We Hosted A Shark Tank For Tech Startups | My First Million Demo Day (#356)

Sam Parr

So basically, we're going to have a show that's like *Shark Tank*, but the viewers can invest. I think we're going to have 6 startups. Each startup gets 2 minutes to pitch, and then we have up to 5 minutes to ask questions. Last time, I don't know if you remember this, Sean, but the companies that pitched ended up raising like $1,000,000. Alright, what up, Sean? Do you play video games?

Shaan Puri

of course I play video games

Sam Parr

do you really

Shaan Puri

not as much as I used to

Sam Parr

I don't really play at all, but I mean, I'm not like a gamer. Do you know what Xbox Cloud is? I didn't know what that was.

Shaan Puri

Yeah, kind of. I don't... I'm in the PlayStation universe, so I don't really use Xbox Cloud. But it's like the cloud gaming thing for them.

Sam Parr

Yeah, but basically, I paid like a dollar to play Flight Sim. Do you know what Flight Sim is?

Shaan Puri

yeah of course you probably love that thing

Sam Parr

It's awesome! I just started doing it. Sarah and I are thinking about going to Korea, and I'm like, "Well, let's just fly to Seoul right now and see what it's like." You could fly around, and I paid a dollar for it. I'm playing it on my computer. It's so cool! I've never been a video gamer, but it's awesome.

Shaan Puri

a video gamer just gamer

Sam Parr

hello fellow millennials yeah wait

Shaan Puri

so do we not see these pictures what's going on here

Sam Parr

So, I see a bunch of comments. I've got a screen over here. Do you have the comments set up?

Shaan Puri

okay here we go

Sam Parr

And then I believe Courtney or someone else is going to control it. So, someone's going to come up and they're going to pitch for 2 minutes.

Shaan Puri

okay great and are we we're really investing money this time

Sam Parr

maybe I'm not doing it if it's I'm only doing it if it's good

Shaan Puri

Oh yeah, only if it's good, of course. I'm not just going to throw money at something bad, but I'm ready. I got the checkbook out, so I'm ready today. I think $50,000 to $100,000 would be awesome to deploy if there's a great startup in here. But we shall see what's up. I can see the chat.

Sam Parr

So, let's give a background here. Alright, this thing is called **stonks.com**. It's like a live Shark Tank type of company. I'm an investor in it, so I have some interest here. But you're not an investor, right, Sean, in this company?

Shaan Puri

I'm just working for free right now

Sam Parr

Yes, I don't care if people use it or not, but I just want to disclose that. So, six companies.

Shaan Puri

**Describe the format. It's cool!** There's basically a video screen where they pitch to the investors. Right now, there are 250 people watching live, and then there's a live chat for people in the audience. They can tag themselves as angel investors, founders, VCs, or just, I don't know, normal moguls. They can chat during the pitches and also express interest in investing, which will allow them to connect with that founder afterward. So, it's kind of a way to do angel investing no matter where you are in the world, making "Shark Tank" the default process for investing, which is pretty dope. And yeah, as Calvin says, "No small boy stuff today." That's my only rule with these founders coming in and pitching. When they ask for advice, I say it's the same as always: no small boy stuff.

Sam Parr

Alright, so basically, we're going to have something like *Shark Tank*, but the viewers can invest. I think we're going to have 6 startups. Each startup gets 2 minutes to pitch, and then we have up to 5 minutes to ask questions. Last time, I don't know if you remember this, Sean, but the companies that pitched ended up raising like $1,000,000. It was pretty interesting, so let's see if we can get that again.

Shaan Puri

just that life change just another day just another life change as far as I'm concerned

Sam Parr

Well, because we... So basically, we're doing this live, and then we're going to air it on our YouTube and podcast. I think people can still invest at that. But, yeah, a lot of lives were changed. Let's check it out. So, let's... We're going to go to the first one. Jesse, you're going to bring it up. There you go.

Shaan Puri

2 minutes and then we do 5 minute q and

Luke Young

a awesome hey guys luke from cherry here hey sam hi sean so cherry is a exist to ensure accommodation businesses get more direct bookings and in turn giving consumers better travel deals so online travel agencies today like expedia booking dotcom and airbnb bringing around $250,000,000,000 in bookings resulting around 35,000,000,000 in commission fees an average property can sometimes pay up to 30% commission on those bookings with the market power that these guys have it's really hard for an individual property to get direct bookings and that's where we've come in make cherry cherry is a free browser extension that gives you deals when searching for accommodations you can find it right now at joincherry.com so imagine that you're searching for a property you're looking on booking.com you found 1 you liked and bam cherry is going to pop up it's going to show you a better deal for booking directly with the property and on clicking get deal we'll take you directly through to the property's direct website we copy across the guests the check-in the checkout and the promo code allowing you to check out with ease now sam imagine we did this with marathon ranch on airbnb you could have cherry popping up showing a deal directly to customers allowing them to come through to your direct guest debugging engine on your own website all of our properties have a dedicated back end allowing them to manage their deal daily monthly or seasonally they've got full control the current product works across desktop and in the future months we'll be launching all your favorite travel deals directly from your pocket on mobile we're highly adaptable we work across all accommodation providers like city hotels resorts vacation rentals and the future proofing of our product is across attractions flights and also car hire within 4 short months we're approaching a 1,000 partner properties in australia new zealand and canada from all the major brands you might be aware of and by november we'll be launching into the us with an expected 20,000 partner properties we're the team to get this done we've got a mixture of great travel and tech experience and a graded sounding advisory board across marketplaces travel and tech as well so what do you say should we get back to traveling

Shaan Puri

oh nice little closing did you work on that today

Luke Young

yeah I did

Shaan Puri

That's good! I like that. Hey, this is really like *Shark Tank*. So, what do you say? Shall we fly through the sky? Yeah, alright. So, okay, let's start off. Sam, give me your initial thoughts.

Sam Parr

I don't know the space that much, so my initial thoughts are: I'm trying to figure out how this is different from just like Expedia with a Chrome plug-in. Or is that a... is that like the dumbed-down version?

Luke Young

Yeah, we're essentially allowing properties to get more direct bookings by having them pop up on online travel agencies. This sends customers directly to the property's website, so they're not having to pay the large commission fees.

Shaan Puri

And there's a two-way incentive. So, the buyer gets a little discount, and then the hotel doesn't have to pay the referral fee to Expedia. Instead, they pay a referral fee to you, presumably.

Luke Young

yeah we we charge on a performance base and sometimes on a subscription base

Shaan Puri

so are you cheaper than expedia then

Luke Young

Yeah, correct. So for us, we charge a performance fee of **$10** a month, and then we pay **79¢** a click. Whereas some of these properties are paying, you know, upwards of **30%** commission on some of these bookings.

Sam Parr

And the way it works is you have this Chrome plug-in installed. I go to HiltonSydney.com or whatever it is, and it says, "Hey," or sorry, I go to Expedia or I go to some other website where there are hotels listed. It goes, "Hey, by the way, if you just click this little... it's like Honey." So I see a little notification on my Chrome thing that says, "If you click that, you're actually going to save $10 if you just come straight to our website." Is that right?

Luke Young

correct

Shaan Puri

So, how do you get the Chrome extension users? That seems like the hard part. You said you had 3,000 of them. Where do those 3,000 come from? Where do the next 10,000 or 30,000 come from? And how much does that cost you?

Luke Young

Yeah, so what we've done is partner with the hotels that we're signing up, which has made it really easy from a customer acquisition point of view. For instance, we're launching with around 300 new properties in Canada at the moment. They're actually rolling it out to their loyalty base of around 2,000,000 members through email. So, we'll partner with them, and that's the engaging approach that we're going out with. Then, we've got some paid media rolling out across YouTube and Reddit, among other platforms.

Shaan Puri

Sorry, I don't understand. Why does the hotel care to tell its customers to install Cherry?

Luke Young

Yes, so they're almost sick of paying these large commission fees to the online travel agencies. For them, being able to bring their members and incentivize them to use the Cherry product while they're searching across all of the different online travel agencies is a benefit. This way, they don't have to pay those commissions every single time.

Sam Parr

Do you think that, let's say, you're actually advising people not to invest in you because the travel industry is so hard? What's the honest truth that you would say? Because the travel industry, like performance marketing in the travel industry, seems like the most cutthroat thing there is, next to ranking for lawyer terms like "mesothelioma lawsuit." Do you know what I mean? What else?

Luke Young

Definitely. Well, I guess the data that we've seen in travel over the last four months is that it's actually back and it's bigger than 2019 pre-pandemic levels that we saw. Not just that, it's back from a volume perspective, but in terms of what people are spending, it's higher. The average room rate, or dollar value that people are spending, is going higher. So, yeah, I'm trying to tell you not to invest at this. But from our regard, travel's back and bigger than ever.

