This Viral TikTok Ad Sold $500,000 Worth Of "Sex Chocolates”

Shaan Puri

Think this guy's like 21 I think they said they sold half

Sam Parr

a $1,000,000

Shaan Puri

what does

Sam Parr

he know about this then

Shaan Puri

bro got his his first first wood and just decided to create a product

Sam Parr

Phil still has his first one. What? Like, well, you're 21. I mean, things work great.

Shaan Puri

Yeah, why... why do you need this? But basically, I think he said they sold like half a million dollars worth of chocolate off this ad. And like, within a couple of weeks or something like that, it really jumps.

Sam Parr

I've got one interesting topic today what do you got let's start there do you wanna start with my thing yeah

Shaan Puri

start start with yours

Sam Parr

So, you're a 33, 34-year-old guy, so you probably haven't been to the doctor in like 15 years. Is that accurate? Yeah, yeah, man. I don't go to the doctors. My wife's gone, and I'm sitting here doing this podcast. I'm wearing flip-flops, with one foot having a sock on, and my underwear is inside out because I didn't want to do laundry. So, like, yeah, I mean, I'm a grown child too. But, so listen, have you been to the doctor with your wife or kid and noticed that there are these TV screens in there?

Shaan Puri

I have like in the waiting room you mean

Sam Parr

in the waiting room but also like in the doctor's office like in the actual medical like in the room

Shaan Puri

Just like them in the waiting room, but I'm at Kaiser, and those guys are cheap as hell. So they don't put them in the actual doctor's office.

Sam Parr

Yeah, Kaiser is its own network of hospitals, so they wouldn't apply to this. But basically, if you go to most independent or normal non-Kaiser doctors, there are TV screens in the waiting room, TV screens in the hallway, and oftentimes now they've got TV screens in the doctor's office. So, have you heard of this company called Outcome Health?

Shaan Puri

I've heard of this once before, maybe from you. No, I think it's actually from our buddy, Ceeva. I'm just going to tell you three words I remember: **$100,000,000**, basically like waiting room TVs, and there's an Indian dude who's the founder. Those are the three things I kind of know about.

Sam Parr

yeah well you're missing the 4th word which is fraud

Shaan Puri

oh okay gotcha

Sam Parr

this was 4

Shaan Puri

years ago so maybe something has come out since then

Sam Parr

So, I'm going to tell you about this business. I actually think that it's kind of morally corrupt, but it's interesting nonetheless. The business model is actually good and interesting, but the guy who ran this particular business sucked. So, basically, it was called Outcome Health. It was started by this guy named Rishi, and he was out of Chicago. He was like this wunderkind prodigy, whatever. He raised money at a $5 or $10 billion valuation and promised that he had—or said he had—$160 million in revenue. Turns out that was nonsense; it wasn't true. So, he got sued, and it didn't turn out well at all. But listen to what their business was. It's actually pretty, again, unethical, I think, but fascinating. So, basically, do you ever watch cable TV?

Shaan Puri

yeah of course

Sam Parr

so it's like all toyota commercials and like pharmaceuticals

Shaan Puri

right it's back to the earlier. Dodge ram

Sam Parr

Yeah, it's like Dodge Ram and then Cialis. One of the reasons is that on Google and Facebook, you can't really advertise pharmaceuticals, or at least the rules are a little bit different. So, pharmaceutical companies are advertising like crazy on TV. They spent something like $8,000,000,000 last year. It's like the third largest category. But they spend way more. Of the $20,000,000 spent on pharmaceutical ads, like $15,000,000 of that is spent.

Shaan Puri

a 1000000000

Sam Parr

$1,000,000,000 is spent in the doctor's office. They do that by giving free samples, mugs, pens, and just stuff like that—swag. So, this guy came up with an idea where he basically puts a TV in the doctor's office. The TV is touchscreen and it's free for the doctor. It can do things like display the patient's chart on the TV. It's interactive, so the doctor can say, "Alright, so your foot's broken, and if we zoom in here, it's this bone." When it's not being used for that purpose, it serves as an advertising platform. It shows ads, but they're not selling the ad to the consumer because the consumer isn't the one making the choice about what drugs they're going to get prescribed; it's the doctor. Pharmaceutical companies go to Outcome Health and say, "Here are the 50,000 doctors we’re trying to reach. Show me which of those have your TV in their office and help us reach them. We'll pay you a lot of money for that." Theoretically, this guy was full of it. In his fourth year of business, he claimed they were making $160,000,000 in pharmaceutical ads. Eventually, Outcome Health was acquired by another company, and they are now operating legitimately, making over $100,000,000, all from pharmaceutical ads on these screens.

Shaan Puri

what was he lying about he lied about which doctor was he at or he lied about the revenue like they just didn't have a 1000000000

Sam Parr

Johnson & Johnson, their executives and their ad salespeople would go to these doctors and say, "Wait a minute, this company told us that there are TVs here. I don't see a TV anywhere." This happened dozens of times. They were like, "Dude, you said that there were TVs and our ad was being seen by this many people. It ain't happening." So, they basically just lied. They claimed that their TVs were in all of these rooms, thinking that no one was going to check. The TVs weren't actually there, yet they were billing Johnson & Johnson for showing their Cialis ad or whatever, but it wasn't actually happening.

Shaan Puri

wow

Sam Parr

so he lied but it's pretty crazy

Shaan Puri

Put the TV there. What a stupid reason to lie! Go get the TV at the doctor's office. It's not that expensive or hard to do to get a TV in a doctor's office.

Sam Parr

I just think it's crazy, though, that this business model is like... crazy fascinating. It is kind of a good business model, but I think the whole pharmaceutical industry advertising is kind of like... bullshit, you know what I mean? It's like someone...

Shaan Puri

Someone's going to do this. We talked to that company that was putting screens on top of Uber cars.

