What Will the Next Opendoor Be?

Shaan Puri

Have you seen what Keith Rabois is doing with his new startup? No? So, you know who he is? Yeah, he's the guy who was an ex-PayPal employee. Then he was the COO of Square. He's kind of a known investor at Founders Fund. Then he started...

Sam Parr

opening known asshole like people don't think that he's

Shaan Puri

Total asshole on Twitter. Super hilarious to follow because he's just an absolute jerk to people. You know, his number one tweet is just "wrong." He won't tell you why; he won't argue back. He just calls you an idiot. Then, if you try to argue, he's like, "This is why I was more successful at the age of 27 than you are at 40." He just rips people like that. Who does that? Nobody does that. So I think that's just really crazy and entertaining to me. But anyway, he's doing it. He did Opendoor, and what Opendoor is now is a publicly listed company because it did a SPAC. Opendoor is a multibillion-dollar company. Basically, selling your house is a time-consuming and stressful process. What if, like, the day you want to sell, you could just sell your house right away? They give you a price, you say yes or no, and that's what Opendoor did. They basically would just buy your house, and then they had a lot of data to know how much to buy your house for. They were the brokers, so they could keep the broker fee for themselves, buying and selling. Then they would sell it within like 90 days, hopefully. They do this in a whole bunch of markets, like Arizona and stuff like that. They've done very well, you know, kind of like on paper. Now, Zillow does the same thing to try to compete with them. They kind of changed the way that the business model of these big real estate companies worked, where now the money to be made is basically in auto-buying your house and then reselling it for you, using a bunch of technology to do that. Anyways, his new company he's starting with Jake Jack Abraham is called OpenStore. So you have OpenStore, and now you have OpenStore. I know they haven't released a bunch of details, but I think I know what it is. It is Opendoor for buying businesses. It's the same idea for buying. I think it's going to be specialized in online businesses, but maybe not. Basically, you just say, "Here's my business," and then they say, "Here's your offer. We'll buy it off you." I don't know if this is going to be specialized like e-commerce roll-ups, like Thrasio. I don't know if it's going to be online and offline like Tom.

Sam Parr

did you learn about this and what what can I go is there a website yet

Shaan Puri

They announced it, so I heard about it a few weeks ago, like 6 weeks ago maybe. I was like, "Oh, that's super interesting."

Sam Parr

how did you hear about this

Shaan Puri

Somebody told me about it because their friend interviewed at the company. That's like the only way you could know about it. When you interview, they kind of tell you the premise of the company. That guy was like, "Oh dude, you know Keith's Voice is doing a new thing. It's basically Opendoor for businesses." I was like, "Oh, that's sick! That's a great idea." Buying and selling your business is even more time-consuming, stressful, and uncertain than buying a home. You're uncertain about what price you're going to get and what price it even should be. The marketplaces to do that online, like BuyBiz or whatever that website is, are just not as straightforward.

Sam Parr

buy biz sell

Shaan Puri

They're so old school, you know, in how they do that. I think there's room for improvement there, so I found that to be really interesting.

Sam Parr

Let me bring this up real quick. It's so crazy how often internet marketers, who are often accused of being sleazy—and many of them are—are actually ahead of the game. For example, email marketing and email newsletters are all the rage right now. Scammy guys... like, I don't think this guy's actually scammy, but David DeAngelo used to sell dating books in the 1990s by having these long emails. I just stole and copied from him. The other thing is paid memberships. Paid memberships have been a thing for decades now. Guys like Greg—your friend, our friend Greg—are doing a paid community thing, and Greg's a cool guy. So it's like, it's cool to do it. And there are so many more examples. Another one is buying and selling businesses online. This has been a thing that internet marketers have engaged in for years. For example, Flippa, where you could buy affiliate websites, has been around for years. Empire Flippers is another one.

Shaan Puri

builders yeah

Sam Parr

empire builders and if you go empire flippers or empire builders I think those are actually 2 different

Shaan Puri

things both yeah

Sam Parr

But if you go to those websites, you're gonna... a lot of people are gonna be immediately turned off. You're gonna be like, "What the fuck is this?" And fucking startup guys like us, we just come in - I guess that's what we are - we just come in and we take this stuff that these guys have been doing for years and we just say...