Shaan Puri

So, it seemed like Honey did a great job because they found a way to acquire users for cheap. I think YouTubers and influencers are one of the big strategies. It seems like you could do that with these travel bloggers, travel tips, you know, flight deals, hotel deal types of bloggers and YouTubers, that sort of thing. Have you guys started doing that? What do you see? What does it cost you to get installed when you pay? Because I don't know, I'm not really buying this idea that hotels are just going to keep spamming their customers to install your app. That just seems... just because they're so fed up with Expedia. I don't know, I really don't buy that.

Luke Young

Yep, yeah. So when we first started, we were noticing $10 to $12 for a CPA on Facebook and Instagram. We realized that this was just not continually achievable. So we switched and pivoted very much into the Reddit and Pinterest of the world. We were able to get down to sort of that $2 to $3 mark. But YouTube is where we identified the big growth.

Sam Parr

how much did you spend

Luke Young

we were spending a few $1,000 a month

Sam Parr

mhmm

Shaan Puri

Yeah, and what do you... what is a customer worth? So, what do those customers generate for you, you know, in a year?

Luke Young

Yeah, so the customers aren't necessarily the generators for us. It's the properties paying the performance and the subscription fee. But the average saving for a customer could be up to $150 a year in travel savings. Gotcha.

Shaan Puri

okay they're telling us we're out of time luke thank you

Luke Young

thanks guys

Shaan Puri

yeah mimi and sam will quickly debrief and then we'll move on to the next pitch

Ankur Solanki

so so

Shaan Puri

sam and dan out

Sam Parr

I'm out. It has nothing to do with him; it's just the industry. I'm just... I... it's.

Shaan Puri

not you it's not me

Sam Parr

Yeah, it's the industry. Look, I'm one of the very few... So, there's this weird rule. I don't know if it's a law or just a rule, but basically, have you ever heard about this? Where like Expedia or some other company, there's this regulation that they have to display the same rate across all websites if that rate is going to be publicly available? Have you ever heard of that?

Shaan Puri

no but that makes sense

Sam Parr

So, there are these guys I met who bought these Instagram handles, like @hotel. Now, they have around 50 million followers across all their accounts. It says, "DM us for a good hotel deal." When you DM them, they have a chatbot that figures out where you want to go. Then, they can actually send you way more exclusive deals because they don't have to follow the law; it's a private conversation. I think that's an interesting take. That's a really intriguing approach to me. However, I don't think it's good enough to be significantly different from all the other folks out there in an industry that, to me, seems somewhat uneducated. It seems like it's really, really tough to succeed in.

Shaan Puri

I think the hard part here is I'm not installing this unless I'm traveling. Right? Like I'm not just, "Oh, let me just preemptively install this." I think travel is so infrequent that it's hard to get people to install this. I didn't love the answer he gave at the end. He said, "Oh, our customers don't generate money for us." Well, they do, right? They're the ones who go book. On average, of the people that install, 25% actually go book something. Of those 25% who book, on average, that generates $20 for us. So I can tell you no public math, but let me just do it anyway. That's, you know, whatever, $4 or $5 that that customer is worth for me. I bought them for $2, so that's your spread. There's going to be some math like that. So that's what I'm always looking for with founders: Can you, from a bottoms-up way, explain how the money machine of your business works? I put a dollar in here, then it generates, you know, $3 on the way out. I've done that at this scale, and now the only question is, if I scale up, will that money stay the same? That's what I'm looking to do. So yeah, I'm out as well. I like the guy, like the name, but I think that if honey for travel was going to be a thing, honey would do it. I also think that the reason they don't is because, as a standalone thing, it's hard to acquire users for this because travel is infrequent and expensive.

Sam Parr

There's a commenter in the chat room that says, "My wife says she's out." I agree with Ben Simpson's wife.

Shaan Puri

And in fact, I want to know what all of your wives feel. If your wife is not around because she's not watching this at 10 AM on a Tuesday, you know your wife and you know your husband. So just tell us in the chat after every single pitch: Is your wife or husband in or out based on what you know about them?

Sam Parr

alright next up yeah I wanna know too and also ask ask them about my mom

Shaan Puri

definitely out my wife is definitely out sarah is sarah out for you

Sam Parr

Yeah, she's not in. If you want to ask them what your wife's opinion is on Sean and me, as well as the startups, we're okay to listen to that, but only if it's a good thing. Next up.

Shaan Puri

Holly, hold on. Look at this cover for Holly. I keep my wife away from the show because you guys are too handsome. Look, if I had a nickel for every time I heard that...

Sam Parr

exactly 15¢

Shaan Puri

I'd have I'd have 3 nickels

Sam Parr

yep maybe 25¢ they we have a whole quarter alright

Shaan Puri

as well

Sam Parr

pill pillup is the next startup what a name

Ankur Solanki

yeah hi guys

Shaan Puri

pillup I'm pillup throw up the gang sign

Ankur Solanki

**Pillup! Pillup! That's why I took the name Pillup. Cheers!** Hi guys, I'm Ankur, co-founder of Pillup, and I'm here to make you millions. Let's get started. **So, 56% of patients in India have poor medication adherence.** And guess how many are chronic patients in India? **430 million.** So that's a big problem and a huge opportunity for us. But what are the reasons behind this poor adherence? 1. **Forgetfulness:** People tend to forget to take their medication due to old age or just being busy with their schedules. 2. **Poor medication management:** People take the wrong medicines at the wrong time or double dose. It happens more often than you think. 3. **Financial constraints.** 4. **Personal beliefs:** Some people in India believe that if they start taking medicines, they have to take them for a lifetime. 5. **Inability to read doctor prescriptions.** **Presenting the Pillup solution:** We pre-sort your medication by time and date, personalized as per your prescription. But you'll still forget to take medicines for some reason, right? Don't worry, we got you covered! We provide medication reminders on your preferred platform so you don't forget to take your medicine. But in case you still do, your wife will remind you because we're going to alert her after one hour of your medication time. Lastly, we convert this beautiful doodle art of the doctor into a Pillup planner, which is much easier to understand. We provide a one-stop solution to improve your medication adherence through the app, presorting pouches, and our dispenser. We are a team of engineers, analysts, and doctors. I'm a serial entrepreneur and a Y Combinator alumni. Doctor Manish has 19 years of experience as a cardiologist, and Akansha is the brains behind this whole business. To put things into perspective, even if you miss one day of medication for tuberculosis, you start again from day zero. Let that sink in. Thank you!

Sam Parr

good job thank you

Shaan Puri

Ankur, that was awesome. Let that sink in. Thank you! You started and ended with some major restaurant owner energy right there. You came in and said, "I'm here to make you millions," and you left with, "Let that sink in. Thank you." I've actually never seen that, and I don't know... I'm still a little shook. Sam, you take it away.

Sam Parr

That was great! Yeah, I think you did a good job. Are you... is this an Indian company? Is this in India? Yes, yes! And you're like in downtown India right now? I could hear the... where are you at?

Ankur Solanki

I'm in the capital new delhi

Sam Parr

nice

Shaan Puri

you you're wearing a y combinator shirt make something people want is this a yc company

Ankur Solanki

no my previous startup was a yc company

Sam Parr

how was that yeah

Ankur Solanki

So, this was in winter 2021. My partner and I pivoted and had a different vision for a way to take the company, so I started anew.

Sam Parr

is this company basically pillpack for india

Ankur Solanki

Yeah, kind of, but the customer insights are a bit different. PillPack was focused on medication management, presorting, and sorting so that people can stay back at home and spend more time with their family. Our focus is on increasing medication adherence, which involves reminding people to take their medication on time and making their lives easier and more convenient. So, I would say it's 50 to 60% PillPack, but there's more to it.

Shaan Puri

And why doesn't PillPack focus on that? Is it that in India the problem is different? Like, are people's behaviors different? Or why wouldn't you just do PillPack for India? PillPack has been quite successful. Is India itself not enough of a differentiator from there?

Ankur Solanki

No, so PillPack hasn't entered India because there has been a recent healthcare regulation change. This change makes it possible for India, similar to the UHI change, which is akin to the UPI. If you are aware of the payments change that happened, it transformed the whole fintech industry. Similarly, the UHI change is happening in India. Moreover, due to COVID, e-pharmacy has been booming in the last three years with a compound annual growth rate (CAGR) of 45%. With online payments, it has become possible to get this technology out there. Earlier in India, online ordering of medicine wasn't a concept.

Shaan Puri

You should change your shirt. Instead of saying "make something people want," you should say "make drugs people take," and that'll be a head turner. What is the attraction like? I feel like you gave us the high-level problem and solution pretty well, but you didn't say much about traction.

Ankur Solanki

Oh, we launched 2 months ago. Last month, our traction was $1,300. We, on average, get an order value of $200 from our customers per month, and we have a very high retention rate. However, as the sample size is very small, it doesn't make sense to say it is 90%.

Shaan Puri

sure and how are you gonna get customers

Ankur Solanki

So, we have three channels. 1. The first is B2B. Today, we made our B2B partnership with old age homes, where there are 20 to 30 clients staying. 2. The second channel is that we are pushing out the product by introducing it to doctors through our sales channel. 3. The third channel is that we will be starting our influencer programs next month, once our WhatsApp bot and all the technical aspects are on track.

