Investigating The Mormon's $100 Billion Hedge Fund (#424)

Shaan Puri

Sam, have you heard the story about how the Mormon Church has a $100,000,000,000 hedge fund? Yeah, that caught my eye. Yeah.

Sam Parr

that was that that's old right that's from 2019 or 2012

Shaan Puri

2019, exactly. Yeah, and Ben... you're... Ben, you are... I don't know how to explain it. You are Mormon, you are a member of this great business. You are a patron of the business that we described first. So far, Ben, have I offended you?

Ben Wilson

not yet

Shaan Puri

okay great

Sam Parr

let's fix

Shaan Puri

that keep going so you're saying this james

Sam Parr

alright we're live dude you're wearing the brightest sweatshirt it's like bothering me almost

Shaan Puri

I'm here and I'm ready to to shine bright like a diamond rihanna style

Sam Parr

oh diamonds that's right

Shaan Puri

This kinda looks like Rihanna's halftime outfit a little bit. If I just had the belly bump, I'd be there. Some would say I do.

Sam Parr

I I wouldn't say that subway but I wouldn't

Shaan Puri

I had to take the shot before you did there

Sam Parr

No, I'm not gonna... You're not chubby anymore, you're strong. So you got your shit right, bro. We've got a couple things to cover that are pretty good. I think you do too.

Shaan Puri

yeah I'm locked I'm locked and loaded

Sam Parr

alright do it what do you got

Shaan Puri

It's amazing what not running another business will do for you. You have so much time to work on this podcast. Okay, I want to tell you about what I think might be the greatest business of all time.

Sam Parr

okay

Shaan Puri

The greatest business ever? I think this is the greatest business ever, and I'm going to convince you of that. Let me, let's just walk through... before I even tell you which one it is, let me walk through the criteria for a business like this. Okay, so if we were going to describe the greatest business of all time, what would be some of the attributes? What would be some of the attributes you have to have?

Sam Parr

so the attributes time ltv

Shaan Puri

High, high LTV [Lifetime Value]. So you want a customer around for a long time that pays you for a long time. Great. What about... let's say I told you there's a high LTV business, but it's only been around for 18 months? Well, you'd be like, "I don't know, not a long operating track record or history here." So you want longevity, right? You want the...

Sam Parr

speed around longevity

Shaan Puri

years what if I told you this business maybe been around for 1,000 + years would that

Sam Parr

be something

Shaan Puri

you'd be interested in okay let's continue on

Sam Parr

are you gonna tell me if there's tax tax advantages too

Shaan Puri

The business doesn't pay any taxes. Okay, I love this! No taxes. How does that sound?

Sam Parr

I like that. I would like it even better if the government would subsidize it. That's a thing. But yeah, that sounds great.

Shaan Puri

to me

Sam Parr

I like

Shaan Puri

That Kanye... Kanye's mom had to come back out for this one. Okay, cost structure. What if I told you: - You basically don't employ anybody - Volunteers do all the work - There are franchisees, essentially, that pop up to sell your product - They just pay you a royalty Wouldn't that be quite nice?

Sam Parr

I'd say hallelujah I I love that

Shaan Puri

What if I told you... You might say, "Well, what's the balance sheet look like? Okay, you've told me the P&L's fantastic, but what about the balance sheet?" Well, what if I told you that these types of companies have, or that this product, this business has not just $1 billion of dollars, but often tens of billions or hundreds of billions of dollars in assets on the balance sheet with no liabilities? Wouldn't that be something you'd be interested in?

Sam Parr

I would be very interested in this. Yes, I pray to God, and I would thank that God that gave me this idea.

Shaan Puri

You're a product guy. You love products. It's all about products—hair products, any product, any type of product. You love it! This is a product beloved by millions. It has insane product-market fit. People use it daily, weekly. They don't even need an app; they could just use it in their head. It's that good!

Sam Parr

even if there's evidence that it it's a bad product

Shaan Puri

If somebody said, "Hey, there is no proof that this product works," they would not care.

Sam Parr

they would not care

Shaan Puri

they would not they would not hear a word of that they would like it even

Sam Parr

more baby in fact

Shaan Puri

In fact, it drives them together. What if I told you this product spreads by word-of-mouth? What if I told you that some people would not only teach their kids, but they would leave their house, go to other people's houses, knock on their door, and tell them about this product? That's how much they believe in it. What if I told you it helps them with their true core issues: their morals, their ethics, their community, their self-development? What if I told you that the product is so good it not only guarantees you a good life today if you use it, but also in your afterlife? When you die, you might go to a nice special place where you'll be happy after you die. That's how good this product is.

Sam Parr

eternal ltv I'm in

Shaan Puri

What if I told you it touches every part of your life cycle, from when you're a baby to when you're old and dead? How you pay for your funeral and everything in between... your marriage... you give away part of your salary to this company just because you feel like it, and it's part of everything in between. What if I told you this company not just sold this product, but also had the number one best-selling book of all time?

Sam Parr

This sounds like the Crips and Bloods, like a gang, but even better. Your blood in, blood out. I love this!

Shaan Puri

You love real estate. They also own a **ton** of real estate. So, tons of real estate. Okay, let's review: - $1 billion in revenue - Tax-free - Basically no customer acquisition cost - Super high LTV [Lifetime Value] It's a product that solves a core need, spreads via word-of-mouth, and the people who use it believe in it. They use it day to day, week to week, month to month.

Sam Parr

to month to month for it

Shaan Puri

They are willing to die for it. People run this business with volunteers and franchisees. It lasts for a thousand years, has network effects, and sells an information product. There's no manufacturing even involved. It's got the number one book of all time, and the total addressable market (TAM) is every human from birth to death. How would that sound? Because religion is the greatest business of all time, and I'm going to tell you why I got excited about this. But how was my rant?

Sam Parr

That was good. I knew where you were going because I'm, you know, born and raised Catholic. I catch your stepping in. I'm all about this.

Shaan Puri

You smell what I'm farting? You know, you hang up on that one quick. So, I wanted to talk about this because there was this news article that came out, or like there was a wave of news about this recently. But actually, there was like a whistleblower thing in 2019. Ben Wilson, you're gonna have to come on to talk about this. Sam, have you heard the story about how the Mormon Church has a $100 billion hedge fund? Yeah, that killed my eye.

Sam Parr

that was that that's old right that's from 2019 or 2012

Shaan Puri

2019, exactly. And Ben, you're... Ben, you are... I don't know how to explain it. You are Mormon, you are a member of this great business. You are a patron of the business that we described first. So far, Ben, have I offended you?

Ben Wilson

not yet

Shaan Puri

okay great

Sam Parr

let's fix that

Shaan Puri

Keep going. So you're saying this, James... Second, Ben, could you explain this $100 billion Mormon Church fund and what your reaction to it was when this [news] broke in 2019?

Sam Parr

yeah I don't

Ben Wilson

I know how deep you want me to get, but the Church of Jesus Christ of Latter-day Saints, popularly known as the Mormon Church, tithes its members. We all pay 10% of our income to the church. But not only that, the church also has a number of businesses associated with it. A lot of this comes from over 100 years ago when essentially the Mormon Church controlled Utah. It spun off a lot of those businesses. It basically doesn't run businesses anymore, but what it did was create a big hedge fund. Because of its association with the church, that hedge fund does not pay taxes and has done really well. Now, as you pointed out, it's worth over $100 billion.

Sam Parr

could the hedge fund be invested in just public equities as well yes like can you just do normal

Shaan Puri

Wow, basically here's how the hedge fund works: So it owns $40,000,000,000 worth of U.S. stocks, so companies like Apple, Microsoft...

Sam Parr

yeah

Shaan Puri

Facebook and things like that, they can't own stocks that are like Caesars Entertainment or Starbucks. They don't own that because of the caffeine and whatever. So, they select some, but...

Sam Parr

don't they own coca cola

Shaan Puri

I don't think they own a mint. They own Microsoft, Apple, Facebook, and Tesla. They made $8,000,000 on the GameStop squeeze when that was happening, so that was pretty cool. They also own 2% of all the land in Florida, which is kind of amazing. They basically grew from $40,000,000,000 to $100,000,000,000 just from 2012 to today. So, like, in a 7-year span, it kind of doubled. They also invest in hedge funds. They own a $100,000,000 hotel in Maui. They outbid Bill Gates for about $200,000,000 of land in Washington. So, land, stocks, hedge funds—this is what they do. Then, they've donated $64,000,000 to charity since 1985. So, that's kind of where the knock on this comes from, which was the complaint that basically said, "Wow, that's a lot of money."

