How to Build a Unicorn Around the NCAA Reg Changes | My First Million #198

Shaan Puri

Really, I've heard this a bunch of times, which is a lot of times. As an entrepreneur, you just need to be in the market. You need to be in the game. Even if your current thing is not working, if you are aware of these inflection points, you're the perfect person to just shift over.

Sam Parr

Alright, we had a good episode. Well, I think we've talked about a lot of stuff. What did we talk about? We talked about Zapier for sound. We talked about...

Shaan Puri

Yeah, we talked about the opportunity now that college athletes can make money. What are the business opportunities around that that just opened up?

Sam Parr

And I think if you're interested in software, I think Sean, you actually gave one of the better ideas in the last three months that we discussed. So that's kind of interesting. We talked about a new company that's creating a search engine for company documents. It sounds boring, but it could actually be quite a big business. What else did we talk about?

Shaan Puri

The last thing is we talked about this business model idea of basically taking the R&D that the big companies do, and that they make custom software for themselves, like the Starbucks mobile app or the Domino's Pizza ordering app. Then, we can make that available to all the mom-and-pop shops. So, we did a bunch of examples of that and discussed where the opportunities might be.

Sam Parr

Alright, listen up! Let us know how you liked it. My Twitter is **@TheSampar**, then Sean's is **@SeanVP**. Alright, what's going on?

Shaan Puri

yo

Sam Parr

I'm in new york I I had a hell of a week but I'm here

Shaan Puri

tell the story

Sam Parr

So, I leave... I'm driving. I got this nice car and I love driving it. I'm living in New York for a few months, and I wanted to do that long drive because it's fun for me and my car. I'm all ready; I got my dog, everything. I get 15 hours into the drive. I get out of my hotel room, and I have two spare keys on the same ring because you can't leave one of these fancy keys in the car. Otherwise, the car won't shut off.

Shaan Puri

right

Sam Parr

So, when I go to the hotel, I put the keys on one ring. Then, when I get in the car, I separate them. I'm on the phone with my mom first thing in the morning, just saying, "What's up?" I put both of my keys on the roof for a second, get in the car, start the car, and drive off. Sixty minutes later, I stop for gas and I go, "Shoot! The car is telling me that I can't start it because the keys aren't here." What the heck, right? Where are the keys? Turns out, I left them on the roof 60 miles back. I drove off and I go back to find them. After many hours of searching, someone ran over both key fobs.

Shaan Puri

so you actually found the destroyed key

Sam Parr

I found the destroyed parts, and I had a locked bike. My nice bike was locked to the roof along with my Thule rack, which was also locked in there. I found those keys, thankfully; otherwise, I was going to have to call a welder to weld my bike off and pop this lock open. I found those keys, but my fobs—my $800, I think they're $800 or $1,000, they're expensive—were completely smashed to bits. I called Mercedes, and they towed my car. This was on a Thursday. They said, "We are not going to get a new key in until Thursday." So I was like, "Fuck."

Shaan Puri

you got you you're supposed to be in new york you're stuck in tennessee

Sam Parr

I'm stuck from

Shaan Puri

Texas to New York, you get stuck in Tennessee. Your car keys get smashed, your car is just sitting at a gas station, and you can't get a new car key for a week.

Sam Parr

And I'm with my dog too, who's like an 80-pound pit bull, and I'm like, "Dude, what do I do?" And he's like, "Well, we could just store it here." So I'm like, "Alright, well I'm not gonna stay in Tennessee for like 8 days." I tried to get a private flight, I tried to fly because you can't fly with a dog. Eventually, I... waited in line for hours to get a [flight or alternative transportation].

Shaan Puri

So, from my point of view, I get a text message in our group chat that says, "How much does a private jet cost?" I was like, "What?!"

Sam Parr

and and

Shaan Puri

I need to get to New York. I'm stuck here. I can't get on a normal flight because I have an 80-pound pit bull with me. I don't want to leave my car, but I guess I have to. And how am I going to come back and get my car? [It's a] very confusing situation.

Sam Parr

It was a very confusing situation. Now, let me tell you a few things that I learned, and this is related to this podcast. I've flown private once or twice, but I've never paid for it. It was just like a rich guy who I went along with. So, what I learned was that we have a friend in this group. We don't have to say his name; I don't know if we could or could not. But anyway, he went to Europe and he sent us a message saying, "I got a hotel that was $3,000 a night for $350." I was like, "What? How?" He sent us a screenshot of the email. He emailed the general manager of the hotel and said, "Hey, I work at this company. I'm going to be there." I mean, he mentioned he worked at this company because it's a huge company, just for clout, but it doesn't really mean anything. He continued, "I'm going to be there with my fiancée. My budget's $400 a night. Do you have anything available? I would love to stay in this room or this room."

Shaan Puri

Right, and he searches for all the 5-star hotels in that area. He just sends the same thing to all the general managers.

Sam Parr

Yes, and then every once in a while, they give him a hotel. So he's staying in a $3,000-a-night hotel for $350. That got me thinking. I googled "Nashville private airport" and I was like, "Look, I want a private flight either right now or first thing in the morning. My budget is $7,000. Do you have any airlines or do you have any pilots that want some quick work?" They were like, "Well, it usually costs $15,000." I said, "Well, look, you tell me what you have. If you have someone who has work, tell me what's the like..." Because you think private airlines have no room to haggle, but they're just like small businesses. So they got me a quote, and it ended up falling through. But I realized that you could... they're like, you know, they actually got another bid or whatever, so it didn't work out. But I realized you could totally haggle with these people. It was so fascinating.

Shaan Puri

Yeah, the hotel thing is great because I feel like anybody can do that. If you have a little social media following or whatever, I know Instagram influencers do this. I've never even thought about doing it. I probably still won't do it because it sounds like it's kind of time-consuming. But I thought that was pretty great, that little tech that he uses. I thought, you know, these situations, when you get in a pickle, you have to get creative. You probably learned a bunch of stuff that you didn't know 24 hours before that and never really would have paid attention to had you not done that. Like key fobs, you know? What to do when you're stranded? Private jets—can you commission a private jet? Can you hop onto somebody else's thing? What are the other options? You know, somebody from this podcast or the listener was like, "I'll drive your key fob to you in New York if you hang out with me for 30 minutes or something like that."

Sam Parr

Yeah, I don't know what I'm gonna do. My... it's not gonna be... the situation ain't even resolved till tomorrow, so I gotta figure out what I gotta do. Coincidentally, I have to be in Nashville for work around August 1st. There's like a podcast conference that HubSpot wants me to go to.

Shaan Puri

right

Sam Parr

So I might fly down there and drop... Anyway, crazy week. But can I tell you a few things I noticed? I've driven cross-country a lot. I've done it a bunch of times. I love doing long road trips in America, and it's always fun to get out of our little Silicon Valley or New York or whatever fancy tech guy bubble. A few things that I noticed: First, dude, the average American eats so poorly.