Shaan Puri

put some lipstick on it yeah

Sam Parr

12.0 Make it a flat, beautiful color. It's so funny because, like, "Cool, this sounds neat," but this isn't unique.

Shaan Puri

Right, yeah. I think, you know, there are really no unique ideas. There are just remixes of old ideas that you make new. There are new platforms, but I think it's cool, and I think it could be big. It's one I'm going to keep my eye on. Then I saw another business like this, so I started to put together a little bit of a pattern here. I said, "Oh, what is Opendoor for X?" What other parts of life and the world could use instant liquidity? Because that's what this is. It's basically taking something that was kind of illiquid, like your house. It takes a lot of time to get liquid when you actually sell the thing. You have to move out, stage it, repaint it, get a broker, list it, and do tours. No instant liquidity. We buy your house today. Don't do any of that. Same thing with buying your business. What else needs that? Then I saw another one, and this business is called... I gotta grab the name, but it's basically doing this for used electronics. It's called Backflip. It just got funded, and Backflip is basically saying, "We'll instantly buy any of your used electronics." And because there's a... and that's...

Sam Parr

not a new thing either and and I think it's awesome

Shaan Puri

And so it's not that it's new. It's basically that there is a big swing being taken by people who are going to try to do this at scale using the modern kind of internet marketing models to do it. So, like, you know, "We Buy Gold" or whatever else does billboards...

Sam Parr

gift cards

Shaan Puri

You know, like gift cards? Yeah, exactly. There's actually a gift card startup called Crushes that basically took the old model and just does it new. I can't...

Sam Parr

what's it called

Shaan Puri

rays I think it's gonna

Sam Parr

I'm at their website right now. I'm looking at Rays.com. Holy shit! I can look at the traffic and just tell you these guys are printing money.

Shaan Puri

Yeah, Raise is gonna be like a $1 billion+ win, and nobody even hears about this company. Nobody talks about this company, but you know, it's a super simple business of... you know, gift cards. The gift card business, resale of gift cards essentially. So anyway, I'm interested in this "OpenDoor for X," which is basically instant liquidity for things that were pretty illiquid before.

Sam Parr

Alright, let's play off that. So, houses. Okay, there's EquityZen, which I think is badass. So, EquityZen also lets...

Shaan Puri

You know, EquityZen kind of looks more like Flippa than it does like Opendoor. Meaning, it's kind of hard to get in; it's kind of obtuse. You have to sign up to see things. Not everything is clear. It's like a 10-step process to make an investment. EquityZen is not like Robinhood on my phone where I could just do my thing. And as for secondary shares, yeah, it's like a bad name. I don't know, it's just bad all around. Forge Global is the other one, and it's also not great. I feel like somebody should do this better. Carta is trying; Carta X is trying to do this better right now, which is like secondary shares of private companies.

Sam Parr

Yeah, I'm not a fan of Carta, but I could see them doing well. However, I'm not a fan of Carta, so I don't know if I'd want them to be the best at this.

Shaan Puri

Angelus is also trying to do it. You know, there's a bunch of people trying to do this. Second, they're trying to do what Opendoor did, but it's a little bit different. They're still trying to create a marketplace. What Opendoor did was different; it wasn't just another housing marketplace. It was, "I will buy the thing off you right now because I know what I can sell it for, and I'm comfortable with this 5% spread that I will keep." So, you give up 5% of your upside, but you get the certainty of it being done now. I'm comfortable with that 5% spread. Somebody would need to do this for secondary shares, where they just say, "You want to sell your company stock? Done." Then I will figure out how to flip this thing on the other side with my own spread.

Sam Parr

So there's a few people that have done this with furniture, but furniture is really hard because furniture doesn't ship well. However, there is... I don't know if you know, I mean, I like buying used furniture because you can get like $10,000 couches for like $3. Most often, really nice used furniture is not really a thing on the internet, or at least it's not hugely popular. But I think there is still an interesting way you could do this with used furniture.

