This Guy Makes $20,000,000/Year With 0 Employees (#365)
Google Plugins, Treasure Hunting, and Sarah's List - September 22, 2022 (over 2 years ago) • 36:17
Transcript:
| Start Time | Speaker | Text |
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Shaan Puri |
So he lives in India and he is a one-man company that makes something between $15,301,000,000 selling simple plug-ins for Google Docs.
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Sam Parr | If you have $20,000,000 a year in income, that is a huge, unheard-of sum. Alright, what's going on?
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Shaan Puri | Alright, I got a couple of interesting things for you. I'm going to start with this one-man company. I saw a tweet, and I got tagged in it a bunch of times.
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Sam Parr | same the exact same one | |
Shaan Puri | and I think we should talk about this because this is very is | |
Sam Parr | it the Google plug in guy | |
Shaan Puri |
Yes, yes. So alright, this guy John Davids tweeted out a great thread. His handle is @RealJohnDavids, so shout out to him for doing this. He's basically like, "Dude, I discovered this guy and let me just tell you some things about this guy." So...
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Sam Parr | Funny, is it that something like this happens? I know exactly what you're talking about because I got DM'ed by the same people who probably DM'ed you.
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Shaan Puri | Well, that's when you know you're doing a good job: when people see something and they think of you.
I tweeted this out: people think you create content, like a podcast or a YouTube channel, to become well-known. Right? Oh, you want fame; you want to become well-known. Some people want that, and there are some benefits to that, but that's not my goal with this stuff.
My goal is to be known well, which means people know you really well. That means when they see something, they'll know to send it to you, they'll show it to you, they'll share it with you, they'll invest in it with you, and they'll tell you to come invest in this deal with them.
When you're known well, it's because you've put your brain out there on blast. People know how you think, and so when they see something that they know you'll love, they immediately think of you and come share it with you.
I would say that even if you create content and you're never famous, it never takes off, and you become known well, that alone is a big enough benefit to justify creating content.
Alright, anyway, we were known well because a bunch of people tagged us in this. This guy—what is his name? His name's Amit Agarwal. He lives in India, and he is a one-man company that makes something between $15,000 and $1,000,000 selling simple plugins for Google Docs, Google Drive, and the Google G Suite of apps.
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Sam Parr | this is crazy to know | |
Shaan Puri | what man's | |
Sam Parr | Plan that... that is... that is... that is shot, dude. If you have $20,000,000 a year in income, that's like the equivalent of... I would have to think about this. Maybe someone who's thought about this is going to say I'm an idiot and I'm getting it wrong, but making $20,000,000 a year in income is probably the same as being worth like $500,000,000.
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Shaan Puri | lifestyle wise it definitely is | |
Sam Parr | like like it's a huge that is a huge unheard of sum | |
Shaan Puri | So this guy, basically, he goes to IIT, which is like the Harvard of India. He's a computer science guy. He moves back to his hometown after going to the big city.
In 2004, he starts off as a tech blogger. He's just writing tips and tricks on how to use G Suite. He creates a Gmail plugin that lets you do what's called a mail merge. A mail merge is basically when you want to email 100 people the same thing, but not in one group email and not even as a BCC, because you want to customize some component of it.
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Sam Parr | the same thing of this product | |
Shaan Puri | And so, he created a plugin that lets you do that in Gmail. There are a lot of services that will let you do that outside of Gmail, but many people just want to run it inside their inbox and not use some third-party app to send emails.
So, he creates this thing, and that's, I think, his biggest hit. He just starts writing "how-to" guides on his website, which is called Digital Inspiration. It will be like, "How to calculate the percentage score in a Google Form" or "How teachers can email parents using Google Forms" or something like that.
It's free, but then he has a paid tier: $39 a year or $79 a year to get rid of the branding and to go past the limit of emails, something like that. His main mail merge plugin has been downloaded 7.5 million times. If you assume a 5% conversion rate to paid, he's doing $1.5 million in ARR just off of that one plugin.
He has 13 more plugins, so he has this whole set of things. He has a document management app called Document Studio, which lets you create documents, certificates, and invoices using Google Sheets. It's $79 a year and has 6 million downloads. He has a notification app for $49 a year with 10 million downloads, and a YouTube app with 8 million downloads.