Shaan Puri

and it's what makes you say that

Sam Parr

Well, granted, I am on the road, but I try to actually go to these small towns. Man, just seeing what... I'll just go to a gas station, or I'll go to McDonald's, or I'll go to a restaurant. I eat in the parking lot with my dog, and I'll just sit and look at what people order. The lines are packed for Rally's or Sonic. People... this whole healthy eating thing that I think is popular among affluent people, I don't think it's popular among all types of people. That is crazy to me because they're just killing themselves.

Shaan Puri

you didn't see a lot of keto and intermittent fasting on the road trip is what what I'm hearing

Sam Parr

No, man. Just processed foods. I'm not the healthiest. I mean, I splurge. I like Diet Coke and I'll eat McDonald's, but oh my gosh!

Shaan Puri

When you're driving, you're gonna see it's like pit stops. It's like: - Here you stop for gasoline - You stop here for sugar - You stop here for caffeine And then you just repeat that loop: gasoline, sugar, caffeine... gasoline, sugar, caffeine. Right?

Sam Parr

I'm just shocked at how there are very few healthy options. It's amazing. When I would go to a fast food place, I'm like, "Look dude, just give me a grilled chicken breast and vegetables. That's all I need."

Shaan Puri

By the way, we had talked about vending machines before. When you're discussing this healthy eating thing, I got pitched to this company. I don't think I'm going to invest, but it's called DailyBlends. What it is, is basically a vending machine—a healthy eating vending machine. Instead of snacks, it offers a meal in a jar. You push a button, and it gives you a jar that has a ready-made meal inside. All you have to do is put the dressing on top, mix it up, and then you're ready to go. The thing I think is smart is that they are doing big corporate partnerships. They're getting into every hospital. Should a hospital really have a vending machine that's just filled with Twix, candy bars, and Red Bulls? Or should it actually have healthy options? Whether it's big companies or large hospitals, I can kind of squint my eyes and see the potential. Obviously, it depends on the food and how that works, but they are able to charge way more than a typical vending machine because people are getting a healthy meal out of it. They have a central kitchen where they make all the jars and then stock all their vending machines in that city. I think this is kind of a cool idea. I'm not going to invest, but it reminds me a little bit of that water company, you know, the office water company that's done really, really well.

Sam Parr

I don't know if you remember the name like a like a $1,000,000,000 company I forget starts with a b

Shaan Puri

Yeah, it's something... Bevy. Bevy is the name of it. Bevy is like one of these genius things. It's like, "Hey, does your office want a fancier water fountain?" Good, use a Bevy. They just get planted in every company, and then it's just a recurring charge.

Sam Parr

And the guy who Quinn, the guy who came on to talk about vending machines, he said that the thing is that these healthy options, like the honeypot at WeWork, where you have like an $8 sandwich, but he's like basically, most of America just wants a Monster.

Shaan Puri

Yeah, but I think that's fair. I think the one smart thing they're doing is they're going to... There's like, if you just take hospitals and airports and things like that, they're kind of incentivized to have another option and a kind of better option, even just from an optics point of view. So I think you could do pretty well just by getting prime placements through that. But anyway, that's a random tangent off of what you said about healthy eating on a road trip.

Sam Parr

And then the last thing that I'll mention is I am so **bullish on America** over the next two years. Dude, every rental car place that I've gone to is sold out. It's so hard to rent a car. I had a friend—maybe it was your friend, someone—I don't know if you're part of this, said that they had to hitchhike in Hawaii because they couldn't get a rental car. They had to just hope someone would pick them up. So, rental cars are crazy. I like to stay at motels. Sometimes I'll stay at a place that ranges from $30 a night to $200 a night, just whatever I'm in the mood for. Everything's sold out. The roads are packed, and every convenience store is packed. I'm so bullish on America. I went and talked to some of my staff and some of my friends who are just average Americans. They have saved a significant amount of money over the last two years, and they're all like, "I want to buy something. I need to spend."

Shaan Puri

Yeah, what was it after... like World War [I], the Roaring Twenties? It seems like we might have the **Roaring 2020s** here where people are ready to travel. They are ready to just go and kind of max out all their experiences after being sheltered in place for, you know, a year-plus sometimes and potentially saving money.

Sam Parr

Have you... so I went out and talked to people I know who earn between $50,000 to $150,000 a year. I asked them, "How much money have you saved?" and they said, "More than I've ever saved in years." I then asked, "What are you going to do with it?" and they replied, "I'm ready to buy a Rolex," or "I want to buy..." They want to spend, right? So, my traveling lately, when we went to Miami and everything, we saw it consistently. I try to buy accessories for my trip, like a new rack for my car, but everything is out. I'm so bullish on America over the next two years. So, that's just an interesting insight from traveling. Do you want to talk about ideas?

Shaan Puri

Yeah, let's do it. I think the big one is this NCAA thing. We had touched on this briefly, but basically, the law changed that allowed college students to make money off their name and likeness. Previously, if you were an NCAA athlete and you made money, you would lose your amateur status. You couldn't play your sport anymore, and you could have your scholarship revoked if you ran afoul of those laws. That changed, and all of a sudden, overnight, a bunch of opportunities opened up. This situation was just bottled up because of regulations and rules, and then the court got taken out of the bottle. You get to see what was going to happen. I don't know if you've paid attention to this, but I think we should do a mini brainstorm on just what we see that's interesting or what you saw people doing.

Sam Parr

Yeah, so can you explain the rule? Because I think that there's some stuff around it. Like, can you not make the money yet? Is it like, you can't access the funds? Is there anything weird like that I don't know about? I think they definitely started getting like signing contracts and getting paid.

Shaan Puri

I don't know what the nuances of the fine print of the law are. I didn't look into that.

Sam Parr

so I had this suite made in college so if you Google pure sweat have you heard of pure sweat basketball

Shaan Puri

pure sweat

Sam Parr

no so this guy is named drew hanlon he's from my hometown

Shaan Puri

drew hanlon yeah he's the trainer like on instagram that you always see with every nba player

Sam Parr

Yeah, so I've known him since I was a kid. He was my suitemate in college, so I've known him since high school, and then we went to college together. I was a track and field athlete, and he was a basketball player in college. He was my suitemate, so I got to know him quite well. He started working on this thing called **Pure Sweat**. It started out just as a binder full of workouts that he would sell for about $50 to kids in the neighborhood. Eventually, he made a website and an app. I don't know how successful it is, but he was always working at night on this thing. He didn't drink or party; he was always focused on **Pure Sweat**. After college, he eventually started training... what's that guy? Like the Greek Freak or whatever?

Shaan Puri

then like

Sam Parr

brandon beal bradley beal because he's from saint louis him

Shaan Puri

zach lavine joe opens yeah

Sam Parr

So, he trains all these guys, and I've always... I wasn't close enough to ask him, but I was like, "I wonder how much that pays?" Anyway, he has this app that's like $100 a year. In college, I was a Division 1 college athlete. I wasn't even remotely a big deal, but they make you sit through these seminars on how you are allowed and not allowed to use your image or your name. He was in that office all the time because he wanted to make sure he was following the rules. He had this business, Pure Sweat, so he couldn't say... I think he was allowed to say, "This is Drew Hanlon from Belmont University" or whatever. But anyway, this guy crushes it! I bet he makes $5 to $10 million a year off his little business. And by the way, do you know that these summer camps for basketball programs? That's the moneymaker.

