MFM #168 - How to Reverse Engineer Businesses, The Indonesian King of Coal & the Story of Adidas

Sam Parr

This chinese indonesian guy was a politician

Shaan Puri

No, he was the guy. He was the middle man. So what he realized was, because I was like, "Okay, cool, we have this coal. What do we do with it?" He's like, "Oh, we just sell it immediately. As soon as we sign the paper and have the coal, we sell it to Exxon." I'm like, "Oh, okay. So how does that work?" He's like, "Well, I bought all this coal for $2,000,000, and then we sell it in blocks for $20,000,000 each." I'm like, "Well, that's like $500,000,000. How are we turning $2,000,000 into $500,000,000?" And he's like, "Yeah." I'm like, "Well, what? That's amazing! Why doesn't Exxon just go in and directly buy this?" I just got vaccinated.

Sam Parr

that's pretty cool I've got a new toy do you wanna see yeah

Shaan Puri

oh nice sam's holding up a gun

Sam Parr

I just drove by a Bass Pro Shop and I walked in. I was just walking around to look at like beef jerky or something, and I just saw it. I've never even remotely owned anything like that, and I was like, "Hey, those are cool."

Shaan Puri

you

Sam Parr

didn't need to like buy 1

Shaan Puri

You can get certified or do a background check or something. You just walk into a Bass Pro Shop and buy a gun.

Sam Parr

But yeah, I mean, I just walked up to the counter and I go, "Oh, those are handguns. Those are neat. What's the deal? Like, how do you buy one of those?" And they go, "Well, just give us your driver's license and we'll run a background check. You could walk out in 5 minutes." And I go, "Sick! I'll take that one."

Shaan Puri

you just held it

Sam Parr

up by

Shaan Puri

The way... like, you didn't hold the gun part. You held it with two fingers and pointed it sideways.

Sam Parr

Yeah, I still have to learn how to use it. I don't even have ammo for it, and I have a lock on it. I'm pretty paranoid. I gotta figure out how to use the damn thing.

Shaan Puri

very texas heavy

Sam Parr

We have something cool happening on Wednesday. I'm a Texas resident now, and we are going to interview Jake Paul. In terms of just famous people, he might be the most famous person we've ever interviewed.

Shaan Puri

probably the most famous person I've ever met

Sam Parr

I met the Pope once, and I met Bill Clinton when he was in office.

Shaan Puri

alright you peaked

Sam Parr

So, Jake Paul... I did both of those when I was like 8 years old. So, Jake Paul is like number 3.

Shaan Puri

but when you say you met the

Sam Parr

pope coming on

Shaan Puri

what does that mean you saw the pope you you shake hands on the pope what does what does it take to meet the pope

Sam Parr

shake hands that said hi in a busy crowd

Shaan Puri

not oh that's pretty good alright you shook hands let's see who is the most

Sam Parr

Or did we get like more of a high five? It was more like a high five. **Bill Clinton**... I shook his hand and said, "Hey, what's your real first name?" He goes, "William." I go, "Hey, why do you have white hair?" He goes, "Because I'm old." And that was... so I met him, and he asked my name. So I actually, *actually* met Bill Clinton.

Shaan Puri

you really shot your shot with bill clinton

Sam Parr

well I was like 6 years what year was that what what year did you what ninety 2 whatever it was I was

Shaan Puri

like 4 5 pre lewinsky post lewinsky what was going on

Sam Parr

pre

Shaan Puri

pre okay

Sam Parr

yeah pre pre

Shaan Puri

Back when he was still young... Bill, alright that's pretty good. I met... the closest thing I ever got to that probably was... Well, I have this really long Orlando Bloom story that's very funny, but I'm not gonna tell it. But it's like, if you're my friend, you've heard me tell the story 10 times because it's just a go-to. It's just a winner of a story, you know? The stories that you just... like you just have in the bank if you ever need to be like, you know, the life of the party.

Sam Parr

impress someone

Shaan Puri

But then I also, you know, the Duke... Duke Andrew or something like that. I forgot his name. Is it Duke Andrew? I think. I don't know how you say his name.

Sam Parr

I know the name is the guy did he get in trouble with jeffrey epstein

Shaan Puri

Yeah, he just got in trouble for that, or maybe for other things. I don't know, something happened that's not great for him. He was doing a tour of Silicon Valley, and we got word that, "Oh, the Duke is coming to our office." Prince Andrew, Duke of York. Yeah, that's right, he was the Duke of York. So I got word in the morning that the Duke of York is coming to the office today. They asked, "Can you give a presentation?" I didn't know what the Duke of York was. I still don't really know what the Duke of York is. He's just not in the prince lineage, but whatever. So anyway, a full security detail comes and sweeps the whole office in the morning just to make sure they get the whole layout. They know where the entrances are, they know where the exits are, and they're like, "Okay, this place is secure for the Duke." He shows up at 4 PM, and I've got this presentation I've been working on. I threw my whole day away and just started working on this presentation for the Duke, explaining what we do and why it's so great. I gave it my all. Our office has couches, not just kind of chairs, so it's very comfortable. The Duke sits down on one of our couches, flanked by security guards. I fire up the first slide on the big projector and start talking, and I see that he's asleep. He is passed out before the first slide even starts. He has completely fallen asleep in his chair, and now I don't know what to do. I'm giving this presentation to a guy who's asleep. It's all my employees who know what the heck we do; they don't need this presentation. They all see that he's asleep, I see that he's asleep, and the security guards are kind of just standing there, not saying anything, not doing anything. So, I give the presentation to the sleeping Duke of York for the first 20 minutes.

Sam Parr

oh my god that's cringe

Shaan Puri

I I was so lame I just

Sam Parr

that's actually really cringe

Shaan Puri

Well, I'll finish the story with one thing because it's kind of relevant to what we do. At the end, because we were in Idealab and this podcast was about brainstorming business ideas and talking about business concepts, I basically paused and said, "Okay, I could keep going, but it would be more fun if you actually joined us in doing what we do and brainstorm some business ideas." So, we asked him a bunch of questions. We were like, "What apps do you guys use?" He was like, "We don't have phones." We were like, "What?" He said, "We don't get to use our personal cell phones." At that time, I didn't know exactly what he was saying, but there was some limitation where they didn't just have iPhones with normal apps. They could only use what was pre-installed. If they wanted more, they had to go to someone who would help them or something like that. Then I asked, "What business ideas do you have?" He replied, "There needs to be a fact checker so politicians can't lie." I was like, "What?" He continued, "We need to hold politicians to what they say. There are so many politicians that just lie, and everything should be on the record and fact-checked at all times. It should be public if you're lying." That was his idea number one. Then he had something else about digitizing paperwork or something like that. I was like, "Alright, thanks, Prince. See you!"

Sam Parr

There's actually... well, I can riff on that. There's this thing called Politico. Politico? What is it? I actually don't know how you pronounce those. God, everyone makes fun of me for not being... Politico? No, Polit... P-O-L-I-T-I-Fact. PolitiFact.

Shaan Puri

politifact okay

Sam Parr

Have you ever heard of that? No? So, what it does is it looks at, like, when there's a big election. They analyze all the major speeches done by someone. In the case of Trump or Biden, when they were doing their debates, they have a meter that says: true, mostly true, half true, and false.