Sam Parr

which I I was totally against like I thought that business wasn't gonna work was I right or wrong did it work

Shaan Puri

I think it looked like we were wrong because they raised a bunch of money. But again, who knows? Maybe there's a "Rishi Rishi in Chicago" situation again here. So, I don't know, but that company did pretty well. Neither of us invested in it. There are other versions of this. So the question is: what are these captive audiences where you can go create an ad network? It's like there are physical places, such as high schools and colleges. What if you could just go put this in every dorm in the country? They'd be like, "Hey, you want to reach college kids? There's no more effective place than this." Because, you know, every three minutes we give out a free code for a Snapple from the vending machine, and then the other two minutes are just straight ads. So, can you find captive audiences in other ways and create a network of highly desired individuals? The key would be: could you somehow do this around, I don't know, stay-at-home moms? Probably not, because they're spread out. That's the thing with doctor's offices; there's a smaller number of them that you need to get the screens, and they're high value.

Sam Parr

there's this company called cheddar do you remember cheddar

Shaan Puri

Cheddar was basically like the hustle if it focused on all the weird stuff instead of just the substance. Then, somehow, it sold for $200,000,000.

Sam Parr

that's what

Shaan Puri

I that's my take on cheddar

Sam Parr

So, you're forgetting the worst component: it was entirely built at first on Facebook Live. Right when Facebook came out with Facebook Live, this guy named John Steinberg—who's a nice guy and a bulldog—launched a company called Cheddar. This guy is like Ari Gold; if he sees what he wants, he just goes for it. It's like a missile; he captures it all and goes straight towards it. Anyway, the content was... well, it was not great, and somehow they got pulled.

Shaan Puri

On the knee, the pitch, right? So here was his pitch on how he raised a bunch of money from investors. He said, very similar to what you said, "Hey millennials, Gen Z, these guys are not trying to watch, you know, CNBC or MSNBC or... I don't know, whatever the finance channel is. I don't even know it. That's CNBC."

Sam Parr

The pitch was that CNBC only has like 20,000 concurrent viewers at any given time. But it makes about $1,000,000,000 a year.

Shaan Puri

Right, and they're all on Medicare. So it's like, okay, how do you get like Gen Z and millennials? They're not going to watch that. What are they going to watch? And he's like, "Social media, social media." Right? All the VCs have nodded their heads. He's like, "Do you have a teenager? Do they watch CNBC or do they watch social media?" And everyone's like, "Social media." He's like, "And guess what? They now have live video. Facebook has live video, Twitter has live video, YouTube has live video." So we're going to create CNBC on social media. They basically created a 24/7 TV show that was business news, streaming all day onto Facebook Live, onto Twitter Live, onto YouTube Live, onto all these different platforms. And it was John and his co-host.

Sam Parr

in itself is amazing building 24 hours

Shaan Puri

is crazy 21st episode is crazy

Sam Parr

So, that is amazing that he could even pull it off. However, there was one factor that he kind of screwed up on, which is that no one wanted to watch.

Shaan Puri

watched it yeah everyone just rolled right past it

Sam Parr

yeah no one and so he's like he he executed a bad premise wonderfully

Shaan Puri

Yeah, 10 out of 10 hustle, 2 out of 10 idea. Because guess what happens on social media? You don't stop and watch live video for 40 minutes. That's just not what happens on most social media. So, you know, it just didn't really work. And you're right, any 24/7, it was kind of boring because this is not 24/7 worth of interestingness when it comes to that stuff.

Sam Parr

And he raised money. I think he raised $40,000,000, and somehow a cable company bought it for $200,000,000. I met with him, and he told me one time, "Yeah, so I'm gonna start this company, and in 2 years, I'm probably gonna sell it for $200,000,000 or $300,000,000." He just called it a shot. He's a bulldog, and he nailed it. He's an unstoppable force, and he pulled it off. But now what they do is, if you go to a gas station... you don't even go to gas stations anymore, do you?

Shaan Puri

you no dude dude I pump my own gas yes

Sam Parr

I do. If you'll see cheddar all on their little screens, that's right. So they're like owning this weird market of people who want to play like Jeopardy while they're pumping their gas. You know, it's like Snapple facts while you're doing your gas. So they've got the gas market.

Shaan Puri

Well, who was it that we met? Didn't we meet somebody? I think... I mean, it was just me. I met somebody recently who was like, "Yeah, you know at a gas station, those screens? I own the ad inventory in these three cities. I'm like the main guy." So, I asked him, "How do you think I should sell these ads?" He's like, "That's what I own. I own this inventory."

Sam Parr

and I was like making money

Shaan Puri

I'm sure he was doing okay, but he was like, "You know, what would you do?" I was like, "Well, the people who want this ad are the local businesses, right? Because they have... look, you can actually send them local foot traffic better than like a Facebook or a Google or these scaled, easy-to-use ad platforms can."

Sam Parr

Dude, selling local ads is the worst, though. There are these San Francisco-based... I remember I had a couple of San Francisco-based Yelp friends, and they were like, "Have you seen that scene in *Get Rich or Die Tryin'* with 50 Cent where he's selling drugs?" In that scene, one guy goes up to one of the drug dealers and tries to buy some crack but with quarters and nickels. The drug dealer smacks it out of his hand and says, "Hey man, come here, I'll take it again." It was like, "See how hard I hustled? I was willing to take the change." The Yelp ad salespeople are like that version of ad salespeople. They would find a pie shop and sell a $400 ad, you know what I mean? They're just grinding to get that done.

Shaan Puri

Yeah, there are these guys in the Yelp sales office. Dude, I would watch a 24/7 feed of the Yelp sales office because those guys are the grimiest, grittiest salespeople on earth. They will shake your local pie shop down and be like, "Hope you don't want this review that I just posted on your page." They'll go and write a horrible review on your page, then call you to tell you to go look at it. After that, they sell you a premium plan that would get that ad removed. It's like the craziest thing in the world.

Sam Parr

yeah dude and it's a racket and and like that's what I'm saying

Shaan Puri

On the phone, put her on the phone. Grandma, stop making pies! We’ve got a problem on Yelp. You gotta fix it.