Sam Parr

and really important question is that 0 to 1 on your bookshelf

Ankur Solanki

yes

Sam Parr

I'm in no

Shaan Puri

yeah is that settlers of catan oh interesting

Sam Parr

Yeah, I love Catan. What have you been saying to American investors who say, "Dude, American healthcare is too complicated"? I don't know anything about that, let alone another country that, you know, I maybe don't even know that much about.

Ankur Solanki

So, I haven't reached out to the American investors yet. This is my first pitch. I just wanted you guys to be my investors because I love my first million. I've already received funding so that I can get into Y Combinator again. I will have a clear path for the next two years; the funding is secured. As I said, I haven't reached out to the American investors yet.

Shaan Puri

And you said that the e-pharmacies have been booming, and I think that's very true. I looked at investing in an Indian e-pharmacy. Why don't they just do this as part of their offering, where they're able to sort of help?

Ankur Solanki

So, their focus is very different. E-pharmacies right now have been working on two things out of the fifteen problems we have identified. They are working on the delivery part; they want to do the delivery within three hours. There are three unicorns already in the space, and the whole market right now is discounted. No one is working on what happens post-delivery of medicines. So, that's the space we want to work in, and that's where we are finding a lot of interest from people. All our sales are mostly through word-of-mouth. We are in the pre-launch phase; we just shared the product with ten people, and then they just shared it further. Now we have two hundred and fifty people, and next month we are doing a proper launch.

Shaan Puri

and and you said you're raising $200,000 at a $4,000,000 cap is that right

Ankur Solanki

yeah okay

Shaan Puri

Okay, great. And they're telling us, "Right to 200,100,000." Awesome! We're out of time. We can close it up. Thank you so much, Ankur. Thanks for coming on.

Ankur Solanki

thank you sean thank you sam thanks

Sam Parr

what do you think

Shaan Puri

I like it. I'm in. I would invest in this at pre-seed. Now, the questions I have, the things I would want to know, is he mentioned that his last company, which was YC 21, that's not very long ago. It did not...

Sam Parr

not a red flag but something to ask about

Shaan Puri

yeah yeah exactly but you know there is some red I see in the distance I just don't know if it's a flag or like you know

Sam Parr

it could be a red flag

Shaan Puri

Sign... Yeah, so why did he and his co-founder disagree? What went into that? How did they handle it? That seems kind of interesting. I'd like to know a little bit more about that. I'd also like to talk to some of the e-pharmacy people and be like, "Hey, why isn't there a PillPack for India?" and just hear what they say.

Sam Parr

Do you have... well, I guess you don't need an Indian-based person to tell you that. But do you have someone who's somewhat of an expert on Indian healthcare?

Shaan Puri

Yeah, I know a guy who runs one of the big e-pharmacies there. And then just in general, you know, this is... I'm one DM away from getting that answer. So that would be the other contingency for me.

Sam Parr

That's why I would pass. I don't have that... you know, I don't... I don't... I don't like, you could tell me anything about India's health care and I would've said, "Yeah, okay, cool."

Shaan Puri

yeah so india has now floated it's next to china you're like oh man it's cool

Morgan Tate

did you

Shaan Puri

realize that yeah

Sam Parr

So, like, he could have said anything, and I just... it's really hard for me to know what the truth is, right? I don't know if I would do it. Also, tell me what you think about this: Do you think that it's a good pitch or not to say, "We are PillPack of India. We are blank but for this country"? Yes, sometimes I'm like, "Yeah, okay, I'm okay with that." You don't have to sell something. He really should... don't piss on my back and tell me it's rain. Just tell me what it is.

Shaan Puri

Yeah, exactly. He should've just told us what it is. He should've said, "We're PillPack for India." PillPack has built a $1,000,000,000 business and was acquired by Amazon. They don't operate in India because of India-specific regulations, like he said. So, the PillPack for India is going to start in India, and it's going to be us. Now, the things that we do that are similar to PillPack are [insert similarities]. That's been validated. The part we're doing that's new is [insert new aspect]. That's how I would have pitched that business in order to make it faster for the investor to understand the size of the prize.

Sam Parr

do you feel partial towards indian startups

Shaan Puri

like

Sam Parr

More so than a non... more so, yeah, more so than like a French startup or something.

Shaan Puri

Yeah, kind of like... I think I know a little bit more about the market. I've been there, I have family there, and I've now invested in a bunch of companies there. So it all just builds over time. But also, it's a humongous market that has just had those, like, you know, what do you call those... inflection points or whatever? Basically, a billion people all got mobile phones with internet in the last couple of years. That's just like... it's a dramatic before and after. So, you know, serving that market and building solutions for that market is really awesome. Now, it's a golden cohort of companies because they're all riding the back of this thing where one company basically gave away 4G internet at essentially a dirt cheap cost—cheaper than in America. So, a lot of people got online.

Sam Parr

You know what's messed up though is that big company, it was a big Pakistani company that everyone was a fan of. Air something... what was it called?

Shaan Puri

yeah air lift or something it's like a like

Sam Parr

All you... I don't know if it was you, but a bunch of my friends were like, "Oh, this thing's awesome! This thing's awesome!" I remember thinking, like, I don't know anything about Pakistan, but all my smart friends say this is a good idea. I was really interested in it, and I think I ended up passing, but it went out of business. Whether it's good or bad impacts whether I want to invest in a foreign company because I don't... like, it's like, "Oh, I don't know, man. I don't know anything about this country." So, I have mixed feelings right now on investing in locations that I know nothing about.

Shaan Puri

Yeah, my... well, some of my worst investments came from thinking, "Well, all these other smart people are doing it." I don't know why they did it. I don't know if they're actually smart. I don't know what their assumptions are, what their context is, or what they can afford to lose. So, I've made some pretty terrible decisions like that in the past. So, that's famous last words for me: "Well, those other smart people are doing it."

Sam Parr

Yeah, well, sometimes that works. Though, it worked once for me. Alright, Steve. Campus Inc. Campus Inc. College Laundry.

Steven Farag

close close close close close

Shaan Puri

I don't know

Sam Parr

like I got like a stain on my or it was like a a college tattoo parlor I don't know

Steven Farag

love it I haven't gotten that joke before but I appreciate it

Shaan Puri

we'll let you

Sam Parr

know that

Shaan Puri

go ahead

Steven Farag

alright hey everyone my name is steven I'm the ceo of campus inc we're a d two c and b two b merch platform powered by college athletes and college students we build a licensed merch platforms for universities so every athlete in every sport has the ability to sell merch and profit off their name image and likeness meanwhile we train students on those campuses in design sales and marketing so they can support the athletes and sell to other organizations like the greek system last year we did 4 and a half $1,000,000 in sales this year around pays to do 7,000,000 sean you went to duke so I'm gonna pick on you a little bit in another world you're a 5 star recruit former coach k brings you in and introduces you to your new nil director you have the opportunity to sell your own branded duke merch through campus inc we're talking jerseys custom drops limited releases and you're gonna earn anywhere between 8 to $15 per item sold your jerseys are gonna be sold in the stadium and online and when you go to the final 4 you're even gonna make money on final 4 apparel when you go pro sean you're gonna be able to sell your duke jersey for the rest of your life at the university of illinois we made our college basketball team over a $100,000 in the regular season at at and mark cuban invested in us over a cold email he's helping us take this to every college across the country so far we have over 600 athletes in our queue we've signed 15 schools including duke yukon syracuse and most of the big ten our platform solves a few significant problems one we noticed that universities are desperate to show they're supporting their athletes in this new nil space coaches are losing recruits because other schools are moving faster they need a solution we have it and we're there we're there for them there's also over a 180,000 d one athletes who are all micro influencers and don't have the time resources or skills to run their own merch platform we're we're there to help them finally we know that traditional d to c is throttled and at the mercy of facebook we'd rather reward the students we think we have an unfair advantage in acquiring customers when we sign schools they connect to athletes and athletes connect with fans and that's how we sell merch at campus inc

Shaan Puri

alright wow wow

Steven Farag

no small boy stuff

Shaan Puri

No small boy stuff, dude. I see you put a lot of your own no small boy stuff. Hey!

Steven Farag

Actually, I got a bone to pick with Sean. Alright, Sam, Sam, Sam... sorry, Sam. I designed you guys a merch platform. Here, check this out.

Sam Parr

oh I remember dude

Shaan Puri

nice I remember

Sam Parr

okay let me that is awesome and I think I replied with send me that shirt I want it

Steven Farag

well I said I said we could actually the site is live right now I bought the domain too

Sam Parr

What is it? mfmpod.shop. Okay, now let me tell you something. I wasn't trying to be an asshole to you; I'm just an asshole to everyone who sent.