He also creates one-off apps for big companies like Airbus, LinkedIn, Disney, and even the U.S. Embassy has paid him to create custom G Suite things just for them.
If you blend this all together and start doing some estimates... I DM'd the guy and asked, "Hey, could you confirm the numbers? I don't want to say the wrong number, but I'm going to tell the story on the pod." He didn't reply yet, but it's pretty safe to say this guy's doing more than $10 million a year. It could be as high as $25 million or $30 million if you're really aggressive with how much he's getting from the enterprise customers. But somewhere between $10 million and $25 million is a fairly safe bet. | |
Sam Parr | how does he have and I and I say | |
Shaan Puri | simple useful things | |
Sam Parr | He had 100,000 followers on Instagram. Is he famous for some reason? Like, what's the deal? Because a guy like this seems under the radar.
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Shaan Puri | I think his blog has a good amount of traffic, so I'm going to open up his blog.
Yeah, so his blog gets about **150,000 hits a month**—visitors a month. I think he probably just says, "Hey, this is made by me," and then people go follow him or something.
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Sam Parr | what's the tax rate in india do you know is it comparable to america or is it way worse or way better what | |
Shaan Puri | I don't know, but I remember hearing at one point that only 2% of the Indian population paid taxes. Really? Like, the majority of the population just simply didn't pay taxes.
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Sam Parr | this is a | |
Shaan Puri | Big problem in India because they're not banked either. So, it's like there's no way to track anything. It's a cash economy. If you don't have a bank account, it's like...
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Sam Parr | there's like money for me | |
Shaan Puri | not exist | |
Sam Parr | yeah taxes nah it's not for me | |
Shaan Puri | Yeah, it's optional, but I think that might have changed. This was like 10 years ago when I heard that stat, and I was like, "What the hell?" So I'm sure that's changed over time. | |
Sam Parr | Dude, what a baller! You know, this is so great. I think that the reason it's great is because it kind of breaks your frame on what's possible.
When you're in Google Docs, there are so many times where I'm like, "Man, I wish I could just do this one thing." There's just this one very, very specific thing. I would never think this should be a product because I'm like, "It's just me experiencing one tiny issue." If I learned how to program or learned how to do like this other thing, it would work perfectly fine.
This little thing is only going to save me 5 minutes; it's not a big deal. But this is a good example of that. That's sick! I use some of his products; they're really good.
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Shaan Puri | By the way, now that the paying rate, I think, is 6% of the population that filed a tax return. When was this? This was in 2020.
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Sam Parr | so you think wow well good for this guy hopefully he's one of the 94% | |
Shaan Puri | Even if he is, dude, if you have like $1,000,000 in India, you're a king. You know, you don't need that much money to just ball out and settle down in India. Like, you are set.
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Sam Parr | well I like this guy what's the who's carl allen | |
Shaan Puri | alright this is my billy of the week a | |
Sam Parr | $1,000,000 isn't cool you know what's cool a $1,000,000,000 | |
Shaan Puri |
This story is kind of incredible. It also came to me from a Twitter DM. The guy's name is hard to... it's not like his real name. I want to give him credit, but I don't know what to call him. His Twitter handle is @eurorepe (r-e-p-e).
So, @eurorepe goes, "I got a 'Bill of the Week' for you: Carl Allen." He goes on, "Sold a garbage bag company."
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Sam Parr | for 4 1000000000 too this is so funny I got the exact same one | |
Shaan Puri | A full-time treasure hunter in the Bahamas.
Okay, so who is this guy? You know, like the... I don't know if you watch *Game of Thrones*, but in *Game of Thrones*, it's like a "Song of Ice and Fire." This is a song of garbage and treasure.
This guy basically has kind of an insane story. It's very hard to even find information about him. I don't know if you looked him up, but I did a lot.
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Sam Parr | the only thing | |
Shaan Puri | this guy | |
Sam Parr | They didn't cover his business; they covered the fact that he was buying a huge yacht, which is a great sign. | |
Shaan Puri | It's about his yacht.