Shaan Puri

yeah my I have friends that run these

Sam Parr

That's the moneymaker, and these guys, my friends, they were... they're paid by the hour, I think. But I think they were getting paid like $50 to $100 an hour, like something crazy. The program makes so much money from these camps. So what I think would be... what I think is an easy opportunity is you're gonna see loads of little "Pure Sweats," which is like a really simple app that just has basketball workouts that you pay $100 or $200 a month or a year for. I have to imagine you're gonna see loads of that. That's just such an easy, low-hanging fruit.

Shaan Puri

My best friend Trevor was a kid from Wyoming. He was sort of like a 5 foot 9, on a good day, white kid. When I got to Duke, I found out that the roommate I got randomly matched with was trying to walk onto the basketball team. So, I was expecting this 6'8" black dude to show up, and instead, this 5'9" white guy from Wyoming shows up. I'm like, "No, no, my roommate is trying out for the basketball team. I don't know who you are." But he's like, "No, that's me." This guy was kind of like a Drew Hanlon type of guy—super hard worker, amazing shooter. You know, whatever you would expect. He was the best high school basketball player in Wyoming, came to Duke, and tried to walk on. Long story short, he didn't end up making the team; he was the last guy cut. He stayed on as sort of like a water boy, hoping for his "Rudy" moment, but that never came. A spot opened up, and they took some other guy instead because his dad was super rich and a booster of the school. They put him on the team instead, and he was like, "Oh, fuck this." Anyways, in the summers, what he would do is go back to Wyoming. People knew him there; they were like, "Oh, you went to Duke! You were like a legend in high school basketball here." He would run these camps, and every single day, he would have basically three camps running simultaneously. Each kid just paid $100. He was underpricing it like crazy, and he would make his whole year's worth of money in like two and a half months.

Shaan Puri

And then he spent the other 9 months out of the year just traveling around learning stuff and then come back and do it again the next summer. Because he had that brand affinity, the way that you're talking about that local brand affinity. So I wanted to go over a couple things I saw happening. The first thing is **Cameo was a winner**. So, winners and losers... Cameo was a winner. All of a sudden, every athlete just put themselves up on Cameo, and if you go to Cameo's NCAA page, you'll see...

Sam Parr

you know so they already cameo already has an ncaa page

Shaan Puri

Yeah, they already have an NCAA page. They're ready to go, and this is like, you know, one of the easy ways celebrities make money. There's like 17 pages of people available on the NCAA page now.

Sam Parr

oh my god that's so funny and they're all so cheap it's like $25

Shaan Puri

Yeah, right! Because they're like, "Oh sweet, that's three meals for me on campus here." Okay, so the second is, did you see what Barstool did?

Sam Parr

yeah so barstool sponsored an athlete for gambling right

Shaan Puri

So, Dave Portnoy... I don't know the exact story, but I was just sort of following this on social media. He goes on an "emergency press conference." He goes online and announces, "I'm announcing Barstool Athlete." What is that? I have no idea. That was basically his emergency thing. Then, some athlete messaged him and said, "I'll be the first Barstool Athlete." He was like, "Okay, great! We got this." You know, whatever. Some volleyball player girl from this college became our first Barstool Athlete. So, he tweets it out, and more people start rolling in. He's like, "I didn't even say what this is yet!" Then, he goes on for a second video and says, "Listen, a lot of you are asking how to become a Barstool Athlete. If you play Division 1 sports and you blink at me, I will sign you."

Sam Parr

I will

Shaan Puri

Send you a T-shirt? You want pizza? You want Campari? I don't know what's going to happen here. We may just become the most powerful agency in the world. I actually think that could legitimately happen because now the athletes can have lawyers and agents helping them with their brand deals. Barstool is just ready to take advantage of this. They have a brand that's super loved among college athletes, and I think they're going to do really well out of this. So I would say they're another winner. We talked about the four levels of luck; that's level four luck, where your reputation is such that luck finds you. That's what's going to happen. The best athletes are going to want to work with Barstool just because of their reputation.

Sam Parr

It's almost boring to discuss the ideas for this because it's obvious. You just look at what I mean; they're not professional athletes, almost anyone has. What I think is interesting is this idea of **inflections**. There are these cultural things that happen. Sometimes it's cultural, sometimes it's political, and sometimes it's technology-driven. Mike Maples, who we have on the podcast, actually has a blog post where he talks about inflections because I look for inflections. For example, it could be that everyone has an iPhone, so now GPS is possible. Or we were able to build this technology to make GPS possible. That's a cultural inflection. Another example is that being gay is now accepted, so having a gay dating app is a cultural shift. Similarly, weed is no longer frowned upon; that's another cultural inflection. There are also regulation and political inflections. One of them occurred about two years ago when telemedicine laws changed, although they are changing back. This provided a huge gap. This is a perfect example of a regulation/political inflection where big businesses are built in times like this. I'm not going to be the one to care about this, but this is the type of inflection that we're going to look back on. The same goes for sports gambling. Those guys have been at it for years, and it was pretty horrible businesses for a long time. Then something changed, and boom, they took off. The same with the UFC; they weren't allowed in New York, they weren't allowed here. Then something changed, and boom, they were allowed. This is one of those moments that we'll look back on in 20 years and think of all the businesses that came from that one ruling.

Shaan Puri

Yeah, there are a couple of examples of this. With GDPR, this is the kind of privacy regulation where you go to a website and it says, "We want to use cookies to enhance your experience." You're like, "Okay, accept cookies." This was a law change that happened, and then you saw companies emerge from this that became pretty significant. One of them is OneTrust. I think OneTrust is over $200 million in annual recurring revenue. It's probably the fastest-growing enterprise SaaS company in the last 10 years. Basically, it's GDPR compliance as a service. They say, "Hey, big company, the way you set things up is not compliant with the new laws. You can get penalized for not being compliant here. It's going to take your team of lawyers and engineers weeks, if not months, to just understand the laws and then make the changes to be compliant. We can do this for you." So, OneTrust is already at a $5 billion valuation in less than five years since GDPR came out. Another great example is Asana. It’s a company I wanted to invest in within that same space because that regulation change made that happen. Then there's UnitedHealth. When Obamacare kicked in, companies like Oscar and UnitedHealth saw significant changes. I don't know too much about this space, but if you look at the stock chart for UnitedHealth, it's flat for a long time. Then something happened around 2009-2010. As Obamacare kicked in, the stock price went from about $24 a share to $400 a share now. That was a better investment than Amazon, Google, Netflix, or whatever during the same period.

Shaan Puri

Of time because they were well positioned to take advantage of the new law changes. One of the law changes that I think you could take advantage of here is the obvious ideas. For example, you're an agency for NCAA athletes, like what we're talking about with Barstool or Cameo. You're a platform where they can go on and monetize their name and face. Another point is that these athletes have to report the deals they are doing to their school. So, you can't just do anything; you have to report it. I can tell you that most of these athletes are not going to do a good job of keeping track of all their deals—how much they got paid, what the date was, what the terms were, and all the collateral they're going to need to report this. The schools are going to need it to report it to the NCAA. So, somebody who builds that back office sort of reporting tool, that underlying infrastructure layer, is going to become incredibly valuable. A way to think about that is like Carta or AngelList—these underlying platforms that sit underneath the entrepreneur. That's one opportunity that I could see taking off.