Shaan Puri

right okay seen this

Sam Parr

"Pants on Fire" and they actually check all the stuff they say. They say, "This is true" or "Is that true? Here's why." It's kind of cool. **PolitiFact**, I guess it's called. It's by the...

Shaan Puri

I like that he goes to pants on fire that's that's a nice question

Sam Parr

Pretty cool! I like that. So, your boy was onto something. Not a great business, but it does exist. There is something that does this, right?

Shaan Puri

Okay, wait. One more thing. You said we got on this tangent because you mentioned Jake Paul is coming on Wednesday. So, why is Jake Paul coming on, and what are we going to do about it?

Sam Parr

So, Jake Paul... okay, I am basically copying Sean, and I started investing in some companies. Jeffrey Wu is a friend of mine; I think he's a friend of yours too, right? Oh, I'm mildly close friends with him. He saw that I was investing, and I saw that he was investing. We were just shooting the shit. I asked him, "What are you doing?" and he asked me the same. We exchanged ideas, and he said, "Hey, do you want to do a phone call? I'll bring on my partner, Jake." I was like, "Oh, aren't you partnering with Jake Paul?" He goes, "Yeah, yeah, yeah, I'll bring him on." I said, "Alright, sounds good." So we just did a Zoom call, and I'm sitting there with Jeffrey, or Jeff, and Jake. Jake's like, "Hey, what's your sell? Let's just have a text chat, like a group thread." By the way, I love "My First Million," and I know the hustle. I asked, "Can I come on the podcast?" and he said, "Yeah, sounds good." So here we are. It's kind of weird but kind of funny.

Shaan Puri

That's pretty legit. I also want to know from him... well, I'm gonna ask him, but like Jeff is a tech founder. [He] sold a company, started like a company backed by Andreessen Horowitz. It's like a keto company. And then somehow... somehow like partners with Jake Paul. I don't even know how they became friends. It's like, how did this Asian dude from the tech world become good enough friends with Jake Paul where they'd start a business together? Do you know that by chance?

Sam Parr

I don't... I know that Jeff moved to Miami. Jeff's like a manly man - Jeff's into guns and fighting and big muscles and whatever men are supposed to be into. And Jake, I assume, is also into that stuff. So they must have met, and Jeff's real smart and savvy. I have a feeling that it's a good shtick, which is like: - Jake's the famous one who gets access - Jeff is the straight man who, you know, makes sure the [operation runs smoothly]

Shaan Puri

knows knows knows how to do it

Sam Parr

Yeah, and that's historically a great partnership. It's actually... well, there's this guy named Brian Lee who does this, and he's partnered with Shapiro. I forget Shapiro's first name, but Shapiro was the lawyer for OJ Simpson, and they started LegalZoom together. And then he [Brian Lee] did it with Kim Kardashian, and they started ShoeDazzle together. Wait...

Shaan Puri

weren't car what was it kardashian's dad kardashian's dad was the lawyer

Sam Parr

Well, OJ had like 8 lawyers. Robert Shapiro's his name. OJ had like 8 lawyers, so it was like Kardashian, it was Johnny Cochran, it was... whatever, yada yada yada.

Shaan Puri

she and was was he the one who also partnered with jessica alba for the honest company

Sam Parr

So, this guy named Brian Lee, I guess he's Korean. He's a Korean American, and I think "Lee" is Korean. He partnered with Shapiro for LegalZoom. Shapiro was supposed to be like the face and the famous person. It turns out Shapiro, I mean, he's a really successful and savvy business guy. So, Shapiro goes, "Let's do this with some more celebrities." They partner with Kim Kardashian and they create ShoeDazzle, which raised a bunch of money but I think kind of flamed out. Then they do it with one other company, and eventually, they partner with Jessica Alba and The Honest Company. It's the same thing; Jessica Alba was supposed to be like Shapiro, kind of like the face, the famous person. It turns out she's pretty savvy, apparently, and good at whatever it is she's good at. I guess running a business. I don't know what her role is, but she's great. That's what he does, and so partnering with celebrities can actually work out quite well.

Shaan Puri

The company is a big company. It's like a billion-dollar company. I think it's Honest Co.

Sam Parr

I think I think many

Shaan Puri

Okay, what do we want to talk about today? I have a bunch of random topics. Do you want me to start, or did you have one you wanted to begin with?

Sam Parr

I actually was researching a fair bit of your things because I found them to be a little bit interesting. Do you want to talk about "Turned Yellow"? Is that... or how about you lead? I'll let you lead everything and I'll follow, but I researched all your stuff.

Shaan Puri

Okay, we can talk about "Turned Yellow." So, we'll start there. This is a cool business. This is in a category that our friend Ryan Beagleman mentioned. He was the first one I ever heard say this term; I don't know if he started it or picked it up somewhere, but it's the term **"drop servicing."** People have heard of **dropshipping**, which is basically like marketing on Facebook or wherever else to sell a product to a customer. However, it's a product that you don't hold in inventory. As soon as you get the order from a customer, you place an order with your manufacturer, and the manufacturer ships it directly to the person. So, it's a way to do e-commerce without having to buy and hold inventory because you're just directly shipping to customers straight from the factory. Typically, it has kind of lower margins, but it's a great way to get started if you don't have any money in e-commerce. That's kind of the idea behind it.

Sam Parr

And "Turned Yellow" is actually one of Jack Smith's favorite things. Jack might be an investor, but I know he's a huge customer of "Turned Yellow."

Shaan Puri

Right, so what Turned Yellow does is similar. It's a drop servicing company. So instead of shipping you a physical product, they do a service for you, kind of on demand. Turned Yellow are actually friends of ours. I don't know if you know the guy Alex who's behind it, but he bought the company recently. I won't share any like numbers or anything like that, but...

Sam Parr

alex who

Shaan Puri

Really cool, Volodarski or something like that. V-O-L-O is how you start the spelling of his last name. You can find him on Twitter; he's @Volodarski or something like that. He also started this '90s-themed kind of party or parade, or thing that used to happen, like '90s Jam Fest or something like that. It was just all nostalgia, which I thought was cool. That's why I first reached out to him. Then I found out that our mutual friends, Xavier and Ceava, helped, you know, invest in him when he bought Turned Yellow. Oh, so Xavier, what is...

Sam Parr

It turned out it wasn't Jack; it was Ceava. I'm an investor in Ceava's fund. That's how I heard about this. Yes, okay.

Shaan Puri

Exactly. So, what Turned Yellow does is they basically offer a great gift. You can submit a picture of your family or your friend, and they'll send you a drawing—an illustration of that same photo or person turned into what looks like a kind of Simpsons character. You know, all the Simpsons characters are yellow, so they cartoonize any picture for you. It's like you went and got this custom-made gift for your friend. It's a simple, simple business. They have a whole bunch of artists who can crank out these illustrations in this one art style. On the other side, they just advertise on Facebook or whatever. Their number one advertisement features a picture of Howie Mandel holding up his Turned Yellow illustration. That ad probably made them millions of dollars.