So, here's what I do know. Alright, so Carl Allen, he basically starts off working at this company called Heritage Bag. Heritage Bag makes plastic trash bags. They don't just make normal trash bags, but also bags for medical waste or hospital waste. They’ll make anything that involves mass production manufacturing for core utilities, very similar to egg cartons, which is a story we told on the pod before.
So, medical waste bags are their thing. He actually started off just working there. It's one of those stories where he worked his way up from the mail room. He had one job, then he climbed up, got into business development, became the Director of Business Development, and eventually became the CEO. Eventually, he buys the company.
I don't know how he pulled this off; I tried to find out how this employee ended up owning the company, but he did. He ends up owning the company, and it's a boring business based in Dallas, you know, selling trash bags. He sells it for something like $300 or $400 million to, I think, a private equity firm.
They have 800 employees and have been around for 30 to 40 years. So, they do this, and then he thinks, "Alright, what do I do with my life now?" At the age of 12, he had visited the Bahamas and thought, "Wow, I love the Bahamas. This is just a magical place." He always had this idea.
He looks at this island and calls up the owner, saying, "Hey, would you ever be interested in selling?" They respond, "No, we've been asked before. We won't sell this thing." It's a 92-year-old woman who says, "No, we won't sell it to some big corporation that's just going to ruin it." He replies, "No, no, no, ma'am. I'm not a big corporation. I'm a family guy. I'm a family owner."
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Sam Parr | a rich guy | |
Shaan Puri | I'm just a guy with a handful of yachts, and I need a place to park them. Basically, he convinces this woman to sell. They sell 50 years after they had originally bought it. He buys this island and turns it into his own little fishing, boating, and exploring place.
So, he's got now three parts of his business: he's got philanthropy, he's got his family office where he invests, and now he's got his island business, his yachting business, and his fishing business. He owns a handful of yachts. He's got like a...
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Sam Parr | half a curve of yacht | |
Shaan Puri | an 80 foot yacht | |
Sam Parr | he calls it an exploration business | |
Shaan Puri |
Well, he's got his... yeah, he's got his exploration business, but I think he also calls his investing his exploration business. I don't know, it's a little confusing. But Alan Exploration, I think, is... none of them? But either way, go to his YouTube channel. Did you watch any of his YouTube videos? Sick!
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Sam Parr | Yeah, the guy is amazing. Let me tell you a story about a young man with a dream. A dream of sailing the sea, living life with the ones he loves, and discovering all the world has to offer. A dream of exploration. It only has 41,000 views. | |
Shaan Puri | 41,000 views! It's basically his channel where he believes that there are **$1,000,000,000** of lost treasures in the sea. He says there have been **3,000,000** shipwrecks. When something is lost at sea, it's not really lost; it's just at the bottom. He insists that it's still there, it didn't go anywhere, and we just have to go find it.
He got into this because he met a guy who was a treasure hunter and had made **$1,000,000** finding treasures in the ocean. He was fascinated by this guy and thought, "Let's do this! I want to do this!" So, he started looking for treasures, like the ones from King Philip of Spain, whose armada got lost at sea back in the year **1200** or so. He believes they need to go find that because there were these crazy gold items.
He wants to create a museum for the things he finds. He has discovered a bunch of treasures, including a long gold chain and all kinds of other stuff. He puts these items in his little museum on his island in the Bahamas. It's a private island, but he keeps it open to the public. People can come, visit, and park their boats there.
Isn't this kind of amazing? What a dope life this guy is living!
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Sam Parr |
This is amazing for a couple of different reasons:
1. It's so fun to give in to these obsessions. You say like, "Well, what's the [point] of spending your life looking for treasure?" It's like... because it's sick! Because it's awesome! Right? Like, it's exciting. That's an exciting chase. You should do that.
2. And it is actually... I'm sure there's some historical value.
I actually had a guy send me a pitch deck on investing in his like, hunt, and I was like, "No, I'm not even gonna..." [consider it]
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Shaan Puri | no way | |
Sam Parr | Yeah, I was like, "Not a chance." I don't know anything about this. This sounds intoxicating, and I love it, but I have to avoid that.