Sam Parr

They're basically like the mob. They say, "Do you want protection?" and then they do something bad if they...

Shaan Puri

didn't use from us jesus christ yeah

Sam Parr

dude they are like a mob yeah

Shaan Puri

totally totally

Sam Parr

It's crazy. Those local ads suck, man. I've had friends who want to start local ads or local newsletters, and I'm like, "Yeah, you're going to get tons of eyeballs." The problem is monetizing that sucks, man. You have to deal with, like, Bob's Steaks and Chops down the street, and he's like, "Well, I'll give you like £30 of filet mignon." It's just hard.

Shaan Puri

I cut this great deal for Milk Road, so I was like, "Okay, what's our fill rate?" I think our ad fill rate was like 75% or something last month, and I was like, "Was..."

Sam Parr

it it was 75%

Shaan Puri

yeah and I was like ben what man

Sam Parr

that's pretty good

Shaan Puri

I was like, "What are we doing with this other 25%?" And he's like, "Dude, you know, we actually got hit up by a couple brands that you have said you liked on the podcast." He's like, "They were just like, 'Yo, we'll take any ad that you don't have that day, but we'll take it at 40% of the list price, and I'm gonna give it to you in store credit.'" It's like the worst deal. It's like, you know, I'm getting shut down by Yelp here, but I was also like, "I kinda love that product, so yeah, let's do it." And so, like, I have, you know, right in front of my front door right now, I have, like, palettes of Fitaid because I just ran a Fitaid ad for them. It's like, "Oh, here's $2,000 of Fitaid, you know, in exchange for that ad. Thank you so much!" So I'm like, "Alright, great! My gym has, like, energy drinks for the year, and it's done."

Sam Parr

that's actually pretty smart and it's really smart on their part

Shaan Puri

It's part of their part. Ben was like, "Yo, tell me the 5 or 6 products you love the most." He's like, "I'm doing mine too, and we'll just give sweetheart deals to all these companies." If we actually want their free product, like if we really want their free product, this is a great way to do it. It's a great deal for them too; they just get this ad hoc remnant inventory.

Sam Parr

I told you this off air, but when the hustle started in order to get advertisers, did you notice that when you started Milk Road and began having ads, you would get more people emailing you asking to advertise?

Shaan Puri

exactly yes

Sam Parr

And so, I noticed that early on... I was like, "If we put ads in there, we're gonna get more ads." I was like, "Well, what's the most famous brands of people who everyone knows of, but hopefully their employees don't read The Hustle?" So in the early stages, it would be like, "The Hustle brought to you by Ford." I had never talked to anyone in my life; I just put their logo in there and said I was sponsored by them. I remember thinking, "Hopefully Ford, you guys, I'm sorry." But basically...

Shaan Puri

still don't listen

Sam Parr

Yeah, hopefully. I love Ford. I had an F-150; I love Ford. But basically, that's illegal. I mean, that's illegal. You can't do that. I didn't know that it was illegal. I was like, "Oh, just put like, you know, Microsoft in here, like put Ford, whatever."

Shaan Puri

who cares like hey a free ad for them right I'm I'm giving them something

Sam Parr

Yeah, and I would put that in there. Then immediately, someone would email me. Eventually, I noticed that if I put a brand's ad in there, their competitors would call me to advertise.

Shaan Puri

right

Sam Parr

And this one, I won't even... I'm not gonna say, but I would put in certain tech brands. I'm like, "Right, dude, this particular company X has a really big ad budget, but they're not emailing me. Let's go and advertise Y, which is their direct competitor, and put them in there." Then immediately after, sometimes what I would do is I would only put that particular ad in the email that was going to that company. Because with email newsletters, you'd be like, "Oh wow, there's 8 people that have an atuber.com email. Let's send an email with a message just to them."

Shaan Puri

yeah here's a lyft takeover email for them do that

Sam Parr

So I'm like a mini Rishi, a little mini Outcome Health here. But yeah.

Shaan Puri

By the way, that's kind of counterintuitive. Like, "Oh, if I put ads, that's actually the easiest way to sell more ads." Then there's the whole "fake it till you make it" mentality. I think that's like the startup way. There is a line, and I don't think he personally crossed it.

Sam Parr

I do I don't think either

Shaan Puri

With the podcast, by the way, it was the same thing. Somebody was like, "You know, I had this conversation on the way. Somebody was like, 'Oh dude, love the podcast!' and they're like, 'How much are you making on that?'" I was like, "Not really making much here, you know? I do this for fun." But then it kind of ate at me. During my Uber ride to the event, I was like, "Okay, I'm gonna get an ad." This was like the first or second podcast, my third podcast. I was like, "I'm gonna get a sponsor." I thought, "Do I really want to do outreach for sponsors? No way." So, in the middle of the podcast episode, I said, "By the way, today's episode is brought to you by no one. No one sponsored today's episode." I made it a joke and I was like, "But think about it, you could have me right here explaining your product. I could be like, 'Wow, it does this and it does that.'" I just did this fake ad read for nothing. Whatever, I just did that. Dude, the next day, I got so many inquiries. As soon as that episode released, we got our first three sponsors just from that "brought to you by nobody" ad. So, I was like, "Oh, that was like the hack for ad sales," you know? Just to embarrass myself a little bit on the pod.

Sam Parr

Well, the reason it works—and this is something that I learned along the way—is that a good marketer is like a shark. What they do is spend most of their time seeking out underpriced new platforms and new places to advertise. The way that marketing typically works is you find one thing that works, you spend all the money, and you crush and destroy it. You strangle it, and then you go, "Alright, that's exhausted. Move on to the next." So, you are constantly seeking out...

Shaan Puri

The middle step, then you go tell everybody about how this ad channel is crushing it for you. You get well-known, you sell a course on that. Meanwhile, you've moved on to the next channel that's not saturated, and you go do that. Then you're silent until that one stops being fruitful, where you do the same thing: you sell the course, you talk about it, and then you move on again.

