We Hosted A SharkTank For SaaS Businesses

Sam Parr

So here's the situation. This is a recording, and it's going to go live on our podcast feed. For the people listening on the podcast, there's you, and then there are people who are live right now—over a thousand people live. So we're on this thing called Stonks.com. I guess I gotta do a disclosure: I'm an investor. Sean, are you an investor?

Shaan Puri

no but fan

Sam Parr

Fan, so Stocks.com... we're friends with them. They asked us to do this, and it's actually interesting. We say no to everything, but this was a cool idea. So basically, five startups are going to pitch us, and we're going to maybe invest, but very likely tear them apart and also compliment them. We're going to make some good content out of this, right?

Shaan Puri

Yeah, yeah, okay, great. I'm down. We don't know much about these startups ahead of time, so it's all going to be kind of fresh.

Sam Parr

and there's a comment section do you see the comment section sean

Shaan Puri

like where people are chatting

Sam Parr

yeah so if like if there's any good questions and also on the stock they

Shaan Puri

can invest right like they can just put in money

Sam Parr

Yeah, so like if they see something, I don't think they can... like they're not literally going to fund the company right there. But they're going to say, "I'm interested, let's talk." Honestly, that's probably what I'm going to do. I never... like on these things, I cannot... I've seen these things where someone says, "I'm in for $100,000," and they say it right on the spot. I'm not that impulsive. Are you?

Shaan Puri

Yeah, I'm that impulsive. It's also more dramatic, so I'm a sucker for the drama. I'll do it.

Sam Parr

Alright, alright. Well, at least one of us will. If you go to the chat of this video, you'll see the order of people that they're going to go through. We're going to talk to one person. I think they get 2 minutes, and then we get 8 minutes to talk to them. After that, it's going to say, "Time's up, move to the next one." Does that make sense?

Shaan Puri

this is pretty sick let's do this

Sam Parr

Alright, we have John Hancock from Stonks. He's like our assistant here. He's going to be feeding the startup. So, John, do you want to bring the first one up?

Shaan Puri

john is that a real name

Sam Parr

I don't think so

Tarush Aggarwal

Hey guys, what's up? Tarush, how's it going? Thank you so much for the time.

Shaan Puri

okay take it away

Tarush Aggarwal

Awesome! My name is Tarush, and I'm the founder and CEO of 5X. I've been fortunate enough to spend my career in the data space, from being the first data engineer at Salesforce to most recently running data for WeWork, supporting thousands of employees. Over the last few years, I've been super interested in the modern data stack. It's estimated that over **77%** of companies in the next **10 years**, in some way, shape, or form, are going to use the modern data stack. The problem is that there's a big disconnect between what vendors are selling today and what customers need. Over **90%** of customers are investing in data to get a business ROI, yet the vendors are really focused on selling individual categories. What this means is that customers have to have expertise. They need to sign multiple contracts and stitch this together. All of this is taking away from actually getting business output. 5X is the first end-to-end data platform focused on business output. We license and integrate with different vendors in the space, and as a result, we can provide customers with an end-to-end platform depending on the use cases, industry, size, and budget. On top of this, we also have a services model where we can give companies access to high-quality engineers who are pre-trained on the stack. Today, we interview hundreds of engineers fully automated, and we get to hire the top **0.1%**. The end result is that customers can implement end-to-end data strategies in weeks instead of spending time signing all these contracts. We're less than a year old, with a **$1,000,000** run rate on a proof of concept (POC) with zero marketing, and we're super excited that we are going to be profitable by the end of this month.

Shaan Puri

Alright, good stuff, Sam. So, what does this business do?

Sam Parr

That's what I'm trying to... I was trying to interrupt you earlier, but I think I saw I was muted. I need you to kind of dumb this down for me for a little bit. I'm looking at... so, for the listeners, alright? The website is **5x.co**. Right now, you are raising **$300,000** at a **$25,000,000** valuation. You got to **$1,000,000** in ARR in less than a year. I don't know what **POC** means. When I see **POC**, I think of "people of color." That's what I thought about.

Shaan Puri

con contest

Sam Parr

Okay, so some companies are telling you that they're going to pay you up to $1,000,000, right? Or collectively, or they actually have.

Tarush Aggarwal

they actually are paying us monthly

Sam Parr

And dude, you got a **$1,000,000** and a proof of concept. That sounds pretty sick to me! Okay, yep, but I'm gonna be honest. I don't know what the hell you do. Can you explain it to me? I've never worked at a big company before, so I'm kind of like a big dumb idiot.