But number two, I've been thinking about this phrase: **"Make 12-year-old me proud."** I remember making some money and someone saying, "I was fretting over doing one thing or the other thing. It was an awesome thing, but I was like, 'It costs too much.' And someone said, 'Yeah, but it's sick! It's awesome! When you were 12, this is what you always wanted to do.'"
And I'm like, "You're right! Why am I being such a boner? I should just do this thing."
Now, I do think that's a good life motto: whatever 12-year-old you wanted—not all things, but some things—you've got to give into those indulgences. This guy is awesome. I'm a big fan of the well.
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Shaan Puri | The question we get a lot is, "Oh, what would you go back and tell your 20-year-old self?"
Well, if you were 21 again, what advice would you give your 21-year-old self?
And I know you hate that question. I hate it too.
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Sam Parr | That question, because I say no. They say, "If you had to start over again, what would you do?" And I'd be like, "I would have done the same thing because that's what I'm skilled at. That's what I'm good at."
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Shaan Puri | you you want you | |
Sam Parr | want me to give you an easy answer like I I don't know what you're good at | |
Shaan Puri | Right, and so you're like, that's the question people always ask. But I'm with you; I want the opposite.
What advice would your 21-year-old self give you? It's very easy to lose the plot. The older you get, the more responsible you become, the more practical you get, and the lower your energy becomes. You take fewer risks and all that stuff.
There's a version of you—whether it's your 12-year-old self or your 21-year-old self—that had the goal of having the most fun and doing awesome things. Back then, you weren't thinking about how to save for retirement; that wasn't on your mind.
I think that for most people, the risk is not that they're playing life too risky; it's that they're playing life way too safe. If that 12-year-old or 21-year-old version of you looked at yourself now, they might say, "Oh man, I grew up and I got kinda lame. Damn! I'm just this out-of-shape guy who complains a bunch and is saving money for when they're even older."
But dude, you're already old!
So, I think that for most people, they actually need to go the other way. They need to have more fun, live more childlike, and incorporate more silliness and adventure into their lives. They need to take a little more risk and play less safe.
I would say that is the majority of people. Yet, people treat it like it's the opposite. They think the advice is that they need to be responsible and play it safer. They believe life needs to be more serious. But it's like, no, actually, life needs to be way less serious. Am I right?
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Sam Parr | Have you ever seen that one? It's about 10 years old, so it was one of the early viral YouTube videos. This guy, he's in his thirties at this point. When he was 8, he recorded himself saying, "Hey Jonah, what's going on?"
He anticipated that he wanted to make a video in his thirties where he was going to have a conversation with himself. So, now, at the time, thirty-something Jonah is having a conversation with 8-year-old Jonah.
He's like, "Hey, what's going on, Jonah?" And the younger Jonah is like, "Are you still playing with this?" He holds up a toy, and the older Jonah responds, "No, I'm not," clearly sad. The younger Jonah says, "But you really loved doing this! We loved drawing it and we loved reading cartoons about this. Right now, I think I want to grow up and be a cartoonist where I talk about this."
The older Jonah replies, "Oh man, I kind of quit doing that when I didn't have time, but I actually still love it."
This video went viral, and I believe it kind of kicked off his career, where he was able to start making movies and cartoons like he used to be into. Whenever I watch that video, I get inspired. I'm like, "What would 8-year-old me say? Like, 'Whoa, you said you were going to do this! Why aren't you?'"
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Shaan Puri | Right, and I actually don't think the answer is to do what the 12-year-old you wanted to do. Maybe the 12-year-old you just wanted certain dumb things or only knew about certain things.
It's more like, if I was explaining this to the 12-year-old me, would they nod and be like, "Okay, that's dope! I didn't know that. Hopefully, you know, that's crazy, but that makes a lot of sense. That sounds awesome! That sounds fun."
Versus just doing what the 12-year-old wants. I think you're absolutely right that, in general, the happiest people are the ones who are most childlike.
What are the traits of a child? A child is generally very curious about the world. They don't just think they know it all. A child is generally looking to have fun; they're looking to play, not just work and grind.
You know, I've never heard a 12-year-old say they're on that grind set. 12-year-olds are looking to play; they're looking to have a blast. And guess what...