Sam Parr

think that's the best idea that we you've had in a long time

Shaan Puri

alright I'll stop there

Sam Parr

and I

Shaan Puri

won't give you more

Sam Parr

I don't know what like the total addressable market is for that but like I mean it's enough

Shaan Puri

well just for I mean for what's happening right now by the way I

Sam Parr

mean universities just just spend tens of 1,000 a year for your software like that's it's there's enough

Shaan Puri

And you'll be sticky, right? You'll become the system of record for all these things. They're not going to want to switch two years in because this other system of record has a new feature. So, whoever gets plugged in as the system of record has the opportunity to own that data. You're entrenched in all these universities that are not looking to take a bunch of risks. Then, you could build on all the add-on services. You could build on other things that allow, you know, whether it's banking, contracts, or a marketplace for deals. Whatever, you could build all that on top of the data records, record book.

Sam Parr

You know what I just realized? Now, this company that you and I invested in... there's actually a lot of competitors. But we invested in this company called Stan. Yes, I don't even know the URL. It's like "stan.stan" or something.

Shaan Puri

with dot me

Sam Parr

Stan with Dot Me is basically a platform where you put a link in your Twitter bio or your LinkedIn bio. When you click that link, it’s similar to Linktree, where you see about five different pages you can click on. It might say things like "Book a call with me" or "Sell you this thing." It's primarily for commerce, allowing you to exchange money for some type of service, whether it's time or a document. I don't necessarily believe that this will be the case, but this platform might impact that business. I think there are a bunch of cool inflections here, and this whole idea of inflections is something we can learn a lot from. I was just reading about Thomas Edison. He basically said, "Look, I just invented this light bulb. It's going to work; it's amazing." But at the time, there was no power. He thought, "Well, we can power it by putting up these wires that go from house to house." The government was like, "No, we're not doing this." So one day, he hosts a dinner and invites all these people. They arrive, and there’s no lamp, so it’s pitch black. They’re sitting there, thinking, "What the hell are we doing?" Then he flips the switch, and boom! His lights come on automatically. There are waiters there ready to greet them, and he says, "This is how people are going to live from now on." They respond, "Oh great, okay fine. We will allow you to put electricity throughout Manhattan in a smaller area to test it out." And that is how...

Shaan Puri

by the way I got chills while you're telling that story I love that

Sam Parr

And that is how GE came to be eventually. It was a bunch of these companies that Thomas Edison had... you know, he was involved in a little bit of everything. And so anyway, that's...

Shaan Puri

how you tweet something that thomas edison invented the word hello

Sam Parr

Yeah, so basically, before Edison, people would say greetings or "good afternoon." In fact, "hello" wasn't even a word. The word "hello" was pronounced a little bit differently; it was like "hallow" or something silly like that. When he invented the phone, he was actually partially deaf, and the phones weren't very good. He would call an operator to set this up, and they had to think of a word to use as a greeting on the phone. He thought, "Well, the word 'hello' I can actually pronounce pretty easily." So, he started saying "hello." Originally, it was meant to express surprise, like "Oh, you surprised me! Hello!" That's how he began using it. Once people started using the phone, they adopted the term, and as the phone technology improved, it just became a standard greeting: "hello."

Shaan Puri

wow

Sam Parr

And that's how the word "hello" came to be. Anyway, this idea of inflections is actually really interesting. There are all types of moments where these things are capable. I think that this NCAA thing is interesting. The idea you mentioned is intriguing, but the concept of inflections is actually more important because we're seeing it happen right now.

Shaan Puri

And by the way, I hear this so often. Two examples come to mind: 1. I was talking to this guy, Jesse Puigy, who we should have on the podcast...

Sam Parr

I know him he lives in saint louis

Shaan Puri

that's right and he was telling me his story you know oh how'd you build your company he built this company ampush it was like this digital marketing agency that was working with dollar shave club and blue apron and all the big brands and so and they eventually sold it and so one of the things he had said he's like yeah you know we were just doing this other thing and then it was kinda wasn't working and then that's when you know like that's when whatever the facebook platform launched or facebook announced you know news feed or Google launched adwords or whatever right there's all these like moments where new thing comes into existence it's like well like this thing we're doing is not working so like let me go jump on that and and the same story is true for for our friend sully who he was like yeah I quit my job at Microsoft I wanted to go be an entrepreneur I didn't know what I was gonna do so I I moved back in to my parents' house and like that day that I moved in I was you know just browsing the internet I saw that facebook launched its new platform app platform so I was like okay cool like let me try to build an app today and he's like I didn't know if it was gonna be a thing but like he was one of the first app developers on there built a simple dumb app and like immediately started to like go to fly on facebook because facebook was that good of a like a platform and it was so new that people wanted to play with the new thing on the platform and so that was like their start and I've really heard this a bunch of times which is a lot of times as an entrepreneur you just need to be in the market you need to be in the game and even if your current thing is not working if you are aware of these like inflection points these shifts these platform shifts or or big changes either in law or technology or open platforms things like that you're you're the perfect person to just shift over because you're kind of like already jogging you're you're not at like a cold start you're not like at a job where you got to decide if I should quit or not and and you weren't so successful at your current thing that you're that you're married to it so you hop on over and I've just heard this many many times over the same same model of like yeah I was doing this thing it wasn't really working that great and then boom I saw that facebook ad platform launched so I made an ad for t shirts and I started selling like crazy and then I started you know then you know those are the glory days and it's it's all downhill from there

Sam Parr

But we are seeing these... We're seeing these actually constantly. There are about 1,000 examples that we could give that just happened in the last 5 or 10 years. I mean, you mentioned Facebook, you mentioned Google. You could say the same for Snapchat. Clubhouse likely won't pan out, but that was definitely an opportunity to have one. This NCAA thing, the medical thing where now doctors could practice remotely because of COVID... I mean, working remotely, this happens constantly. What I like to do is read Politico. Politico is a cool site that tells you about regulation updates. That's a great way to learn about these things. There are loads of different inflections, and they happen consistently. You could be an insider to see some of them. So, like, if you're not working in tech, you're not going to see the power of Facebook early on. But a lot of the information is oftentimes blatantly obvious. It's not obvious that this is going to be the one, but it's blatantly obvious, like, "Alright, this could be an inflection."

Shaan Puri

Yeah, and it goes back to that same 2x2 matrix. This athlete thing is basically a new problem. All of a sudden, a whole bunch of people have a new problem: these athletes have to keep track of their records, they want to make money, they can now do this. And there's going to be old... you know, you can take some old solution and repurpose it for this new opportunity, this new problem that exists in the world. So alright, let's move on. Let's do another one. Do you have one, or do you want me to?