Sam Parr

There's so many replicas. So if you keep your ads on and type in "turned yellow," there's TurnedYellow.com, which is, I guess, the original. Then there's Simpsonify Me, then there's Art of Yellow, and they are all complete, total rip-offs. The exact same website, practically. That's kind of interesting. I would have thought this would have required some type of licensing or blessing from *The Simpsons*.

Shaan Puri

The thing I think operates in a slightly gray area because they don't say anything about *The Simpsons*, but the art style does evoke that idea. I think that's part of why people are buying it, for sure.

Sam Parr

it's 100% the simpsons I mean they're sitting in front of the cops

Shaan Puri

He's my friend, so I'm trying to say this a little bit softly here. But anyways, the cool thing they were doing was they bought the company. The company was doing well and had all these competitors because everybody was kind of doing the same thing; everyone was trying to clone them. Then they brought on this badass licensing guy who has been in the licensing business for decades. The idea was that he was going to go and actually talk to all the different IP holders of *The Simpsons*, *Futurama*, *Harry Potter*, and any other brand. He would basically say, "Hey, we would love to cut a licensing deal with you so that we can do this and do it totally above board. You make some money from this, we lose a little bit of money, but we can kind of knock out all these competitors who are doing this under the table." So that was the business plan. I don't know exactly how it's going now, but I thought this was really cool. It's a cool business that generates very good revenue, and there are a whole bunch that are like this. Right now, what people do is they just do this for every popular theme. For example, a lot of people like *Rick and Morty*; that's like a cult phenomenon now. So people are doing this with the *Rick and Morty* art style, and then people are doing this with another art style. This reminds me of what our friend Sully did, where he got the rights to *Family Guy* and made the *Family Guy* mobile game. He created a version of *Candy Crush* that was themed around *Family Guy*. He took a proven game, *Candy Crush*, which is super addictive and amazing at monetizing, and he just skinned it with the *Family Guy* branding. He got *Family Guy* to help promote it, and *Family Guy* earned a million dollars in revenue from the success of this game.

Sam Parr

and then

Shaan Puri

eventually the same thing with harry potter

Sam Parr

Yeah, he did the same thing with tons of stuff. But how do you think you even... I wouldn't even know the first thing. What do you do? Do you find someone who happens to know someone who knows someone, and they introduce you to someone at Fox? I mean, like, I don't even know. That seems really hard to make happen.

Shaan Puri

Yeah, well, I think that's why they brought on a guy who's done decades of licensing. He has the connections already. He maybe worked with these same brands to do a different licensing deal, maybe putting faces on T-shirts for Bud Light or whatever, right? So, I think that's one thing. There's a network aspect to it where you can get your foot in the door. But I don't know, did you ever listen to the first episode of this podcast with Sully where he explained how he got the Family Guy rights? No? I kind of an insane story.

Sam Parr

yeah I listened to the episode but that was 2 years ago now what happened

Shaan Puri

2 years ago yeah basically he was like alright first why did he need this they were just making normal mobile games but distribution costs kept going up and up and up because facebook was getting more and more expensive to advertise on because all the game developers were all competing against each other bidding the prices up so he's like shit we need a way to stand out we need a way to acquire users without paying for as much in ads we need a more efficient way to acquire users so he had seen that the simpsons did a mobile game with ea and they made like simpsons like the quest I don't even know what it's called like some simpsons game with ea and he's like oh that's genius that's what we need to do and this is before the kim kardashian mobile game and before others started copying this playbook so he's like okay what's the next franchise that we can get family guy so family guy is also owned by I think fox and so they have they have simpsons and they have family guy so they go to they they get in touch with the you know Google around they get in touch with the person to who who's in charge of this stuff and they're like yeah like okay I don't know I've never heard of your startup but we're gonna probably just go with ea I mean we just did the simpsons with them it was pretty successful like ea is like a big name trustworthy you don't get fired for going with ea I I might get fired if I go with you guys so they're like okay you know fair enough but they didn't give up and so what he said was every he he had decided like the company was screwed if they didn't find like pull a rabbit out of a hat so he just put all his chips into this one strategy and was like okay every morning when we come into the office we just have a whiteboard the whiteboard says how do we go get the family guy rights I was like what can we do and they would just come up with some ideas and then they would try it that day and then they would like fail and then they would come back again the next day and like the next day and then eventually his number 2 it was only him and 2 other people who knew about this plan in a company of like 50 60 people I think and so the number 2 guy was like dude we've exhausted we've we tried this we tried this we you know blah blah blah and so eventually marc andreessen was on their board who's their investor so they had asked marc andreessen hey do you you're super well connected do you know know the guy he says yeah I'll make a phone call so he makes a phone call they they get the meeting but the meeting again is like I don't know guys so he says alright how do we pull this off he goes first we're gonna economically make this like a ridiculous deal for them so like we're gonna offer them this ludicrous upfront guarantee of x 1,000,000 of dollars of you just get that money from day 1 number 2 you're gonna get this like awesome fat royalty on the back end if this game is successful and so that was kind of lucrative and they were like okay we're into that and by the way he didn't have the money to make like he didn't have the money to give them

Sam Parr

he promised

Shaan Puri

It was like, "I'll go raise the money if they say yes," was his plan. Then the last thing was they found out that the main guy, who's the decision maker, his mentor was like a family friend of Marc Andreessen or something like that. So he's like, "Oh, talk to the mentor guy." They talked to the mentor, and the mentor was like, "Okay, guys, I hear what you're saying. I like your spunk. I'll help you out." They put him on the board of their company. They were like, "Dude, we'll give you shares, we'll put you on the board." He was like, "Guys, I don't need it. It's okay." But he put in the word, and basically that got the guy to lean their way, like, "Yeah, give these guys a chance. They're legit. Don't worry about the fact that they're not a big household brand. In fact, these guys will go all out for you. It's life or death for them, and that's what you want in your partner." So that's how they ended up getting the pitch to work, got the rights to *Family Guy*, and saved the company.

Sam Parr

Do you ever think... at least I mean, I think of this. When I think of stories like this, I ask myself: why wouldn't you just go to this person with the job and say all the obvious things? "Dude, you don't want to get fired. You also hate your job. I'll give you $100,000 personally. I'll wire you $100. Can you please...?" What's stopping that? Just total cronyism. I mean, I guess not what's stopping it. Maybe I should rephrase this. It's pretty mind-boggling that there's not more of that.

Shaan Puri

of that not more

Sam Parr

of that

Shaan Puri

So, okay, let's answer both questions. What's stopping it? Well, usually the person you want to bribe is in a pretty high-up position. They're doing well already, maybe hard up for money.

Sam Parr

Maybe how much do you think the person makes a year who's in charge of licensing for *Family Guy*?

Shaan Puri

I bet you not I bet that guy's I bet you that guy's easily pulling

Sam Parr

in 300 $400,000 a year so that's not stupid money but that's good money

Shaan Puri

Good money, right? So he's not desperate, let's put it that way. The second thing is, in a big company, I don't know if you've had yours yet now that you got acquired, but there is a whole anti-bribery training you have to do. They really put it in your head like, "Hey, look, even just taking any gift over $50, tickets to a game, or a dinner, you need to report it. It could be bribery, blah blah blah." So it gets put in your head, and you start to think, "Okay, do I want to risk it all?" Because if I actually got caught doing this, I would basically not be able to have a career anymore. So you kind of have to pay me so much that I'm willing to risk the odds of getting completely blacklisted from my profession, where I've worked so hard to become a VP after 30 years.