Steven Farag

it though that's why I'm helping sean out with the duke stuff

Sam Parr

So, we... I don't know about you, Sean, but I bet he does even more. I get like 5 or 10 of those a week of someone saying, "I wanted to buy merch." So, we just made a store for you. I just... I politely tell them to "fuck off." And I think that's what I said to you, right?

Steven Farag

Yeah, I forwarded that to Mark as well. That's why I didn't want to come on the pod. No, I'm just kidding.

Shaan Puri

so now that we're friends with

Sam Parr

them I'll treat you nicer

Shaan Puri

Yeah, you're crazy! We should do swag. Okay, but let's go back to his business. I really like a bunch of things about this business, but I have some questions. So, what do I like? I like that you're basically riding the wave of this regulatory change—the NIL change that just went into effect. That means all the businesses that need to serve that market of college athletes can finally monetize their name and likeness, which is what NIL is about. All those businesses are being created, you know, last year and this year. It sounds like you were early on that wave. A couple of quick questions: Can you use the team logos like you did there? And so, you don't need a special license for that?

Steven Farag

So, that is a special license. But we go to the university and we basically pitch to them that we have an inclusive and holistic solution for every sport and every athlete: softball, baseball, rowing.

Shaan Puri

right good

Steven Farag

They grant us the IP, and then we're able to build them a whole school platform. So, yeah, we're able to do what's called co-licensed merchandise, which is a very specific segment of licensing. We've got those at 15 schools.

Shaan Puri

you're like we've told tens of women's lacrosse sweatservices well I'll

Steven Farag

be I'll be honest our biggest one of our biggest rev generators was women's softball at like virginia tech

Luke Young

the

Steven Farag

Girls just crushed it! They were in the World Series, and people are buying their stuff. I mean, it's not just football and basketball. Amazing!

Sam Parr

Hmm... what's Learfield? Someone was saying how Learfield owns 90% of the licensing rights. If I know nothing about it other than 3 seconds on Wikipedia, if they own it, can you also get it?

Steven Farag

So, Learfield owns Collegiate Licensing. We get the license from them, so they are the license clearinghouse on behalf of the university. When we go to Duke, for instance, we talk to Duke, pitch them, and they say, "Okay, go apply for your license." You go log on to Learfield, apply, and Duke accepts it in the back end. They're just the exchange that you use.

Shaan Puri

And is Leerfield incentivized to let you guys grow? Do they see this as competitive to what they do?

Steven Farag

Well, there are different parts of Learfield. Learfield is a licensing arm for the university, so they're there to protect the intellectual property (IP) of the university. However, when we have something that's a really unique segment, it's hard for the university to say no. For example, if I just wanted to sell Duke merchandise, Duke would likely say no because they have hundreds of other people doing it. But the fact that we're in a very niche vertical means the universities are more inclined to create the best possible opportunities for their athletes. It would be silly for them to say no because that would take away opportunities for them.

Shaan Puri

By the way, we have 500 people watching live. I think your startup has a total interest of 140,000, which is pretty dope! People in the crowd.

Ankur Solanki

it doesn't sound

Steven Farag

I'm 30

Sam Parr

You've got that young, 22-year-old dog energy there. "There you go, I'm a dog!" "There it is, I'm a dog!" Thank you for proving my... Alright, does that have a hot dog on it? Dude, put those two shirts in a package and please send them to me. I'll Venmo you. Those are awesome!

Shaan Puri

he's like you do he's like I have a store just go buy it why do I why do I have to do this

Sam Parr

give me a yeah give me that coupon sam will order

Shaan Puri

What about... I like that you're doing this franchise model, right? So you're basically going to get kind of passionate, cheap labor on the campuses. You're going to have this setup on each campus where they do the design and the marketing.

Steven Farag

Yeah, and we already have that. Up until NIL [Name, Image, and Likeness] came about, that was our thematic approach. We teach college students design and sales. Right now, we have 150 students on 40 campuses. They're really big into the Greek system, but now that we have the Greek system and sports, it makes it so much easier for our students across the country.

Shaan Puri

gotcha okay so there's there's kind of a a pivot or a little bit

Steven Farag

It's just... it's just adding... it's just opening our opportunity. Because before, you couldn't really do sports. Now, you can do just about everything.

Shaan Puri

when did you start this company and like how much money have you already raised

Steven Farag

So, I bought out a little print shop right after graduating college. I had a Brian Scalabrini design go viral when I was in school, and I had enough money to buy this little print shop. We've since scaled that, and we just got Mark's investment for $250,000. Other than that, everything else was bootstrapped from the ground up. This is the first time we're actually raising capital. We still own most of the company, and we are cash flow positive. We should be profitable this year. There is like a first mover advantage; we gotta land grab all these schools pretty quick.

Shaan Puri

Okay, you gotta stop. Sam's getting too excited. This is a video at a family show. We can't cross the line here. So, you're saying all the right words.

Sam Parr

yeah

Steven Farag

I mean I love you

Sam Parr

I think I love you. I bid, and my wife is definitely a no. I'm totally interested. I think you've got a lot of charisma and charm. You're all those things. The story about buying the small print shop and then getting Mark Cuban via cold email is impressive. I know that it looks like you have Lightbank on board. They seem like sharks. I don't know much about them, but they seem like a strong backing if you got them involved.

Steven Farag

that's groupon yeah yeah

Sam Parr

That's Eric. You have a very interesting energy about you, so I'm definitely interested in learning more.

Shaan Puri

They're telling us it's time. I got one last question for you, which is: these ideas sound fun, and I often run away from fun ideas because, you know, a bunch of people go try to do it. Maybe the opportunity is not that big because it's fun and sexy. The big YouTuber merch backend stores, like Fanjoy and some of these other ones, like...

Sam Parr

they pretty much all suck right

Shaan Puri

none of them got huge what's the difference here okay so got big but that's different

Steven Farag

So, you have to think about why we're defensible. It's because we're essentially enabling our athletes to do the marketing for us. Right? If you have 300 athletes at the University of Indiana all pushing this store every year, the school is going to be adding more athletes, and then they're going to be pushing those into our big funnel. For example, at the University of Illinois, we're sitting on 20,000 Illini emails. Now we can step up to Fanatics and start competing with them because all of our customer acquisition is rooted in the kids that are actually playing. Does that make sense?

Shaan Puri

yes okay so so

Steven Farag

What's Spring? So, Teespring is the platform. Actually, Walker is one of my good friends.

Sam Parr

yeah yeah yeah

Steven Farag

And so, like a lot of our stuff, there's a small circle of us that are raising money in the tech space and apparel. We all talk to each other, so a lot of this is calling on a lot of each other's APIs and using a lot.

Morgan Tate

of the

Shaan Puri

tech that's them what you print through them

Steven Farag

No, we could print through... like we have our own facility, but that doesn't scale. Our CTO actually came from a company called Printavo. Shout out to Bruce Ackerman; he got acquired recently. So, we can connect to thousands of print shops across the country. We have the ability to connect the same way Teespring does, customizing all the bigger guys, right?

Sam Parr

where where where do you live live in chicago nice dude

Shaan Puri

you wanna hang sam's coming over yeah

Sam Parr

Okay, alright. You're talking dirty to me, Midwestern guy, doing all that stuff. I'm very interested. Yeah, thanks.

Shaan Puri

steven great job talk

Steven Farag

soon thanks

Sam Parr

I like it, man. That guy had some charisma. I think the business is more than mildly interesting.

Shaan Puri

Yeah, he's a good entrepreneur. You can tell that he has a bunch of the little "green flags" that indicate he would be a good entrepreneur. I think he has a really interesting opportunity here because of the NIL change, and that answers the big "why now" question. Okay, the idea of printed T-shirt swag is like, you know, the oldest solution in the book. But there's a new problem: all of a sudden, athletes can do this. They never could before, but they don't know where to start, and they're not going to want to deal with all this infrastructure. So, being the company that partners with them, that's what I think is really strong.

Sam Parr

These ecom plays can be freaking tough, man. Walker Williams, who... the hard part here.

Shaan Puri

Is this upside right? Like, is this a $1,000,000,000 company? Is this a $10,000,000,000 company? There's basically no way this is a $10,000,000,000 company. It's unlikely it's even a $1,000,000,000 company. So that's the hard part. He's going to raise on tech valuation terms, right? Well, he has a $1,000,000 cap right now.

Sam Parr

yeah but what is his revenue

Shaan Puri

I don't know yet. He didn't say. He said, "7." He said, "7 million" this year, I think he said. I mean, in e-commerce, 7 million is like not very much.

Sam Parr

Right, so this is none. $4,000,000 last year. He said this crosses the threshold. So, $4,000,000 last year, $7,000,000 this year. It crosses the threshold of being interesting enough to not say no, at least for me.