Sam Parr

but this it's just like why they're homeless when you all got this that's like the

Shaan Puri

And why are we giving 10% of our income when maybe I actually need that money? Right? If it's going to this massive stockpile and then that's not being redistributed to this... The answer was, like, they called it... This is where there's some all-time, all-timer lines. I gotta give credit to whoever these people are in the church that are giving these lines out. I mean, to say these with a straight face is amazing. They go, "It's a rainy day fund." So this $100,000,000,000 fund is a rainy day fund. Actually, it did start out like that. That was the initial intent, I believe, like in the seventies or something like that when it started. It was like, "Alright, for every $6 we get, we'll put $5 towards operations and furthering the mission, and we'll put $1 away for the rainy day fund." But then...

Sam Parr

Maybe it's still a rainy day. It's just their household now has 100 or 200, or however many, hundreds of millions of people it is instead of whatever it was.

Shaan Puri

but there's not that many members I think there's ben how many members of this like 16,000,000 members or something like that

Sam Parr

that's ballpark yep

Shaan Puri

Yeah, so it's not that many members. Overall, this thing has just sort of ballooned up. I think they don't know exactly how much members contribute every year. Some guy said $7,000,000,000 in the whistleblower report. There are historians who think that's too low; it's probably closer to $30,000,000,000 that gets contributed per year. So, there's a bunch of complaints, and there's a lack of transparency. That's the second complaint. Not only was this not openly discussed, but that's why a whistleblower had to come out and say, "Hey, there's this management company called Ensign Peak." Ensign Peak is taking the money from the Mormon Church and deploying it. Ensign Peak now has $100,000,000,000 in management, and they're not being open about this. They said, "Well, we didn't want people to know how much money is in there because then they might not feel like contributing." The first line of defense was that. The second one is, "Well, how come you did it through these 13 shell companies so that nobody could track what you're investing in and how?" You bought this mall and you bought stock—what's going on here? They said, "Well, we obscured it because we didn't want our members to try to copy Ensign Peak and maybe they would mismanage their funds not having the same info that we have." These are just... I just love the repartee here between the people that were running this thing. I thought this was kind of amazing, and it was just staggering that they've accumulated this much wealth from a very small base of people. That's why I kind of had this realization: oh man, religion really is the greatest business ever invented. You know, there are five big ones, and they sort of dominate with the same benefits and characteristics.

Sam Parr

you're hindi or hindu is that what are you nothing

Shaan Puri

I don't I'm not a I'm not a believer but yeah like most people in india are hindu

Sam Parr

Is there no central hub? There's no organization, you know, like the Catholics or the Mormons have, like a crew. You don't have HQ?

Shaan Puri

I don't think there's a centralized structure. I think it's more decentralized than that. So, there's no singular entity like the church. I don't know if that means there's not one or what, but there are many temples that are sort of like the Vatican. They receive tons of donations, and people make pilgrimages to them. There's also a lot of shadiness around that. For example, we went and were in line on this mountain to get to the top to see a statue. Then, it was like, "Hey, for $100, you can cut the line." The guy taking the bribe, essentially, was a priest. They don't even obscure it. The guy comes down in his robe and says, "Oh yeah, your family, come here! We want to give you special treatment. Do you have something to donate?" Then you're like, "Yes," and he's like, "Cool, cool, cool! Come to the front of the line." They found that these guys have been raided. These gurus and leaders of these temples have piles of gold in their master bedrooms.

Sam Parr

just like yeah

Shaan Puri

yeah just like you know it's a gold storage facility

Sam Parr

Dude, did that always... it always. So, I went to Catholic school my whole life, from K to 12. Then, I went to another religious college. We used to go to church three times a week: Catholic Mass on Monday, Friday, and Sunday, from the time I was 8 until I was 18. Every week, your mom and dad would write a check, and someone would come around to collect it. I remember hearing about this all-powerful God and how smart He is. It's like, you know, this guy is the greatest. He's brilliant! He created us; we just came from His hip and all this stuff. We're just magical... like this guy's magical. But He's really bad with money. He needs more of it; He can't get enough of this money. And if He loves you, but look, if you don't give Him money, you're going to go to hell where you burn for all eternity. But He loves you, and He needs fucking money. It looks like it's fucking God, man.

Shaan Puri

he's like the worst uncle ever

Sam Parr

Yeah, he just needs money. He comes scratching his neck, he's like, "Hey man... yeah, oh yeah, like what do you got? I'll take anything you got, you know. Literally just give me change. You got change? I'll take change. You got a check? I'll take a check." And now you can even Venmo him. I just remember being at church every Sunday thinking, "This guy, man, he ain't so good with money, but he's all-knowing?" But he can't... he doesn't know which stocks to short because he cannot figure this out. He needs more money.

Shaan Puri

There's also another little side thing before we get off this religion tangent: **Ministry Brands**. Have you ever heard of this PE firm? Yeah, yeah, yeah. Are they the...?

Sam Parr

ones who buy software companies for churches

Shaan Puri

yeah they've rolled up

Sam Parr

I've talked them up 30 30

Shaan Puri

Church-related software businesses generate $100,000,000 in EBITDA, which is essentially profit before taxes. This is just from this roll-up, which is kind of amazing. I mean, it's a $1,000,000,000 church software roll-up, which is pretty awesome.

Sam Parr

Alright, I have a story for you. Well, let's stick with scandal and negative stuff because I gotta go by the...

Shaan Puri

Way one, disclaimer: The product of religion genuinely is great. It genuinely helps people. I'm also just saying that the business of religion, I think, is amazing from a pure business point of view... and also a little sketchy to me. But I do think the product is amazing, and the believers - you guys are awesome. And Ben, you're awesome. You're super awesome, and I hope we didn't offend you.

Ben Wilson

I haven't been offended, but I just want to add a final word on this, which is kind of the Mormon perspective on our $100,000,000,000 hedge fund. The leaders of the church, like the prophet and the apostles, had their salaries leaked by some disaffected members who wanted to make them look bad.

Sam Parr

tell me more

Shaan Puri

what you got

Ben Wilson

you guys wanna know you guys wanna guess what the salaries were

Sam Parr

300,000 that's pretty good for

Shaan Puri

shows I would have guessed 200 200

Ben Wilson

That's close to $170,000 a year. They get a car, which is usually like a Toyota Highlander.

Sam Parr

Why a Highlander? That's so specific. Is that like Prius? That's like... they've just signed—no, no, no, no. They just own a bunch of Toyota stuff.

Shaan Puri

there's no cup holders can't can't put soda can't put soda in it

Ben Wilson

My dad was one of these people who was getting this. He was a clergy, so he had a Stanford MBA and was making a bunch of money. They asked him, "Would you come work for the church?" So he took a 90% pay cut and went to make this change. He was driving around in his Toyota Highlander, just like a very middle-class person. No one's getting rich off of this. Even the people who manage the hedge fund kind of get paid below market rates. They should get paid fine; they get paid well, but it's less than they would make at other big hedge funds that are doing equally well.

Shaan Puri

That we know of, because with the Catholic thing, it's a little bit different, right? On the Catholic side, it was like, "Oh, this whatever bishop took 17 private jet rides last year," and that's like blah blah. There were a bunch of things like that. So maybe in this case it wasn't, or maybe it was more obscured where the benefits come from and not just so obviously on payroll. But I know with other religions that also have a big balance sheet, they also have huge revenues and tax-exempt status. The perks were substantial.

Ben Wilson

But this is why it seems like it's a bigger controversy outside of the Mormon Church than within it. A lot of people, like myself, hear about it and we're like, "Well, I wish it was $200,000,000,000." You know, it doesn't bother us that the Church has...

Shaan Puri

woah doubling down on

Sam Parr

it yeah

Shaan Puri

"Take 20% of my income, dude?" Well, so not everybody... I mean, one guy, you know, one guy famously was suing them. He [was suing] for 5 days like: > "I want all my tithing money back because I was basically under the impression this was going to help people or like expand the church."

