It’s The Most Taboo Business Model We’ve Ever Seen
Taboo Business Models, Momfluencers, and the Art of Quitting - March 25, 2024 (about 1 year ago) • 42:19
Transcript:
| Start Time | Speaker | Text |
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Shaan Puri |
Sam, you know what they say: when you're on a boat and it's sinking, "Get off! Women and children first!" And that's what we're doing with the podcast today - women and children first.
I have a topic I want to talk to you about. Have you seen this startup that's called Co-Fertility?
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Sam Parr | How do you spell it?
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Shaan Puri | C.O. Fertility | |
Sam Parr | Dude, I don't know. It could have been "co," like you spelled with a "k," in the Asian way. I don't know. "Co-fertility." Alright, I get it. Yeah, I'm there.
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Shaan Puri | So, check this out. You know a little bit about egg freezing, but I didn't know much. I've never done it, but I do know there's a growing trend.
I think basically people are having babies later in life, and egg freezing technology has come along. It's also become more normalized. I think some companies will pay for your egg freezing.
But, like, just look at this Google Trends chart. In the last 5 years, egg freezing has basically gone from roughly 30-40 on the Google Trends scale to like 80. It is on the rise, and that's just in the past, I don't know, couple of years—2 to 3 years.
I think last year, 20,000 women in the United States chose to freeze their eggs. So, it's still a very small number.
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Sam Parr | So, for the 18-year-old men who are listening to this podcast...
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Shaan Puri | Me, 6 months ago. | |
Sam Parr | What is?
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Shaan Puri | What do you think about egg freezing? | |
Sam Parr |
What do you mean? So, egg freezing... I guess I actually don't know the difference in terminology, but I know from experience there are two ways to do it:
1. A woman just freezes her eggs, and then when she's ready...
I don't... yeah, I guess why...
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Shaan Puri | Does it feel like we're having "the talk"? It's like whenever everyone loves each other very much, who wants to be...? | |
Sam Parr | I was a participant in this process. So, I guess you could freeze just eggs, and then eventually, when you meet a husband or someone you want to mix with, you mix them. They stick it inside the woman, and then, like, nine months later, hopefully, she has a kid.
The other way to do it is to freeze embryos, which is a process that I went through, and it was awesome. But leading up to doing it, I had to bring my sperm to the doctor about 30 minutes after getting the sperm out of my body. You just have this ultimate look of shame.
I remember my wife and I debated what is more embarrassing and shameful: when a woman has to go to a gynecologist or when a man has to donate sperm. It's a tough comparison.
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Shaan Puri | I haven't seen him in a little while. He's like a 3-year-old. He just comes out of somewhere and he'll be like, "I did a bad thing."
So that's you walking into the hospital.
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Sam Parr | Holding a cup of sperm... it's a horrible experience. And so, yes, that's what egg freezing is.
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Shaan Puri | Somehow, we made this about the dude side of things, but I think for women, it's a little bit harder. They have to literally take shots and harvest the eggs. It's a very hard process on your body.
Anyways, it's also very expensive. I think traditional egg freezing, one cycle, is something like $10,000.
So there's the startup company, Co-Fertility. What they came out and said was, "Hey, free egg freezing! How is it free?" They had this billboard or ad that said, "The best time to freeze your eggs is often when you can least afford it. That's why we're making it free."
I don't know if you've ever heard that phrase: "If it's free, then you are the product."
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Sam Parr | Yes.
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Shaan Puri | Basically, wow! The biggest version of this... so what they're doing is, they're like, "We will freeze your eggs for free, but we keep half."
This sounds a little crazy when you first hear about it, but I actually think this is pretty smart. What they've done is they've bundled together two things: egg freezing and egg donation.
Some people do donate eggs; they get paid for it and they're willing to do that. They go in with their eyes wide open and they choose to do that. That's great because other people need eggs.
So, they bundled it together where now you can get free egg freezing if you agree to donate half the eggs upfront. On the other side, they go and charge people who want eggs. They charge them $13,000 to $13,700 as their matchmaking fee to get you your eggs.
I think this is a pretty smart and disruptive model. What do you think of this idea?
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Sam Parr |
Insane. I think this is insane, not in a bad way necessarily. I think it's a bad way for me, I don't want to do that, but I think that the whole process that I went through, that my wife and I went through... I think it was something like $60,000, and her insurance paid for it. But if you can't afford it, you're screwed.
This is pretty wild. Do you think this could actually work as a business?
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Shaan Puri | I think this can totally work. I believe there are a lot of people out there who, like you said, don’t have the extra tens of thousands of dollars to freeze their eggs.
So, if your options are to either not freeze them or take this free option where you donate some of your unused eggs, knowing that they’re out there in the world, I think a lot of people will choose that.
By the way, I think that because this is controversial, it’s going to get so much free press. There is something almost strategic about doing a sort of controversial, taboo, or even naughty idea. You will get article after article, online argument after online argument.
All it really does is push away the people who were never going to be your customer, but it educates the people who actually might be your customer because it’s going to be so noisy.