Sam Parr

Do one. So, I just found this company and I actually heard of it for a while. I'll tell you two interesting companies that I discovered. The first one, it's called Nira.com. Before this, it was called FYI, I think. Yes, so the reason why I... I found this... Do you know who Hiten Shah is?

Shaan Puri

I know heat and shaw yeah I invested in nirrah by the way

Sam Parr

Oh, you did? Yeah? Oh, sick! Alright, well we can talk about it. So, Heat and Shaw. There's this guy named Neil Patel, who's like the face of it. If you are probably a little bit younger than me, then you probably don't know who he is. But if you're about my age or older, you probably know who Neil Patel is. He had this amazing blog called Quick Sprout, and this was like, if you wanted to learn anything about search or Google, his blog somehow covered pretty much everything. He built a huge blog for SEO, and it became a huge business. He launched loads of different software products on top of it. Well, Heaton Shaw was his right-hand man and probably the brains behind this. He just launched this new business a while ago, and I looked through my old messages. I had DM'd them two years ago when we first launched it, but I didn't have any money at the time. I was like, "Dude, this is amazing!" So, he changed the name to Neera, and it's really simple. What it is, is basically if you are a company like HubSpot, so you have 30 or 3,000 employees, or The Hustle when we had just 10 employees. Even when you have 10 employees, my current Gmail has 100 gigs full. So, let's say you do times 10, that's 1,000 gigs. That's like a terabyte, I believe, of data. That's like hundreds of thousands of documents and images and whatever. It's really hard to find all of those images, but also it's hard to know who has access to all these things. For example, you have this document called "Salaries," and you must have accidentally said, "Share to everyone who has access to this folder." You don't see that. Or if someone quits, they still have access to this document called "Passwords." Like, stupid stuff. Yep, well, Heaton built this software that I didn't even realize was a problem. I mean, I have had this problem, but I'm like, "Oh, this is actually a great thing that you could sell."

Shaan Puri

It was a blind spot. You're just like, "Oh, this is just the way the world is." You know, it's just like a problem you live with until somebody says, "By the way, you know you can stop that, right?" And you're like, "Oh, shit."

Sam Parr

And so he's been working on it, but here's... So anyway, it's... The product is interesting, but that's not even what I care about. It's basically just a search engine for an entire company's documents.

Shaan Puri

Well, okay, so that's what it originally was. That's what FYI was, which was like a quick way you just type in. You don't need to know that the doc is in... like normally you want to find a doc, you think "Oh, that's in Google Drive" or "That's in Dropbox" or maybe it's in Asana. So I need to go find this thing. So what he made was just like one search bar to go find the document across all your cloud apps. And I think, you know, after a bunch of trial and error and customer development, he found out that that's not the problem worth solving. The problem worth solving is that second part you talked about, which is...

Sam Parr

the security

Shaan Puri

If you go to niro.com, it just says "Protect your company documents from unauthorized access," which is exactly what it says. And that's the problem you were talking about, right? I just brought somebody on board and they were showing me, you know, like a spreadsheet from a previous company that they worked at. I was like, "Oh, you still have access to this?" and he's like, "Yeah, I don't know." Like, I'm not obviously doing anything bad with it, but...

Sam Parr

yeah it's so fucked up

Shaan Puri

You shouldn't have that. You know, that's like their KPIs. I'm guilty of this too. Like you said, you share one thing with a group or a list, and now they have a bunch of stuff. Or somebody leaves, and they shouldn't have it. Or you're sharing it with some vendor, and the vendor still has access. It is impossible to go through all your documents that are in the cloud and make sure that the right people have access to the right things. So, Neera is solving that problem by creating one interface. I think that's kind of a pretty genius problem that they identified that's worth solving. I think this is an every company problem, as far as I'm concerned, and it's only growing.

Sam Parr

but I wanna explain why first of all how'd you hear about this because you're friends at heaton he hollered at you

Shaan Puri

yeah loosely

Sam Parr

he he but he's

Shaan Puri

like we're cool with each other and then I saw this I was like oh that's dope

Sam Parr

how did you see how do you know all this see I'm friends with him and he like I we talked to him through

Shaan Puri

chat with him and so I saw he was talking about it there

Sam Parr

Oh my God, that's so funny! You're in on everything. But there's a few things that are interesting: First of all, I'm pretty positive this has... I mean, he could screw it up, and there's execution risk here, but I think it's gonna be pretty big. As long as it has C+ execution. What is interesting to me is, and this is out of my world, you know... You and I do stuff where we come up with an idea and we can make money off of it in 5 days, but it can also go away pretty easily.

Shaan Puri

yeah

Sam Parr

He's been working on this for 2 years before getting any customers, with like 10 employees. Because in order to sell these enterprise contracts, especially to the IT department where everyone's... uptight (as they should be), you have to... everything's gotta be buttoned up. It's really cool that I get intel or insight into that because I normally don't ever see that. You have to have so much patience to build these SaaS tools, and so I don't think I'm cut out for it. But I thought it was really interesting, specifically the...

Shaan Puri

The enterprise ones, right? There are two types of SaaS. There's the "bottoms up" approach, which is kind of like consumer-driven. For example, a developer hears about your product, or a product manager hears about it, and they just sign up themselves. You're hoping it spreads virally throughout the company because the product is so good. This is known as product-driven growth. Then there's enterprise sales. Enterprise sales is basically saying, "I need to be able to knock on the doors of the right people at the top of a company." I need to be able to sell a product for over $100,000 a year eventually. That's my game. The sales cycle might be 6 to 18 months, and I'm going to do what I can to accelerate that. But in reality, that's just the way these companies move. I'm with you that this is not the DNA I have. That's not where I would be; that's not where I would be strong. But other people who do it, obviously, enterprise sales is extremely valuable when you can do it.

Sam Parr

Yeah, so I just wanted to bring this up because it was interesting to talk to him and be like, "Yeah, we've worked for 2 years doing this. Our roadmap is this and that." It's just not really what we talk about a lot, like this epic planning. It's more like, "Alright, in 3 years hopefully we'll be here," and "Next, in 2 quarters we'll be at this." I actually think that’s good. I wish I were like that a little bit; I'm not. But I thought it was crazy fascinating to see how you have to sweat the details so much before you even get a customer. You just have to spend so much money, you know? 10, 20 engineers to do this. So I just wanted to bring that up. Do you want to do another one?

Shaan Puri

Yeah, let's do one. I think I've said this once before on the pod, but I want to do... I'll do it quickly. You tell me if we've already talked about it, but it's this idea of "Zapier for sounds." Have I talked... do you know which idea I have here?

Sam Parr

You didn't bring it up last time, but I've heard this phrase before from you. I don't think you brought it up, though.

Shaan Puri

You're the one who really highlighted Zapier to me, right? I was using it, and for all I knew, Zapier might have just been like two dudes who built this as a side project. They could have been on Indie Hackers, bootstrapping, and at, you know, $8,000 a month in MRR. No, Zapier is like a $1,000,000,000 company.