Sam Parr

did he get it that's an interesting lawsuit

Shaan Puri

sued for $5,000,000 and I I don't know if that's been resolved yet

Sam Parr

Let me tell you another interesting, controversial story. So, we've talked about software as a service (SaaS) and a few other types of "as a service" products. Now, I'm going to talk to you about **psyops as a service**, meaning psychological warfare. This story involves my researcher, who is around here on the Eugenio, on the Riverside. He might have to pop in if I get something wrong. I found this article that blew my mind and was totally underplayed. I thought it wasn't talked about enough, so I'm going to be recanting a bunch of the story. Nothing here is crazy original, but we found a bunch of articles that we kind of tied together. Basically, this starts in the summer of 2022. A bunch of journalists from different newspapers teamed up to write this story. They went undercover and found this company called **Team Jorge**. It's pronounced... I actually don't know how it's pronounced, but it's spelled J-O-R-E. So maybe "Jorge"? I'm going to call it Team Jorge, like Jorge Masvidal. This Israeli company does **psyops as a service**. What that means is you can give them anywhere from $1 to $10,000,000, and they'll basically hack stuff for you. This company is based in Israel, and they have employees. This isn't like a criminal enterprise necessarily; the guy who runs it has a LinkedIn profile. I want to tell you this crazy story. It starts off with them calling themselves a private intelligence agency. They charge anywhere from $50,000 to hack someone's phone, $400,000 to have their services on retainer, and $6,000,000 to get involved with an election.

Shaan Puri

To save $6,000,000 to meddle in an election? This is hilarious that that's on the menu.

Sam Parr

dude and the guy gives like these crazy stories so the guy's name his name is tal hahnen so he's the guy he's like the ceo the founder and he does this like crazy stuff and so basically their their 3 step part process is to gather intelligence construct a narrative and then deploy maximum impact all wonderful phrases and so I'm gonna give you an example so this guy tal he's the head of team george he's in kenya with these journalists who he thinks work for an african government who wants to hire them to do some work and at the seminar or at the meeting where he's pitching his services he shows his phone tal shows his phone and he's talking to a person who's supposed to be an african government consultant or something like that and he goes here look check this out I just sent your mom a few messages from your telegram account and the guy's like what he goes yeah here's my phone look I'm logged in to your telegram account I hacked you already and and so they do these crazy things where they offer these ridiculous services so they do they have this tool called the profiler which is can it can create all these different fake social media accounts and so what they'll do is they'll figure out what what story they wanna like who they wanna hurt what story they wanna construct and then they use these fake social media profiles to make it really popular and they have something like I think it was like 50 or 6 or no sorry 39,000 of these profiles out there and so here's like a handful of crazy stories so here's a a couple examples so the clean the the team claimed to have a sex toy delivered via amazon to the home of a politician with the aim of giving his wife the false impression that he was having an affair thank you my love it was a wonderful night waiting for you whenever you come back read a note inside the box the wife received the package and then the team george they sent a film crew to film this and they found the politician sleeping in his office for the next 2 days and they found out who the sender was it was this woman named shannon and I think she's one of their fake avatars and they found out who she was and she's active on twitter and on facebook and has a gmail account and whatsapp account but I don't believe this woman's real and her amazon card was connected to a digital wallet so they could like track all this and so that's like an example of the things that they do another thing that they do is to prove the journalist to prove how powerful these guys are do you know who emmanuel the emu is do you know who that is have you heard of that person

Shaan Puri

no who's that

Sam Parr

So there's this TikToker, this lady who's got a TikTok and she's wonderful. I've followed her forever, and she has an emu. You know what an emu is? Like an ostrich-looking thing. Yeah, like a pet emu that went viral on TikTok, and she talks to the emu. His name's Emmanuel. Well, the journalist asked Team George to make it go viral that Emmanuel was dead, and so overnight they did that by...

Shaan Puri

Way started really weird. Request by the journalist: "What the hell were they thinking?"

Sam Parr

I don't know it's just weird they're weird

Shaan Puri

strange choice makes zero sense

Sam Parr

And it got to the point where this woman, who owns Emmanuel the Emu, whom I follow and love, was featured in an article. I found this story where they were talking about Emmanuel the Emu. I've loved Emmanuel; I know all about them. I even own an Emmanuel the Emu t-shirt. Today, I saw online that "RIP Emmanuel the Emu" was trending on Twitter. I just want to let you know that I ran outside to check what was going on. He's totally fine! I have no idea why this happened. But this company creates all these crazy stories. One company might say, "Hey, the CEO of this $1,000,000,000 company, we need something bad to happen to them. Find some dirt in their past." What they'll do is hack into a person's Gmail or Google Drive. Using that, they'll find passwords to all these other things and create these crazy stories. Then, they'll use their network of 20, 30, or even 50,000 fake social media profiles to share all this stuff. They also bribe some journalists or create fake blogs where they'll write these stories. The avatars or social media profiles then share that content. It's crazy and fascinating, and I read this article, and it absolutely blew my mind.

Shaan Puri

Yeah, this is really, really wild. You know, I thought psyops was when you use social media or articles to influence somebody's beliefs. Not just that, but hacking their phone is sort of different. So, it's interesting that they do both. I have a couple of quick reactions. Number one, prices seem really low.

Sam Parr

I feel like this I can seem low

Shaan Puri

Team George, triple your prices! This is a small voice still for the value you're providing. I mean, it's only $6,000,000 to meddle in an election. That's it! You know, I've taken shits bigger than that. Come on, look at what's going on here. So, I don't really understand their pricing. $50,000 to hack into a phone? You know how much chaos you can cause by hacking into someone's phone? That seems wild! So, I think that's crazy. Good find that this business exists. That's my second reaction. My third is that this kind of lines up... I feel like this is a thing on social media that people sound like conspiracy theorists if they bring it up, but it clearly happens. It makes total sense that this would happen. I also know that this happens in the non-election context. You know, this is basically also done for influencer marketing, right?

Sam Parr

like like

Shaan Puri

what like we've talked about my buddy steve bartlett and how he used to own a huge number of twitter pages and he would own pages that had nothing to do with anything it'd be like you know hermione's favorite books it's like some harry potter fan page and they would have like freshman problems they would own that page and like things I overheard in manchester they would they would own that so they own a bunch of things that if you were like a 14 to 21 year old in the united kingdom you followed probably you know 4 to 8 of their accounts and so what they would do was when we wanted our app to go to to grow and to go our goal was to to go get a bunch of downloads for cheap we worked with him and I was like alright steve what can we do to grow this thing he's like well we can use my network and I was like great so just say you know hey this is a great app download it you know blah blah blah here's the link and he's like he just looked at me like okay you know get out of here get out of the room dad like you don't you don't understand and he was like yeah we're not gonna say this is a great app because nobody cares and that looks like an ad we're gonna say like my mom's reaction when she sees me checking bebo for the 43rd time that day and then it's a mom slapping a kid I was like oh well I don't think that's a good image for a new app and he's like no he's like do that and then be like you know when I you know when I you know my notification's blown up because of this annoying effing bebo app and it shows 47 notification like but you're calling it annoying that seems bad right steve he's like no when somebody sees that there's an app that has 47 notifications they wanna know what it is and that you're complaining about it makes it look like not an ad and I was like but then where are you gonna find the link he's like I put the name bebo in the thing they'll go search for it and he's like then they'll search for it and then they'll find it and then they'll share it because they saw 7 he's like when you hear 5 people talking about something on social media the same thing in a day that you hadn't heard about that's what we call it when every when all the accounts start talking about it at the same time

Sam Parr

that's great on the

Shaan Puri

same day

Sam Parr

yeah thunderclap who made that up you make that up

Shaan Puri

Well, I used to say that when, you know, if your thighs get together or something like that, then it's a thunderclap. I just decided to reuse it for a better purpose now.