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Sam Parr | Dude, let me tell you a related story. So, she said I could name her name, but you and I have a friend named Kat. I'm really close with her; I don't know if you're close with her. I think you've just met her once or twice.
Her and her wife, Emily, wanted to have a kid. Although she's successful, she's a frugal woman, and it was really expensive to do this. We all have a mutual friend, David, who's this wonderful man. He's like a 6-foot tall, good-looking, nice, smart guy.
Kat and Emily were like, "David, would you like to... you know, could we get some of your sperm and have a baby?" They looked into some of this egg freezing stuff, and it was really expensive. They were like, "Can we just kind of do it ourselves on this one?"
So, they didn't have sex, but he would come over in the morning when they were ovulating. He would do the deed in the bathroom, they would get the sperm, and they just kind of... I guess they had like a do-it-yourself kit at home.
Yeah, I don't know. They did that, and in the very first try, Kat got pregnant. Now she has a beautiful 2-year-old, and wow, it worked!
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Shaan Puri | It's a loaded idea, like "free lunch." What did David get out of this?
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Sam Parr | Nothing. He just... he's like, "Dude, it's like on paper, this..." that's.
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Shaan Puri | How she's a great marketer! Dude, she is a great entrepreneur and a great marketer. She convinced this guy to do this for free. You know, she used her marketing skills. | |
Sam Parr | Well, they have a beautiful kid, and he's like the uncle. His parents sort of act like a mixture of grandparents and uncles and aunts. It's like a wildly awesome relationship, and everyone's happy with the ordeal.
So, this whole co-fertility thing, I think this is another interesting solution to the same problem, a similar problem.
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Shaan Puri | What's the slogan for Austin?
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Sam Parr | I don't know what "Keep Austin Weird" is. They kept that weird doing it.
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Shaan Puri | Your part out there.
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Sam Parr | They kept it weird. If I told you this solution, like, "Oh, it's just possible," you'd be like, "That's crazy." These three people... I guess it's a throuple? I don't know what you call this. It's perfect. It's like the most harmonious relationship I've ever seen.
Yeah, it sounds actually very healthy, to be honest. It's very healthy. So, I like co-fertility. Do they raise money?
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Shaan Puri | I, you know how I think they raise money? They have the, like, you know when you see somebody who goes to the store and buys a new outfit, and you're like, "You're looking great," but you can't really put your finger on what's new about it. Then you see the tag on their jacket still, and you're like, "Oh, this is a new jacket! That's what you went shopping for."
Their fonts are all the fonts of like a red antler brand, where you're like, "Oh, you launched!" But you paid for fancy branding up front. You got a font that I can't find on dafont.com in the free section. So, I know that they got some money somehow to do this.
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Sam Parr | Alright everyone, a quick break to tell you about HubSpot. This one's really easy for me to talk about because I'm going to show you a real-life example.
I’ve got this company called Hampton (joinhampton.com). It's a community for founders doing between $2,000,000 all the way up to $250,000,000 a year in revenue. One of the ways that we've grown is by creating these cool surveys. We have a lot of founders with high net worth, and we ask them all types of questions that people typically are embarrassed to ask but that provide a lot of value.
So, things like how much the founders pay themselves each month, how much money they're spending each month, what their payroll looks like, and if they're optimistic about the next year in their business. All these questions that people are afraid to ask, but we ask them anyway, and they tell us in this anonymous survey.
What we do is create a landing page using HubSpot's landing page tool. It basically has a landing page that says, "Here are all the questions we asked. Give us your email if you want to access it." I shared this page on Twitter, and we were able to get thousands of people who gave us their email and told us they wanted this survey.
I could see if they came from social media. I can see if they came from Twitter, from LinkedIn, basically everywhere else that they could possibly come from. I'm able to track all of that. Then, I can see over the next handful of weeks how many of those people actually signed up and became members of Hampton. In other words, I can see how much revenue came from this survey and how much revenue came from each traffic source, things like that.
But the best part is I can see how much revenue came from it. A lot of times, it takes a ton of work to make that happen, but HubSpot made that super, super easy. If you're interested in doing this, you could check it out at hubspot.com. The link's in the description, and I'll also put the link to the survey that I did so you can actually see the landing page and how it worked and everything like that.
I'm just going to do that call to action then, and it's free! Check it out in the description. Alright, now back to MFM. This is pretty cool. Would you do this?
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Shaan Puri | Yeah, why not? Also, it's hilarious that on this huge life decision, I was like, "Why not?" And then for the first time in my life, my brain responded with several reasons why not. Usually, "why not" is met with nothing.
So, I was reading some study, and it said that **83% of egg donors** share that they would donate again, and only **2%** regret their decision. Forget about surveys; I think they are often prone to just finding data that supports what you want. But I do think it's interesting.
That's an interesting statistical thing: what percentage of people regret a certain decision? I would love to see a list of life decisions and then the regret score, you know? For example...
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Sam Parr | Burning Man.