Shaan Puri

Yeah, the one thing I would want to figure out here is, okay cool, you're going to raise this money at 10. Are you going to raise money again? Does he think about this mentally? Like, "Oh, I'm a tech founder. I'm going to raise my seed, my Series A, my Series B, my Series C." If so, I'd have to get off the train. But if he's basically like, "Hey, I'm going to fund this and value this based on the category that I'm in," which is, you know, let's say in this case, e-commerce, I think our tech-enabled e-commerce, I think that there would be a better conversation there. So, I think that's my only concern: how big is the prize? I like everything he's doing, but that part's not in his control.

Sam Parr

Yeah, well, I felt bad for being rude to him, so I'll look at it.

Hubspot

this data is wrong every freaking time

Hubspot

Have you heard of HubSpot? HubSpot is a CRM platform where everything is fully integrated.

Hubspot

Woah! I can see the client's whole history: calls, support tickets, emails. And here's a task from three days ago that I totally missed.

Luke Young

hubspot grow better

Sam Parr

alright next tera shroom jared from tera shroom

Jared Steele

what's up guys how are we doing

Shaan Puri

what's up alright take it away

Jared Steele

Alright, Sam and Sean, why do people listen to my First Million podcasts? Well, it's because they want to make more money. Coincidentally, Tim Ferriss says, "Of all the billionaires I personally know, almost without exception, use mushrooms on a regular basis." So, if you want to step up the podcast to my first billion, you might be interested in what we're building. **Tear Shroom** is really straightforward. It's a patent-pending mushroom grow chamber that is intelligent and automated. This way, anyone can grow mushrooms at home effortlessly. The problem is, while a lot of people want to grow mushrooms at home, growing mushrooms is complicated and it's an eyesore. I've been growing mushrooms for nearly six years now, so I'm speaking from my own personal experience. Mushrooms are becoming wildly popular, and the space is blowing up with **$1 billion** that is spent on mushrooms annually. Let's transition a bit and talk about product market and where we're at. Over the past two months, we spent about **$4,500** on Facebook ads, which has resulted in nearly **$65,000** worth of preorders. Our business model is set up with subscription revenue, basically gross supplies that we send every single month. When you factor this in, we're looking at over **$100,000** when you consider this subscription to lifetime value (LTV). This is the team that's making it all possible. The team is stacked with deep technical, operational, and sales experience. We have multiple exits and IPOs under our belt, and one of you might even recognize an old friend of yours, Sam, as well as a former guest on this podcast, Justin Mayers. What we're looking for is **$500,000** at a **$3.25 million** post-money valuation. This will help cover all manufacturing costs, get us slated for a Q4 launch, and ultimately ship out in Q1 of next year. So, guys, if you want to be part of building a product that's helping people become happier, healthier, and maybe even produce a few more billionaires, then we'd love your help to make this happen. Thank you!

Sam Parr

Dude, that Tim Ferriss quote... ambitious! That's a very rich quote. Is that real? He said every single one of his billionaire friends takes mushrooms.

Jared Steele

a derivative of mushrooms we can say but yes

Sam Parr

interesting well good pitch it

Shaan Puri

looks good

Sam Parr

so

Shaan Puri

so explain what it is it's a it's a home brew kit for growing mushrooms

Jared Steele

Yeah, any type of mushroom species. So let me give a little bit of backup. There are a couple of companies that are kind of in the space right now. One is **Back to the Roots**. They're doing over **$100,000,000** right now in revenue per year.

Steven Farag

back to the roots

Sam Parr

is doing a 100,000,000 in revenue

Jared Steele

Yep, and then there's MudWtr and Four Sigmatic. Basically, when you think of some companies that are in this space, they're doing nearly a quarter of a billion dollars from just three companies alone. What we're doing right now is we have a Trojan horse. This is a beautiful grow chamber that gets people into the app ecosystem, where we have awesome upsell opportunities into other verticals. Then, the long-term play is ultimately therapeutic. So when you think of the science, the research is irrefutable. Legislation is changing; it's 2022. Big Pharma, quite frankly, they're scared. They see the science. So we just have a really, really cheap way to acquire customers. We get people into the ecosystem, and then ultimately down the line, we can almost go down to telehealth. We're basically not selling atoms; we're ultimately selling like ones and zeros or bits and bytes.

Shaan Puri

So, let me pause you. You said "Back to the Roots" does $100,000,000, and you're like, "That's comparable." But I go to "Back to the Roots," and it's like, you know, moms and their kids growing plants at home. It's not like, you know, high achievers taking mushrooms to be happy because of the money they're making. Cool mom? Yeah, that seems like a totally different thing.

Jared Steele

So, let me talk a little bit about distinction. You can grow any type of mushrooms in this gourmet, medicinal, and other varieties as well. This is not limited to the type that you're thinking of. You can even grow microgreens. I mean, this is ultimately a containerized grow environment that gives you full control over all environmental settings. So, there's a lot that can happen in this, and that's the exciting part. We have an IoT device that's connected in the home. You guys know what's happened with SodaStream and Traeger Grills, doing hundreds of millions of dollars in revenue. It's the exact same thing, and this is exactly where we're skating to where the puck is.

Shaan Puri

And so, why do you pitch it like it's the psychedelics thing versus, "Hey, we're SodaStream for growing veggies," or whatever the hell, like micro veggies or whatever?

Jared Steele

There are a couple of people in the whole space right now when it comes to hydroponic growth solutions for lettuce. I think the truth is that what we're seeing is the green rush that happened a couple of years ago, about a decade ago in California. We're seeing the exact same thing happen in the mushroom space, and that is where there are going to be billions of dollars to be made.

Sam Parr

So, you can sell... I know nothing about mushrooms. You can sell that stuff.

Jared Steele

So here's the thing: what we are selling, just to be clear, is the grow chamber. We're just selling hardware. We'll basically sell some raw ingredients that you can buy from the store or what have you. We will also sell the grow supplies if you want to do gourmet varieties. **Fun fact:** It's not something that most people know, but you can order any type of mushroom spore varieties, if you catch my drift, because they do not contain the psychoactive ingredient in 47 of the 50 U.S. states. This is a legal loophole. I've been growing them for about 6 years, all different types. So it's something that not many people know, but it's becoming very well established.

Sam Parr

are you

Shaan Puri

I'm on shrooms right now. I'm okay. This is okay. He didn't...

Sam Parr

he didn't answer

Shaan Puri

No, he's got his wits about him. Alright, okay, so you're doing this and you think that also, like, you're growing through paid ads. Through paid ads, you're like, "Okay, we're not gonna get blocked by Facebook for basically saying, you know, grow your own weed at home." Like, you know, that's what they wouldn't allow. But you're going to basically be able to show this terrarium, you know, this...

Luke Young

home you

Shaan Puri

know little terrain that you're gonna be able to buy

Jared Steele

Yeah, yeah. So actually, you know, it's funny talking to Justin here. We're doing a huge pivot away from actually the whole psychedelic aspect. So it's actually very much more generic. We're taking it down a more PC route to basically grab a much wider audience.

Sam Parr

Wow, oh okay. So, you have some interest here. You have $40,000 of interest, but you're raising $605,000. Is that right? No, I'm sorry, am I reading this wrong?

Shaan Puri

He's raising $250,000 at a $3,300,000 cap. In this whole session, how many people have been interested in funding things? He's got two cases himself.

Sam Parr

and how is this business and what's gonna happen like where where what do you think the exit is

Jared Steele

Yeah, great question. So honestly, I've just been working on this for the past few months. Everything from the CAD modeling design, you know, literally everything you've seen, I've done myself. So basically, we're getting ready for some engineering validation testing. Ultimately, the exit strategy is extremely profitable acquisitions. I mean, the truth is, we'd like to make money. That's why, you know, we're on this podcast, right? But there's a lot of different ways to...

Shaan Puri

Give us the unit economics real quick. You can make the device for what? The chip, like basically the COGS (cost of goods sold) plus the shipping is what? And what do you sell it for?

Jared Steele

Yeah, perfect. So, what we're looking at right now is **$49** and some change for manufacturing. When you factor in **CAC** (Customer Acquisition Cost), manufacturing, and **3PL** (Third-Party Logistics), basically the landed costs, you're looking at about **$128**. The **MSRP** (Manufacturer's Suggested Retail Price) is **$3.99**, and then we have a **$29** a month subscription. So, basically, you're looking at a total of about **$700** for the customer **LTV** (Lifetime Value) based off of about a **$30** cap.

Tim Tesluck

alright

Sam Parr

k that's time thank you dude

Shaan Puri

thanks jared

Sam Parr

Dude, it's crazy, man. Valuations have changed. He's raising on a $3,300,000 cap. I was thinking about the upside here. Angel investing has become far more attractive in the last 3 months.

Shaan Puri

Yeah, these valuations were all extremely reasonable. I think they were all also very early stage, so these are like pre-seed type of investments, which is great because, you know, that's where a lot of money can be made. Yeah, my wife's definitely out on this one. My wife, who has never said a curse word and never drank a drop of alcohol, I don't think she's a believer in that.