Sam Parr

And you do the same thing. So, whenever you see a new podcast that you think has potential, or you see a newsletter, or like TikTok ads, those are a good example. They're probably going to crush once they open it up, which they are. That's how marketers work. The smart marketers early on would approach me and say, "Hey, can we just buy it out for the year?" At the time, I was like, "Yeah, definitely! I'm poor; I need everything." Then I realized, oh no, that's stupid because we're going to grow a lot. I know what they're doing, and they're smart.

Shaan Puri

Right. Have you seen, did I send you this TikTok ad for Tabb's chocolate?

Sam Parr

I don't know. You've been sending me all these messages. I didn't realize it until two nights ago that I even had an inbox on TikTok. Alright.

Shaan Puri

I'm going to show you what I think is the best ad I've seen in... I mean, I don't want to say my whole life, but I can't really think of a better ad. So, I'm just going to give this guy mad props for this ad.

Sam Parr

This company, Riverside, just raised like $40 million. Sean and I are using this podcast thing called Riverside. They just raised $40 million, so it better work.

Shaan Puri

Tell me this is not the best ad you've ever seen, and I'll break down why. Okay, so first, let me explain what it is for somebody who's not watching the YouTube channel. They're not going to...

Sam Parr

So, there's this attractive 19-year-old, or 21-year-old, woman. She says, "Y'all, let me put you on." This is a special chocolate that will change your love life. Seriously. It shows her and her boyfriend each taking a tab of the chocolate. Then it shows her again with her hair having that "sex hair," implying that she just had sex.

Shaan Puri

And then it just says, "It works" at the end of it. Okay, so this ad has 650,000 likes. It went viral and got featured in Vice and a bunch of other places because of its brilliance. So, why is this ad brilliant? First, the hook. The first hook is her; she's got her hand covering her face partially, which is like the kind of "oh my god," and then it says, "Y'all."

Sam Parr

but it's real this is a real like this is not a real thing

Shaan Puri

this was a this was I think he created this ad this wasn't like

Sam Parr

What I mean is, it doesn't look like a highly produced thing. It literally just looks like a woman holding a selfie. Yeah, yeah.

Shaan Puri

She's holding her phone. Okay, this, this... and then there's a good, viral song right after that. It looks like she's saying, "Oh my god, let me tell you something." Then it zooms in on her eyes, and she's just moving her eyes in that mischievous way. The next scene shows the packaging, but there's also another thing on the table. So you kind of don't... it doesn't scream at you, right? It's not like this beautifully presented product that a normal marketer would say, "Well, get this candle out of here; that's confusing." She's like, "No, make it look like a desk and then put the packaging of the product." It says, "This quote-unquote special chocolate will change your love life... Seriously." Okay, so now I'm intrigued. It zooms in on it, and then it shows the guy and the girl each breaking off a piece, half and half of this thing. So, hey, that looks kind of fun to do. Then it doesn't tell you anything about it except for it goes to her with the disheveled hair—the "JBF" hair, as they used to say in college, if you know what that stands for. Then it just says, "It works," with a shocked face. And then it's again her looking around like, "Oh my god."

Sam Parr

dude what is okay

Shaan Puri

so

Sam Parr

I actually don't know what does jbf mean I didn't go to like cool

Shaan Puri

Just been... just been... so, so, so, so, basically, why is this amazing? This is amazing because, to me, the best ads have three components. First, they have the **hook**, which is like a thing to draw you in and get you to pay attention. In her case, it's her with the hand-over face. The second thing is the **promise**. It has the promise that gets me curious, and in this case, it's that this "special chocolate will change your love life." Seriously! Then, it skips to the end. I have moved straight to the end; it has the **implication** of it working. It doesn't tell you how it works or why it works, or even what it does exactly. It's just the end state. It takes you straight to the happy ending of, "This is life if you use our product." Most people don't get this. Most people don't know how to do a hook. They usually understand how to do a promise, and very rarely do people know how to use the implication. This is, "If this works, here's what happens to your life." You kind of just show the ending, and people want to get into that. They put two and two together about how this might work, and they want to click to learn more. So, that's why, to me, this is an amazing ad.

Sam Parr

And this is called Tab Chocolate. If you look at the rest of their TikToks, they're all doing the same thing. It's all like, "You and your husband when you first get married," and it's like them wanting to have sex. Then it's like, "10 years after marriage," and it's the wife trying to be sexy while the husband ignores her. Yeah, and then they show, "Now here's you with Tab," and it shows them wanting to have sex. So, like, it's an easy thing to advertise for... well, kind of easy. But what's this company about? Are they killing it?

Shaan Puri

Yeah, so they basically are a B2C company. I want to give the founder a shout out. I think his name is Oliver. I want to say Oliver... let me see.

Sam Parr

and what's in this chocolate what what what makes you horny I don't even know

Shaan Puri

Dude, I don't know. Probably nothing. It doesn't matter. Yeah, this guy Oliver... I see this guy Oliver on Twitter. He's young. I think this guy's like 21. I think they said they sold half a million pounds. What does...

Sam Parr

he know about this then

Shaan Puri

bro got his his first first wood and just decided to create a product

Sam Parr

Still, he still has his first one. What? Like, well, you're 21. I mean, things work great.

Shaan Puri

Yeah, why... why do you need that? But basically, I think he said they sold like half a million dollars worth of chocolate off this ad. It was within a couple of weeks or something like that, so it really jumps out.

Sam Parr

Is it a bootstrap company? I mean, just Tab.com would cost half a million dollars. He has Tab.com, right? So, one...

Shaan Puri

Of the guys, Jake, his thing says "Freshman at the University of Michigan," which is just kind of insane. And then is...