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Shaan Puri | Burning Man is this thing that I've been on the fence about for like 11 years. Even though everybody I like and trust in my life who goes says, "It's the best! What are you even talking about? What's the decision? Just go!" I don't know anybody that's regretted it personally in my life.
I'm sure there are people because there are like a million people that go every year, but I just kind of want to see, for life decisions, the regret percentage for each thing. I think that would be very illuminating for somebody who's trying to make good decisions in life. Don't you think?
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Sam Parr | Wait, so why haven't you gone? | |
Shaan Puri | To Burning Man, I'm scared of drugs.
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Sam Parr | Yeah, same. But you just literally said no one that you've met has regretted it.
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Shaan Puri | And when I tell them that, they're like, "So then don't do drugs." I'm like, "But I thought that's what you do there." And they're like, "No, that's just one of many things. You don't have to do drugs." What kind of dork-ass response was that?
Then I'm like, "Okay, I'll think about it this year." Then I'd go home and I'm like, "I'm still scared of drugs. I'm not doing this."
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Sam Parr | My square friend, like, I'm straight edge. So my other straight edge friend and his girlfriend were like, "Hey, we went to Burning Man! It was awesome! You guys will see some pictures."
I mean, I was looking at pictures and swiping through their phone. It looked a little bit normal, a little bit normal. He's sitting over my shoulder like, "Yeah, this is this cool guy we met. Here's this cool van that we saw. There's us just doing this."
Then there's a picture of him butt naked, like a full frontal photo with his arm over her, who's also naked, and they're just smiling. Then he's just like, "Yeah, there we were, celebrating this thing."
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Shaan Puri | The weather was great that day.
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Sam Parr | Yeah, and then just swipe. I was like, "Okay." And I saw that, and I was like, "I don't know, man."
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Shaan Puri |
"Burning Man" might be the scariest words in the English language. "Do you want to see some pictures from my Burning Man trip?" It's like, you know, right before you go to Six Flags and they put the... the roller coaster thing and the bar comes down and clamps you in. That's how I feel when somebody says, "You want to see the pictures from Burning Man this year?"
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Sam Parr | I want to do another parenting one. Before I get to the parenting one, can I do a quick little thrill of the show?
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Shaan Puri | **Thrill me, baby.**
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Sam Parr | This is something I'm proud of. So, in Hampton, we have access to like a thousand founders. We've been doing these really cool surveys where we... what's that?
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Shaan Puri | By the way.
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Sam Parr |
**Hampton** is my community for CEOs. The average CEOs are doing about $25 million in revenue. You guys can check it out when you apply. We interview everyone. Fun fact: my partner Joe and I watch 100% of the interviews, and we're the ones clicking the approve or deny button.
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Shaan Puri | You're like the Harvey Weinstein of the process, would you say?
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Sam Parr | No, I would not say that. I would not.
So, check it out: joinhampton.com. Here's what's kind of cool. We did this survey, and I was like, "Let's do wealth," where we ask all these people all these questions, like, "How much money do you have? What's your monthly burn?" All these questions that people are embarrassed to answer.
It was cool, but then we thought, "Let's actually do it by industry." So, we're doing it by software and all the different industries. What other industries? Other software, marketplaces, health stuff. We just did one on e-commerce.
If you go to joinhampton.com or just search—actually, this is easier—look in the YouTube description or just Google "joinhampton" and then "blog," and you'll see our blog and all of our reports.
Dude, we did this thing with e-commerce owners. We asked them all about their revenue per employee, how much profit they're making, how much they're paying themselves, things like that. Did you see that thing released?
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Shaan Puri | What was the revenue per employee? I'm curious.
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Sam Parr | Dude, it was pretty good. So, let me read you off some of the wow.
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Shaan Puri | What a satisfying answer! Thanks.
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Sam Parr | I'm going to read it.
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Shaan Puri | This chart just says "pretty good."
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Sam Parr | Yeah, "deese." It just says "deese." I'm gonna read "deese."
I'll read you off some information. We had about 50 people reply. The average revenue of the responders was $25,000,000. The average revenue per employee was $1,350,000. The average founder paid themselves $385,000 a year.
Net profit has grown consistently over the last couple of years, and we break down each company's net profit. Shockingly, I guess this isn't shocking to you, but I fucking meta, dude. It's still the best platform for buying ads for e-commerce.
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Shaan Puri | Dude, it is... except for there's a couple of people just dominating on TikTok shops right now.
But let me ask you something: on $1,300,000 of revenue per employee, right? So, $1,300,000 of revenue per employee. I would say that a good eCommerce brand is doing 20% profit margins on that before taxes, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin.
I would say the average might be between 10% to 15%. So let's just do a little math. So, $1.3 million, and let's just use the 15% number. What is that? $195,000.
I would guess the average wage might be $100,000 for these eCommerce stores, maybe $120,000. So, roughly $50,000 to $70,000 of profit per employee.
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Sam Parr | And so that's why the 30th and final slide of this presentation, where we go through all the numbers, just says "sucks." It just says "don't."