Sam Parr

I'm not saying that's... I'm not saying, by the way, I'm not even remotely implying that I'm into this. I'm just saying I'm actually.

Shaan Puri

of course

Sam Parr

I'm doing

Shaan Puri

what I'm you're saying some other guy might be into this company

Sam Parr

What I'm saying is I'm surprised that this doesn't... I'm surprised it doesn't happen more. It's just crazy that we all agree that... we mostly all agree what's right and what's wrong, and we kinda stick to it. Because like if Sullio [possibly referring to a person or concept]...

Shaan Puri

would be like so

Sam Parr

Look, man, I'm gonna give you this deal: if you get fired, I'll give you a job, right? But I'm gonna pay... I was gonna pay your company $10,000,000. I'll give you just $1,000,000 of that. I'm tracking this.

Shaan Puri

Is gonna happen. One is, somebody said this the other day: "So, how many employees does Amazon have? How many employees does Facebook have? How many employees does Google have?" I wonder how many foreign spies work at these companies.

Sam Parr

a lot

Shaan Puri

It's like... sounds crazy, like a foreign spy movie. It's like, "No, no, no, of course it's not." There are people working for China, for Russia, and for different countries as foreign agents. There have actually been cases where guys took the machine learning model out on a USB stick from Google and basically went back to Russia. That's something that has been found to be happening in these companies. So, one is, it's crazy that that's actually happening. You know, I probably worked with somebody who is actually a foreign agent, which is just bizarre.

Sam Parr

Is it an agent on behalf of Google? I mean, how many times do you think that there's someone who is a Facebook employee and they're like, "Hey look, I'm gonna fire you and we're gonna act like we're not friends anymore. I need you to get a job at Snapchat and I'm gonna funnel you money and... tell me everything." Yeah, that totally exists, which is pretty funny.

Shaan Puri

that has to happen well we

Sam Parr

don't talk about that

Shaan Puri

So then, okay, I was exactly that. I've had this experience where I thought, honestly, I didn't think anything was wrong with this. But again, this is where maybe my moral compass is a little screwed up. For example, when we got acquired, we had talked to five other companies. While we were getting acquired, each of them was laying out their map: you know, what their strategy was, how they were going to win, how we fit into that strategy, where they were strong, where they were weak, and what the numbers were. So when we finally got acquired, I walked in and I was sort of like, "Guys, congratulations! You got me, you got my team, you got our code base, but you also got a little bit of intel."

Sam Parr

no they were

Shaan Puri

Like, I talked to them and they had no interest. I didn't even say anything, but I was like, "Nobody asked me anything! That's insane." I know I would've, if I was in that company's shoes and I acquired somebody who had talked through the strategy with the CEO of all these different companies. I would've been like, "So, what did they say? What do they plan? How do they view the world?" Well, that's... not even for like most people to tell me their secrets. It's just like, "What were they saying?" It doesn't even seem wrong to me. But the fact that nobody asked me tells me maybe they do think that would be wrong to ask. And maybe my moral compass is screwed up. What do you think?

Sam Parr

Well, this is my whole... which is... and I just want to say this again incredibly clear: I'm not saying I do this or support it. I'm just saying I'm surprised it doesn't exist. But the moral of the story is most people are actually quite ethical, and particularly if you're in a room full of people, they're going to be extra ethical. So, right, I know I'm not surprised that they didn't do that, but then I told... but as an owner, I would have been like, "Hey, come here. What?"

Shaan Puri

yeah exactly

Sam Parr

I wouldn't

Shaan Puri

and especially when I was like in a startup I act but I wouldn't ask have nothing to lose and I have everything to gain but

Sam Parr

I wouldn't say "Tell me their numbers." I would just be like: - What are they like? - What motivates them? - Are they cool? - Do they assume that they have their act together? These are like fluffy questions, and then if you...

Shaan Puri

I can say honestly, I totally would have asked for their numbers. I would have been like, "How big is it? How much revenue are they doing?" I was guessing, you know, $500,000,000. Is it $500,000,000?

Sam Parr

you have to ask those other questions first you gotta like see if they're gonna bite the bait

Shaan Puri

you gotta see if the person's cool with it or not

Sam Parr

Yeah, you don't want to make them uncomfortable, but I am a bit surprised. We... you and I know someone who isn't involved in a lawsuit because they were hired at one company, a large tech company, and... yeah, previously they had worked at the competitor.

Shaan Puri

dude we can we can say the names this is public information

Sam Parr

Alright, it was Anthony Pompliano. He worked at Facebook. This is all public. You can read the deposition, or I believe it's a deposition.

Shaan Puri

he didn't tell us I read I read the deposition like a nerd and that's how I know

Sam Parr

Yeah, and basically according to the records we read, he worked at Facebook. He decided to work at Snapchat, and they said something like, "Here's a piece of paper. Write down the organization chart, tell us how it works, and then go and recruit those people." He, according to the deposition, said "No, that's... I'm not... No chance." And they fired him. Snapchat did, or they butted heads or something like that. So, yeah... I do, yeah.

Shaan Puri

they butted heads over that yeah

Sam Parr

I think this stuff happens actually a fair bit, but I'm shocked it doesn't happen more.

Shaan Puri

Right, my only concern in that situation would just be that I don't want to make my own person, my teammate, uncomfortable if they don't feel like sharing or if they think that's wrong. Okay, no problem then. But if they were down to share, I would 100% be asking all the questions. I'm thinking from my startup brain. At a big company, you sort of have more to lose. It's not really worth it; you're not in a life or death situation for the company. You don't need the information. But I really have been surprised. We will hire people who are from YouTube or whatever, and wherever we're at, we're hypothesizing like, "Well, you know, how do other companies handle this? What can we try?" I'm like, "That dude worked there. Why don't we just ask that guy? Hey dude, what did you guys do? How did it work? What was the retention number? Is it good or bad relative to what you saw?" And nobody asks the question, which is maybe just not in the big meeting settings. But I have been surprised at that. I know if you're working over there, there are other companies that don't have that same credo. I worked for a guy in Indonesia for my first job, kind of like a summer job. My dad hooked me up with this guy. He's like, "Oh yeah, this guy is known as the king of coal in Indonesia. He owns like all the coal in Indonesia." I'm like, "Oh sweet, okay." So I go do this summer job with this guy.

Sam Parr

was it was he an american or an indonesian

Shaan Puri

He's a Chinese guy living in Indonesia, a 5th grade dropout who can't speak much English—pretty much just very broken English. He had four women doing his email on giant TV screens in his office because I don't think he could even type. He would just orate; he would say out loud what he wanted to reply to every email, and that's how he would do his business. So, as I get there, I'm like, "Oh cool, you're the king of coal! How'd that happen? What'd you do?" Basically, what I realized pretty quickly was that this guy's entire business model was based on big companies like Exxon, BP, and Chevron. They all wanted land in Indonesia, and the land was owned by the local city province; they had the rights to it. The only way to do business with this guy was to bribe him. The local politician wanted a bribe. If you gave him the bribe, you could have the land rights.