Tarush Aggarwal

It's not just for big companies. Think of, you know, if you want to get value from data, fundamentally you need two things: you need infrastructure and you need tools. Infrastructure, you might have heard of Tableau or Snowflake. The second thing you need is people. Now, the way the infrastructure is working today is that every vendor is really focused on one small part of the stack. So, if you want to do something like analytics, you need to go sign four or five different vendors, sign these upfront contracts, and stitch this together yourself. Now, if an industry is going to become mainstream, then you can't really expect 90% of customers who don't care about it.

Sam Parr

when you say words like vendors it's it's still hard for me to understand give me a very specific example

Shaan Puri

You use this format. Yeah, use a format that's like: "X company had Y problem."

Tarush Aggarwal

yeah

Shaan Puri

They tried Z, but the problem with Z is this: so then we came in and we did it differently instead.

Tarush Aggarwal

sure so x company you know wants to figure out whether the customers are coming from

Sam Parr

name name yeah name sorry that was confusing use one of

Tarush Aggarwal

Our customer, Bank Novo, wants to figure out where their customers are coming from. They need to know how to personalize the app, save costs, and optimize their cash flow. Currently, they don't know where to go. They could buy a single reporting tool like Tableau, but an end-to-end data strategy is much more comprehensive. There's a lot more involved than just having a dashboarding tool. Instead of hiring multiple engineers or signing with different tools and vendors, they can come to 5x5. We instantly provide them with an end-to-end platform that includes all of these vendors. We license these vendors and can offer customers a complete solution. On top of this, if Bank Novo doesn't have the resources to figure out how to use the platform, they can add engineers from our side who are pre-trained on it. The end result is that they're getting business output in weeks, whereas if they tried to do this themselves, it would be 12 times slower and 6 times more expensive.

Sam Parr

Alright, that's way better. One question: how on earth did you get people to spend $1,000,000 with you on a proof of concept? This sounds like a very hard thing to sell, and $1,000,000 is a lot of money. Are they actually going to pay you a certain amount of money every single year?

Tarush Aggarwal

Yeah, so you know, at the moment we don't... So in the next two months, our self-service platform will be live. Right? So anyone will be able to go to 5X, enter their credit card for a few hundred dollars a month, and they'll have the platform. Early-stage companies can do this by spending very little money. What we do today, because the self-service platform isn't ready, is combine a semi-automated platform with a services model. So you get engineers, and you get the platform. Our average order value at this point is about $10,000 a month. Multiply that by about 10 to 15 customers, and we're at a $1,000,000+ run rate.

Sam Parr

Which basically means you're doing it by hand from now on, and then you're raising money so you can automate it all.

Tarush Aggarwal

Correct, it's semi-automated already. It would take a consultant about 3 or 4 months just to give you that platform. They would go build it and start from scratch. We do it in less than one day today. That's pretty semi-automated.

Shaan Puri

And where are these customers coming from? Let's dig into this $1,000,000 of ARR [Annual Recurring Revenue]. You said you got roughly $10-15K per customer, and roughly 10 customers that are paying you monthly right now. So you've got about $100K a month, roughly, in revenue. Where do these customers come from? Is this inbound, outbound? Do you have a growth strategy? Like, do you have a strategy that would lead you to the next $3,000,000 also?

Tarush Aggarwal

Sure, at the moment, we've done zero marketing. We've really been focused on the platform. We have been producing content on my LinkedIn and YouTube, mainly getting customers by word-of-mouth. So really, the last 8 months were early on using this as a proof of concept. This is not just a technology problem; you have to convince all of the vendors in the space to give you API access to provision them, integrate with them, and build for them. So, you know, it's a little bit of a chicken and an egg problem where you need customers, and at the same time, you need to show these vendors that there is actually traction. We become an added sales channel for them.

Sam Parr

okay I what else sean

Shaan Puri

I guess I'll just give you a little bit of feedback on the pitch itself. So, a couple of things: Your house, or wherever you're at, is super nice... almost distractingly nice. I kinda like my founders to be a little more scrappy than that. Just gonna put that out there.

Sam Parr

there where are you

Tarush Aggarwal

I'm in bali

Sam Parr

Ah, he's in Bali, man. It's probably not the most expensive place. Yeah, yeah.