But if you're listening and you are into e-commerce, check it out. Just look up joinhampton.com/blog or just search "Hampton blog," and you'll see all the reports there or in the YouTube description.
Now, can we talk about something? It was your idea to cover this person, and I'm now obsessed with them. Who's that person?
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Shaan Puri | Doctor Becky.
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Sam Parr | I love Doctor Becky. I more so love the idea of her than maybe I actually love her.
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Shaan Puri | **Explain who she is and why.**
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Sam Parr | You love her? I'm going to give you a two-minute breakdown of who she is.
So, Doctor Becky, I believe her real name is Becky Prince, but now her name is Becky Kennedy. She grew up in Scarsdale, New York, which is a really nice suburb on Long Island, about 45 minutes outside the city.
She had a bunch of issues as a kid, including emotional struggles that she wasn't sure how to handle. Eventually, that developed into anorexia. She started going to therapy at age 8 or 9 and became obsessed with it. She went on to study psychology at Duke and Columbia.
Then, starting around the pandemic in 2020, she began creating content on Instagram. I looked at her first post, and it feels very impromptu. It's just her, kind of like this setting or your setting, next to a wall with her camera up, answering questions about parenting based on what she studied at Duke and Columbia.
It takes off! One of the reasons it becomes so popular is that she's very charismatic. She has a cool look and possesses that "it" factor. She looks like someone you can trust, and she grabs your attention nicely. It's sort of like Andrew Huberman; he's not doing anything thrilling, but there's something about their personality and the way they look that makes you want to trust and listen to them.
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Shaan Puri | I trust you. Just trust this person, yeah?
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Sam Parr | I just want to listen to you now. Things kind of take off, and she's like, "Let's turn this into a thing."
So she creates this business called **Good Inside**. It's a community where you pay $300 a year, and you get access to an area where you can talk to other members and ask questions. They also have a bunch of what she calls **Good Inside Clinicians**—people who, I guess, she has trained to talk and answer different questions.
Now, it's a thriving community. Behind the community, you can also see videos of her and things like that.
By the way, do you know who she partnered with to start this business?
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Shaan Puri | I do. I just found that out right before this podcast. | |
Sam Parr | Did you catch that?
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Shaan Puri | I was like, "Erica Belsky, is that a common last name or is this Scott Belsky's wife?" And it turns out it's Scott Belsky's wife. No way!
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Sam Parr | It's Scott Belsky's wife.
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Shaan Puri | The pod Scott Belsky.
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Sam Parr | Yes, Scott Belsky, who is now the Chief Product Officer at Adobe. I don't know if he's actually been on the podcast, but we both admire him. He's just a wildly successful, cool dude, and that's her partner. Did you also know that they've recently raised $10,000,000 for this business, Good Inside?
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Shaan Puri | No way! I did not know that. It's only like a few years old; I think it's about 3 or 4 years old.
But you missed the headline. The headline of the story is the product. Their product has about 50,000 paying members, so their membership community is probably doing around $13 to $14 million a year in revenue. They provide parents with parenting tips and advice from two clinical physicians and mothers.
That's kind of amazing! And this is a... that's...
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Sam Parr | **Amazing.**
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Shaan Puri | It's an interesting market. There's actually a bunch of these. So, I don't know if you ever saw "Taking Care of Babies." Do you know who that is?
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Sam Parr | No, what's that one?
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Shaan Puri | So, if you just get her... Her name is Cara, and then her handle is "Taking Care of Babies." We had bought her course for $100 when I had my first kid. She has basically a sleep training course.
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Sam Parr | Like train. | |
Shaan Puri | Your baby to sleep without crying it out.
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Sam Parr | I did this too.
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Shaan Puri | I bought.
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Sam Parr | Her a $100 course. I sat down.
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Shaan Puri | I did it. I looked at it, I watched it, and I was like, "Yeah, we're not gonna be able to do that." But either way, it was good material and there were some good insights in it.
Basically, the funnel for these is all the same: free content on Instagram or YouTube. They are just building trust on Instagram, really. It's like, "Here's who I am, here's what I do." I'm gonna put up stories and tips every single day. They build up trust, trust, trust, trust, and then they have the paid, either membership or educational product underneath it—the info product.
Taking Care of Babies was making somewhere between $10 million to $15 million. This was not even like a company; this is just her $10 million to $15 million a year in revenue with fat profit margins because she was spending nothing on marketing and basically had a small team or no team.
Then she got canceled, unfortunately. She got canceled because she donated to Trump, of all things. It's a pretty crazy reason to cancel somebody, but the moms sort of, in mass, unsubscribed. In all the mommy groups on Facebook, they were like, "We're not gonna support her if she's gonna support Trump." So she kind of got knocked down a couple of pegs. I think she's still out there doing fine, though.
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Sam Parr | But wouldn't the Trump people be like, "Yeah, I'm in even harder"?