Sam Parr

multi $1,000,000,000

Shaan Puri

multi $1,000,000,000 company that was largely bootstrapped I think I think they they got

Sam Parr

the result $1,000,000 in funding and use that $1,000,000 in funding to get to a $1,000,000,000 status

Shaan Puri

Right, so, pretty impressive. When you go to the product, it's a very simple thing. Zapier just lets you say, "Hey, I was..." It's like a pipe, and it connects two different services. You might say, "Hey, whenever somebody signs up on my website for my mailing list, put them into this spreadsheet," or "Send me an email." So, you're just connecting Gmail and your website, or you're connecting Shopify and Slack. You create these little formulas: "If this happens, then do this." That's what Zapier is. Zapier has become very, very successful, obviously, because people want that. They want to say, "Okay, they want to..." Basically, nobody wants to build anything. There are a million tools for everything, but they don't speak to each other. So, Zapier is like a connector between tools. Anyways, Zapier for... What is it? My friend Samir had this idea—Samir Bala—and he was going to do it. Then he found a better opportunity at a fast-growing startup and joined as an executive there instead. I was like, "Oh dude, I love this idea," and I agreed to put like a one-and-a-half-year embargo on talking about this idea because I thought he might do it.

Shaan Puri

I'm pretty confident he's not gonna do it, but the Visony outline was pretty damn good. He goes: > Every team, every company has something in their... some event that happens in their company that they celebrate for the hustle. It might be getting an email subscriber, maybe it's getting a new advertiser to come on board, or selling a trend subscription. And... wouldn't it be great if there was just a sound, right? The old kind of... like in most offices there's like a gong. I bet you guys had a gong for your sales, no?

Sam Parr

yeah you have a gong

Shaan Puri

You have a gong. You literally go, you make a sale, you stand up, you walk to the gong, you grab the thing, and you hit it. Everybody knows, "Boom! The good thing has happened." In our office, we used to manually wire this up. We built a charity product, and every time somebody donated, it would go "cha-ching" on the speakers in the office. You would do that until it gets too annoying, and then you kind of turn it off if it gets too frequent. I really like this idea of basically taking any service you have—maybe it's Stripe, maybe it's your email list, maybe it's your bank account, whatever—and anytime something good happens, you just create these formulas. You say, "If this good thing happens, play this sound." Play it on my phone as essentially like a ringtone, or play it on my Sonos speakers or whatever in my office. The cool thing that you could do with this is, I think that's a pretty simple problem, and I think people will like that they'll be able to hook it up. But it actually gets pretty sophisticated because what you can't do is say, "Hey, you know what? At the beginning, notify me about everything." As it gets more mature, what you really want is to say, "Hey, when we hit 100 subscribers today, play that sound. I want to know when we hit 100 for the day," right? Because every one notification now is too annoying; it's too frequent. So let me set this better rule. There's nothing that lets you set those rules. I think there's a very simple company to build here—it's Zapier for sounds. That could be a SaaS company that, you know, I think it could do a few million dollars a year. But maybe it's more like Zapier; maybe this is a bigger problem than I would have otherwise expected and could get into the tens of millions or even $100 million of revenue—just celebrations as a service. What do you think?

Sam Parr

Alright, what my reply is going to sound like a tangent, but it's not. So again, I'm on this Edison kick. I'm reading all about him, and in the biography, when he created the phonograph—basically a record player—people were like, "Why are you wasting your time on this stupid toy? This is not interesting. This is not going to help anyone. This is so dumb. This looks janky." And obviously, it wasn't. It changed the world. It was the first time that anyone had ever heard someone's voice before, besides just talking. A lot of really cool ideas that great people have, or ideas that turn out to be amazing—whether it's Airbnb or Uber—sound like these stupid, dumb things. You're actually particularly good at finding things that are toys or silly on the surface and making the case for why this could actually be huge and big. You kind of default to optimism. What is your default to optimism on how this could be big? Because my default is, "This is such a silly..." I recognize that I default to that, but although I'm trying not to, my default is, "This is just a... what? That's such a small, silly thing." Tell me everything.

Shaan Puri

Yeah, I think it probably is a small, silly thing, but I like ideas that for sure can win at a small scale. There's a "hey, who knows" path that you can go down. I think most things that end up quite big typically start with what looks like a kind of humble level of ambition. Right? Facebook started as a college network for Harvard, and then, oh, maybe it's a social network for all colleges. Now, you know, they literally just started building this internet pipe in Africa to bring internet to more people so that more people can use Facebook. Their ambition was progressively growing. There are interviews of Zuck early on when they asked, "Oh, are you going to expand to high schools?" He said, "No, I don't know. I mean, does it have to? It could just be a cool college thing." That was Zuck then, and now Zuck is like, "Let me take over the universe." So, I think I like ideas like this that start small. The thing that gives me hope that this might be bigger than you think is that every single company I know wants to celebrate their wins. Morale goes up when you celebrate your wins. If you can come up with simpler ways to celebrate progress, I think it'll make happier companies. I think that managers will want that option or want to be able to configure that option so that everybody feels a sense of progress. Everybody feels a sense of a boost. As you used to say, "Every email is like we're a pirate ship, and every email subscriber is a little bit of wind in our sails." So, how do you make it actually feel like that versus just sitting in the office every day and only focusing on all the problems and all the things that are broken?

Sam Parr

I actually think that there's a great lesson here. I didn't use to think about it this way when I was a little bit younger, and now I'm changing. I remember when I first started creating stuff, and I see a lot of people who are early in their careers of creating. They think the market is too saturated, like no one buys courses or there are already too many click ads, and no one clicks on ads. But what you actually just did was interesting. You looked at the macro level; human beings do want this. The way that you just described it is that you go, "Everyone I know, all companies want to celebrate a win." We all know celebrating a win is great. We also know that a lot of them celebrate a win with a sound. Therefore, it is plausible that this could be interesting. I think that’s far more productive and helpful than starting the other way around. For example, I would justify a course by saying, "We all know that people want to learn how to do this, and we also know that a lot of people buy stuff." So, it's pretty justifiable that if I execute well, people will buy this. That's an easy way to back yourself into the idea that, of course, this can succeed. It can succeed a lot; I don't know. But I think that’s actually a really interesting way that you tend to look at things, and that’s cool.

Shaan Puri

That's cool. Alright, let's do one more idea right now. Do you have one, or do you want me to do one?

Sam Parr

I could tell you one, and I don't want to make this all about stuff that I'm investing in, but... So, I will disclose: I am an investor in this, but I actually am not entirely sold on the idea. I'll say that. Click that website: stake.rent.

Shaan Puri

Okay, I'm on it. So let me just tell you what I see, first reaction: It says "Cashback for rentals is here. Pay your rent and get cashback at a home or office that offers Stake." So... what does that mean?

Sam Parr

Okay, so there's this guy. I don't even know his name; I barely talked to him. But he created the rewards program for Amex and a couple of other airlines. These reward programs give you stuff in order to make you happier, so you want to stay with Amex. For example, you get discounts on things when you sign up for Amex, like movie tickets or your insurance. So, he was thinking—this guy knows nothing about real estate, I don't think—he was like, "We should actually do this for rent." When you think about it, a lot of renters or landlords actually do this. They say, "I'm going to give you a month's free rent or two months free." Have you seen signs for that?