Sam Parr

would would would you ever do shrooms

Shaan Puri

I don't know probably not I don't I don't know I'm probably not

Sam Parr

To tell my wife to do it this year, I'm like, "Hey, before we have kids, you should try LSD or mushrooms or something. That'd be awesome!" I'm not going to do it.

Shaan Puri

yeah you're like you should

Sam Parr

I'm not gonna do it like... well, like the other day we were talking about this relationship book. To make our relationship better, I'm like, "Hey, can you read this for us?" That's it. That's the problem, I think.

Shaan Puri

you just identified the problem

Sam Parr

Yeah, that's how I feel about mushrooms. Like, "Hey, can you do this for us?" So, it's mostly changed people's lives and made them feel better and happier. Can you do it for both of us? Yeah, I would say I'm mildly interested in this as well. I need to learn more. I don't know; his answer of "Is this illegal to sell?" is still a little... no.

Shaan Puri

He's saying it's illegal. He's basically saying all we sell is hardware and then we sell raw ingredients. Then, 49 of the 50, whatever states... yeah, but he used the phrase "is not legal."

Sam Parr

he used the phrase if you catch my drift

Shaan Puri

Yeah, you never want to use "if you catch my drift" during your pitch. That just sort of says, you know, you're one inch away from this business collapsing.

Sam Parr

Yeah, if you catch my drift... that's real interesting to me.

Shaan Puri

More than two winks in your pitch about, like, you know what I mean? Like, yeah, you know what I mean?

Sam Parr

Yeah, I need to learn a little bit more.

Shaan Puri

I'm out, but not for that reason. I just... hardware is hard. So if I have the choice between investing in a hardware company or a software company, I'm sort of just leaning towards software unless there's a real outlier. And then on top of that, I don't really know this market. I don't know how real the "shrooms" trend is, if it's just like an LA/SF/New York type of trend for this type of thing.

Luke Young

I don't

Sam Parr

I know how big it is. I think it's bigger. I read a couple of books about it, enough like...

Shaan Puri

So, people that are going to buy a $400,000 device, like a clean, nice-looking Nest, versus just paying Diego across the street for like $20 for some shrooms... I mean, of course, more people take shrooms, but how many people are going to do this? Yeah, it's a good, just like, sexy homebrew situation.

Sam Parr

you ever grew did did I grew weed in high school in a closet did you ever do that

Shaan Puri

I can't say I did

Sam Parr

Well, we used to go to Home Depot and have to buy the bulbs and stuff. We would put a lock on the closet so your mom wouldn't come into it. Things like this... But with Amazon, it's like the easiest thing ever to grow drugs. I love it.

Shaan Puri

Alright, we'll go to the next pitch. So, I think in that case I was out, and you were a maybe. Is that right?

Sam Parr

I'm a maybe okay

Shaan Puri

cool let's do the next one morgan from deal builder

Morgan Tate

hey guys

Sam Parr

what's up what's going on

Morgan Tate

alright so yeah my name is morgan I'm the cofounder of deal builder so sean and sam have you guys heard of the baby boomer tsunami it's a bit of a ridiculous name but it's the $10,000,000,000,000 of baby boomer owned businesses that are gonna need to sell by 2030 the unfortunate reality is that a majority of them will fail to sell and the reason why is because the current marketplace is confusing it's super expensive and it's really inefficient how do we know this well over the past decade my cofounders and I have sold over 250 businesses and have really mastered how to sell small businesses and what we found is that we've developed a proven system for successfully selling businesses and we found the solution was to build a tech platform so we could rapidly scale and make the process more efficient and transparent and that's what we built dealbuilder an online marketplace to buy and sell businesses so what unlike typical listing sites dealbuilder makes the process guided through end to end which makes deals close faster and for a fraction of the cost we make money by taking up to a 3% platform fee of the transaction so our early traction so far we've closed 4 and a half $1,000,000 worth of gmv on the platform we have another 8 and a half million under offer and we launched the platform at the tail end of 2021 and currently that's been a year to date revenue of about 80,000 we have another 65,000,000 that's listed on the platform right now and we're projected to hit a 1,000,000,000 of gmv listed on the platform by the end of 2023 that represents another at our current 65,000,000 listed about 600,000 on the platform and to put in the context that 80,000 of year to date revenue we're doing we did 24 and a half in august and we anticipate that a similar amount in september as well so we're just getting started as those deals are starting to land our lead investor is friend of the pod andrew wilkinson from tiny we've secured 450,000 of of canadian dollars in funding and we're looking to raise another 250,000 to scale this and take on this $2,000,000 problem and we wanted to have that chilling there grind set mindset from you guys on the cap table as well

Sam Parr

what's the conversion of 450,000 canadian dollars to real money

Morgan Tate

oh it's like you guys are paying like 20.20 or $30 I think

Shaan Puri

yeah

Sam Parr

yeah yeah it was just I couldn't figure it out like what monopoly money to usd is

Morgan Tate

Yeah, no, I think that in actuality, that's probably like $150, I think, or maybe a little bit more. Something like that.

Sam Parr

Really? Okay, dude, this is awesome! Your site is great. I think your branding is really slick and cool. It's not, you know, like Micro Acquire. I think maybe it's because Andrew is just being controversial on Twitter. I don't think that he's appealing to maybe all the right people. I think that what you're doing is incredibly intriguing. This is very interesting. Why haven't you raised from more people? This seems like a pretty big opportunity, and you only listed Andrew. He's great, but that's just one person.

Morgan Tate

Yeah, so we started out bootstrapping. We actually just built this for ourselves for the first little while. Then we kind of pivoted the business model. At first, it was just like, "Alright, small businesses that weren't a good fit for our brokerage, you go and use this and pay a nominal fee." Then we thought, "Why not expand this?" That's when we decided to raise funds. So, we're kind of seeing that blue ocean right now and going after it.

Sam Parr

Have you talked to all of our nerdy friends? Like, well, you're talking to me and Sean. Have you talked to Cody? Have you talked to Nick Huber? Have you talked to all of our buddies who are all like these influencers around this stuff?

Morgan Tate

Not Nick Huber. I've exchanged DMs with Cody, but I haven't finalized something. I also talked to Xavier recently as well, who's really in the space. Everybody's like, "Yeah, this is absolutely needed," because... well, like...

Sam Parr

Amongst our little "circle jerk" group of friends who talk about buying boring businesses, I think you have a nice little influencer. At least, not a game changer, but maybe a little game changing. Anyway, I would probably invest a little bit. I would like to learn more and do some due diligence, but this is really, really cool.

Shaan Puri

yeah when how how big is buy buy sell

Morgan Tate

Yeah, so BizBuySell, or whatever way you want to do it, is owned by CoStar. CoStar owns LoopNet, and yeah, they're a public company. I think they did $2,100,000,000 in revenue, but they're just listing. They don't take any transactional fees. So our difference with BizBuySell is that they... I think BusinessesForSale is another competitor. They had 160,000 listings in 2019, but they probably do around $5,000,000 in revenue because they don't take any piece of the transaction. So their value capture is so low compared to what they could actually be delivering on, but they're just a listing site. They only send buyer leads; they don't actually help guide through the acquisition.

Sam Parr

sean why'd you ask about that versus like fe international

Shaan Puri

Because it seems like that's the closest comparison, right? I misidentify myself for the types of businesses you're selling. When I go to your site, I see a chocolate shop and a services company. So, like, Micro Require is trying to do SaaS (Software as a Service).

Morgan Tate

yeah we don't touch it

Shaan Puri

Specifically, FE International is doing these larger deals that are using basically a kind of private banker. It looks like this is how the SMBs are going to trade hands. Is that what you're trying to do? Is that accurate?

Morgan Tate

Yeah, Neffi International could be a client of ours. We have a brokerage, like a white label side. So, our brokerage now runs all of our deals through Deal Builder and pays a small percentage of every completed deal. We do their whole back office for them, so they don't have to. With brokers, your cash flow is like this because it's in between each commission. Now, they're only paying when deals actually come through. So, brokers have just kind of flooded to it and asked to be on the platform, which is really cool.

Sam Parr

I think more than anything, I'm interested in the... I mean, I think your brand is cool. You seem nice, great, and competent. I think that I'm interested in the macro trend. Yeah, you're handsome like a baby dolphin... yeah, like a little Ivan Drago. I think that this macro trend is really cool, and I would like to take part in that.

Shaan Puri

So, how do you get the crank going? How are you going to get a bunch of buyers and sellers onto this platform? What does that take? I'm sure it's a bunch of brute force at the beginning, but what are you doing to make that happen?

Morgan Tate

Yeah, so the sell side is harder than the buy side. Buyers are everywhere. Everyone thinks buyers are the problem, but it's super easy to find them and it's free to sign up, so there's really low friction. On the seller side, we've really grown by referrals—accountants, other brokers. Brokers refer deals to the platform as well. Then there's just awareness; people don't know that these solutions exist. So, it's actually really nice from a marketing perspective. You just say, "Hey, you can sell your business on our platform," and they're like, "Great! I had no idea. I thought my business wasn't worth anything." So, it's really just about getting awareness and getting into the right centers of influence. I think, like you're talking about with some of those influencers, can make a really big difference.