Sam Parr

but it so this this chinese indonesian guy was a politician

Shaan Puri

No, he was the guy. He was the middleman. So what he realized was, because I was like, "Okay, cool, we have this coal. What do we do with it?" He said, "Oh, we just sell it immediately. As soon as we sign the paper and have the coal, we sell it to Exxon." I'm like, "Oh, okay. So how does that work?" He explained, "Well, I bought all this coal for $2,000,000, and then we sell it in blocks for $20,000,000 each." I'm like, "Well, that's like $500,000,000. How are we turning $2,000,000 into $500,000,000?" And he's like, "Yeah." I'm like, "Well, what? That's amazing! Why doesn't Exxon just go and directly buy this?" He's like, "Well, if they could, they would, but they can't, so they won't." Basically, what he was saying was that those companies couldn't get their hands dirty. They could not risk bribing foreign politicians. So what they did was let this guy bribe the foreign politicians, get the rights, and then they would cut a commercial deal with him. This guy knew nothing about the coal. I'd be like, "Oh, is this a good asset or a bad asset?" He's like, "It doesn't matter. We get the paper; they pay for the paper. We don't have to do any of the work. We don't have to extract it, mine it, or do anything." And now, by the way, this guy's in jail. You know, that's the end of the story: he's in jail.

Sam Parr

for other names

Shaan Puri

Yeah, his name... Well, I don't want to risk personal harm by outing this guy. You know, we're a world away, but this guy is kind of a gangster, so I'm not gonna say his name. But you could use what I said and Google it.

Sam Parr

your dad

Shaan Puri

but basically

Sam Parr

your dad got you an internship with a gangster

Shaan Puri

yeah me and my sister by the way both of us

Sam Parr

that's crazy

Shaan Puri

I remember we were in his office one time, and he had a friend come in. His friend was kind of like, you know when it's his friend because alcohol starts pouring, and women start showing up at the office. I was like, "What's going on here? Who are you trying to wine and dine?" It was this one sleazy-looking dude, and I asked, "What's your business?" He replied, "I work in Singapore. I help companies on the Singapore Stock Exchange." Literally, this was just straight insider trading. I'm sitting there, and I'm hearing this guy say, "Yeah, these are the three companies you need to buy. They're dirt cheap right now, but they're about to announce XYZ, and they're going to pop." Then they would toast their whiskey and buy this stock on the Singapore Stock Exchange or Hong Kong Stock Exchange. Sure enough, the numbers would go crazy, and I was just sitting there thinking, "Wow, this is insanity. This is how loosey-goosey these guys are with business."

Sam Parr

Well, what I was going to say was, I think that, even though people make Amazon or whatever to be like evil, you just said, "No, we would never even ask this ex-Googler about X, Y, and Z." I was going to say that's like a very American thing. I've had a couple of friends who I worked with who run Chinese companies, or you know, they're Chinese and they're either based in China or are now American, or they're Chinese American now. I have a bunch of Indian friends and they're like, "Yeah, but we operate differently than you. Our opinion of the right and wrong way is a lot different than yours." It is far more unadulterated capitalism of just, "Why is copying wrong?" And they're kind of right.

Shaan Puri

right

Sam Parr

like why is it wrong but anyway it is quite interesting

Shaan Puri

yeah totally anyways I don't know how we got on that topic but

Sam Parr

first versions

Shaan Puri

We can go back to... yeah, what is that? I saw this website, my guy Chris—who's my apprentice right now for content—sent this to me. I haven't actually spent a ton of time on it, but go to **1stversions.com** and check that out. I'm pretty fascinated with this, and I think you are too. We both are like internet archaeologists. We like to go find the OG thing. I did this blog post that got like tens of thousands of views once before I had any audience. It just went viral because it was about what the first web page looked like for these 10 big companies. This is kind of common to do, like Uber's homepage back in the day, Snapchat's homepage back in the day, the first Facebook homepage, the first eBay homepage, and the first Amazon homepage. These things look so basic and rudimentary. It really makes you realize, like, dude, you need to launch. There's that quote: "If you're not embarrassed by version one of your product, you launched too late." All these companies definitely fall into that category. So, I thought **1stversions.com** was a cool little archive of stuff like this.

Sam Parr

I think this is so cool! I actually just sent you a link to an article that I wrote. I think I wrote this in 2016, specifically on October 15. You could probably find that it doesn't even work entirely, but anyway... What I love to do, and I've always loved doing this, is using a few different websites. Web Archive is the easiest. What I like to do is get a Google Doc and a spreadsheet, and I'll map out the whole journey of a company. For example, I'll look at when Airbnb started and then read all about them. I'll note, "Alright, here's when they announced they had this many users. Here’s where they announced this much funding. Here’s where they said they had their first 50 employees." Then, from 50, they actually went to 1,000 in only 2 years! I'll take screenshots of their website, and in doing that, you can actually see how the evolution occurred.

Shaan Puri

progression

Sam Parr

Yeah, and I'm just starting. I'm just making this up with Airbnb, but it could be like it started as "Air Bed and Breakfast." It was about renting cots inside of a living room. Then, oh wow, they actually changed their positioning to "travel like a local," and they started taking higher-end pictures. I don't know what it is, but when they started actually taking those higher-end pictures, that was right before they raised their $100,000,000 funding. So anyway, you can actually track the progression really nicely by doing this, and I love doing that. I love it! You can actually see, oh, Uber... yes, UberCab.com. They were only black car services. Oh, when they raised all this money, they actually got rid of the black car. The black car became secondary. So actually, the black car didn't work, so they switched to this, you know what I mean? It's kind of cool.

Shaan Puri

Yeah, you can totally reverse engineer a lot of the stuff. Some of the tools we use to do this include the Wayback Machine, which is the Internet Archive. Just Google "Wayback Machine." It lets you put in any domain name and then go back in time. They took screenshots of what the website looked like on June 12, 2010. For example, you can see what Uber's homepage looked like back then and how they were describing themselves. Another tool I use is TechCrunch. I go to TechCrunch, search for a company's name, and then reverse sort it by the earliest mention of it. For instance, with Twitter, you can see the very first article where Mike Arrington mentioned, "The buzz at the party this week was about Twitter," spelled without the vowels. Basically, it was described as a short messaging service that was kind of fun. You could see people tweeting about their breakfast, and it was all through SMS. I like that one; it's a useful tool. Another one I'll use is Twitter's advanced search. You can type in anyone's name and do things like... Twitter doesn't make this obvious how to do it. There's a specific format for writing these searches. For example, you could write "@sanpar before 2011" and then say "minimum 300 likes." This way, I can see your most popular post at that time.

Shaan Puri

In time, what were you talking about? What was working for you and what wasn't? I've done this with a whole bunch of people, and I kind of like... I really am a big reverse engineer type of guy.

Sam Parr

me too

Shaan Puri

It's not that you could copy it, but it's just data points. It's a way to fast forward experience because experience the hard way is slow. It takes decades to get good at things and to learn, to figure out what's normal, what's not, what's fast, what's slow, what's good, and what's bad. A better way to do it is to download a whole bunch of data points quickly. It's not perfect experience, but it's better than being blind and just kind of going off only your personal experience.