Sam Parr

that true

Shaan Puri

let me find this other guy oliver

Sam Parr

there's no way this do you think it's founded by

Shaan Puri

So, this guy... I'm going to send you this guy's Twitter, which is just hilarious. Wasn't that long ago that this whole operation was just the captain, me, and a couple of parents. But HubSpot helped us grow our business across all seven seas.

Sam Parr

hey celebratory cannons

Shaan Puri

HubSpot, grow better. First of all, this guy's handle is @oliveroliver_b1 or something like that, or maybe two underscores, but his name is Oliver B. Then it says, "I sell sex chocolate." That's his name on Twitter. You know, he's got his photo, which is like here with his bros. Yeah, he's been tweeting out about how it's been doing. So, they did $73,000 this week. He's like, "I have this army of user-generated content creators." So, he's like, "I basically have, you know, I think he's got like an army of 20 creators." He'll pay them between $500 and $3,000, and then they make 30 videos a month or something.

Sam Parr

He's being a little loose with that word "army." Maybe a *gaggle*... he's got a *gaggle* of...

Shaan Puri

got a supper supper supper party

Sam Parr

Yeah, he's got like a full NHL team.

Shaan Puri

he's got half the classroom

Sam Parr

Behind him, he'll have a good touch football game worth of creators. I want to know about Army 20.

Shaan Puri

But honestly, this guy knows more about marketing than like half of the marketing gurus that you see on social media. Just go look at this guy's content. No, they're... I think they're bootstrapped. I don't know about you, but I'm kind of making up half of this stuff as I'm going along here. However, I know enough that this is an amazing ad. These guys are young, and they understand marketing at a pretty deep level, especially on new channels like TikTok. They've done a decent amount of sales. But I was looking at... he had said something; he was bragging about his ROAS (Return on Ad Spend) or something like that, and it actually wasn't super impressive. So, I didn't understand why he was bragging about that.

Sam Parr

Do you... so this is kind of an interesting topic. It's basically about trying to reach a young audience. You're trying to look cool, then you go and hire a young, cool person and you're like, "Make us look cool."

Shaan Puri

Yeah, the best example was when I hired Steve Bartlett. He's gone on to do some amazing things. We've talked about him before. If you don't know, he basically ended up creating a marketing company—whatever, a marketing agency—that did over $100,000,000 in revenue. It ended up merging with the company and went public. He's like a dragon on *Dragon's Den*. He's got a really popular podcast and a bunch of other stuff. To me, he's the young black Gary V. That's like the best description I can have of him.

Sam Parr

it's it's and you think he's he's totally the real deal

Shaan Puri

yeah he's the real deal he's the real deal in the sense that like you know I don't know in the same way that we were like dude gary v is awesome you know does he kinda put on for the camera of course that's the game does you know is vaynermedia the best business I've ever seen no it's not the best but it's a great you know it's still a business that works and is like at scale so you know real deal can mean a bunch of things but I think steve's the real deal in all of those terms meaning I've seen his talent firsthand he's really super talented so I recruited him from the uk he flew over he lived with us and and worked with us in san francisco and then he then after that he basically went and spun out his like marketing agency and like that's how he kind of got his start and and my whole thinking was like this guy gets social this guy gets social media he's a hustler and like if we're gonna build these social apps we need somebody who like a they're they're not like an engineer neck beard like who's like oh yeah people want to share photo galleries because why would I not wanna share a 128 photos instead of 1 it's more it's like no dude people don't wanna share a 128 they want one disappearing photo actually because I'm trying send like you know something you know inappropriate to my friend I don't want this permanent record right so like there's there's a big difference of like what how an engineer will build a social product versus how somebody who's you know social will build a social product and and so I wanted to have basically like somebody who was young who was a user of every social platform to be like hey dude just shit test some of these ideas and be like is this good or is this not good and then secondly when we have something good be able to like blast it promote it on social in a way that's not like cringe and he did that like and so when we were we were like alright let me give you an example at the time he had this like network of pages he was like look I have all these I either own or know the owners of these twitter accounts that have you know together like whatever 50,000,000 followers so when we're ready to launch we'll post it there and I was like great and so again the engineers were like alright we're ready and so I was you know my brain went to like cool on all these accounts post like hey love this new app it lets you do x y z and I love this new app bebo it lets you do blank blank and blank and then engineers like oh and make sure we can track the attribution so we're gonna use this like this url with this utm parameter and they give me this url that's like 9,000 characters long it looks ugly as hell but it's like super trackable they're like look at this in the dashboard we know exactly who clicked and which tweet and all this stuff and then steve was like like alright thanks for the suggestions but not using that link in fact not using any link because nobody's posting a link and nobody posts links on twitter we're like what like then how will they go download the app he's like they'll go download it if they hear about it a bunch and they feel like they're missing out and I was like yeah but that's like more work he's like yeah but again they're gonna feel like they're missing out not that they're being sold to and then he's like and we're also not gonna tweet hey check out the new bebo app it has these features he's like we're gonna tweet out memes like you know my teacher when she sees me you know like my teacher when she hears about bebo like for the 50th time today and it's her throw it's a gift of a teacher throwing a phone out this class window and like shattering the window or like you know my feel m f w my you know my face win or my feeling win I see bebo trending on twitter you know after 10 years and it's like and I was like but that sounds bad for us right they're annoyed at us he's like yeah get it it's like they're annoyed because they've been hearing about it so much and so somebody who's not hearing about it is gonna be like oh shit I'm out of the loop what is this and they're gonna go Google it and find it and I was like nah this this is stupid guess what he we did it his way we launched we hit number 1 on the app store charts hit I don't know how many down I think we hit 250,000 downloads in like the 1st month or something like that something crazy and yeah it was like insane and we spent $0 so it was awesome

Sam Parr

But how did you get the influencers?

Shaan Puri

So, Steve owned a bunch of them. Hiring Steve was like getting to use his assets. He had clout in the social meme world, among the people who own these pages. He pulled a favor and said, "Yo, post this on this day. We're gonna get this to trend. I need this." He was like a 21-year-old trying to prove himself, so he said, "Yo, I need you to do me a favor here. Put this thing up here." We probably paid like, I don't know, a few thousand dollars total, but it was nothing to get hundreds of thousands of downloads and the number one rank in the overall App Store charts. And we did that. Was he a pain in the ass?