Sam Parr

and your revenue this year is gonna be a couple 100,000 is that right

Morgan Tate

Yeah, likely it's a little bit hard to predict when the timing of deals will close. But in our pipeline of $600,000 right now, I know a couple of $100,000 of that will close for sure, just in the quality of the businesses. We've already done $80,000 this year already.

Sam Parr

paid the bills on your team it looks like on your website it looks like you got a bunch of people let's go

Morgan Tate

Yeah, well, there are the three co-founders. I'm the active operating co-founder. The other two co-founders are really in adviser and investor roles. They help out with some of the actual process, like breaking down the brokerage process. So, there are two developers, myself, and a marketing person. One of them is on leave right now. But yeah, so it's like there are four of us right now that are on payroll.

Sam Parr

sick well thank you this is awesome I'm I'd like to learn more

Shaan Puri

yeah same alright thanks morgan good job

Sam Parr

Sean, the thing you said at the end was a little funky.

Shaan Puri

not about what the team not being the team

Sam Parr

Yeah, the team not being the team... that freaks me out a little bit. Because in a couple of years, when things start working out well, if I'm that kid, I'm going to say, "Well, what the hell, man? You're not even working here. Why do you deserve this equity?" You know, like there's going to be some anger.

Shaan Puri

we don't know that they have equity we don't know how much

Sam Parr

they're listed as a cofounder

Shaan Puri

Yeah, but that might just be like... it seems like if you go to their website, there are these stock photos of happy people holding coffees and clipboards. It seems like maybe he just buffed up the team to be like, "Look, our team has tons of experience finding out the differences." So if it's a website marketing thing, okay, that's fine. But if it's actually on the cap table or it's in the deck, and then you're in the deck because "here's our awesome team with tons of experience," oh, I'm the only one who actively works on this. That's when I'm like, "Okay, hold on. How many other things in this deck do I need to question?" So I think that's a little bit of a... you know.

Sam Parr

Yeah, that's all I'm saying. I don't think it's a red flag. I'm just saying I would want to dig in just a little bit more on that.

Shaan Puri

right

Sam Parr

But that guy just raised $250,000. It said he was raising $250,000 and he got $250,000 of interest. So good for him. I'm... I'm... I'm.

Shaan Puri

A total of $1,000,000 in interest for this session. So when you talk about moving weight, when you talk about bringing size, when you talk about really hitting the handle, about that hit... and hit when you're talking about.

Sam Parr

those things

Shaan Puri

You're talking about us? Alright, let's go to the last pitch. It is Tim from Field Complete. Alright, Tim.

Tim Tesluck

Hey guys, **Field Complete** is a free app for your local plumber or electrician to run their business. They live in our app, and we become their bank over time. We found a very unique wedge into this market. As you know, rentership in the U.S. is on the rise; over **35%** of all homes are rented, and it's growing. It all started back in **2008** when most of the foreclosed homes were bought out by Wall Street and rented. Pair that with the short-term rental **Airbnb** craze and millennials not being able to or wanting to own. Heck, now even VCs are buying real estate portfolios right through **Adam Neumann**. All these homes need to be professionally maintained by property managers, and property managers use contractors and subcontractors to maintain them. The problem is that traditionally, contractors would either focus on the residential sector with homeowners or the commercial jobs. With property managers entering the single-family rental scene, as a contractor, you're basically either forced to bootstrap your operation or use **seven different apps** to run your business, or you resort to pen and paper, which is basically **80%** of contractors today. Actually, my co-founder experienced this problem firsthand when he transitioned his construction company. He tried the seven different app route, ended up building his own, and only after the subs and the property manager started asking, "Hey, what software are you using?" did we realize how huge this problem is. So, in a nutshell, **Field Complete** is a free software for your local home service contractor to run their business, and over time, we essentially become their...

Tim Tesluck

Of sale, their bank, their credit card. Think of it like a Shopify for the home service contractor. As far as traction goes, we raised a small pre-seed to rebuild the app. We launched at the beginning of this year and have over 200 contractors on the platform. We have serviced over 19,000 homes and generated over $5,000,000 in GMV this year. We're on track to do $10,000,000. Currently, we are only monetizing the actual revenue on the merchant services. So, anytime a credit card is swiped on there, we're on track to do a little over $100,000 this year. We're raising a $2,500,000 seed to integrate banking into the solution at job sharing, which basically gives us more users. We plan to pilot with a property manager integration and hire some support reps. We know this model works well because ever since we've removed the SaaS fees, we've been getting about 3 to 4 companies signing up organically every day. So, I'll open it up for questions.

Sam Parr

Tim, you and I have interacted a bunch online, haven't we? "Yes, we did. I know your face, but we've never hung out, have we?" "Not yet. Well, let's... What's going on? Nice to meet you. This is cool." "Congratulations! When was the first raise that you did?"

Tim Tesluck

yeah so the first raise was a year and a half ago about almost 2 years

Shaan Puri

interesting why no deck

Tim Tesluck

we went with the no deck that that's attached to the the the thing of distraction

Shaan Puri

okay alright sounds good

Sam Parr

are you running out of money now

Tim Tesluck

No, we have enough runway. We have more than **seven months** of runway, and this round is coming together. We have a lead for this round. We're basically most likely going to close it in the next month or two. All the investors from the pre-seed round have exercised their options into this round, and we have some new investors coming in.

Sam Parr

the call how much is how how many people will work there and what's your spend each month roughly

Tim Tesluck

The total team size is 18 right now. We burn about $60,000 to $70,000 a month.

Sam Parr

Today in Net Burn, yeah. And you're raising how much?

Tim Tesluck

We're raising $2.5 million. We can potentially oversubscribe it, but we think that's enough money for us to get to the next stage.

Sam Parr

and last question on that what's the next stage

Tim Tesluck

Yeah, so the next stage is basically that this money will get us to either default alive or raise a bigger growth round. We're on track. Right now, the companies are signing up organically through subcontracting, and so the user base is growing on its own. We literally only have two support reps on the team right now. Customer acquisition in this space is tough because it's SMB (small and medium-sized businesses) and it's fragmented. We found this wedge where, through property managers, they work with multi-trade contractors and they subcontract jobs to each other on our platform. This way, we get more and more users signing up on their own. Therefore, our customer acquisition cost (CAC) is not as high. We don't spend money on CAC; basically, all the users that we currently have on the platform were organic.

Shaan Puri

So, say that again. How many users do you currently have on the platform, and over what period of time were they acquired?

Tim Tesluck

Yeah, so for this year, we've had about **500 contractors** sign up. Of those, basically **200 are active**. Some contractors are daily active, weekly active, or monthly active. We're tracking all of that. The daily active contractors are the ones that live inside our software. The weekly and monthly active contractors are the ones that basically use the app to receive work and perform work. They're just using it to receive a job and do it. With the new feature that I was talking about, the **job sharing** that we're going to release, they're going to get a full field complete account as well. They'll be able to use it for all the third-party work.

Sam Parr

and right now you're keeping 1% of the money that goes through you guys

Tim Tesluck

Yeah, so merchant services were out. When we were raising our pre-seed, we were thinking it was going to be up to 1%. We're doing like... and the deck says 1.07. The actual is 1.26 right now.

Sam Parr

but with a goal of 10%

Tim Tesluck

Yes, the answer is yes. The way we get there is by releasing the banking solution in Q1, which is going to average out to about 2%. There are other fintech offerings we can layer on top, basically like settling invoices earlier, kind of the way Deal does it, along with other fintech offerings. From there, we want to pilot with a property manager, integrate with them, and give them our book of contractors to dispatch work to. They will then give their book of contractors back to us.

Shaan Puri

Let me ask you a question. When you internally forget about the pitch and look at the health of your business, what is the number one KPI? So, what is the main KPI for you?

Tim Tesluck

Yeah, so we're measuring GMV (Gross Merchandise Value) across the board because that's what we can monetize. We can add layers of monetization in terms of marketplace fees.

Shaan Puri

So, the GMV (Gross Merchandise Value) is your number one metric. GMV matters because that's what flows through your app directly.

Tim Tesluck

yes

Shaan Puri

so so you're saying gmv matters because I take 1% of gmv

Tim Tesluck

Yes, for today, 1.26%. Then, without increasing the user base, we can layer more offerings on top of that and increase the revenue as it scales.

Shaan Puri

What does the math come out to? So, you've basically done about $70,000 in revenue over the last year, something like $55,700,000 in GMV. Then you multiply that by 1.26, is that right?

Tim Tesluck

Yeah, so for this year, right? This past year, we had about $5.7 million in GMV. To date, we're at about $42,000 in revenue already. We will be, at the end of the year, basically at over $100,000.