Shaan Puri

Fair enough. The second thing is, you know, I think you want to try to get the most information into the pitch. However, I think you need to slow down and work on that first 30 seconds to clarify the main point. The thing that I was confused about, and Sam was confused about, and most of the chat on Stonks was confused about, was: "I don't really know what this does." When you say "end to end," that makes sense to you because you're knee-deep in it. But for us, we've never heard of 5X before, so we're like, "End to end what?" All of the words were quite generic, like "vendors," blah blah blah. What you want to do is basically paint a picture. Did you ever work at a company that had this problem? If you've ever been the marketing manager at a company, you know that you spend almost six months getting your analytics platform set up and then integrating it. Then you have to get your CRM and integrate that, and it takes months just to get set up with the things you need to see your business. Every business has the same problem. So what we do is go to that person and say, "Hey, use us and you get XYZ benefits out of this." People are choosing it because of this. We got $1,000,000 in ARR already during our pilot, just in a couple of weeks or whatever it is. Now I'm kind of more engaged here, and look, this is actually quite easy.

Sam Parr

What year did you join WeWork? Someone in the chat said, "This guy made a bunch of money off the WeWork IPO," and then I just went to your website and it said you worked at WeWork. So, I don't know what the truth is. I joined...

Tarush Aggarwal

In 2017, I did not make money off the IPO.

Sam Parr

That's okay, that's irrelevant. I mean, that would have been sick if you were... it looks like you did because you're in that nice house. But I guess what I was trying to get at is I would do exactly what Sean said, but I would use the WeWork story. So, when I worked at WeWork, because you were the head of data, it looked like at WeWork or something, like you led data for WeWork. Your bio says that sounds impressive. It doesn't matter if it is, but it sounds like it. So, I would use the story of, "I led data at WeWork when we were this size, and I grew the company to this size." A problem that we consistently had was [insert problem here], and we solved it by hiring tons of people. It was still like riddled with errors. Talking to other people in this data world, I noticed they all had the same problem. So, to bootstrap this company and get it off the ground, I hired a couple of friends, and we actually have been doing this by hand. We convinced X, Y, and Z to give us some money, and slowly or quickly, we've actually automated a lot of it. We've automated by doing X, Y, and Z. So now, all these companies who want to get this thing done, they can actually use us. Instead of hiring 30 people, they just have one person use this bit of software, and it saves them X amount of money and X amount of time. You know what I mean? By the way, I'm just totally riffing. I don't know if any of this is true.

Shaan Puri

no that's great

Sam Parr

but you know what I mean

Tarush Aggarwal

yeah totally

Sam Parr

But now, if we should just get to the product, I think it sounds neat. It looks like my good friend Anker invested, and he's actually quite impressive as he knows his stuff. I think it's a cool company.

Shaan Puri

Yeah, I would definitely want to learn more based on your traction alone. I'm like, okay, you know, a good pitch is not necessarily a good business, but good traction is usually a good business. So, you actually have good traction and a bad pitch—that's okay. I would want to dig in to understand how much of this is a service and consulting business versus whether this is going to be software and automated. It sounds like you've actually found a problem that people care about. We'll see how durable that is, and then we can go from there. So, thanks for coming on, man. I think, you know, for both of us, it seems like the answer is that we'd actually want to learn a little bit more and look at the deck before we go too far.

Tarush Aggarwal

amazing thank you thank you so much

Sam Parr

Thanks for being brave and doing this. So, Sean, on the Stonks platform, it says he's got $75,000 of interest. I do agree this potentially is more of a services play, but we actually just talked about that company, Worldwide Technology, and this sounds just like it, doesn't it?

Shaan Puri

Yeah, there are several companies that are like this. There's a lot of SaaS companies that have either a consulting thing - that's how they get embedded - or it's just an ongoing revenue stream. It actually can get quite substantial, so I don't think that's a complete [drawback].

Sam Parr

no I didn't I didn't agree anything

Shaan Puri

like that

Sam Parr

I I didn't mean that as a diss

Shaan Puri

But I kind of said it as, "Is this just a consulting company?" Because if it was just a consulting company, I would not do it. But yeah, I was just so confused for half.

Sam Parr

the time that

Shaan Puri

I didn't really get to think about the business, to be honest. I was trying to figure out what the heck he does.