Sam Parr

to employ though

Shaan Puri

no no he wasn't a pain in the ass

Sam Parr

but I'll

Shaan Puri

Let me tell you first why I knew we needed to hire Steve. When we were building this app, we realized that it definitely leans towards a younger audience. We thought, "Alright, we gotta be in touch with high schoolers." So, I told Jason and Tyler, "Guys, we need to pitch our app to high schoolers and see what they think about it." I was like, "Alright, how the hell are we gonna do that?" At first, they were coming up with all these schemes. I visited them about an hour later and asked, "What's the plan? How many high schoolers do you have?" They replied, "None. We're coming up with a PowerPoint deck on how we're gonna do this." I said, "Let me put it differently. Here's a better question: In the next hour, how can I show our app to two high schoolers? Go! Let's make that happen." They were like, "Okay, alright." Then they got what I was looking for. First, they said, "Alright, my nephew's on the line," so we got the two. I said, "Great! How do we get 20 high schoolers now in the next hour?" They responded, "Okay, there are a bunch of high schoolers over at the mall near our office." They went over there with a sign that said, "Test our app, get a free burrito," and they immediately got about 20 people. They said, "Okay, that was cool, but there were only 20 people there. How are we gonna do this regularly?" So, we found a high school nearby. They started the same thing, putting a sign outside that said, "Free burrito if you try our app." People were signing up like crazy. By the way, we didn't have burritos; it was just a promise. We were like, "I don't know, we'll figure out how to get you a burrito later." And then we got a bunch of people to try it out.

Sam Parr

a teacher came out and

Shaan Puri

Hey guys, what's going on here? They were like, "Oh, sorry, sorry, sorry! We're not creeps. We're just trying to get beta testers for our app. Do you know what that word means?" And we were like, "Oh cool, you're a startup!" They invited us to come speak. They said, "Hey, you know, you could just take over my class for the day. I'll just sit down and play Sudoku, and you just teach my kids about startups."

Sam Parr

it sounds like the most naive trusting teacher like to a fault

Shaan Puri

it was it definitely was

Sam Parr

Oh, you're a little kid lover? Great! Come on in. You must love kids so much that you build apps for them. So, you're a little kid lover.

Shaan Puri

It was definitely worrisome, like why it was so easy. But literally, that's what happened. For **seven hours straight** that day, a class would come in with **50 kids**. We would teach them about startups for **15 minutes**, and then we'd pitch them our app for another **15 minutes**. Then we'd say, "Next!" By doing that, we were getting **210 kids a day** in the same school to download our app. All their friends were on the app, so it was a great way to take over a high school in a day and see if it goes viral once we get that seed community. So, on the first day, it was me and Jason. I'm like, "Dude, it's cool. I'm cool." Then I start talking, and I'm like, "Yeah, that's tight." They start giggling, and I'm like, "Oh shit, 'tight' was a cool word when I was in high school." So I say, "It's lit! It's super lit!" And they're like... you know. I was already outed as not cool by saying "tight." I got humbled big time. By the way, if you go talk to kids in high school, they just don't give a shit. They don't pay attention. They'll be straight talking to somebody else while you're talking, and you can't control them at all. I was like, "Oh man, this teaching is so hard." So I'm like, "Okay, whatever. Let's skip to the end. Let's skip to the part where we test our app." I said, "Alright, you guys wanna see our app?" Nobody says anything. I'm like, "Okay, you know the first person who downloads our app gets candy from this bowl." They're like, "Alright, what's that?" I said, "Oh, it's not in the app store yet. It's on TestFlight." I could just feel the blood draining from my body as I said that. I was like, "What the fuck were we thinking?"

Sam Parr

you weren't so just

Shaan Puri

I was like, "I'm gonna put the link up here on the projector. Just type that in and it'll take you to the thing." And this kid in the back, no joke, he goes, "Links are gay, dude." I was so embarrassed. I just got wrecked and started laughing so hard I couldn't stop. Literally, at the office from there on out, we were like, "Hey, HR, we don't mean this in a bad way, but it's the funniest thing that just happened." The whole company was in on this joke. So anytime somebody was like, "Yo, send me that link," in Slack, someone else would be like, "Links are gay." It was the most... you thought you got nagged? I got straight-up bit slapped by this like 13-year-old. It was unbelievable. It was unbelievable.

Sam Parr

way the other thing

Shaan Puri

Every high school kid has just a cracked screen. None of them have a phone with an intact screen. They all have cracked screens. You...

Sam Parr

You know what? I think about this every once in a while. Do you remember this company called Chubbies? Yeah, so basically they made shorts—like short shorts—and they were great. The guys who were their customers were just like bros. Hard, like Chad bro chill. The hardest, the hardest bros you could think of. And that's fine, but I don't want to be 40 years old and having to make ads about summer and spring break. You know what I mean? I don't relate to that at all. At least I don't if I'm 40. It's kind of like the Barstool guys. It's like, "Man, you're losing your hair. Do you still want to be doing these beer bongs?" I think about building a social app or even other products like Chubbies in that space. To be a grown adult doing it, if that doesn't work, it's super embarrassing.

Shaan Puri

But you're going with some highly intellectual... no, like, conclusion here. It was just like, yeah, you basically were like, you know, like, yeah, you're kind of a loser.

Sam Parr

It was just embarrassing, man. Like, it's cool because TikTok worked, but imagine a bunch of like... a 45-year-old, I think the guy who started TikTok or whatever, what's it called? The owner of TikTok, I forget what it's called... Bitnami or what's this shit? Bytedance. Like, this 43-year-old Chinese guy trying to make products for like...