Sam Parr

so for when your thighs get together just messing around no

Shaan Puri

We made that up, but I think it is actually a social media term. I remember looking it up because I was like, "Oh, this is genius!" What do you call it when all the accounts on the same day just flip on and start organically talking about something? Like, what is that? Some other person had made that up, so I stole that name from them. But basically, that's what these guys were able to do. He used to... and we've talked about this before, so I'm repeating a story here. But like, he gave a talk once on stage and goes, "Watch this. This is, you know, whatever. I've made up a name like Freddie DB." He puts a slide on the screen of him wearing a Manchester United uniform and he goes, "Freddie DB just signed with Manchester United for $72,000,000. One of the craziest contracts for a prospect who's only 17 years old." Oh, but the thing is, Freddie DB doesn't exist and he never signed a contract. But watch this, we're gonna make this go viral. Just by the end of my talk, this will be trending on Twitter. And oh my god, he nodded to one of the 19-year-olds that worked for him off stage and goes, "You know, like, launch the missile." And that's exactly what they did. By the end of the thing, it was trending. Real, like, ESPN-type news sites started picking it up. They're like, "Freddie DB signs for $72,000,000," because they're all trying to find information on it, but they just publish first because they don't want to be late to the news. It just showed how much influence you could have. And so this happens, I think, from a commercial perspective in the business world, and in this case, for political power as well.

Sam Parr

That's wild! What a badass presentation, Steve. That's a really good presentation. I mean, that's like...

Shaan Puri

My time swagger... like the swagger knob is broken. It's just stuck on 12. There's nothing you can do. We've tried to take it into the shop.

Sam Parr

The Hustle, we now are read by about 3,000,000 people a day. So we're not a big deal, and we're definitely not like influential enough that one of these companies would be like, "Let's get that company to influence the masses." And... same with this podcast. We're not a big enough deal where we're a target where someone's gonna... or at least I don't think so... where someone's gonna be like, "I'm gonna trick them into saying this because then they're gonna actually have influence over the outcome of whatever we want."

Shaan Puri

We'll make your analytics guy say what happened today, but that's it. You know? Yeah, because I'm not... that's going crazy.

Sam Parr

Yeah, like it might be a little bit of a note on your spreadsheet for that day, but that's at best, that's it. But I would see a little bit of this fake news stuff because I would do little tests. For example, my parents do this all the time. They'll look up a celebrity and they'll say, "Oh, Nick Cannon is only worth $8,000,000. That's not a big deal." And I'm like, "You guys..." They wouldn't even click the article sometimes; they just see the paragraph text. And then, the other day, or this past weekend, I was with my father-in-law, and he's like, "Oh, look! If you Google it, it says the worst way to sleep is on your belly." It's like, because we were talking about someone in your back.

Shaan Puri

answer yeah

Sam Parr

Yeah, I'm like, you guys realize that anyone can write these articles and I can make them show up. So, I used to write these articles about net worth. For example, Ross Albright, the Silk Road guy. I would write an article about his net worth, and I would just *make it up*. I have no idea what it is; I would just make it up. I would track my analytics, and people would start linking to it. I would start getting traffic, and that happened a lot of times. There would be instances where I made errors in articles, and I noticed I would see that same error on a few other people's websites. You start seeing, "Wow, this is how it starts." These little things, this is how it starts. So, this whole fake news conspiracy—it's one of the few things where I'm like, "No, there's actually truth to that." I have very small examples of that, but if you're a much bigger deal, you can find lots of bigger examples of that. It's actually this whole fake news thing; it is 100% real. So, this story is definitely proof of that.

Shaan Puri

Dude, as soon as you see how the sausage is made in any industry, it just really ruins it for you. I remember when we were doing our restaurant startup, we were like, "Dude, we don't know anything about restaurants. Like, how does a restaurant even work? This is... what are we doing?" We had learned a little bit about sushi because we're a sushi restaurant, but I was like... Dan, who's our business partner, was like, "My favorite..."

Sam Parr

raw fish seems like the best the best platform to learn by the way

Shaan Puri

yeah yeah yeah exactly my favorite sport russian roulette yeah so we were like dan go work at noodles and company and go learn their like process stuff and he's like alright so he dan graduate he's he's a duke graduate goes applies for a job at noodles and company they're like wow son you you interned at goldman sachs and now you're here he's like yep it's always been a dream to be on the back line and they this they've whatever and so he we used to bring home noodles and company every night and we were like dude what's a so he's like he's like bro the the way they make this the way that he's like the amount of salt in this and he had this like this guy that worked this guy who barely spoke english that worked back in you know like a line cook with him and dan was like eating the tomato soup and because he's like I'm gonna eat he's like I don't wanna get like super foul I mean I guess I'll just have the soup so he's like put the soup in a bowl and the guy just like knocked it out of his hand he goes no don't eat the soup too much salt too much salt he's like he showed him like when they make it they just like take a salt thing and just it's like is it measured in grams no it's measured in seconds what do you mean seconds it's like how long do you hold the lid with the can upside down pouring salt and it's like 17 seconds worth of salt and so he used to tell us like dude don't eat this shit and that's how I feel about everything like when we sold the milk road to mike and kendall these guys are they come from an affiliate marketing background and so what they do is they make websites that are like news or blog sites that rank at the top of Google and they're the authorities site example like they were doing it for gold buying gold online and so they were like should I buy gold or the price of gold over time or should I buy gold coins or bars and so whatever question you would ask they wanted to be the number one result the the other guy did it in for for sports betting so it would be like you know is it legal to gamble in the state or like you know what's the best place what's the best place or what's the safest place to do x and so they're good at at doing this on Google and so as I met them and I was like okay so who else does things like this and it's like dude have you ever googled anything like every top result in Google is the same model like oh you you're worried about that whatever like that that thing on your elbow yeah Google that oh you found healthline cool yeah healthline seems like a great website right super helpful

Sam Parr

for you

Shaan Puri

you're making a medical kind of decision on whether to worry about this or not off of healthline

Sam Parr

an seo company like red ventures

Shaan Puri

Red Ventures... yeah, it's like, "Oh, this rolls back up to Red Ventures." So does this credit card website, and so does this other thing. You want to know what's the best credit card? Don't Google it. You want to know what's going on with your health? Don't Google it. Not only is their model that they're just going to write whatever's going to rank, but when they rank, they're going to promote whatever they get paid on as an affiliate. They'll try to say, "No, no, no, we just say that what's the best," and if they happen to be an affiliate, they happen to be an affiliate. But we don't let that affect our editorial ranking.

Sam Parr

yeah right

Shaan Puri

**Bullshit!** That's how you make your money. You're going to promote the things that will pay you a bunch of money. And so, I... dude.

Sam Parr

We used to have a TV in our office which [showed] the person who had the most page views that day... things like that. So it's like, what does that make the writers' room do? Oh, you better get more page [views].

Shaan Puri

views yeah

Sam Parr

get more page views

Shaan Puri

Like I paid you for it, dirty thing. I don't think there's malicious intent; it's just a natural incentive. What I'm saying is that if your natural incentive is that one company does not offer you an affiliate deal and the other one does, you're probably not going to put the one that doesn't give you the affiliate deal as the number one best choice. You might put it as number four, right? So the editorial thing has been slightly smudged with that. You see this with everything, and then you're like, "Okay, cool. So who's writing these articles?" Must be like you guys have all these doctors on staff or...

Sam Parr

not a chance an seo specialist in upwork

Shaan Puri

Yeah, exactly. You know, this is Jorge, and he is the guy writing our best articles. We pay him $19 per day. I know they don't... I'm just making all these numbers up, but you get the idea. This is like... it's basically what ranks in Google. It's somebody who understands how to rank in Google, which is not the same thing as the person who has the right answer. Once you see how the content gets made, once you see how the tomato soup gets made at Noodles and Company, you become very, you know, suspicious or skeptical of things, which has, you know, pros and cons, I would say.

Sam Parr

Alright, well, sorry everyone. So, what do you got? Next topic, what else do you want to discuss?

Shaan Puri

Okay, let's do a quick one. Then I have another one. I put this thing in here: the "work smarter, not harder" hack.