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Sam Parr | that's what you should be trying | |
Shaan Puri | To do too... and so, you know, everything I think about, like if I went back to the 13-year-old me and I was like, "Dude, this is our wife," they'd be like, "What?" It's like, "Yeah, we get to be with her. She likes me." And he would be like, "Oh dude, awesome! This is so... wow, this turned out amazing!" That would be something I would brag to my 13-year-old self, like, "Dude, we pulled this!" That would be so sick.
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Sam Parr | do you get to have sex | |
Shaan Puri | Exactly. Yeah, dude. | |
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You want to do this last one?
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Shaan Puri | Yeah, okay. So the last one I wanted to do was an update on Sara's list.
For those who are new to the pod, back... I don't know how long ago this was, maybe like a year ago.
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Sam Parr | only a year ago I was in new york yeah it was a year | |
Shaan Puri | So, let me go look at this video. We did a video; it's on YouTube from September... oh, almost exactly September 17, 2021. It's September 19th today. Wow!
So, to you know, basically a year to the day we did this thing. It's titled "12 Startups Where Stock Grants Can Make You a Millionaire." This was inspired by your wife, Sarah, who basically was a self-made millionaire. We said, "Oh, how'd she do it? Did she invent the next big thing? Did she make this crazy investment that paid off?" And you're like, "No, she just worked at good companies and had a good job." Not that she wasn't a CEO or in the C-suite... yeah, she was.
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Sam Parr | just like normal job | |
Shaan Puri |
Normal job at a good tech company... Think about it this way: They give you a job offer that will pay you, let's say $50K (just to use round numbers) a year in stock compensation. So maybe you make $150K, then you get $50K of stock. Over 4 years, you've got $200K of stock. Well, if that company goes up 5x in value during those 4 years, which many tech companies do, it's a $1,000,000 of stock that you got. She's just a self-made millionaire.
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Sam Parr | A lot of these companies will give you like maybe $100,000 a year in stock. In Airbnb's case, I don't know what it went up to, but I think it probably went up 5 or 6 times. I don't remember.
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Shaan Puri | And your wife had done this at Facebook. She worked at Facebook and she worked at Airbnb. Did she work at another one, or were those it?
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Sam Parr | she worked at everlane but I don't think they've had an exit yet | |
Shaan Puri |
And so she had done this, and I was just like... kind of... and it's also like, dude, those were obvious. It's not like she was one of the first 10 employees at Airbnb. It's like, no, she joined and Airbnb had how many employees? It was like 100, not 1,000, right?
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Sam Parr | No, it was... I think it was either 900 or 1,000. It was 6 years ago, maybe. So they weren't new. | |
Shaan Puri | and do you remember the valuation at that time like roughly it was worth I | |
Sam Parr | I think it was **18 billion**. When they IPO'd at the peak, I think it was worth **$110 million**.
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Shaan Puri | Okay, yeah, $100,000,000,000. So, let's say 5 times there at that peak. Anyway, she had done this, and I just thought that was amazing. I thought this is like the most underreported story in, you know, podcasts or tech news or well...
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Sam Parr | You're missing the part about not talking about this. One of the big reasons it's underreported is that it's not that unique. You know, there are thousands of people who work here. There are hundreds of thousands of people who collectively work at... maybe it's millions, actually. Millions of people who work these types of gigs.
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Shaan Puri | The way she... she's not a programmer either. She's not like an engineer. There's not like some barrier that you need, "Oh, I can't do it. I don't know how to code. I can't work at a tech company." No, she's a non-technical person. She's skilled, but she's non-technical, totally at a tech company.
So, anyway, we basically made a list called "Sarah's List," which was: what are the dozen companies that we would bet on today? We think if you just went and got that job, you got that stock package that's worth, let's say, a quarter of a million dollars today, that could 4x and turn into a million dollars over your 4-year vesting period.
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Sam Parr | so are we gonna recap this and and see how we did | |
Shaan Puri | Yes, so I have the numbers. Great idea! I have the numbers here, so I'm going to read you the companies and then I'm going to read you where we were right and where we were wrong.