Shaan Puri

but it worked dude

Sam Parr

American girls, like young 14-year-old American girls, it's like, "Yeah, it's cool because it worked." But man, this was like, this could've gone either way. Like, this could've gone either way, and that's kind of scary to me. Not scary, but that's another one.

Shaan Puri

We built that app, and after going through the process, I got humiliated. I thought, "Oh my god, we are so far disconnected from our customers." We thought we could go in there, teach them about startups as if they cared, and then tell them to download our TestFlight app from a link. We all heard how that went down. So, I felt like a character in South Park that day. I got honed, and I thought, "Alright, let's pivot." We tried this other app, which ended up being what Houseparty was. It was an app where you could say, "Oh, I don't want to call somebody, but I'm down to hang out if someone else happens to be free at the same time." It was an app where you could just indicate your availability. If other people were around, you could get into a more spontaneous conversation versus a phone call, which often feels like, "Dude, what do you need from me?" So, they made the app and created a prototype quickly. The engineers were great again. Then, for the front screen, they said, "Hey, we need some text for this." Right now, it just said, "Push to begin" or "Initiate." I thought, "Oh no, we don't want to write 'initiate.' That's not going to work." Teenagers don’t like links; what do they like to do? Netflix and chill. So, I suggested, "Just make it like a swipe, like Tinder." We ended up saying, "Swipe to chill." Literally, the first version said, "Swipe to chill." We had one guy, Johnny Dallas, working for us. He was a teenager, a 16-year-old programmer. When he saw "Swipe to chill," you could see him thinking, "Do I have to share this with my friends? Did you guys run this by other people before I send this to my friends?" Because it said "Swipe to chill" on the front, and that’s not something people say or do. So, it was all bad, dude.

Sam Parr

that sucks

Shaan Puri

Okay, so then let me tell you a Steve Bartlett story. Alright, so I'm like, "We need some young blood in this office." Steve Bartlett cold emails me a great cold email. I'm like, "This guy's awesome!" So, I fly him and his buddy out, and we're like, "You guys work for us now. You're kind of like our youth department."

Sam Parr

how did they stay in america

Shaan Puri

There was no visa. Now, there was just not a tourist thing that came. They could stay for 3 months at a time, and then they would go back and come again.

Sam Parr

and did they live at the office

Shaan Puri

They would live... We got them a hotel, but it was like they were staying for a while. So we were like, "Alright, just stay at the office because there's an apartment built in." And, you know, just... I don't know, make it work, dude. But...

Sam Parr

Did you ever think, like, what did Steve tell his parents? Can you imagine a 20-year-old, or 19-year-old, you explaining what's going to happen?

Shaan Puri

Yeah, I would have been like, "This is awesome!" I knew Steve was wired like that, so he was also like, "This is awesome!" He didn't bother to tell his parents; he was just living his life. He thought, "This is great!" So, Steve was there, and if you remember, our office in San Francisco is kind of a baller pad. Steve basically went from living in a dump, like a tiny place—he was a college dropout in the UK making no money—to coming to the U.S. and now living in this baller pad that has a bar built into it, a private chef, and all these perks. It just looks like it's designed straight out of some British magazine. Steve would take advantage of that. He was living there, and people would leave the office around 6 or 7 PM. What he would do is go on Tinder; Tinder was active. We would come into the office in the morning, and I remember one day I came in and saw some girl leaving, doing the walk of shame, holding her heels in her hand. She was walking out, and we had women working in the office who were like, "Who is this girl, and why is she hungover leaving the bedroom in the office? What's going on here?" Then Steve would come down, and he was like, you know, proud of himself in a way, like, "Dude, I'm winning at life." So, that was a little bit of a problem. I remember they were like, "What are they doing?"

Sam Parr

What did you say to him? Like, "Hey, you know, you can't even... yes, you are living here, but you can't live here."

Shaan Puri

Yeah, I think I told him once, but I remember just like even in the conversation, it was, "Man, he feels like he's in the principal's office, and I feel like the principal." I could tell this was lame because he wasn't doing anything out of any malice. Right? Like, it would just be like they would be hanging out, drinking at the bar we have in our office, but they would kind of leave the bar sticky with beers everywhere. They didn't know to, you know, just like some professionalism stuff. It's a Tuesday night; I should just, like, let me at least make this look like we weren't here drinking and hanging out all night and playing the music, and the neighbors get a noise complaint. Stuff like that, right? Nothing harmful, nothing bad, just slightly annoying to people who felt like they were parenting them in the morning when they came in. And I remember one time, the funniest one, and the one where I was like, "This is just not working out." They had ordered... I was talking to our office manager, and I was like, "I promise I talked to Steve. They're not gonna play the music too loud, and they'll clean up the beers or whatever." And that happened one day, and then the next day, no beers, no loud music; it was all good. Then she opened up the supply closet to get some new pencils and sticky notes for the board meeting we had, and like just a giant pizza box fell out.

Sam Parr

and she was like why

Shaan Puri

Would you put a pizza in this closet? Like, just throw the pizza in the trash. She was like, "These kids... I can't do this, Sean. I can't do this." And I was...

Sam Parr

like oh him

Shaan Puri

No, no, no, I didn't fire him, but I kind of knew in my head, I was like, "You know what? Birds gotta fly." I was like, these guys, they're talented; they need to do their own thing. Them conforming into our office setup, it's just not a fit, you know? They don't need to run these meetings, like these daily stand-up meetings with the engineers. That's not their skill set; that's not what they need to do. They're good at taking something that's dope and making it pop in the market. Basically, that's what their marketing agency did. They would find cool brands to work with and figure out how to tell that story and make it big and trend on social media. It turns out they were great at that, and they went on to make, you know, hundreds of thousands of dollars doing that. So that was a successful outcome. But I kind of knew in my head, I was like, "Alright, there are these advantages when you bring in these sort of non-domesticated cats." They're going to be real with you about the market. They're going to have fresh ideas; they're going to be good at playing the social media game. But, you know, they're not going to be the best at running these agile software meetings. It's just not what they need to do. They don't need to be product managers; they need to be out and about.