Sam Parr

Yeah, that was a little bit of an error. Hopefully, he'll fix that. But this type of business, I think it'd be sick to own. I don't know if you... I don't know why you'd want to raise money if you got $1,000,000 and are just selling.

Shaan Puri

By the way, the simple test here is to just say the first 30 to 60 seconds of your pitch to somebody, like a friend. Then, ask them, "Hey, can you play that back to me? Based on what I said, what does my company do?" What you want to know is: do they get it, first of all? You have to make sure they understand it. Then, are they interested in it? Does it sound compelling? If they don't get it and it's not compelling, then don't move forward. Don't go to the rest of the pitch. You need a friend or random people who are going to do that for you. The format you used was good because you sort of added the team and credibility. It's well, when I was leaving data for WeWork, right? You know, all the shenanigans were going on, but in my little corner of the world, we actually had this big problem that we had to deal with. That's where I kind of realized that every company has this issue: that blank and blank and blank. It's like, "Oh yeah, that's a good format generically for a pitch."

Sam Parr

Yeah, I agree. Alright, John Hancock, you want to send us the next one? Alright, alright, Kenny, you got it.

Kenny Totten

hey guys thanks for having me on the show so I am kenny I'm one of the cofounders of bakarai and we've built the world's 1st online marketplace for group airfare and the problem that we set out to solve is that group airfare flights of 10 or more people traveling to together it's sold offline so what does this mean say that you are a you're organizing an 8th grade school trip and you're flying 50 people from san francisco to orlando if you wanna shop for for quotes you actually have to call the air call the airline's group desk over the phone and once you get something that you like well the offline nature of groups doesn't end there it's really important to note that group airfare is unlike booking a normal ticket so it actually takes place in 5 unique stages and that's from shopping to deposit to final payment submitting names lists and before bakarai all of that happened over the phone so we thought in 2022 this is insane that a world with so much money in it operates totally offline so we created what's like a b to b expedia like marketplace for shopping for flights of 10 or more people in terms of traction we we did launch bakarai in october of 2021 we have really strong growth great unit economics and we're actually profitable as a business model we make between 10 15% margin on flights and from january to april we've done $4,200,000 worth of total sales we take about $1700 in revenue per per group and have 40 corporate customers that are using the platform today and one of the most exciting things that happened as a result of the pandemic is we got a ton of inbound from corporate meeting and team off sites that are looking to book group airfare it's our fastest growing customer segment and it's caused us to build out a bunch of tools to meet the needs of meeting planners and you're probably asking why is why is this the team to bring group airfare from analog to digital well we have really deep domain expertise in group travel our ceo eric previously sold a tour operator business where he kinda learned the ropes of the business and then our team internally from the service side to the tech side we have a lot of deep expertise in travel tech and we think that we have a shot to be both the storefront and the underlying operating system for group airfare so we'd love to answer any questions that you have about our business

Sam Parr

Are we live? Can you hear us? Dude, the top comment is actually pretty funny. It says, "Fly together and brew flights.com is available."

Shaan Puri

go by the domain yeah

Sam Parr

go by the domain

Shaan Puri

"Get on that one!" Yeah, you got the... the... the stonks Chad Adams value here. They're the real value-add investor. I love this. Also, I like how you just looked out at your ears like, "Ma, go buy the domain!"

Colton Woodard

ma go get it

Shaan Puri

Buy the meatloaf. Yeah, because Baccarat... I thought you were like a Chinese gambling website. When you first came on, I thought this was Baccarat. Well, based on your last...

Kenny Totten

podcast that wouldn't be a bad idea too that australian business is crazy

Shaan Puri

fair enough

Sam Parr

What is... can I ask a clarifying question on the pitch? You said that you get 10 to 15%, and I think your chart said... did your chart say $100,000 a month in bookings, or did it...? I forget what your... but you said $4,000,000 between...

Shaan Puri

the traction slide again

Ali Moiz

yeah

Sam Parr

It was like $4,000,000 between January and April. Does that mean that between January and April you did $4,000,000? But the...

Ali Moiz

did yeah

Shaan Puri

so we did gmv correct

Kenny Totten

We did, yeah, exactly. So, we've sold **$4,200,000** worth of group airfare, and we're averaging about **$150,000** a month in revenue.

Sam Parr

And that's the revenue that, like, it's real revenue. Yeah, that's what you... And how old's the business?