Sam Parr

so those

Shaan Puri

are some ways

Sam Parr

I would actually go as far as to say you can copy it. You can... you actually can copy a lot of stuff, and I think you should sometimes. So, for example, this first... by the way, 1stversions.com, this is a wonderful website. This is such a good website! I think this is so cool. I wish they... they don't even...

Shaan Puri

By the way, what they do is not just internet-related. What we're talking about is homepages because that's kind of our niche. But they'll be like, "This is the first version of Tom and Jerry," like the very first pilot. Last night, I don't know why, for no reason, before I went to bed, I was watching the very first pilot episode of *Curb Your Enthusiasm* before it was even a show. I just love seeing that original content, like the first pilot of *It's Always Sunny in Philadelphia* where they're using the handheld camera. I like seeing that because, as somebody who is frequently starting things, it's important to see that your favorite things started with very humble, simple, kind of "shitty" beginnings. And then, you know, you sort of can see how much better they got over time.

Sam Parr

This is so good! I love this. I'm going to link something to you. So, in 2013, I created this thing I called the "CEO Doc." It was a stupid name, but I sent it to you, and you can actually see that. It's so funny that you do this because, I mean, it's so funny that we're similar and we've been doing this for years. I created... oh wait, is it not working? I created this document where I would take, I think I had a list of 500 people, and I would make timelines for each of their lives. I would say, "Started their..." It was broken into apprenticeships, first hit, and then the self-actualization mode. For example, Jack Dorsey started his apprenticeship at age 22. From 22 to 28, he basically was like this poor nobody who worked as a dispatch service for a taxi cab company. From 28 to 31, he started Twitter at 28, and it actually became a pretty big hit really soon at 29. So, I have timelines and I have average ages for each person. I love doing that stuff, and it works so well for just seeing what's possible.

Shaan Puri

right

Sam Parr

so we're we're actually quite similar I've been doing this as well for a while

Shaan Puri

Yeah, it's great to nerd out about this kind of stuff. Okay, so the first version is cool. I have another kind of cool thing. Here's an idea: I would say this is not a business; it's probably a very bad idea. Maybe this is something that you reminded me of because this thing that we're doing, like the thing we're talking about, is extremely nerdy. Probably most people don't do what we're describing, like going back and mapping out the evolution of companies or people or whatever it is. So similarly, I want a tool that I'm calling **Business Pocket**. So Pocket is this Chrome extension; it's this app or service where if you see an article you like but you don't have time to read it, you just hit Pocket, and it's like you put it in your pocket for later.

Sam Parr

do you think

Shaan Puri

I think it used to be called read it later

Sam Parr

do you think pocket is going well I bet you it's going pretty badly I bet you that'd be a cool company to buy

Shaan Puri

Yeah, I don't think it's going well. It got really big, raised a bunch of money, and then it's just been around for so long without an exit that you wonder if it just became obsolete somehow along the way. But anyway, it was just a way to save articles. Now, I actually want something that I'll call "business pocket." I have this bookmark thing in my Chrome that's called "Companies to Watch." It's basically like anytime I stumble across a company I find interesting, I've been doing it for about 10 years now. I find an interesting company, and before it used to be, "I want to see if this will be successful," or "Maybe I should, if I was an investor, I would have invested in this." So I want to flag this and then come back later in three years to see how it turned out—whether I would have made money or lost money on this thing. In reality, I hit bookmark it, and then I like never go back and recheck those because who’s got the time? But I would love a service that's almost like a programmatic newsletter where I can just flag either people or companies that I want to keep watch on. I want to keep watch on this company or this individual, like the CEO, or maybe this startup. Then I want it to take the 10 that I've flagged and send me any time there's interesting news about them with some filter, like, you know, they raised new funding, they got a new job, they announced something, they're on TV, whatever. My 12 that I'm tracking might be different than the 12 that you're tracking, but we might have three that are the same. So this company underneath it would just need to set up a kind of programmatic way to watch for the news around certain names and then turn it into an automated newsletter. That was kind of just a random idea. I don't think it's a business, but I think it would...

Sam Parr

be cool to switch

Shaan Puri

to it

Sam Parr

I think it's a business. When we were getting ready to decide if we wanted to launch Trends or launch something new, I wrote a landing page for this product. I forget what I called it, but it involved the word "spy." The headline was something like, "We're your secret spies that track your competitors and tell you everything that they do." We would deliver this information to you via email. I think this actually could have worked wonderfully. The reason I came up with this idea was that I had a friend who worked at Rocket Internet. If you Google it, it's a company started by three brothers named Ali, Alex, and another brother, Sam. They started this thing called Rocket Internet, and basically, the way it works right now is that it's a large publicly traded company. They had this guy who was like the chief scientist, and what they would do is research fast-growing companies in America. Then, they would clone those companies and deploy them in Africa, Asia, and different parts of Europe.

Shaan Puri

brazil

Sam Parr

Brazil, and so they cloned Uber. But in Mexico, they cloned Pinterest. For Germany, they cloned Zappos. But for Germany, they did Amazon. For Thailand...

Shaan Puri

they they own like the amazon for brazil I think

Sam Parr

Yeah, and they also own the Amazon for Thailand. They would pick a variety of companies; they would do like the Wayfair for Nigeria or something like that. They have this guy who is called the Chief Scientist. All of the clones of Amazon in this country, that country, and the other country—there would probably be like 8 clones. He would send an email every day. This is a story I heard; I don't know if it's true. He would send an email every day and he'd be like, "Hey everyone, Amazon actually just moved on their homepage. They moved the clothing from 8 pixels or 100 pixels to the left. It probably means that clothing is a little bit more popular now than furniture. So, alright, make sure you move your clothing thing." Or, "Hey, they changed the color of this button from this yellow to this orange. Go ahead and do that." I thought that's pretty awesome. I would love to have that. I would love to track my competitors because I would do research on them. I would say, "Oh, which ads are they using? Oh, I wonder why they're using this ad. Maybe they're using this ad for this reason, that reason, or that reason. I'm gonna go and copy it." I would use a variety of tools like SimilarWeb, Facebook Ad Archive, Ahrefs, and a few other things. I would just think, "Oh, here's where they're succeeding and here's why they're succeeding. I may copy them; I may not copy them. I just know what's working." I think that could 100% be a service that you pay $100 a year for, and they would tell you the 5 nearest competitors. Every month, you meet with their team and you say, "Alright, your competitors are doing this, they're doing that, they're doing this. Here's what's working, here's what's not working, right? Here's a hypothesis as to what all this means." I think you could actually charge a six-figure annual contract for all of it, and I think it would be a really cool company.

Shaan Puri

Right, yeah. I told you about my friend who I nudged in this direction to do this for eCommerce. I'll give him another shout-out here. He said he got a bunch of sales last time I mentioned it, so I'll do it again: **shopifysalesdata.com**. Basically, it's a way to track your competitors, how much they're selling, what new ads they're running, and stuff like that, specifically in the niche of eCommerce. It's, you know, I don't know, around $100 a month or something like that, and I pay for it. I'm like, "This is great!" It's a valuable service. So, you could do it in a niche or you could do it more broadly. But yeah, I think that's cool. Let's give you a different topic.