Sam Parr

I sent that to you

Shaan Puri

you sent this to okay this is amazing explain what this

Sam Parr

is so no you explain

Shaan Puri

you explain well we just need to lighten the mirror

Sam Parr

do something funny

Shaan Puri

so I

Sam Parr

I sent this to the group chat because I thought it was hilarious this is a this was really funny

Shaan Puri

A guy at Barstool, or sorry, Barstool retweeted this, but there's kind of an ad. There's a tweet we will play in the YouTube video if you see it. Basically, there's a guy who goes out to a party. He looks like he's wearing no shirt, just in Miami somewhere. It looks like he's live streaming. So he goes up to this girl and she's like, "No way! 50,000 people are watching this! Oh my God!" And then he's like, "Yeah, what's up guys? All they want to know is, you know, what's the craziest place you've ever been?" She's panicking because 50,000 people are watching this.

Sam Parr

and then she's like how are you so famous

Shaan Puri

Yeah, and he just like doesn't answer or something like that. Then, he just does... it's a montage of a bunch of people reacting. He's like going into the club and he's like, "Yo, what's up y'all? We're at this place." The guy's like, "Hey, yeah, go ahead, VIP." So basically, it's all fake. It's just a fake livestream, see? The screen looks like you're live. It looks like you're on IG Live. It'll say "Live," it'll show 50,000 people are watching this, the comments are flooding, and you look like you're some sort of celebrity. But that's all the app does. It's called Parallel Live. I think it's a real app, by the way.

Sam Parr

It's real. I'm on it right now. Yeah, by Big Brains LLC. "Work smarter, not harder." Yeah, that's like the whole thing.

Shaan Puri

I try not to get jealous anymore, but I'm jealous. I didn't think of this app, to be honest with you. By the way, I did this when I was younger. We did a version of this that made sense back in the day, where we paid a guy to walk around with a camera behind us, like we were on a reality show—with an on-the-shoulder camera. We were like, "Dude, I bet you we won't need to do anything tonight. We don't need to pay for stuff, we don't need to approach people, we don't need to wait in line." And it sure enough played out completely that way. So, I was sort of onto this idea more than 15 years ago now, and I think this is so smart. What a great idea!

Sam Parr

Dude, my best friend Neville... So you can Google this: Neville Medhora (N-E-D-H-O-R-A). One year at South by Southwest, Neville... So, Neville's Indian, but he's from whatever part of India he's from. He looks Persian. So one year, he wore like these stereotypical things that you see in the Middle East, where it's like a white... you know, like what do they call that? A white gown with like a... [head covering, possibly referring to a keffiyeh or turban]

Shaan Puri

a book yeah

Sam Parr

Yeah, with like a head cap thing, he basically looked like, "I'm gonna look like a Middle Eastern prince; that's my goal tonight." His other friend, I think it was Noah, and a few other guys wore black suits. He said they walked around in the evening at South by Southwest, and he goes, "We got in everywhere! They thought I was from the Middle East and that I was this king or prince." I had people coming up to me constantly. His friend Noah would whisper into a girl's ear, "Hey, this man wants to speak to you," and they kept up the schtick for a while. If you Google it, you'll be able to find it. But dude, these types of pranks are my favorite.

Shaan Puri

what's the what's the play the clip sometimes you just wanna do hoodrat shit with your friends

Sam Parr

but I wanted to do hoodrat stuff with my friends

Shaan Puri

That... that's what this is. This is an app that lets you do hoodrat shit with your friends. **Parallel Live Genius LLC**. I went and looked at what other apps they've made. There's one thing called...

Sam Parr

relationship one right

Shaan Puri

A relationship tracker, and it's got 17 ratings and 2 stars. You can almost see the development of an entrepreneur go to their app store. It starts with productivity apps, to-do lists, you know, bus trackers to be more efficient. Then it evolves into something that helps you save your favorite memories with your family. Eventually, it starts to become like "Hot or Not," a big livestream simulator.

Sam Parr

get laid tonight

Shaan Puri

Yeah, exactly. So, you know, that's like... it's like eventually you stop selling what you want people to do, and you start selling what people *want* to do.

Sam Parr

I can't find this client info

Hubspot

Have you heard of HubSpot? HubSpot is a CRM platform that shares its data across every application. Every team can stay aligned - no out-of-sync spreadsheets or dueling databases. HubSpot: grow better.

Sam Parr

alright let's do one more thing

Shaan Puri

what do

Sam Parr

you got

Shaan Puri

do you

Sam Parr

have one more

Shaan Puri

I had a fun meeting I want to tell you a little bit about. So, I went and met up with James Currier, who is an internet entrepreneur.

Sam Parr

og I know this guy I like him

Shaan Puri

He runs something called NFX now, which is a big fund. They have like $1,000,000,000 under management or something like that. Oh, I didn't know that! So it's grown a lot. Back in the day, he started a company called Tickle. Here's another example of how you start by doing what you think you should do, and then at the end, you give people what they actually want. So Tickle started off doing psychological quizzes. It'd be like, you know, I forgot what's that thing called... Myers-Briggs or whatever.

Sam Parr

I think it originally for like which jobs are you built for or something like that

Shaan Puri

Like that, it was like trying to help you figure out what career you should pursue, blah blah blah. Then, the thing that went viral was the quiz "What Dog Breed Are You?" It's like, "You're a Husky!" and people would say, "Oh, that's so cute! I'm going to tell all my friends about this." It went super viral. Then, they started making more and more silly quizzes. Eventually, they sold the thing for about $100,000,000 to Monster. It was a great win in the early internet days, and then they did a bunch of other things.

Sam Parr

And they kind of invented a little bit of the internet virality, if I remember correctly. Your old boss Michael worked with them, and I think Rick Marini was there too. Rick Marini now owns... what's the gay dating app that went public? Grindr. Rick Marini [owns] Grindr.

Shaan Puri

rick marini owns that

Sam Parr

yeah well he owns well he

Shaan Puri

didn't start it

Sam Parr

No, he didn't start it, but Rick Marini owns or founded the private equity firm that eventually bought Grindr. I think they either took it public or sold it to someone else, and then it went public—something like that. But it was a pretty big deal. Yeah, yeah, yeah. So these guys are all about... they've been doing this from the beginning. If I remember correctly, they invented little things that we take for granted today or things that don't even work anymore. For example, "Enter in your Gmail here, and we'll email all of your friends to ask if they also want to join along with this thing." And they grew that way.

Shaan Puri

Yeah, they were basically early to the viral game. They bought Mike, so Michael Birch, who was my former boss and an investor. They bought his first social network, Ringo. The way Michael described it to me was, "I built this social networking thing. It grew to like 300,000 users, which was really big at that time on the internet. That was a big internet thing." He said, "It was costing so much money to run it. Pre-Facebook, nobody knew what to do with it. Nobody thought social networking was going to be a money-making thing. It just seemed like a kind of time waste." So, they offered me a couple million dollars, and I sold it. I worked at Tickle for like 9 months or something like that. Then I was like, "You know, I learned a bunch of things through sitting in an office with these really smart people." When my earn-out was done or my non-compete was over, I went and said, "Now I know how to do this right." He built Bebo, which got 1,000,000 members in 9 days using everything he had learned during that time.

Shaan Puri

And ended up selling for $850 million. So yeah, they kind of were all this cluster of people that were doing the early address book imports and how to measure virality with a k-factor, that sort of thing. So I go meet with James and...

Sam Parr

what was the premise of the meeting

Shaan Puri

So, the premise of the meeting was just ketchup. He knew that I sold The Milk Road, and he was like, "What do you think about doing next?" I was like, "I'm not sure, let's chat." He invites me down to Palo Alto. It could have been a Zoom, but I was like, "No, no, Sean's leaving the house today. Let's go meet belly to belly here." I think it's going to be worth it... and it totally was. So, I go down there. The first thing I noticed was that his office is right on, like, whatever, University Avenue or whatever that is in Palo Alto, where everything is there. It's right in the middle. I just kind of noted that observation. I was like, "Oh, that's interesting that he made that choice. It could have been somewhere else."

Sam Parr

bde that's that's big big energy

Shaan Puri

The second thing was, there wasn't really anybody else in the office, but he was there. I think other people may be working remotely. So we sit down, we start chatting, and I wanted to give you some of my notes from this thing. The first thing is... have you ever met him before?

Sam Parr

Yeah, he's really nice and can have a conversation, but he's quirky. I wouldn't use the word eccentric, but he's just... he loves this network density stuff and sharing information. I don't know, I mean he's very academic almost about it.