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Shaan Puri | Well, I think there's probably some lean in the demographics of who uses these products and who pays for them. It might be more coastal moms and whatnot; it might be skewed in that way. I'm not sure, but you're right. It doesn't fully make sense.
I remember reading that there are other ones. Ben had bought this one called "Big Little Feelings." I think they sold 200,000 courses at an average of $100, so that's $20,000,000 in revenue. It turns out being a mom influencer can be a great career if you can pull it off. It's a very simple career—not easy to do, let me put it that way—but very simple. Free content on Instagram leads to paid offerings.
Obviously, these people have expertise. Maybe they've been a doula for a long time, or they're a clinical physician or a clinical psychologist. They have to have some expertise or authority in the domain.
One of the things I really liked about Dr. Becky's content, by the way, is that I think she intentionally makes it relatable. She's not wearing a lot of makeup, and she's not sitting in front of a very well-produced setup, which, of course, they could afford. | |
Shaan Puri |
But she'll be like, on the go to pick up her kids from soccer practice, just take out her phone when she has the impulse about some topic and say it. I think it makes her feel like the kind of relatable but aspirational mom who "just finds time" [when she] doesn't have time type of thing. And I think there's something strategic about that that's pretty cool.
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Sam Parr | So, that's what I wanted to bring up. Dr. Becky is, I think, a very, very smart woman, and I believe she runs with very smart people. I was looking into this woman a little bit, and this may sound like I'm hating, but I don't mean for it to sound that way. I'm a big fan of this person, and I think they're the real deal.
I believe that this is far more put together than it appears to be. It tries to look like it's kind of thrown together, but Dr. Becky lives on the Upper West Side of New York, where an 1,800 square foot apartment typically costs between $5 million to $7 million. She also went to the best schools and is from Scarsdale, which is a beautiful, fancy community in New York.
I think that she runs around with people like Erica Belsky—these people are top-notch, at the top of their game. I believe it was definitely a "we're going to do this, and we're going to do this, and we're going to do this" approach, not just "oh, what thing just happened to turn into this, this, and this." She's executing this plan perfectly.
Again, this may sound like I'm being negative, but I'm not. There's nothing wrong or unethical about any of this. I think this is a perfectly executed plan. | |
Shaan Puri | Yeah, I think for most content creators, it starts organically. You don't sit there and think, "Now from scratch, I shall become an influencer with millions of followers." It's not really like that.
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Sam Parr | Helpful to start? I don't think so.
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Shaan Puri | I don't think so. We could scroll back. Like, let's scroll all.
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Sam Parr | The way down old posts... all the old posts. I already found the old posts. They've been like... I looked on YouTube, and there aren't that many old posts.
Here's what I think: If you had met this woman 10 years ago, it would have been very different. You could have just had a conversation with her and been like, "Yeah, I think you got the 'it' factor." This is the type of person who, when I see her talking, I'm like, "Dude, it's very obvious that you've got whatever these popular influencers have."
Let's just put a little bit of money behind this and turn this into a thing.
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Shaan Puri | Well, I like that you've gone "Coffeezilla" on this one. You're like, "Hey, wait, pause that frame. That's Oprah in the background. She's friends with Oprah!"
If I try to find the thing, I think my personal belief is that I don't think it's plotted, but I do think it's strategic. Meaning, I think there is a lot to making something look effortless. To make something look authentic and real, it actually takes some effort. It takes some thinking to make something look off the cuff in a way, right?
Often, it's not that you're manipulating people, but you're intentionally saying no to certain things that would ruin that vibe, that would break that trust, that would break the fourth wall or whatever. I do think that they've done a great job of that.
But there is the negative version. I think, remember those stories about Sam Bankman-Fried? They were like, "Hey, you know you're going to meet with whoever this investor today," and they're in the boardroom. They're like, "Sam, you look good." He's like, "Thanks." And they're like, "No, you need to look like a dork." They were like, "Get this man some jorts!" and "Somebody ruffle up his hair, make it look like he hasn't slept in six weeks."
There was an article that basically said they knew that people pattern match. If they can look basically like Zuckerberg and a bunch of the other prodigies who are awkward, who don't know how to dress, who have these weird personality quirks... okay, let's play up that he's vegan. Let's make him drive this car, right? There were intentional choices along the way to either make him look more like that or prevent anybody from polishing up those rough edges. They were like, "No, no, no, the rough edges are key. Let's keep those and actually put those front and center."
Yeah, and there were stories that came out. It's very rare for those stories to come out because even the people that pull it off, they never have any incentive to come out and acknowledge that. It's only when somebody has a complete downfall that his closest confidants come and betray and say, "Yeah, that actually happened."
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Sam Parr | By the way, I am not remotely implying that Sam Bankman-Fried did this to the woman or that they are even in the same category. I'm not. All I'm saying is I like this lady. I trust her advice, and I think she's not getting... | |
Shaan Puri | An invite to her hamper's party this summer, right?
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Sam Parr | What I'm saying is, I think that she's just a shark when it comes to business, which is not something that you would necessarily want to portray when you're trying to be a mother expert. I'm on board with Becky; I think she's the best.