Shaan Puri

yeah especially to start your lease yeah

Sam Parr

Yeah, so it's very common. They're already doing that, and he was like, "You know, if you give someone 1 month free, that's 8.3% of annual rent that you're giving someone a year." Right? If instead, you made it so you get 3 or 4 or 5% cash back every month that you pay your rent on time, that's actually kind of an interesting way to build loyalty amongst the renter. And it's like a smaller... you know, it's like a gold star. Sometimes Sean might be happier if I give him a gold star versus like giving him $100.

Shaan Puri

right

Sam Parr

you know what I mean

Shaan Puri

Okay, that's interesting. So the math... I mean, 3% every month would add up to more than 8% for the year. So how does the math work? Is it more like 1% cashback basically, or what?

Sam Parr

Yeah, it's a smaller fee. I don't know the exact fee, but it's usually less than 6% a year. Gotcha. And so it's something like $20 a month, but they get the money if they pay the rent on time and it's easy.

Shaan Puri

They're proving to the landlord, "Hey, look, if I help your renter... if your renter feels like I'm getting a bonus for paying my rent on time every month, I will lower your defaults and your late payments on rent." By spending a little bit [on incentives], they can show that if they can influence one behavior, then they can go to every landlord and say the same thing. That's the idea.

Sam Parr

Exactly! I thought that was kind of interesting. The reason why I found it interesting is that there are actually a few things I don't care about, like the stake, the rent, whatever—who cares? There are a few things that are interesting here. One, what I like is a guy with no experience in real estate but experience with human behavior, being around loyalty, and looking at different places to apply that. That intrigues me. I lost my train of thought, but that's really interesting to me. Oh, and the second thing is when I heard this idea, I thought, "Well, this doesn't seem like a groundbreaking idea. This seems shockingly obvious and easy to pull off. Why isn't anyone doing this?" Part of me was like, "Well, if no one's doing it, there's a reason why no one has done it." But the other side of things is, maybe there just isn't the right outsider. So, I thought this was an interesting idea. Do you think that this can work?

Shaan Puri

Yeah, I think this could work. I think it's hard because... it depends on your worldview. Like the first time I heard about... what do you call it? Layaway. You know about layaway? And this is...

Sam Parr

where we're gonna solve it doesn't really exist much anymore

Shaan Puri

It sounds like privilege exists. I think it exists in a big way still. So, I think at like, you know, I...

Sam Parr

I think it was more popular years ago. My dad used to tell me all the time that when he was a kid, he would do layaway.

Shaan Puri

Right, so basically layaway... I didn't know about this, but let's say you go to a Walmart and you want to buy something. You don't have the money to pay for the whole thing, so you basically say, "I want to put this on layaway." What I thought was going to happen is it's more like those "buy now, pay later" type of things where it's like...

Sam Parr

you could

Shaan Puri

Keep it. Yeah, like it's like a firm or something like that where you buy the thing, and instead of paying the whole $100 upfront, you make 4 payments of $25. You pay it over time, but you get your thing from day one. With layaway, from what I understand, it's the exact opposite. You just put the thing on hold there, and then you come back every month and start making your payments until you own the thing. So it's kind of like doing a chore in a way, right? It's like telling your parent, "Hey, I will work hard for 4 straight months in order to get this thing." This is apparently a very big... I should've looked this up. I didn't know we were going to talk about it, but layaway is actually a pretty huge part of the economy, especially in lower-end retail like Walmarts and stuff. So I thought that was kind of interesting. It got me thinking about all these little incentive structures around paying for things. So what you're talking about is an incentive structure for rent. There are other incentives around rent. I don't know if you've seen... have you seen Rhino? It's like a rent service. Basically, you pay your rent and you build your credit by paying your rent on credit.

Sam Parr

I love those! I wanted to do one of... it's say, Rhino.com. I wanted to use one of them because for years my credit was only okay because I didn't have credit. But I'm like, "It's bullshit that your rent doesn't count as credit."

Shaan Puri

Yeah, so I don't even know if that's what Rhino does, but some people do that. What Rhino is doing is they looked at when most people rent a place; you put the first or the first and second month's rent down as a deposit. They're like, "Dude, that means there's like X 100 of 1,000,000 or 1,000,000,000 dollars that are just deposits locked away." So basically, what they created, I think, was like an insurance product that said, "Hey, you don't have to pay your deposit." Instead of putting down $1,000 as your deposit, you pay $5 a month as an insurance policy. We will cover the landlord if the deposit ever kicks in, and you get to keep your money instead of having that dead money just locked away for a while. I thought that was a... I think that's what Rhino does now. But there are all these interesting things around here. The real estate incentives... Another one I want to tell you about is Smile.io. Have you ever seen this? Probably not. It's more of an e-commerce thing, but I'm right now in the process of designing a loyalty program. So when you said this thing about the guy who did it for Amex, that's interesting because I was just researching Amex's loyalty and the psychology of these programs.

Sam Parr

Well, let me read it: > "Smile.io: Turn your hard-earned sales into repeat customers. Maximize your customer acquisition efforts and turn transactional sales into passionate brand advocates." I don't really know what that means, so...

Shaan Puri

I'll explain. So, do this instead: go to this website and just look at the bottom left where it says "Give 10, get 10. Give 10%, get $10."

Sam Parr

well I see 3 for 40

Shaan Puri

at the bottom left see see there's a little pop up that says give 10 get 10 so in this is 2 things so this is powered by smile io so basically what smile io is they're going to ecommerce stores and they say hey you should have a loyalty program you should have a referral program just like starbucks and amex and these companies that spend 1,000,000 of dollars and 1,000 of hours fine tuning and designing this thing we'll just make it like a shopify app for you and so what does the shopify app do so basically you go on and it's like you you want a referral program cool here's the thing that will be on your site so any customer who comes in they know that if I share this with a friend I get a discount and they get a discount so it created a two way reward system the second thing is if you scroll down there's like a little like points program in this case it's called bubbles but but the points program basically says here's how you earn points you follow us on instagram you like our stuff you buy you for every dollar you spend in the store you get 5 points tell us your birthday well if you if you create a birthday we'll give you 500 points write a review you get 200 points so they incentivize all these behaviors that you know leads to a stickier customer and in doing so they get points that they can redeem for free shit in the store like store credit basically and so all of that like reward system magic they just make available and easy for any ecommerce store right so then it sounds a bit like an infomercial but really the I don't I have no skin in the game here I just think it's a sick product but I love the idea of basically taking like what the big brands do and what the big brands have spent 1,000,000 of dollars developing for themselves and then just turning that into an app that any little mom and pop can just plug into their store and have that same user experience and so I've I've seen this as a trend as a business like kinda like model blueprint I I told you about that company I invested in joe coffee they did the same thing they took the starbucks mobile app which was like super slick made it easy to order on your phone you earn stars for everything that you buy and they basically give any mom and pop coffee shop a white labeled version of that same app called joe coffee and so now you can have order ahead you can have loyalty points you can have push notification marketing you have all the things that starbucks put like probably tens of 1,000,000 of dollars into building they just made for and they said good we're gonna arm the rebels we're gonna give this to all of the indie indie coffee shops instead of just what just starbucks having it because they can afford the r and d

Sam Parr

This is sick! I... yeah, this is sick. I'm looking at it now. I... does this work? Have you implemented this? Like when I see these rewards programs or things like that... when I go to a lot of e-commerce sites, there's like a wheel that you spin if you enter in your email. You get something... there's all these like tricks.