One of the companies on here just got acquired. The reason this came up was that Figma just got acquired. Figma was on our list; it was number 7 on our list. They weren't in order; it was just one of the ones we listed. Figma got acquired just now for **$20,000,000,000**. When we had done the analysis, Figma was at **$2,000,000,000**, so that was a **10x** increase.
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Sam Parr | was it really fair | |
Shaan Puri |
Yeah, Figma was at $2 billion later. Wow, like 12 months later it got valued at... or sorry, in between it had also gotten valued at $10 billion. So it kind of depends on the timing, but when we did the pod, the last known valuation was $2 billion, I believe. Wow.
And so that was their Series D. So, yeah, basically that's a 10x from where we're at. So you go get that $200,000 stock package!
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Sam Parr | but what you're saying sitting | |
Shaan Puri | on yeah | |
Sam Parr | And it invests over 4 years. So, a $200,000 stock package is $50,000 a year, which is incredibly reasonable for...
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Shaan Puri | that's like a yeah more like an entry level | |
Sam Parr | that's a table space | |
Shaan Puri | Your position there, whereas you can get $100,000 a year, so you might have had $400,000 in total stock. That'd be $4,000,000 that you're sitting on. It's so hard to make $4,000,000 in cash; it is not that easy. This is one of the easier ways to do it, so I think that's kind of underrated.
Alright, so let me give you the next companies on the list. We had Flexport, Zapier, Uniswap, Anduril (the defense company), Replit (the developer tools company), Airtable, Figma, Rippling, OpenStore, Fair, Next Health, and OneTrust.
Okay, so those are the companies. Now I'm going to read you where they were at and where they are now. Out of the 12, I'll just tell you right now that all but 2 of them, I believe, are up. The other 2, it's just that they haven't raised another round, so we don't know. But there's reason to believe where they might be up.
Uniswap might be down just because crypto has gone down in total value, so Uniswap might be down. But only Zapier and Uniswap are not marked up. So already, you're up if you're in any of these.
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Sam Parr | Zapier is not marked up because their whole shtick is they don't want to raise. They're like, "We bootstrapped. We raised this one round of funding. We're not raising anymore until we go public."
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Shaan Puri | Exactly. So, you're still likely up; it's just not marked.
Okay, Flexport. When we had done it, it was at **$3,000,000,000**. It's now at **$8,000,000,000**, so almost a **3x markup**.
Okay, Zapier and Uniswap, we talked about.
Okay, Anduril. When we talked about it, it was at **$4,600,000,000**. Now it's at **$6.6 billion**, so not a huge markup, but you're up, you know, whatever **50%**.
Replit. When we had talked about it, I think the last known valuation at that time was **$200,000,000**. It raised again at **$800,000,000**. I invested in that round, so I know that it's actually worth more today because I get emails and phone calls from these groups that are trying to buy my Replit stock. They're like, "Hey, we are willing to buy up to **$5,000,000** of your Replit stock."
So, I think that Replit's probably valued today on the open market more than **$800,000,000**, but that's the last known valuation. So, at least a **4x markup**, likely more like **8x** is my guess on Replit.
Airtable. Airtable was at **$2,000,000,000** when we did it, **$2.3 billion**. It's now at **$11 billion**, so a **5x jump** on Airtable.
Figma. We just talked about **$2,000,000,000**. Now it got bought for **$20 billion**, so **10x**.
Rippling. Rippling was **$6,000,000,000** when we talked about it. It's now at **$11 billion**, so double.
OpenStore was **$250,000,000** when we talked about it. That was the only exception; it was the one that was lowest when we talked about it as a valuation. It's now at **$750,000,000**.
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Sam Parr | what was it when we started | |
Shaan Puri | 250, and now it's what, 750? Wow, 750. Fair was at $7,000,000,000; it's now at $12.5 billion, so a little under double. NextHealth was at $400,000,000; now it's at $1,000,000,000, so a little more than double—2.5x.
1Trust was at $2,700,000,000; now it's at $5,000,000,000, $5,300,000,000, so another 2x. Pretty good! We did well.