Shaan Puri

he yeah personality wise he's got a great vibe like he's very lighthearted and

Sam Parr

and he doesn't take himself

Shaan Puri

Too seriously, you know? I even wrote this... I emailed him afterwards, which is a little life hack by the way. I emailed him afterwards and was like, "Here's my notes from the meeting." People don't usually do that. They don't: a) even take notes, but b) if they do, they keep it to themselves But if you actually send the person the notes, they really appreciate it. It's almost like it's a double meeting, and they'll edit [the notes].

Sam Parr

and then

Shaan Puri

They'll edit, and so he sent me a revision of one thing. So here's my takeaways from the meeting. I go, "Here are my notes: five big takeaways." I like your lifestyle. I learned something about compliments too, by the way. I go, "I like the way you live. I like your lifestyle. I like how you've used your financial freedom." He said he spends four months a year with his kids. So it's like just four months out of the year he's with his kids. They travel and do some stuff. He's like, "Dude, that's the max your kids will want to be around you." He's like, "I have teenage kids. That is... I'm pushing the boundary of how much I can max out."

Sam Parr

months in one turn like summertime per year

Shaan Puri

yeah no no no like spread spread out

Sam Parr

okay

Shaan Puri

Probably a couple in the summer, and then whatever the rest, he's writing a TV show for fun right now. I was like, "I want to do things like that." I think that's dope that you have a life that lets you do that. Noted, because he's 55, I think, and I'm 35. So, you know, I'm basically looking at like I'm always hunting for blueprints. Like, who's got a gold lifestyle? Not their whole blueprint, but like part of theirs. I want to cherry-pick. It's like Costco; I want to go around and sample different people and then be like, "Oh, I like that." I like the way that Sam has his ranch and how he does things. I like your home gym, for example. I went to your place in Austin, and your home gym was awesome. Then I came home and I was like, "Sam, what did you use for the floor? What did you buy for this? How do you get the leaves out? What do you do this?" You gave me the information, and I recreated that in, you know, with a 10% change in my own house.

Sam Parr

it going is it awesome

Shaan Puri

oh dude it's amazing yeah and so like that's good that's that was what I stole from you

Sam Parr

and then I did you get did

Shaan Puri

you get the cordless leaf blower the leaf blower is dope it's also a great

Sam Parr

party trick by the way

Shaan Puri

People are just like... if people love it, but it's super effective. It's way easier than sweeping. So, anyways, I was like, "I like your lifestyle for these reasons." I told him a bunch of stuff. Then I go, "The second good thing," he told me. He goes, "I think I could say this. Let me try to say this without causing any ruffling of any feathers here." So he's like, "Where do you want to land in the status game?" He draws this line on the board. He goes, "On one side of the spectrum, you have, let's say, Gary Vee or like 500 Startups." He's like, "You know, think about people who go for a mass market, like Tony Robbins. They try to reach a mass market type of individual with their content, and then that becomes their audience. That becomes their deal flow." So, you know, if a really popular person sends me, "Oh, here's a startup I got pitched," I'm like... he's like, "I kinda know where that's gonna be in the quality filter." Versus if Sequoia or Benchmark sends me a deal, like, I know where that is in the quality filter. That's on the other end of the spectrum. They have a much more niche audience. They're only creating... like NFX. He creates really niche content that's for an A+ founder who's trying to build a $1,000,000,000 company using network effects. And so this is NFX.

Sam Parr

you're referring to nfx the blog or nfx their customer base or both

Shaan Puri

The blog is to attract a certain type of founder. He doesn't need a million hits on a video; he needs the right 100 people to read the thing.

Sam Parr

right

Shaan Puri

So that they think about NFX and they learn from NFX. He's like, "We're on this. You're making content, but who's your customer? Are you more like McDonald's or, you know, a Michelin star restaurant?" They're like, "McDonald's." You know, we're not going to get the volume that they get, but they're not going to get the quality of clientele we get. So he's like, "Today, MFM is in the middle here." He's like, "And my advice to you is don't slide down that way." He's like, "Because today, I like you guys and I tell people to listen to you because you keep it real when it comes to entrepreneurship. A) You guys are real entrepreneurs; you've done it before. B) You just tell it like it is. C) You don't talk about the most complex subjects; you like simple businesses and more achievable business models for most people. But you're not yelling at them to hustle harder. You're not just 'hustle porn' that's saying, 'You bro, you need to grind and do whatever.'"

Sam Parr

we're not motivational because we try

Shaan Puri

to be motivational and we're not promoting paths that are like you know drop shipping and like you know flipping things on ebay or whatever like you know there's a a a business class there we're neither nor are we saying like enterprise saas isn't like the main thing we talk about either so it's like you know we're somewhere in the middle he's like I think you should stay in the middle because it'll be tempting to slide there to get more views but I don't think that's what you're gonna want in the end because that will be the network you create those will be the deals you get those will be the people who like you those will be the people you meet and so you will your your content will define which network you're a part of today you're here you can kinda go either way you should either stay there move up market but like he's like my my my advice to you is don't don't slide down market there so I thought that was interesting nobody really talked about that and there's also like you know I had gone through this exercise recently where it was like defining kinda like your your brand like who do you talk to who's your customer and who do you who do you like to create content for and initially the thing I thought about was like usually it's like oh you know I'm all about entrepreneurship I'm all about starting a business and that's what I did and that's what I like but there's many different flavors of that there's like tech startups like more like yc there's stuff like starting an agency there's different stuff in between and then there's some people who are like they cater to a market of people that are like kind of like wantrepreneurs only so it's like quit your 9 to 5 job don't be a slave to the cubicle get out there and be your own boss type of messaging and I'm like I don't feel like the people who listen to us are mostly in that category like I think the people we talk to often are like 2nd time founders they're people who are they own small businesses or they they're actually planning to take shots and they're not like they already have made the decision of like I'm not gonna like sure struggle in this 9 to 5 I don't think you know I don't think it's dairy queen worker that's our main like kinda person who listens so it was just like interesting to hear that okay here's the last thing that I think is 2 two last things 1 partnership advice so him and his buddy stan have been partners for I think like 20 years now

Sam Parr

yeah forever

Shaan Puri

And I had talked to Stan before I met James. I asked him, "Hey, I want to have a business partnership that's like yours. Like a business marriage, not just a partnership." Your thing is like multi-decades; there's no end in sight, and it's been great. You guys have had multiple successes with the same people. What's the secret? Normally, when you ask somebody this, the odds of them actually saying something insightful are very, very low. But you can tell how good they are. Off the cuff, he's like, "There are four things you need to know."

Sam Parr

oh my god I love the people

Shaan Puri

He tells me the four things, and I'm like, "Whoa, what are these four things?" So here's what he told me. He goes, "Most relationships are where both sides are focused on what they're getting out of it." He says, "The first thing, if you want this to work, is you make it a giving contest." I go, "Giving contest?" He goes, "Yeah." He explains that when they sold their first company, James owned 90% of it or something like that—80 or 90%—and he owned, I think, 10% or 20%. Right before the deal closed, James evened up the shares. He was like, "Really?" And James said, "No, no, no, you don't need to do that." James had had some financial success right before that or something, and he was like, "No, that's not right." James insisted, "No, this is right." In a moment where everybody would have been selfish, he had every right to just keep the deal exactly as is.

Sam Parr

I'm I'm more of a gift basket type of guy you know what I mean

Shaan Puri

And I've kind of done it both ways. It's not about making everything 50/50; I don't think that's the right answer. However, I think making sure everybody's taken care of is an important thing. When we sold Bebo the first time, or when I sold Bebo to Twitch, I owned double the equity that my co-founder Furkan owned. So, on paper, I should have gotten double what he got. As we were getting close to the deal, I told him, "Hey, we're gonna get the same. Whatever that total pool is, we're just gonna split that 50/50 between me and you." Because, you know, that's what felt right to me. I was like, "I think this is the way."

Sam Parr

it before furcon had was this before app app lovin sold

Shaan Puri

no they had sold by then actually so

Sam Parr

Wow! And so, for those who don't know, Sean's partner helped found AppLovin, which varies in market cap between $20, $40, and $50 billion. It's like a huge thing. And so you still... I mean, he had... that was probably a home run for him financially, the AppLovin [venture].