Sam Parr

I remember I read a profile about him when he was still pretty young. It was on BuzzFeed or something; I think it was BuzzFeed. He must have been only 23 or 24. They were like, basically, the office has a slide in there and it was like everything got...

Shaan Puri

a ball pit like a mcdonald's playpen it's my face

Sam Parr

And he was like, "They've got like 40 employees here." I asked him how much each person is getting paid, and it was like $25,000 a year. It was like nothing. But they love it because it's the first time a 21-year-old is able to be the head of HR and just figure out stuff as she goes.

Shaan Puri

and I was

Sam Parr

like oh my god

Shaan Puri

I don't know about those numbers, but I do remember at one point, they had 23 employees, and I think 22 of them were under the age of 22. It was like all 21-year-olds. That was the Vice article or the Vox article, or whatever it was. It was just like, "Meet the 21-year-olds who are running the internet right now." And it was true; they really owned all of the popular Instagram and Twitter accounts in Europe. So they just had a crazy ability to influence the market, and they had the right people to do it, right? That's who knew how to build.

Sam Parr

the space was the business the business was brands would pay to advertise on those twitter and instagram handles

Shaan Puri

Initially, that's how we used it. That was a part of it. We created this idea of a "thunderclap," which is getting all those pages to talk about your brand on the same day.

Sam Parr

came up with that name

Shaan Puri

I remember saying it, but I think other people use that term, so I don't think that's a good idea. I didn't invent it, but I'm sure I learned it; I heard it somewhere. The thing is, what they were doing was that a brand would be like, "Hey, how do we develop our social strategy?" They quickly got away from just saying, "Hey, pay to post on our pages," because that's kind of transactional. Instead, they would say, "Hey, Netflix, do you want to know how to do your social? Why don't we just be your agency of record for social media marketing?" That approach came with a fat retainer and ongoing campaigns. They would create proper videos and kind of viral video stunts—things like that. Whole strategies for these brands. So that's what it became, and then they launched their own brands too.

Sam Parr

We've been getting, in the past few episodes, more into just trying to tell them funny stories. I'm very eager to see if this is the route that we should go. It's way more fun, that's for sure.

Shaan Puri

Yeah, it's fun, but after every episode, I have to do a cancellation check-in and be like, "Was I sexist, racist, homophobic? Is there anything that I said that could have been construed as hateful in any way to any group of people that is going to be offensive?" Like, I tweeted out this thing the other day that's like... and by the way, they're never hateful; they're always like a compliment. But I tweeted out this thing which was like, "You know, my investment criteria: big market, good traction, founder is Mormon, Russian, Jewish," or whatever. I said something, but it was positive. It was like because I think those founders are, on balance, awesome. Like, I've had a...

Sam Parr

few years ago and it

Shaan Puri

Was it a joke, right? People were like, "What does race have anything to do with who you'll fund? This is what's wrong with..." And I was like, "Well, first of all, it's a joke, to be clear. Did you think this was serious?" Secondly, it wasn't a joke saying, "I don't fund these random niche minority groups." It's like, "No, I think Mormons are awesome at sales." As a general positive prejudice, I am inclined to believe that these people are really smart, really talented, or really gritty, or really whatever. But of course, there's no winning, right? The audience that gets that and thinks it's awesome is so small compared to the other audience that's like, "I will make it my life's mission to get you canceled now for this joke you said."

Sam Parr

The Nelk Boys, which are those YouTube guys, now have a new podcast. It's only good because they're not really good at asking questions, but they're so famous that they get the best guests. The Nelk Boys had Donald Trump on, you know, one of the most famous people in the world. They also had all types of hugely famous people like Khabib and Dana White. They were talking to Dave Portnoy and they were like, "Yeah, we're uncancelable because everyone's expectations of us are so low." Right? And like, "We're just degenerate, so they don't... everyone's like, 'Yeah, of course they did that thing.' There's no surprise there. These guys are idiots." I'm not sure if we're there yet. I don't know if we're... maybe.

Shaan Puri

we can be but it's like you know for example do

Sam Parr

you wanna be

Shaan Puri

yeah do you wanna be right like I call it the cancellation vaccination

Sam Parr

like

Shaan Puri

Do you want to be vaccinated against cancellation? Here's what it entails: you need to consistently be provocative, never apologize, cater to your base, and ignore the rest. That's the cancellation vaccination. It's what Joe Rogan does, what Donald Trump does, what the Milk Boys do, and what any group of people like Dave Chappelle does. They say, "Look, I'm going to say what's on my mind. There are going to be some people who are offended by this; that's not my audience." Some people understand the point of view I'm coming from. They're going to understand what's a joke and when I'm saying something positive about somebody. That doesn't mean it's negative about someone else. They're consistent and willing to take heat. They're not going to apologize, etcetera, etcetera. So, you know, that's like the cancellation. Now, I think you could do that, but I also think you need to be financially independent or directly fan-supported. For example, this is a HubSpot Podcast Network podcast. You work at HubSpot, and I don't think they're going to love some of the jokes that you tell. Even if that person individually thinks it's funny, they'd rather us just take no risk. For them, the risk-reward calculator is like, "Oh, just take no risks, and it's fine. Just do your other stuff; it's great." Whereas for us, it's like, "Dude, no! I'm here to have a conversation with Sam. I want this to be like a conversation we would actually have." I think that's how you get super fans because they feel like you're being authentic. You're not separating the real you from this public podcast version of you. I know my intentions are pure. I know I'm not actually a bad guy. I'm not sexist, racist, or homophobic or any of those things. If I say that I think Mormons are awesome founders, I think that should be a totally fine thing to say. I don't think that's a controversial thing in my books. So, I'm part of the common sense party, and I want other people who can use their common sense or are not easily offended around me. But that's a risky path to take.

Sam Parr

That's a good speech. I'm on board. Good, very good speech. Alright, I guess that's the episode.