So, I'm on board. Are there any niches that you think are interesting other than parenting for this model? Because this model is the most basic, simple model.
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Shaan Puri | **Explain the model.**
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Sam Parr | What? What? | |
Shaan Puri | Do you mean by that?
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Sam Parr | So, the model is... well, I don't know why they raise money for this because typically you don't need to with this model.
But the model is, we'll use Andrew Huberman as an example, or we could use what I've done, whatever. The model is you get popular on the internet and become a thought expert. You often get popular through having a blog, sometimes a podcast, or sometimes on social media.
Then, you create a community. You create a community that costs something like $200 or $300 a year, and you try to get as many people as possible. You also host events that cost money, and then you have courses that are between $1,000 and $1,021,000, something to upsell. You want your pricing to be something cheap, a little bit more expensive, and a little bit more expensive.
Then, you just focus on getting more and more popular and creating this business all around a lifestyle, an idea. For her, her idea is... what's it called? Good Inside? I think that's like her thing she teaches called Good Inside.
For other people, like there's Mark Sisson who did this with Good Apple, which is about a health company. There are a lot of people who have done this in a variety of niches where it's thought leader, blog, book, course, community, and then some type of higher-tiered membership.
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Shaan Puri | Yeah, definitely. Like, Miss Excel did this by just teaching people Excel.
An Excel expert creates free content that leads to courses, info products, and memberships. I think this playbook has been out for a while. By that, I just mean to say I don't think you have to do the figuring out. All you have to do is the execution, which is nice in a way, but it also means it's kind of competitive. It's not as easy as it might have been if you were early in the figuring out phase.
But you could definitely do it. We've done it in a way. We just gave three examples in the parenting niche that have done it. There are people who have done it in the, you know, the V Shred type of model that have done it in the guys' bodybuilding space.
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Sam Parr | What's V Shred?
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Shaan Puri | V Shred? You don't know what V Shred is?
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Sam Parr | No, what does that involve? Like the V of your abs?
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Shaan Puri | Yes, yes, the Dorito body, baby! You want your upper body to be shaped like an upside-down Dorito. You don't know who V Shred is? That blows my mind, dude!
Let me explain. V Shred is the perfect intersection of shirtless dudes, successful businesses, and internet affiliate marketers. I can't believe you don't know who this guy is! That is your Venn diagram. | |
Sam Parr | Sign me up.
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Shaan Puri | You don't know who V Shred is? Oh my God! Alright, so let me give you a little V Shred story. You do know this guy. As soon as you see him, you're gonna know this guy.
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Sam Parr | I'm on his website. I've never seen this before in my life.
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Shaan Puri | Basically, this guy was a super jacked individual who ran Facebook ads. You click the Facebook ad, and it takes you down a funnel. His funnels are pretty well-known in the internet marketing niche, like VShred and ClickFunnels.
It would usually start with a quiz. For example, it might ask, "I'm a guy. Do you want to get jacked or get abs?" And you're like, "Oh man, or it's like both. Give me both!" Then it would ask, "What holds you back? Is it, you know, eating poorly?" And you're like, "Yeah, it is eating poorly. How'd you know?"
Then you just keep going down this funnel. It's like, "I'm going to give you a personalized plan." After that, he gives you a personalized plan, and you pay $99 for it. He basically ran this funnel and made, I don't know how much money this guy made, but I'm pretty sure it was in the nine figures. However, I think I might be mixing up Kinobody and VShred.
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Sam Parr | You're right. I'm looking at V Shred, and there are some stories saying it's done $200,000,000 in revenue.
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Shaan Puri | Yeah, so, look at this blog post: "How VShred Used a Quiz Funnel to Drive $200,000,000 in Revenue." I don't know if this is legit or not, but in 2022, they had 5,000,000 monthly visitors on their website.
This guy basically dominated with Facebook ads for the health and fitness niche. What he was doing was using ads; he was still an influencer, but he was like, "Cool, I'm gonna pump ads." He had this funnel that was basically the most simple ClickFunnel in the world.
You go there, and literally, we could show this on the screen. It's a progress bar, and then it just says, "Are you a man or a woman?" There are simple A or B type answers, and you click, you click, you click. You kind of want to see what's at the end here.
Then, at the end, before he sells you the thing, he shows you like five transformations. "Here's this nerd, now he's jacked. Here's this fat guy, now he's skinny." It just shows you these five transformations, and it's like, "Do you want that or not?" Then you buy it.
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Sam Parr |
Dude, imagine them just describing it at their meeting like:
> "You did so... we're gonna show them a... show them a... a nerd, a fat guy, and then we're just gonna say, 'Want this shit or not?'"
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Shaan Puri | So, where are we gonna get a nerd? Take your shirt off right now. Go and take a picture. It's you, you're the guy. | |
Sam Parr | Do you want to talk about this guy, Isaac?
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Shaan Puri | Yeah, yeah, tell the story.