Sam Parr

do you wanna do one more did you wanna do the pets thing you've had that here for 2 weeks

Shaan Puri

So, this is actually like a really... I thought it was a really random idea. Then I saw an ad, a commercial for it on TV yesterday, and it's like totally a thing. It's just going to sound stupid because it was like a stupid thought. Basically, I was thinking, kids love having pets. Pets are like a pain in the ass maintenance-wise. Your kid wants it, but they're not going to maintain it. I was thinking about why people get fish. It's kind of like self-contained in this little tank, and you don't have to do anything most of the time—just feed it. A fish dies all the time, and it's really sad for the kid. So, I was like, why are there not just AI pets? Why aren't there just robopets for kids? I thought, oh, a fish would work because it just needs to swim around sort of aimlessly. You don't touch it, so even if it was mechanical, it wouldn't feel cold. A mechanical dog, I don't think, would feel great, but what about a mechanical fish?

Sam Parr

You hit home runs. This is such a dud. This is such a dud. You're a home run hitter. Today's a strikeout. This is a stupid, stupid idea. You are... well...

Shaan Puri

I saw the commercial report it was called robo fish yesterday and I was like oh this exists no way

Sam Parr

oh my

Shaan Puri

God, so I'm gonna go check May, right? You see if you can see the Robo... I think it's called RoboFish. I saw the commercial. Tell me they do $100 million a year and prove that this is not a debt. So anyways, that was one. And then there's a related one which was... There's a medical thing that's going on for, you know, like pets are sometimes labeled as kind of like an emotional support dog or whatever. It's like anti-anxiety, that sort of thing.

Sam Parr

you know that's total bullshit too right

Shaan Puri

Well, I know most people use it for **bullshit**. I don't know if there's any medical... like, there must be some cases where it helps or something like that.

Sam Parr

No, I agree that in some cases it is true. But a lot of people are like, "Oh, they're certified in emotional [intelligence]." There's not really a certification process.

Shaan Puri

Yeah, there's no... yeah, exactly. This dog did not get trained. But anyway, I saw this company that was doing this for people with dementia and Alzheimer's. They were giving them a weighted... it's the equivalent of a weighted blanket, but it's a pet. So, it's a pet that sits in your lap. It's heavy, like a weighted blanket, but it feels like a pet and moves like a pet. Now, if you're just an adult who has no health conditions, you'll be like, "Oh, this is clearly a robot. This thing is not really fully natural." You know, this dog is obviously not running anywhere; it's not a real pet. But for somebody with dementia or Alzheimer's, they found that this is extremely comforting to them. Now, they're really expensive right now—like $1,000 for this kind of realistic-feeling thing. What's it called? But they're going to bring the price down. I met this guy through my wife; she was consulting for this company that was doing it. She was showing me the videos and stuff like that about this thing, so I thought that was kind of cool too. I think we will see more and more either genetically engineered pets or just straight-up mechanical AI pets. Because if you can get 60% of the benefits with 0% of the work and maintenance, I think there's a whole class of people who would take that trade. They just don't own pets because it's too much cost and too much work.

Sam Parr

so man I called your thing totally stupid I think for the average oh

Shaan Puri

Yeah, hold on. Receipts, Brie. You come in and tell Sam about the RoboFish.

Sam Parr

I don't know if this is what you're talking about, but this company in 2012 sold 15,000,000 of these at $8 apiece in the first year.

Shaan Puri

well 1st year that's right

Sam Parr

Alright, I've... I'm both... I kind of take back and I don't take back. So you're wrong in that you're saying like, "Oh, pets are so annoying, just give them a robot pet." Like, yeah, I think that's actually silly. I don't doubt that people buy a robo-fish; I think that's just like a cute little widget that's fun to have, but...

Shaan Puri

Dude, you were the one who was like, "Oh, these AI girlfriends are great." It's the same idea; it's the same premise.

Sam Parr

Okay, well, look, I'm open-minded enough to challenge my views. But you started talking about this Alzheimer's thing, and that's actually quite interesting. I just Googled it; I wanted to see which ads come up. I like... because, like, you so I Googled this thing. I don't really like looking at this; I feel a little sleazy. But there's this... oh, I actually don't like the name. There's a name called... I just sent it to you, the "ALZ Store." It stands for the Alzheimer's Store, and they call it the "All Store." They sell these Livestrong bands that have your name on them, so if you forget your name, you can remember. They actually have a robotic therapy dog. This website looks like it's an entrepreneur who's just looking for a money-making niche, which is a little weird with this type of thing. But people seem to love it. It's a whole store dedicated to Alzheimer's products. I have zero idea if this is actually what Alzheimer's patients love and need, but this is incredibly fascinating. I'm looking at their similar web traffic. No, I actually think this is legit. They have videos of the founder talking on, like, the Today Show about selling all types of products for Alzheimer's stuff. I'm looking at their similar web traffic, and it's incredibly popular. What a fascinating business all about Alzheimer's! Yeah, no, this is a legit company. I'm looking at the About page; they have a good background story about the father who has Alzheimer's, so now they create all these products. Yada, yada, yada. It looks pretty interesting. Can you believe that this exists, the All Store?

Shaan Puri

Right, that's wild! I had no idea, but it makes sense, I guess. I have one more... can I do a last two-minute "Billy of the Week" story?

Sam Parr

yep a second billy of the week story

Shaan Puri

I learned this... I tweeted this thing out and it kind of blew my mind. Okay, so I was doing some research, you know "Shoe Dog" is like super popular about the founding story of Nike.

Sam Parr

yeah you did one on adidas

Shaan Puri

I did one on Adidas and I was like, "Okay, Nike, great. What's the story with Adidas? Where did that come from?" So, I just started Googling for a second. I didn't go so in-depth, but okay, here is the 60-second version of Adidas. Tell me if you knew these things. Just give me your "yay" or "nay" if you knew it or not. So, Adidas, when you were a kid, did you not hear that this stood for "All Day I Dream About Sports"?

Sam Parr

yeah soccer all day I dream about soccer

Shaan Puri

Soccer, yeah, yeah, that's right. Not true, basically. The guy's name was Adolf Dassler, who started it, and he went by Adi Dassler. Dude, and so it's just Adidas.

Sam Parr

I was in Germany one time and someone, a German, was like, "Do you like Adidas?" I'm like, "I don't know what that is. Is that like a German brand?" They're like, "Oh no, it's Adidas. You don't know Adidas?" I go, "No, I've never heard of it." And they started laughing at me. That's Adidas, I guess... yeah.