Shaan Puri

right

Sam Parr

so I think trading cards

Shaan Puri

Is 1. So, I know a lot of people that have sports cards. They collected them as kids, and now they're in their attic somewhere, in a box. They kind of heard, "Oh, cards are worth something," but they don't know what they have. They don't know what it's worth. They haven't had them graded; they didn't send them into PSA and pay the money to get them graded. I think if somebody basically did the shoebox model, where you say, "Put it all in a shoebox and mail it to us, and we'll pay you for it," that would work. We'll do all the work of figuring out what it's worth, and then we'll pay you, you know, 70 cents on the dollar for what it's worth. Today, you're getting nothing for it. And if you don't like our offer, we'll send it back. I think that if somebody did that, they could just hoover up all the long tail of trading cards that are out there that people are not doing anything with but want to monetize.

Sam Parr

That's interesting. Okay, so we've... furniture is not that good. Trading cards are pretty interesting because it's a lot easier. Cars... everyone, a lot of people do cars. **Carvana** does cars and I think that that is so sick. They're a multibillion-dollar public company.

Shaan Puri

they they use where they'll instantly buy your car off you

Sam Parr

Yeah, like they'll buy it in a matter of minutes. If you told me this years ago, I'd be like, "No way, that can't be done." But they made $5,600,000,000 last year in sales, so it works.

Shaan Puri

okay so it's working open door for cars is working yeah

Sam Parr

Yeah, totally works. What else is interesting? What's a huge thing? Like, what are some of the bigger assets that you possibly have in your life that you want to... Wow, Carvana's market cap is $45,000,000,000. Holy shit! Yeah, it's working. Yeah, what else is there?

Shaan Puri

I don't know, there's gonna be some obscure stuff like... oh, like life insurance policy payouts or something. Or, you know, something like that where I'm like, "I don't even know that space," but it makes sense. It takes... you know, it's something that you get. Or like Social Security - I know my parents are getting to the age where they can collect Social Security. Would they take a lump sum of all their Social Security now, you know, at 70 cents or 72 cents on the dollar, and then this company just collects the payments over time? Like, probably... I don't know. There's a lot of people who would make that trade.

Sam Parr

Dude, did you know this? There's a company—I have to go and look at what it is—but you guys could probably Google it. I think some banks do it, like Goldman Sachs will do it. If you have a winning lottery ticket, they'll buy it off you. They'll give you the money up front, and it's structured in such a way that they're still able to make their profit. They'll buy lottery tickets from you, like we're talking $10,000,000 lottery tickets or seven-figure tickets. It's kind of interesting that people buy winning lottery tickets off of others. That's actually a fascinating concept. I would need to do some research. How much money do you think is won in the lottery per year?

Shaan Puri

Oh dude, I have no idea. I mean, I feel like the weekly lottery, the Powerball, every week is like, you know, between $50 and $200 million. It's like that's on a weekly basis. It doesn't get won every week; that's how it accrues and that's how it gets bigger. But like, you know... I don't know. Do you have the number in front of you? I feel like it's gonna be...

Sam Parr

I look at it... I don't know. No, I can't find it. There's 1,600 lotteries created each year, so there's at least 1,600 unique winners. No, I don't have the numbers, but lottery tickets might actually be kind of interesting because you said the life insurance. I'm like, "What do you wait to get paid for that?" You would take a discounted upfront payment. Lotteries are actually kind of interesting, and I do know that some banks actually do that [offer upfront payments for lottery winnings].

Shaan Puri

right

Sam Parr

you know who else does that is whitey bulger you remember whitey bulger

Shaan Puri

I've never even heard that those words in my life

Sam Parr

do do you know the movie the departed

Shaan Puri

yes

Sam Parr

you know jack nicholas's character

Shaan Puri

okay yes

Sam Parr

It's modeled after Whitey Bulger. He was a gangster in Boston, either an Italian or Irish mafia guy, or a mobster. He ended up going to jail, and recently they found him; he got beat to death in jail. So, it was like a crazy ending to his story. He was America's most wanted man for like 20 years. As part of his story, he won the lottery three times. The way he did it was that people who had won the lottery in the neighborhood would have to go to him. He would buy the ticket from them and then go cash it. This is like a famous numbers game, which they call a famous mafia thing.