Okay, this is like a full circle story. So, have you seen what the guy, Isaac, is doing? The guy who we talked about, his mini katana brand?
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Sam Parr | What's his last name?
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Shaan Puri | I have no idea what Isaac's last name is. Isaac, the mini katana guy, sword guy. We talked about him before because he had taken a product that was super niche—literally katanas, like, I don't know, Japanese swords or what it is.
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Sam Parr | Yeah, so, me one. | |
Shaan Puri | Yeah, they're called mini katanas. By the way, this thing is like 6 feet long.
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Sam Parr | That's not mini.
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Shaan Puri | Nothing mini about it. No, I was pissed about how my wife was, and we've got this giant sword in the house now. I'm like, "I don't know, it's supposed to be small." I don't know what happened.
They couldn't run Facebook ads or Google ads because you can't advertise weapons. So what he did was really smart. He basically got content creators to make cool videos. He turned his disadvantage into his advantage. His disadvantage was, "I can't run ads." His advantage was, "I sell a cool product: swords." There's a lot of cool content you can make with swords.
He just used YouTube and TikTok to go viral many times. He built it up to like $10 million or so a year, basically around $10 to $20 million a year in revenue on the katana brand. But of course, surprise, surprise, there's not a lot of repeat purchases in the sword niche, right? Like, you're not... you know, there are some collectors, but for most people, most people don't want a sword. Of the people who want a sword, you might just want one. You might not want to fill your house with swords. So it was not a great e-commerce product. But what's he doing now? He switched... hold on.
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Sam Parr | Before you get to what he's doing now, you've missed a few points about Isaac.
So, Isaac... I listened to a podcast with him. He was doing Postmates and freelancing and things like that. Then he decided, "I'm gonna start a business."
He was like, "Yeah, we can't... like you said, we can't advertise," but you didn't mention how big his channels got. Basically, he went hard on content. He gets to **1,000,000,000 views a month** across his network of YouTube channels.
His main channel on YouTube, which only launched in 2022, has **8,700,000 subscribers** and **5 billion views**. This is not their main product; their main product is the swords, and they're just using this as marketing. But they knocked it out of the park.
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Shaan Puri | It's an incredible example of marketing. I've learned some things from Isaac and used them in my business that have been very effective. It's just a different way of thinking about marketing.
What he was doing was asking, "Alright, how do you sell a mini katana?" You can either go to people who already are collectors, but that's a really, really small market. Alternatively, you can go to people who might be interested because they have an interest in anime and other overlapping interests.
Where do they hang out? Okay, they hang out on TikTok and YouTube. Alright, cool. How do I actually get them to want my product? How do I build desire for my product?
Instead of saying, "Here's the sword, here are the features, here's how the handle looks, here's how sharp it is," he posed a question: "Do you think I can cut this bullet in half if I shot a bullet at somebody? Do you think the ninja could cut it in half with a sword?"
That video has like, I don't know, 10 to 20 million views. It's an insane video where a guy literally chops a bullet in half as it's flying at him using a sword. Then he does another one where it's like... | |
Sam Parr | That's a weird thing. It's like saying, if you punch me, me saying, "My face could stop that," is like the bullet aiming at the sword.
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Shaan Puri | Hurt your. | |
Sam Parr | Hand up. | |
Shaan Puri | Yeah, as you bleed, he also did one that was like another marketing thing I really liked of his. It was about how to not mention the product in a way that drives the comments crazy.
So, he started a video—well, not he, but one of his creators started a video that looked like it was about cooking a steak. You think it's a cooking video, and then they put the steak on the cutting board. Then, they take a giant katana and cut it into slices, but they never mention the katana.
Every comment was like, "Are we going to talk about him using an actual sword to cut the steak? What the hell was that?" The comments drive the virality. If he had said, "Now watch me use this sword," people wouldn't care. It's when he didn't mention the sword that all the comments had to talk about it.
"Bro, what is this?" It's that type of social engineering that I think was really, really smart. All he needed was a better product. I think he might have a better product now.
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Sam Parr | And so, he starts to sit down and he's like, "Alright, so my business got to like $10 or $20 million in revenue. That's not enough. I want to go to $1 billion."
He shared that in late 2022, he stepped back and said, "I need to hit a $1 billion company, or I want to make a $1 billion company. Here are my five requirements:
1. Would the content playbook give us a severe unfair advantage?
2. Does it have a huge Total Addressable Market (TAM), meaning could a 1% win be a massive outcome?
3. Is this something that I'm personally passionate about?
4. Does this have a moat, sort of like the mini katana store I already had, which is like making swords that are really hard? If I could figure that out, I have a moat.
5. Finally, the product doesn't 100% rely on marketing because I want tailwinds. I want to catch a wave."
So, he said, "What can I launch that fits that?" And so, what did he launch?
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Shaan Puri | He launched a freeze-dried candy brand called **Kanpai Foods**. It's basically a candy brand. I... I don't know, have you ever had freeze-dried candy? I've never tried this.
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Sam Parr | I don't think I've had this. I don't even really know what it is.