Shaan Puri

We went from a normal and pretty looking thing that says, "Hey, you know, give us your email for a discount code," to the wheel. It tripled the conversion rate. Triple.

Sam Parr

so have you implemented this club tub or that's the address there

Shaan Puri

I just started working on this last night to implement it, but I'm figuring out what the perks are. You have to find the balance, right? If you give too much value away, it eats all your margins. If you make it too unappealing, then nobody's motivated to do anything, and you've wasted your time. You’ve got to find the sweet spot where it's compelling enough for them and doesn't eat away at your margins. That's the art of doing this. I love that I can do this without knowing how to code. I think that's a great business model and idea. If I wanted to think of other ideas like this, I would look at what the top retailers are doing. I would go to Starbucks, Lululemon, Macy's, Nordstrom, and I would walk around. I would use their online shop and walk around their store. I would ask myself, "What have they built that's custom and awesome for them?" Then, I would think about how I can create a white-labeled version of that and offer it to every other retailer that's competing with them.

Sam Parr

There's this great thing I want to bring up. Basically, I don't know where I heard about it, but at Facebook, Chamath or someone early on discovered that there's like the magic number of 7. Basically, if you create a Facebook account, we need you to add 7 friends right away. And if you add 7 friends, you're likely to become a Facebook user forever, or for a long... you know what I mean.

Shaan Puri

I'm talking about yes basically they they said the moment meaning moment when

Sam Parr

we talk about in product building is just like a a user

Shaan Puri

When a user comes to your site, they don't know what the heck is going on. They're kind of confused and trying to sign up. Finally, there's a moment where they get actual value from the product. They're like, "Oh, you know, like if I go to Mint.com, the moment is seeing all my financials laid out in front of me in my budget, in the pie chart. Oh wow!" Automatically, that's the moment for Mint. You have to do a whole bunch of things, like connect a bunch of bank accounts and credit cards to get to that point. But when you're there, you're sticky. For Facebook, what they found was that seeing 7 friends in 10 days was the moment. So, once you saw 7 different friends on your feed, and if you could do that within 10 days, you were like super, super sticky.

Sam Parr

So, at The Hustle, we found... I don't remember the numbers off the top of my head, but we discovered that if you open 5 out of 7 days right off in the first 7, you're going to be with us, and we're going to call you a "gold person." We have this new thing called **snippets**, where we're trying to automate a lot of the email content. You sign up for The Hustle and tell us what type of news you care about. We automatically provide you with a customized email. What we're seeing is that the people who fill that information in—it's a relatively long flow—are about 3 or 4 times more engaged than other people.

Shaan Puri

right

Sam Parr

And a debate that I have, and I'm bringing this back to what we're talking about, is that I actually think the question is like: Were those people more likely to become power users anyway and they are filling that out? Or are they becoming power users *because* they fill that out? I would argue it was the second one. So like, if someone's going to give... what's this tub? Whatever this would become, it's whatever we're talking about.

Shaan Puri

yeah

Sam Parr

Are they going to become power users? Are they power users already, and so they're more likely to give you their email and like you on Instagram? I would actually say no, because they are going through this small indoctrination process. They are now becoming power users. It's like... what comes first? Are you confident, therefore you're going to flex your muscles? Or do you flex your muscles and then feel like you are confident?

Shaan Puri

right right

Sam Parr

And so, I actually think that making users do this stuff is turning them into power users.

Shaan Puri

Yeah, I... you know what I mean? That's true too. I think there's an element of both: 1. I think that the people who are already power users are gonna be like, "Oh my God, my favorite thing has more value! I can go get... let me go do it!" 2. And then there's a whole bunch of other people that are potential power users if the circumstances were right: - If they followed you, so then they would see your updates - If they gave you their email so that you could show them the new stuff, blah blah blah Then you're gonna get more... you're gonna have a higher likelihood of turning that casual person into a hardcore person. So I think both do happen.

Sam Parr

do you wanna save this you wanna wrap up now and save some of the stuff for next week

Shaan Puri

Yeah, actually, I just want to say two more examples of the same trend. So, the same trend: if you go and look at the Hustle's emails, you guys have at the bottom a survey thing. It's like, "Were you happy, medium, or sad from this email?" You have an ambassador program, and a lot of those were things you either got off the shelf and modified, or you just built homegrown. So, if you're a newsletter, if you want to build something for the newsletter industry, go look at what the Hustle, Axios, or what these guys are all using. Be like, "Cool, how do I give every newsletter the ability to just have this feature without having to build it themselves?" Because clearly, it's working, and they're competing with groups like the Hustle that are years ahead, have employees, and have money to be able to spend on this type of stuff.

Sam Parr

Yeah, and we did have to build a lot of that, by the way. It was horrible, and it breaks all the time. And like, I would weigh...

Shaan Puri

it like

Sam Parr

A lot of people... there's this whole, large contingency of people who say, "Oh, let's build our own stuff." However, many who have been there and done that will say the exact opposite, which is: "Never build anything if you don't have to. Always use off-the-shelf." I fall into that category. Yeah, and I wish a lot of this stuff had existed earlier. I'd rather pay a software fee than an engineer.

Shaan Puri

And you talked about this once. You were discussing paywall software. You said, "Yeah, I'm in the media business, and the best sites have really good, smart paywalls that convert." Then you mentioned that the rest of us are using this kind of crappier version of that. So, why don't we all just pretend and say the New York Times has the best paywall flow that's causing the highest conversion rates? Somebody should take that and just say, "Do you want the New York Times paywall on your site? Great!"

Sam Parr

here's new

Shaan Puri

The New York Times paywall as a service is an example. Another example in this trend is Slice. So basically, Domino's had the best pizza ordering experience. You would order the pizza on your phone, and it would show you a progress bar. It's like, "Oh, you know, John has put it in the oven. You're 20 minutes away. Oh, it's out of the oven. We're just putting the toppings on top. Oh, it's in the car. It's almost near you. Hey, it's at your door!" They spent a lot of money doing that because they're Domino's; they can afford it. What Slice did was go to every indie pizza shop and basically give them an app that replicated the Domino's mobile ordering experience. They said, "Hey, now you can compete against that." So let's just compete on the basis of whose pizza is the best rather than, "Well, they made it so easy and fun to order, and mine still is like, 'Call me and I'll write it down on a piece of paper.'" They became a $1,000,000,000 company doing that in that space. So it's the same model. When you see three or four versions of these, that's the pattern recognition to say, "Okay, that's a blueprint I can follow to get a new business idea."

Sam Parr

I agree do you mind if you wanna wrap up there

Shaan Puri

yeah let's wrap up this one and then

Sam Parr

yeah alright we that's the episode holler