Shaan Puri

yeah yeah I mean the app 11 thing is way bigger for him than than our deal was and we knew like he was gonna be wealthy from that so you know it wasn't I I don't know like I just felt I felt it was the right thing to do and what I the it was actually it wasn't like dude I'm gonna make it so that we're even that's that's not really the mentality it was I the original deal was not fair and so I just wanted to correct it like when he joined the company he had like 0.5% of equity or something like that and so I had already upped him once upped him twice upped him I've been upping him without him asking anyways just because I was like this first deal was wrong so now I just try to cut the right deal upfront so you don't have to do that anymore but like the? Is like you try to do what what is actually right so anyways so that was the first lesson from stan was like he's like I never feel like he's like I basically feel like we are both trying to give more and it's not about equity only like it's like effort like he's gonna do something I wanna do more he's gonna you know try to like you know sack make some sacrifice I wanna sacrifice the same amount or more just turn it into a giving contest that was lesson 1 he goes lesson 2 when you disagree or you fight which is gonna happen a lot and you have to decide which way to go do we go my way or do we go your way don't use logic use the sleep test so he's like I ask who cares who is more emotionally invested in this in this decision because if I'm if we go with my way but you were more emotionally invested you're not gonna be able to sleep at night and if I turn out to be wrong it's gonna really hurt you if I'm a little less emotionally invested in this let's go your way and we agree that we'll just you know we'll we'll pivot if we need to you know later and he's like when it's really like just a deadlock that's how we resolve the deadlock is who's not gonna be able to sleep at night yeah all about this thing and when you have that attitude you know both sides end up trying to compromise versus trying to get their way 3 he goes I think in 20 year increments so if I'm gonna work with this person for 20 years what decision would I make today that's gonna be the best in a 20 year time.

Shaan Puri

Versus how most people operate, they just make a decision today about what's good today. The future consequences may not be that good, but they're thinking short term. Whereas if we plan for this to be long term, we're going to make different decisions today to set ourselves up for long-term success. So that's number three. He goes, "Number four, the last thing." I asked him, "Okay, that's the partnership, Stan. Why are you great? Why is Zuck recruiting you?" Because he ended up getting recruited by Mark Zuckerberg to go run...

Sam Parr

oh I know this guy

Shaan Puri

facebook messenger and didn't

Sam Parr

he go and actually do that

Shaan Puri

He went and did it. They've been trying to recruit him for like 7 to 10 years, and he finally said yes. I asked him two questions: "What makes you great?" and "What makes that great?" He replied, "I'm not that talented, but here's my thing: I don't have the same bias as most people. I don't have to be right." I asked him, "What do you mean?" He explained, "When I look at data, everybody else seems to have a story in their head that they want to be true. Then they look at the data and try to find something that supports their story. I look at data and ask a simple question: 'What story is this telling me?' I just keep doing that, and I make better decisions because of it. That's my approach to how I actually read data. That's why I can have more business success than others."

Sam Parr

what about zuck

Shaan Puri

On the Zuck side, he... I go, "What makes Zuck great?" He said, you know, he didn't want to say the obvious things like "he's brilliant" or "hardworking" - that would be a pretty blah answer. Again, that's how you know the quality of the person: they just skip over the blah answer and give you what you want. They give you a little candy. So here's the candy: He goes, "I was sitting with Zuck when he decided to buy WhatsApp, and everybody said it was way too expensive." They bought it for **$19 billion**. WhatsApp wasn't producing any revenue or more...

Sam Parr

much revenue what's that worth now you think I don't even know

Shaan Puri

hard to say I don't know

Sam Parr

a lot more though

Shaan Puri

I think more... yeah, okay. Like the Instagram one, they definitely bought it for $1,000,000,000. It's probably worth $100 billion now. WhatsApp is probably double that. Sorry, but WhatsApp's probably also a $100,000,000,000 franchise. So, he was trying to decide to do it, and he goes, "You know what's great about you, Mark? You're lucky. You're smart enough to know that you got lucky once and you found lightning in a bottle with this when social networking was going to be a thing. But you're smart enough to know when somebody else got lucky too." And he goes, "You are smart enough to know that this messaging thing was like... this was the big winner of this era, and these guys got it. You need to pay whatever effing price you have to pay to get it because there's only going to be one, the way that there was Facebook. There was only going to be one big winner, right? And you know that. You don't think you're so genius that you're just going to outcompete everybody and beat everybody in everything. You can recognize when somebody else got lucky too." And I thought that was just like a fun answer for her... for the...

Sam Parr

answer for the did he say that he like work did he like working with zuck

Shaan Puri

You know, he's not gonna tell me if he hated it. But, you know, actions speak louder. He's been there for quite a while. I think he just left this year. I believe he was there for like 7 years or something.

Sam Parr

how did this guy run nfx labs while working at facebook

Shaan Puri

He didn't. He just worked at Facebook, and I came as an adviser. Then James was like, "Again, no problem. Go do that. Take the big fat check. I'll run on FX; you keep your partnership."

Sam Parr

Dude, how much does a person like that make? If you're the head of a Facebook business, are you making over $10,000,000 a year? I have no idea.

Shaan Puri

yeah yeah for for sure you you

Sam Parr

think so for sure wow I have no idea say for sure

Shaan Puri

I know I don't actually know what he was making, but I would be stunned if it was less than $10,000,000 a year. I think it's probably closer to $20,000,000 a year.

Sam Parr

that's so much money that is so much money

Shaan Puri

there are people at these companies that make 40 $50,000,000 per year like

Sam Parr

because they had stock grants early on and they just stayed there for a year

Shaan Puri

Not the early-on type person. Like, they'll get a package in 2019 that, at the 2019 prices, is going to pay them $20 to $40 million a year. They're usually like the top AI guy because they're like, "Look, if this top AI guy leaves and goes to another company, not only do we lose this talent that's kind of irreplaceable, but then Google gets them." And then, you know, now they have a problem. So, like, Google has published some of these numbers about guys who are making like, you know, $30 to $40 million a year.

Sam Parr

I want to have a... I don't know if this has to be anonymous or what, but I want to have a conversation with one of these kind of OG guys who saw the rise of Twitter, Facebook, and some of these companies like Google. You know, they're around, and they're probably only 50 or 60 years old. The people who saw Google when it was getting started—I want to ask them all about their stories. What's it like being around some of these people? What are some of the stories from when it was getting going? You hear these crazy stories about, like, I think we had someone on here talk about eBay. They said, "I joined eBay when we were 50 people," and they were explaining what the day-to-day office life was like when you're adding 50 employees a month or 50 employees a week when you're only at 50 people. Anyway, this type of stuff doesn't truly exist anymore because the playbook for a fast-growth company is kind of... it's not entirely made. There are still companies like Uber that are recreating it as they go, but there's a story there. You have a history. If you're Google, you're a little bit of a pioneer, and you're like, "I don't know, man. How do we add bodies to this problem?" I want to hear... I want to get some OGs on to tell those stories.

Shaan Puri

Yeah, that would be awesome. I've been lucky to hear a couple... like, the guy who was my boss at Twitch was semi-early at Google. So he would be like, "You know, Larry says this," he's talking about Larry Page from Google. He didn't do it often, but he would say these little things that I would ask him a million questions about.

Sam Parr

Dude, so when my wife, Sarah, worked at Facebook from 2000... I forget exactly, maybe 2013 to 2016. During that time, Facebook, I think she joined at like 5,000 employees, and then when she left, there were like 50,000—something crazy. During that time, Zuck would do these meetings every Friday in like an auditorium or in a cafeteria on Facebook's campus. Any employee could show up and just ask him a question. They would also stream them. Every once in a while, I would look over her computer and watch her streaming these conferences. There'd be like 50 or 100 people in the cafeteria asking questions to Zuck. I'm like, "Sarah, you are crazy! You should be in that cafeteria every single Friday. This is like being around John Rockefeller or Teddy Roosevelt or JFK. This is a pretty big deal! If you just ask an interesting question every Friday, maybe eventually he'll say something like, 'Sarah, it's nice to see you again. Why don't you just come talk to me afterwards, and we can help? Maybe you could work on that.'"