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Sam Parr | good yeah alright | |
Shaan Puri | Good. Yo, give us a Larry David clip. It's pretty good. It's pretty, pretty, pretty, pretty good. Pretty good. | |
Sam Parr | Keep in mind, we've made these predictions at the beginning of, like, the best tech bull market—not of all time, but a really good one. So, a lot of these valuations could be completely nonsense. You know, at that time, we could have thrown a dartboard and picked 10 random startups, and the likelihood that they would raise...
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Shaan Puri | Is... and now it's down. But the valuations I'm giving you, the afters, are all 2022 valuations. | |
Sam Parr | Wow, alright, so a few takeaways.
1. **Exponential growth** is hard to completely understand.
Thinking like, "Can this 2x, 3x, or 4x?" For most people, myself included, it's an exercise to understand what that means.
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Shaan Puri | read the figma read the figma revenue numbers you have those right | |
Sam Parr | I I don't know if I can well they're | |
Shaan Puri | public they're publicly available oh they're they're they're out when this deal came out they came out | |
Sam Parr | alright keep talking and I'll find it | |
Shaan Puri | Okay, so basically you're right. Exponential growth is astounding.
You look at these companies. I've talked about this before. When we were getting acquired, we had a chance to get Discord stock. I was like, "Oh, Discord is valued at $2 billion. Wow, it's already at $2 billion."
It's like, "Well, what would we need to believe for us to take this deal?" It's like, "Well, we need to think that it's going to get over $6 billion." I don't know, its last valuation was $15 billion.
So even me, who's in the industry, in the space, I am a tech investor. It's just hard to fathom these companies becoming worth not just $1 billion, but tens of billions. Not just tens of billions, but even up to $100 billion in value. That is just very, very hard to fathom. | |
Sam Parr | Here's Figma. Figma's growth is astounding, and the reason why is because I heard what their valuation was, which was **$10,000,000,000**. I thought that was ridiculous. I heard these numbers, and then I thought, "That's actually not that crazy."
In 2017, they started charging customers. In 2018, they had **$4,100,000** in revenue. In 2019, it was **$23,000,000**. In 2020, they reached **$77,000,000**. In 2021, they hit **$100,000,000**. And check this out: their 2022 goal is **$450,000,000**, and they're on pace to hit it.
So, in the course of six years, they went from **$0** to **$450,000,000**.
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Shaan Puri | in very recurring revenue | |
Sam Parr | Sticky, sticky revenue. Their product does everything. But let's look at... | |
Shaan Puri | some of those jumps what what were the first jumps so it goes 0 then it goes from 0 to what | |
Sam Parr | 2 or | |
Shaan Puri | or 4 | |
Sam Parr | What did you say?
So here's the order: 42575, and then this sucked a 100, and then 450. A 100 to 450 is astronomical. That is huge.
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Shaan Puri | Yeah, I think there's a thing in SaaS that SaaS investors look for. It's called "triple, triple, double, double." I don't know if you've seen this, but basically...
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Sam Parr | they're like triple triple double triple tripled | |
Shaan Puri |
Well, they did more than a triple. They went from 4 to 20-something, that's 5x, so they did more than a triple. Then they went from 20 to 75 or 25 to 75 or whatever. Then they did a triple from 55. Triple, and then they did a double, and then they did another double. Then they did another 4.5x. So it's just kind of insane.
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Sam Parr | it's crazy | |
Shaan Puri | So, and obviously helped by remote work, because Figma is basically a tool for designers and product people to share designs.
A designer will send me a mock-up, I add my comments, I can move stuff around, and I can see their mouse moving. It's almost like we're working on the same thing together, right next to each other, even though we're miles apart.
By the way, amazing story—this is also another Thiel Fellowship win. It's crazy; this guy started this thing when he was 21 years old, like 19 or 20, and he’s been building this. There was like a 5-year buildup where they didn’t make any revenue. He was just building the product slowly but surely, then got to a private beta, then a public beta, and finally started charging people.
I think the company was founded in 2011, and then it started making money in 2017. Even if I had this idea, there is no way 5 years later I would still be doing this idea. In the middle of that, by the way, there was the ICO boom in crypto in 2017. You know, guess where my head would have turned? I’d have been like, "Oh, whoa! I should be doing that over there!"
In between then, there were just waves and waves of other interesting, exciting, sexy things, and he just didn’t take his eye off the ball. They just kept going, kept building, and they won.