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Shaan Puri | Alright, so here's what it says: the freeze-dry process removes all moisture from the candy, leaving behind a perfectly crunchy treat. So, I think it's candy that's crunchy, like a chip, basically.
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Sam Parr | And light. So, it's like a gummy bear, but it's light.
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Shaan Puri | Yeah, exactly. It's like just the sugar.
By the way, this is a great example of one of the most valuable insights that I ever had on the podcast. When Alex Hormozi came on the podcast a long time ago—I don't know when this was, maybe three years ago—he puts out a metric shit ton of content every month. I don't consume all of it, but this one thing he said to me three years ago on our podcast has stuck with me. I've repeated it to myself and many others.
I actually told Isaac this at a party once when I was talking about, "Dude, you are doing 10 out of 10 execution on a 2 out of 10 opportunity." This was the advice I needed to hear early in my career because I started a restaurant. I tried to do all the coolest stuff in the world. I tried my hardest and was bringing 10 out of 10 effort. I thought I was a 10 out of 10 talent, but I was going after a 2 out of 10 opportunity.
That's what Hormozi said. He got that advice from Russell Brunson about his gym launch thing. They were like, "Dude, you're an amazing marketer, but you're just using your marketing to launch brick-and-mortar gym chains one at a time, maybe a couple in a year." What you need to do is take your marketing playbook and go sell it to every gym across the country. That's the 10 out of 10 opportunity.
Similarly, just in the last segment we talked about with Dr. Becky taking her expertise in children. If all she did was see five clients a day as a clinical child psychologist, that would be a smaller opportunity than what she decided to do, which was to make a media product that scaled to millions of people. Then she could charge a membership fee and make $13 to $15 million a year on her membership fees.
That's the same skill set but a bigger opportunity. I think what Isaac's done is he's taken that 10 out of 10 content playbook that he really mastered and switched from going to a one—I would actually give the sword thing a 1 or 2 out of 10 opportunity—and now he's going for a sort of 5 or 6 out of 10. It's going to be a 6 or 7 out of 10 opportunity because he said it right. He might have had 100% of the mini katana market before, and it'll be smaller than him getting half a percent of the candy market or even the alternative candy market in this case.
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Sam Parr | What did you do with your mini katana?
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Shaan Puri | It's sitting right over there on the wall in my office, in a case, just in case.
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Sam Parr | Which is the problem with it. That is the exact problem with that business. Mine's doing the same thing; it's just sitting there. I showed it to three people.
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Shaan Puri | One time practice every day. What am I supposed to do with it?
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Sam Parr | And so, did he shut down Mini Katana?
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Shaan Puri | I have no idea, but he should.
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Sam Parr | Alright, just light it on fire, throw it in the dumpster, and hope no one finds it with that whole business.
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Shaan Puri | It's honestly an underrated thing: the art of quitting. Your whole life, you're told not to quit and that perseverance is everything. Well, quitting, like everything, wouldn't exist if it didn't have a function. There is a function to quitting things.
You know, it's easy to quit when everything's failing. The hard thing to quit is the slow burn of mediocrity. It's the thing that's not taking up all your attention, but it's taking up some. It's the thing that's not totally working and achieving your goals, but it's not totally failing. That middle zone is the danger zone.
The things that are obviously failing are easy to stop; we stop them, no problem. Things that are working are easy to keep working; you just shouldn't stop them. It's the things in that middle zone that people are very, very bad at quitting.
If I had to give myself a little pat on the back, this is the one thing I'm good at: being pretty ruthless about things in the middle zone. I had a venture fund that I was doing. I had a rolling fund; it paid me very well, and I was deploying, I don't know, close to $10,000,000 a year to invest in startups. It was good, but it was in the middle.
I found better investment opportunities outside of that, but it wasn't so bad that I needed to stop. I could have just let it chug along and eat away at my focus. Instead, I made a ruthless cut and said, "I'm stopping this."
When am I stopping it? I'm stopping it yesterday. It's done now. I'm just going to stop it now.
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Sam Parr | That was a good time to use a line that I think we should make our line, which is: "Not to toot my own horn, but beep beep." You gotta say it like that.
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Shaan Puri | Dude, have you said that before? Where'd that come from? Is that from something?
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Sam Parr | That's an MFM special.
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Shaan Puri | Dude, once in a while, you just get me. You make me laugh in a way that very few people can. Dude, it is so funny that... oh my God, wow!
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Sam Parr | Just give yourself a little toot.
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Shaan Puri | I have to toot my own horn, but beep beep! Oh, that was good. I don't want to do the podcast anymore. I want to end it and laugh.
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Sam Parr | That's an MFM special, Isaac. I think you're awesome, man. Sean, I think you're awesome for being a quitter. Beep beep. Doctor Becky, even though I sounded like I was being rude, I think you're also awesome. Beep beep.
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Shaan Puri | Is | |
Sam Parr | That it is... that the pod. | |
Shaan Puri | That's it. That's the pod.
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