Shaan Puri

right you I'm sure you corrected him I'm like his own hometown

Sam Parr

I go oh you're the adidas yeah I know adidas now I don't know what adidas is

Shaan Puri

so okay so the story is kinda crazy so 2 brothers basically dad owns a a leather shoe factory the 2 sons are like okay shoes are cool but we wanna do sports shoes not these like leather shoes and so they spin out and they create the dassler brothers shoe factory and what they do is they're like we're gonna you know adi you're gonna design the shoes and rudy you're gonna sell the shoes you'll do sales and marketing 2 brothers they they do that right it's like a 10 year grind you know building this thing up they're growing but they're growing slowly and then finally 1936 the olympics come to germany and they are a whole bunch of the athletes from germany are wearing adidas but they also get a little bit you know they go and they hustle and they get their adidas shoes in the hands of some non german athletes also one of whom is jesse owens jesse owens goes on to win I think 4 gold medals at those olympics and so jesse jesse owens is a black guy who basically wins gold and beats the germans in front of hitler who's like promoting white supremacy at the time and so it's like you know a big deal for for that victory at the time he's wearing adidas and this is kind of considered the first time that an entrepreneur used sports to promote their products or their businesses and he kept doing this right like you see photos of ali versus frazier they're both wearing adidas because he was like hell bent on getting adidas into the hands of all the iconic athletes that they could which nike went and took that strategy and did even better with that strategy over time and so they you know business is going great they you know after that olympics thing where they get all this exposure next 3 years they sell like I don't know 600,000 pairs of shoes business is great you know 9 1940 hits and world war world war 2 starts and the factory just gets seized by the german military they're like this is now a war factory we need to produce war goods here no more shoes and hey you 2 brothers join the army so they get they get enrolled in the army so the business just goes on break adidas just it goes out of business for the whole world war okay world war 2 ends the brothers come back you know adi's like alright he gets 50 people together he's like we're restarting the factory we're gonna do this again and somewhere along the way the 2 brothers break up so I didn't know this part yeah I know this other brother goes on to start puma

Sam Parr

yeah and

Shaan Puri

So, one brother starts Adidas, and the other brother starts Puma, which I just thought was like, you know, the most baller shit. You knew that already.

Sam Parr

yeah I know that they got in an argument

Shaan Puri

is that well known

Sam Parr

Yeah, well, I don't know but I mean... you're talking to me. I think that yeah, they got into an argument. One of them started Puma for some reason. I thought that he... did he move to Africa and start Puma? Is there any part of...

Shaan Puri

The no, I think he like literally moved across the river and started a competing factory within earshot. That's the way I read it. Maybe I read that wrong.

Sam Parr

Yeah, I knew... and the two brothers, because they got into a disagreement on how to do... Oh, Bray said Reebok started in Africa, so I guess I'm getting confused. But yeah, yeah, yeah, I knew that.

Shaan Puri

So, they restart the factory after the war. Now, they're using all the leftover war materials in the shoes, like rubber for the soles and certain designs, like the look of camouflage and different things like that. They come up with the three-stripe logo. Anyways, business does well, and then there's this crazy run of deaths. The Puma brother dies, and four years later, Adi from Adidas dies. His wife takes over, but she dies six years later. Then, the son takes over, and he dies three years later. It's just this run of early deaths. It's like, you know, the Defense Against the Dark Arts position—nobody can hold this thing. Finally, now the two daughters own the company. They sell it for pennies on the dollar because Adidas has just been declining for years. They didn't have the right people running it, I guess. So, they sell it for $500 million to this French guy. The French guy tries to turn it around, but he can't do it. It's on the verge of bankruptcy, and then they sell it to this guy—this is actually the "Billy of the Week." It's this guy Dreyfus, and I think his name is Robert Dreyfus.

Sam Parr

do you know who you know who this person is related to right

Shaan Puri

no his dad was rich but I I don't know why he's rich

Sam Parr

I believe it's elaine from seidenfeld that's her

Shaan Puri

julia dreyfus

Sam Parr

yes I believe I believe that's her grandpa

Shaan Puri

Wow, okay, that's crazy. So this guy grows up kind of rich, goes to Harvard or whatever, and buys this thing. His tagline—I love it—he goes, "I'm a gambler and I like turnarounds." That was kind of like his business philosophy. So he takes a gamble, takes the lead role at Adidas, and he basically says, "Alright, we're doing three things. We're moving the factory to Asia, we're cutting the payroll, and we're cutting jobs—cutting two-thirds of the jobs in this company so we can get profitable. Lastly, we're going to take that money we were spending on people and we're going to spend a ton of it on marketing." You know, they were like, "Wow! You took it from the brink of bankruptcy—3% market share—and it came roaring back to become the number two brand. How'd you do it? You must be a genius." And he goes, "You know, I was in Time magazine." The quote is, "It didn't take a genius; you just had to look at what Nike and Reebok were doing and do that." He said it was just easier for somebody outside the company to see what was obvious than for somebody inside the company who had all this baggage and couldn't do it. So, he turns it around, retires a billionaire in his fifties, I think. And that is, you know, the crazy story of Adidas today. I thought that was wild; I had no idea.

Sam Parr

So there are two takeaways from this for me: 1. A question that I should start asking myself (and you don't actually need to follow through): **"How would a PE firm run your company?"** I actually think that's a great question to ask yourself, which is, "What would a PE firm do if they owned this right now?" That's kind of an interesting way to get ideas because you said to yourself, "Oh man, I'm being such a punk. I could be so much better." 2. The second thing... [Note: The speaker didn't complete their thought about the second takeaway]

Shaan Puri

And the opposite... and the opposite would be, what would Larry Page do? So, Google's CEO and founder, at the time, took this small thing and just kept expanding it. Like, "No, we need to do Google X. We need to do moonshot projects, self-driving cars, you know, satellites into the sky, giving people internet." They had unbridled ambition and were like, "What if you just blew the top off this thing in ambition?" Then the other one is the ruthless operator way. What would they do? I think both are valuable questions for your business.

Sam Parr

And the second thing, and this is actually something that I've been thinking a lot about, is Louis Vuitton. Not that I own even one Louis Vuitton item; I'm never going to own all the Louis Vuitton things. But it's pretty fascinating that I, in my head, stereotyped fashion brands as just trendy, thinking they would come and go. In reality, I would bet that some of these fashion brands, like Adidas, Puma, and Louis Vuitton, are actually some of the longest-lasting companies I can think of. That's pretty fascinating. A brand like Adidas, which went through near bankruptcy and multiple owners, is still relevant and kicks ass. That's actually pretty cool—to create something that can last that long. I think that's inspiring; something that has withstood all that nonsense has succeeded in spite of itself.

Shaan Puri

In fashion, especially in fashion where everybody wants to do it, fashion is literally kind of in and out. It's like a fad-type business where things are in and out of style so quickly. So, just to last is pretty impressive.

Sam Parr

What I'm saying is, there's some stuff that has lasted for many, many decades. For example, Louis Vuitton luggage... I imagine it existed at the turn of the century in the 1900s. Same with... yeah, right now I'm wearing Nike Cortez. I just looked at the website that we were talking about earlier, "First Versions," and the first version of Nike was the Nike Cortez. I'm still wearing the same damn model! It's kind of interesting and inspiring to create something that can last 50, 100, 200 years. That's a cool aspect of design and manufacturing.

Shaan Puri

of that feel about like altoids or coca cola

Sam Parr

Yeah, I guess you could do it. I mean, you can do it a lot more than fashion, but there are a bunch of fashion brands that have done it successfully, and I think that's pretty damn cool. You know, like **Rolex** or **Tiffany's** diamonds or something like that. It's kind of neat.