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Sam Parr | So, the two more things that are hard to understand:
The first one I mentioned was that it's hard to understand **exponential growth**.
Number two, it always seems late. If I bet a lot of reactions, if we go and read the comment section, it often says, "This seems overvalued," or "This is already too big. There's no meat left on this bone." It always seems too late, and that goes back to the fact that exponential growth is hard to understand.
For example, if I told you that your home, the one you're in right now, might be worth **$10,000,000** in 20 years, you'd probably say, "There's no way!" But then I would explain that it's just like, you know, **4% growth** for the next 20 years, and it's already grown **4%** for the trailing 50 years. You might say, "Okay, I understand logically," but when you hear that number, it's quite hard to grasp.
The last thing is that every startup we named is not like they're unknown. It's all pretty obvious stuff. If you Googled "best startups to work at," I bet you that **6 of the 12** we named would be on some type of list. Granted, we're not playing with our lives here; we're just naming **12 things**, and we got **10 out of 12** right. If you're in that **11th or 12th** spot, that might stink, but we're not that smart. We're just **7**.
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Sam Parr | Five out of ten in terms of industry knowledge. It wasn't that hard.
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Shaan Puri | Yeah, totally. I think there are a couple of other takeaways with this too. You said it right; it's really easy to think you're too late on these tech winners.
What I would say is, when there's actually a tech winner—when they have the fundamentals, a great product, and they're winning in the market with a real growth rate—these things can get a lot bigger than you think.
I remember reading when Facebook got valued at $15 billion by Microsoft. At that time, they had like no revenue, or maybe a few hundred million in revenue, but it just seemed like, how big is this social network thing going to be? If someone at that time had said, "Yeah, this is going to end up being a $1 trillion company," I would have thought, "Is there such a thing as a $1 trillion company? That's insane!"
I've told this story before: one of the biggest mistakes I made, one of the worst investments I made, was an investment in Tesla. Tesla was at $2 billion, and I put all the money I had, straight out of college, into Tesla at $2 billion. I rode it up until it was at $7 billion or something like that, and I cashed out at a 3x return.
I remember at the time thinking, "Okay, General Motors and these other companies, whoever the biggest ones were at the time, I think they were at $20 billion or maybe $25 billion. I don't remember the exact numbers, but something like that." I thought, "One day, Tesla could be half as big or maybe even as big as those companies." It just seemed like that was the roof, the ceiling on how big these could be. Then Tesla went up and became... well, you know the rest.
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Shaan Puri | A $1,000,000,000,000 company. Now it's come back down to like, you know, whatever half. But my $2,000,000,000 could have become a trillion, basically, in terms.
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Sam Parr | of multiple made do you think how much did you put in 25,000 | |
Shaan Puri | yeah I had like $25 in it and | |
Sam Parr | so what's what's that something like that is that a 100 I I can't even do that is that 2 | |
Shaan Puri | I did the math at one point, and this wasn't the peak, but at one point, it was like I would have had $6,000,000 from that $25,000. It was a great angel investment.
Again, this felt late. Tesla was already out and successful. Elon Musk was... he's not what he is today, but he was a known person.
I'm talking about this was back in probably 2012 or 2013, something like that.
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Sam Parr |
Dude, we should do another one of these episodes because I think there are a lot of great companies right now where valuations are low. In 10 or 15 years, when there's another great market, things will be drastically different. You know, this will be one of those things where you'll say in 10 years, "You're gonna wish you would have done what we're suggesting."
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Shaan Puri | right | |
Sam Parr | and we should do another one of these | |
Shaan Puri |
I even had people build me like a website for this... a sick-looking website. I think we should do this, me and you. I think we should own a job board called **Sarah's List**, and we should just keep this updated and well-maintained.
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Sam Parr | Did you think that I tweeted? I tweeted out, "Yeah, I think this is a great way to make wealth."
However, researching these is a bit challenging. That tweet got seen by hundreds of thousands of people, and I received a lot of really good replies. There were some cool startups mentioned and different job boards, but nothing that was perfect or where I think it needs to be. But yeah, I agree.
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Shaan Puri | alright I think that's it that's a wrap |