that's exactly how I feel. Every time I've ever had any bit of success, or even when I've done something that didn't work out, I just think that if you start, you're going to see so many things that you didn't even expect or realize were an opportunity. Or, that weren't an opportunity. You're like, "Oh, I thought this," but it's actually way different. But that's cool, or that's not cool. We gotta quit, you know what I mean? And that's why you just have to do something.

Shaan Puri

I have this

Sam Parr

and I get really frustrated with inaction

Shaan Puri

I've been saying this lately: I love thin books and quick silence. So, what does that mean? I love a thin book.

Sam Parr

did you make that up yeah

Shaan Puri

I love a thin book because a thin book is like a simple idea presented without the fluff. That's it; that's the value. You don't need a thick book for everything, so I'm a big fan of thin books. Now, the other one is a quick silence. I call my buddy, Sue Leo, about every business question I have. Basically, it's like, "Oh, we're starting the Milk Road. Hey, what do you think about this?" Then there's a quick silence. He says his thing, and it's obvious that's the answer. I was building it up in my head, thinking, "Oh man, I really want to sit down with him and talk." But within three minutes, we've reached a good pause where it's like, "Well, I guess nothing else really matters till we go do that, right?" Yep, alright, well I guess I'll just call you that. Obviously, yeah, check you later. That quick silence to me is like what I want now, whereas I used to want to fill that silence with more detail, more analysis, more planning, more nuance, more like if-then statements. You don't really need any of that. We talk, and by the end of my sentence, he says his sentence. Sorry for that; I guess I didn't really need a call. I could've just sent a text. You know, I kind of knew this to begin with. Maybe I didn't need to call you, right? But that quick silence really shows me that I'm on the right track. When I get either a thin book or a quick silence, that's when I'm on the right track. When I need more answers, typically, I'm actually going in the wrong direction altogether. Dude, that's...

Steph Smith

That reminds me of coding. If you run into an error and you're on something like Stack Overflow, and you just can't find your answer, it's probably because you're googling the wrong thing. You've completely messed it up; you're in the complete wrong direction. I feel like that applies in most cases. If you find yourself asking like 10 questions, it's like, "Hold up! You are just going in the complete opposite direction that you should be." Pull back and revisit.

Sam Parr

How many people reach out to you after each one of these episodes goes live, Steph? Do they say that they want to pitch you on something or they want to recruit you to come join something?

Steph Smith

well it grows and some of your buddies reach out which is always fun but I feel like what are

Shaan Puri

we talking about what are we talking about here

Steph Smith

I don't wanna drop any

Shaan Puri

what's what's behind that

Steph Smith

No, no, I just mean like it's cool because... well, also I should say, like, some people that I've really looked up to. I don't want to call out their names because these are obviously private messages. But people that I've looked up to, that I was like, "Oh, I used to read your stuff," or "I've literally read your book," or like... we're...

Shaan Puri

from the same country

Steph Smith

Andrew Wilkinson reached out. Step 3. I'm not naming any names, but it's been cool. It's grown, obviously, because you guys have grown the pod a lot. So, yeah.

Shaan Puri

that's nice

Sam Parr

Well, there are a few people I'll get into a fistfight over. You are one of them, Steph. So let me know who.

Shaan Puri

who

Steph Smith

is the leader your contract sam so

Shaan Puri

you're good

Steph Smith

you're good

Sam Parr

well good I'm happy you came you have so much more to cover I think we should wrap up here though

Shaan Puri

Yeah, sorry. I actually apologize to everybody who listened to this because Steph had a bunch of gold, and I feel like I took it in these really random directions. So to make up for it, we're going to do a second part with Steph, if you'll come back. We'll do more of these ideas rapid-fire, and I'll shut up.

Steph Smith

yeah I'm down let's do it