Shaan Puri

I personally like the concept of what you're doing, which is basically the workflow and how to run your business if you're a blue-collar contractor. I really like that concept. However, what I don't like about this pitch is that I'm just confused about how big your business is. I feel like you threw a bunch of numbers at me, like, "Oh, we service 19,000 homes, $5,700,000 in GMV." These sound really big, but what's the reality? The reality is you have 200 active users and you made $40,000 in revenue this year. That's the reality of the situation.

Sam Parr

and I

Shaan Puri

I feel like that was so buried in this that I'm like, for me personally, that's too much work to get to an understanding of your business. This tells me that if the business itself was super compelling, you would have just led with the more clear, easy-to-understand metrics. It's not like, "We serve 19,000 homes, which is a total of 43,000 people because four people live in the home." It's like, "Oh dude, I don't know what these numbers are, but they're irrelevant to what your actual business is."

Sam Parr

is is your growth keeping you up at night right now what what's keeping

Ankur Solanki

you up at keeping you up at night

Sam Parr

Where you think like, "Fuck, things are going well." Which everyone at all stages of business... So I'm not saying it for you, but just like... I'm not saying you have this only, everyone has this. So what are you saying that about?

Tim Tesluck

Yeah, so growth has actually been very good because we're getting organic users. We're not paying anything for these users. The pie is growing on its own.

Shaan Puri

how how can you say that you have 200 active users how could you say growth is very good like I I don't

Tim Tesluck

yeah so the the reason why it's good is because we spend basically no money acquiring them right so we're

Ankur Solanki

getting 2 to 100 companies

Shaan Puri

That's what I'm saying. I have, you know, I have so many friends. I have three friends, but I don't go out, so it's no problem. You know, it's like, well...

Sam Parr

my muscles are really good for not working out

Shaan Puri

Yeah, exactly. I can do 2 reps, but I never work out. It's like, well, the goal is to have really strong muscles. The goal for you is to have a lot of customers. Maybe you should be spending to get more customers, right?

Tim Tesluck

Yeah, so where we're at now is that we're onboarding customers, like I said, that are coming in. In terms of revenue, it trickles in a bit later when it's a fintech solution, right? So that might be a concern for an investor. But our investors are aligned with us. If we were to turn on soft fees today, we'd make around $400,000 to $500,000 in ARR. However, we're purposefully keeping them low so when they subcontract, there's no barrier to entry. Then we monetize the financial layer. Because of that, we're prioritizing growth over immediate revenue right at this moment. So that's our strategy again, and our investors are aligned with it.

Shaan Puri

I would argue, so you're basically saying we're not charging because we don't want to have a barrier to entry. Any business that doesn't charge is going to get that benefit, but then you should see awesome growth, right? So that's the counterargument. The counterargument would be, okay, you've sacrificed $400,000 to $500,000 in revenue, like you're saying, and what have you gotten in return? Is it some, you know, 200 active and 500 total registered users? If you had just charged and actually had $400,000 in revenue, you could have spent that money on advertising. You could probably have, you know, ten times more users. So, I don't know. I guess for me, those parts don't add up personally. And I'm saying this too just because, you know, on the show, there are a lot of people listening, and they want to hear the full thought process. Which is, I think in general, you want to have a capital-efficient business. It seems like you might have spent... you've raised $1,600,000 to date, is that correct?

Tim Tesluck

yeah so in this round already and yeah

Shaan Puri

or like okay in the life of the company how much money has been like burned total

Tim Tesluck

yeah total burn is like we've burned about 1.8 to date

Shaan Puri

Right, so what I would say is, okay, if I knew nothing about business, I would say, "Here's a business that has burned $1,800,000 to achieve 200 customers and $50,000 in revenue this year." That's the harsh truth about the business. Now, that doesn't mean you shouldn't invest. There might be tons of other reasons why that burn was on infrastructure, building a product, building a brand, or whatever. There are other reasons, but just sort of objectively speaking, that would be my main issue. I give you that feedback because maybe you can look at your model slightly differently. If others share that view, maybe they don't, maybe they do. But if others share that view, then you could say, "Alright, the feedback from the investor market is that I need to either have an impressive user number or an impressive revenue number." You know, maybe I should double down on one of those areas and do things slightly differently.

Sam Parr

The stock guys are saying, "We gotta end this particular presentation." Tim, we appreciate you a lot for coming on. This is awesome. Thank you!

Tim Tesluck

yeah sam sean thanks

Shaan Puri

thanks thanks sorry if I was too harsh buddy

Sam Parr

Dude, I hate doing this because I agree with everything you say. I hate... I don't want to rip on someone. But here's the thing: I think the business could be great. I think maybe there's a chance that he just kind of missed the pitch a little bit.

Shaan Puri

But yeah, that could totally be the case, and/or we misunderstood, right? Because without a deck, you're trying to follow it while you're trying to read the chat, while you're trying to look for the company's metrics, and you go to their website. So it's very easy to miss things during that process. That might be on us, and the other part of it is...

Sam Parr

Some information... The lead was buried. When the lead is buried, I get a spidey sense that goes off, and I'm like, "I'm nervous. What am I nervous about here?" Now, that doesn't mean that it's always the case or that he meant to do that, but he could've just been nervous or something because there are a lot of people watching. But the pitch... the pitch was missed.

Shaan Puri

And I feel like, you know, on one hand I'm like you. What you said, which is just like, "Dude, I hate kind of saying something not positive to an entrepreneur," because I know how hard it is to be an entrepreneur and be a founder.

Sam Parr

I don't mind doing it when it's just me and them

Shaan Puri

Yeah, especially in this format. But, you know, if you sign up to do this publicly, and a founder signs up to do this publicly, that's the right... the risk and reward with that. I think you have to know that going in. But I think the best thing that can happen is if you... I don't know if I'm right, but if I was, it would be short. It would be a little pain today for a lot more benefit down the road, right? Hard today, easy later. If we just keep it easy now and say, "This looks really interesting. We'd love to chat more and just bounce it," I mean, who knows what... why we might not want it?

Sam Parr

You nailed it, which was to answer the question: why is it $1,500,000 or $1,800,000 for 200 customers and $80,000 or $160,000, whatever it was, in revenue? There is a good answer, or there could be a good answer to that, which is: "Dude, we're building software. It just takes forever, but once these guys get on us, they are hooked forever. They tell their friends." Here's how we grow and here's how the math looks. I just think that he kind of didn't present that wonderfully, even if the truth is good.

Shaan Puri

right right right okay so I don't know are we doing anything else here

Sam Parr

no that's it

Shaan Puri

Last pitch! Thank you to everybody who showed up. That was great! I think there were at least two companies in there that I know I’m going to follow up with. The Campus Inc. presentation I thought was really interesting, and the PillPack one was really good too. I think those are my top two. What about for you?

Sam Parr

I think I like campus inc and I like the business what was the

Shaan Puri

Oh, oh, DealBuilder. DealBuilder also is a good one. The valuations are fantastic. DealBuilder's at $4,000,000.

Sam Parr

DealBuilder's interesting. Well, this last one was at $21,000,000. That's why I asked, "Somebody last raised, was it 18 or 24 months ago when things were hot?" And that, yeah.

Shaan Puri

And if your valuation is $21,000,000, the bar is higher on what you need to deliver, right? The PillPack guy is like, "We got $2,000." You know, he said, "We made $1,500 in revenue or something like that," but he launched 2 months ago and he's raising at like a $3 or $4 million cap, right?

Sam Parr

yeah like the the the push

Shaan Puri

as hard on that

Sam Parr

When I think about what I'm doing with my personal money right now, I'm like, "Man, I think some of these tech stocks or just the total index are a little underpriced at the moment." I believe there's going to be some upside. Then I look at a $20,000,000 company and I'm like, "Okay, what the...?" This is still super high risk, and it needs to have a fairly good outcome to make the risk worth it for me. Whereas a $4,000,000 deal with just one guy working on it, you know, that could actually survive a little bit. There might be a higher likelihood it could survive, and the return could be great. So, down in a way, that's where I am. I love the chat here; these people are such... there are so many funny and interesting, smart people.

Shaan Puri

Yeah, the chat makes it a lot of fun. Like, Henry just now goes, "This pitch was WLD: Whole Lotta Dogs."

Tim Tesluck

dude

Sam Parr

I love this man! These guys are great. So, I almost kind of want to have... I can do a podcast every once in a while while we have a live chat. This is actually quite good.

Shaan Puri

Yeah, maybe we should. And thanks for coming out. If people like this, don't think this is the second time we've done this live pitch. If it's cool, we'll do it again.

Sam Parr

Dude, these guys' stocks... like, I'm biased here, but I'm impressed every time I go on their platform. It is cool, isn't it?

Shaan Puri

yeah it's pretty sweet so that's not really

Sam Parr

such a pitch sorry but it's really cool

Shaan Puri

We're at 1,300,000 in total interest expressed. So, they really did help these companies raise money. Pretty dope! 500 people were here, kind of hanging out. Alright, that's it. We're out of here.