Shaan Puri

Sam's like, "Fan fiction?" Yeah, I'm like creating this story with you and then...

Sam Parr

I'm creating this story in my head. I'm thinking about what could potentially happen, and it never happened.

Shaan Puri

each other in the elevator and he says

Sam Parr

yeah

Shaan Puri

like you know

Sam Parr

You have like a meet cute in the cafeteria. He says, "Nice shoes," and you already know, like, this is the boyfriend I want to hang out with. Maybe he'll follow you on Instagram, who knows? Maybe you're posting a bunch of pictures of me, and I just so happen to say, "Bobby," since him. I don't know, I haven't thought this through already, but I had this old playbook, and she didn't do any of it. Instead, we just had a traditional fall-in-love marriage and all that boring stuff. She's like, "I'm gonna go."

Shaan Puri

to yoga class during the all hands yeah

Sam Parr

we could have had a throuple with zuck but no

Shaan Puri

Well, dude, this is one of the other things that James was talking about. To kind of actually relate to that, I asked him about his office. Remember I told you I noted that he was here? I was going to ask, "Why do you have an office right here?" He's like, "I mean, it's a no-brainer." He goes, "I made one mistake when we sold Tickle." He drew a diagram and he goes, "He drew a circle."

Sam Parr

he goes I'm a diagram guy I like this

Shaan Puri

Oh dude, if I'm going to meet you in person, we're going to be on the whiteboard. Like, you know? Yeah, that's what's going to happen. It's going down. Yeah, it's going down, you know?

Sam Parr

I'm a

Shaan Puri

Lady in the streets and a freak on the whiteboard. So, you know, I'm going to the whiteboard. He draws a circle and says, "Yeah, let's say that the white hot center of Silicon Valley was like Sequoia, Benchmark, these people, these founders." At that time, Facebook was just getting started. Facebook was like the hot center of where all the action was happening, along with Google. He goes on to explain, "Then, like, you know, one ring out from that, we were kind of adjacent. We knew a lot of those people. I helped, you know, I advised some people to take jobs there. I had a job offer there, but I didn't take it because I maybe had a little too much ego. I thought I was an entrepreneur. I probably should've just joined Facebook; it would have been great." He continues, "Yeah, but we were like one hop away. We were like one ring away in this circle. What we should have done is realized that Silicon Valley is a network. In a network, like all the value, a lot of the value concentrates at the core. The closer you are to the center of the network, the more value you get."

Sam Parr

physically in many cases as well

Shaan Puri

Literally, physically, it's like... he's like, "The further you go out, the more you're on your own island." He goes, "We decided to go start our own thing, our own lab, self-funded, doing our own startups with new people, and, you know, doing our own thing." It felt so entrepreneurial to go out on our own terms and build our own island. He goes, "I could see you making this mistake too. I wish somebody had explained this to me at the time." He goes, "You see this all the time. I can't believe people are moving out of the tech scene. People are moving out of the Bay Area to go live in Austin or, you know, Florida or these places. You're gonna save 13% on your taxes but make 10 times less money." Like, you know, that's the trade that they're making; they just don't realize it.

Sam Parr

it buy that

Shaan Puri

And he goes, "When we did this, when we moved out, you know, when we decided to go off and kind of do our own thing—not physically, not geographically, but just, you know, philosophically— all of a sudden, I had a meeting scheduled with the Uber founders because..."

Sam Parr

you know

Shaan Puri

they were in our network and our friend was like you should meet with the uber guys travis is doing something cool and had the meeting scheduled but I was so focused oh I'm doing my thing here and I got busy and I had to I just canceled the meeting didn't take the meeting missed uber would've would've definitely invested in it at that time just because it was in the network as our friends put a small check-in you know no big deal but I was so focused on building my own little island I I stopped paying into the network it goes you know similarly I could've took a job at facebook at that time and like you know one of the earliest people at facebook I kinda knew facebook was gonna be a big deal but again had my own thoughts about what I wanted to do so I went the other way and made things harder for myself rather than easier and he goes you could see what like the value of the network he goes when facebook started getting popular facebook started in in boston and he goes zuck was smart and peter thiel told him the right thing which is get your ass to you know get your ass to silicon valley as fast as possible is the startup that builds this in silicon valley is gonna have a better shot a better high expected value than one that tries to do this on their own in a new talent network you know in a new funding network outside of silicon valley and and I was asking about yc I go well didn't kind of yc do their own thing he goes no I have the opposite view of yc yc is is fully a network and he goes paul graham did the first one in boston and immediately moved to silicon valley because he had figured out oh shit this is the blueprint for for investing in early stage startups that's gonna work whoever does this in silicon valley is gonna be the winner and he goes guess what they moved to silicon valley right away as soon as the first batch was done paul his 2 little kids they just forget drop everything pick up and move like he's like you know it wasn't convenient for them he's like I know the architect that was building their house and you know they they had to get there quickly and they they just rushed it moved in to start their 2nd batch in silicon valley because they look at all the other accelerators that copied their exact blueprint the all the you know techstars is the one in boulder boulder city and you know they've had like a couple unicorns paul you know has had 100 and it's like you know the the difference is like a you know more than a 10 x difference in outcome just by being in the center of the network and he goes and I saw so I was thinking about that I was like you know there's a physical location part of that then there's like staying in touch with people so like me doing that meeting with james was great because like yeah this guy's in my network but I was just sitting in the burbs over here you know doing my own thing create my own content I wasn't a meeting

Sam Parr

with a silicon valley guy because you're dude I don't 40 minutes outside

Shaan Puri

I haven't been going to anything like I don't meet with anybody I don't go to anything it's like dumb and then this brought my awareness to like wow I'm silly for not taking advantage of the network that I the hard network that I've built over you know 10 12 years that's crazy that I'm not taking advantage of that and then so I asked him I was like you know what do you think I was like how do you actually take advantage of the network besides physically being there I okay I I believe the physical thing and I've always said this like proximity is power the closer you can be to the people you like and the people you wanna be like and the people you wanna be around like literally physically the closer you could be the better and I go why does that work and he goes he goes what you should do is that you wanna build something that brings value not only to you but also to those people around you also you wanna be like an api so like you know when a when a when when twitter is a product they create an api that lets other people like read the twitter stream write create apps that help twitter like they basically twitter stronger it makes twitter stronger he's like you wanna be like an api you wanna tell you wanna tell people how they can plug into you where can they get help from you how can they give help to you like if we know that andrew wilkinson buys internet companies then when we see an internet company we talk to some guy who's like yeah I'm thinking about selling we'll make that introduction because andrew has an open api he he has made it clear how somebody can interface with him how somebody can help him and how he can help other people you know he he has made it clear for those founders hey if you wanna exit I'll I'll buy you out and so he's like that's why silicon valley is great because you can invest in other people's stuff you can join them you can partner with them you can work for them you can send them talent you can do a podcast exchange you can share ideas about growth with each other you can share knowledge about a term sheet with each he's like that's why silicon valley works is because the network is super dense and people share a ton within that and so you get all these extra benefits that you don't really plan for that are sort of serendipitous when you're in there and I I thought like this is all obvious like I kinda nodded my head but it brought my awareness to

Sam Parr

it's not that obvious

Shaan Puri

A lot of people don't take advantage of this stuff. Even me, who knows this information and still lives in Silicon Valley, I wasn't maxing that out. I'm going to make a sort of like turn that knob a little bit and do that better.

Sam Parr

If I could, I would only live where I live now for family reasons. But if my family were willing to live in California, I would be in Palo Alto, not San Francisco, actually. I would be down the peninsula in a heartbeat—totally, 100%. I would be there in a heartbeat. I think it's the greatest. People say, "Well, it doesn't matter anymore." I'm like, "Well, maybe currently it doesn't matter that much, but things that maybe in the 6 or 12 months are going to be happening." I actually think it is kind of happening still a little bit. But I think New York and Silicon Valley are a little bit even now, whereas for years they weren't. Still, Silicon Valley has a much better existence living there. But I would be there in a heartbeat if I could. If I were a single guy, I'd be there tomorrow.

Shaan Puri

right cool alright I think we went a little over but

Sam Parr

that's it

Shaan Puri

that's it that's the pod