Kenny Totten

So, we started in 2018. We survived the pandemic, just barely. Then, probably like half of our clients didn't make it through the pandemic, so it's kind of like a fresh restart for us. Prior to launching Flight Shopping, we were just a trip management platform for tour operators. For example, if someone organized a lot of student travel, sending people to places like D.C. and Orlando, they would use our trip management platform. It was a way to stay organized and make sure that they didn't miss deposits and final balances. During the pandemic, we had a lot of time to ourselves, so we created Flight Shopping because it was our number one request. People didn't want to call the airlines for quotes.

Sam Parr

and then how many people work there

Shaan Puri

we have 11 now

Sam Parr

cool got it okay okay

Shaan Puri

So maybe in each of these, Sam, when we do this, I kind of like clarifying questions... like reactions to the business. Then maybe some pitch feedback at the end on how to improve it. So, okay, reactions to the business and clarifying questions. You are trying to do group travel for corporate, and you said something at the beginning which was like, "It's insane that there isn't really a good solution for something with this much money in it." I didn't catch, did you say how much is spent on group travel every year?

Kenny Totten

Yeah, so I didn't... It's about $130 billion worth of total group spend, and that equates to about 5% of an airline's revenue. So, floating around, about 225 million passengers fly as part of a group pre-pandemic.

Shaan Puri

Okay, cool. So 5% of airline revenue is done via these groups, and that's all kind of over the phone or some other old-school method at the current... currently.

Sam Parr

exactly yep

Shaan Puri

Okay, cool. And then what's the "why now"? Because people have been doing travel startups forever, like Booking.com, Priceline... These were... I think Booking.com and Priceline came out like in 1995 or something crazy like that.

Sam Parr

yeah

Shaan Puri

And so, why has nobody tackled this part of it? Because I've seen travel startups from every angle, but what is there... Is anything that's unlocked now? Or you finally have the great idea? What's going on here?

Kenny Totten

No, so not finally have the great idea. We do have some people that are competitors who sell a SaaS solution to airlines. This allows airlines to create a white label version of what we do. The "why now" is that before the pandemic, Lufthansa, American Airlines, and United were rumored to be working on it. They want to go digital for their groups and have actually instituted a private white label. We see it happening in the same way that single tickets came online. We think groups will come online as well. The airlines are already starting to develop the underlying technology, and we think that's amazing. We want to be basically that second shelf where they sell their group airfare.

Sam Parr

How are you getting the customers now? Because isn't travel like the hardest? When I think of hardcore customer acquisition, I think of online gambling and gaming. Then, like travel... yeah, that seems like one of the most cutthroat industries to get customers. I think the guys who started Reddit also started Hipmunk, and it didn't work out because they just couldn't get... or, you know, it wasn't nearly as big as Reddit. How are you getting those customers?

Kenny Totten

Yeah, so currently, about 99% of our business is B2B. We get customers really in two core ways. 1. We have a referral program. We are a preferred partner for meeting planners and tour operators in the student travel space. If you refer us business, we give you $5 per ticket booked. That has been enough to send us so much business that we have to hire and raise money. 2. The second way is kind of old school. Industry events are still really popular, just meeting with meeting planners and tour operators. Something that we'll try to get better with in time is SEO. There's not a lot of competition for keywords like "group airfare." Before the pandemic, we got it down to 72 cents a click. But admittedly, since we just survived and now have the capital to run a bunch of marketing experiments, we're not doing any paid marketing at the moment.

Shaan Puri

And then until now, you've got a bunch of savages in the chat that are all gonna start beating you up. I know this is... they already bought the domain "Fly Together" before you could get it. So, by the way, explain: What are the terms of the raise? You're raising how much at what valuation?

Kenny Totten

Yeah, so we would like to raise **$1,500,000** at a **$15,000,000** cap. Great.

Shaan Puri

And so, for somebody listening to the podcast... there's people who listen to the podcast that aren't part of the angel investing scene. How does a company... Are you just $15,000,000? Wait, but you said you're doing $150,000 a month in revenue. So is it some revenue multiple? Just explain, where does this $15,000,000 magic number come from for you?

Kenny Totten

Yeah, so we have our customers book pretty far out. Our average customer books 9 months in advance. So, through the end of the year, we should make about **$1.5 to $1.6 million** in revenue. We just took that top-line number and multiplied it by 10 to kind of be safe. Now, there have been crazy things happening, but we want to be set up for success and fairness, so we just multiplied it by 10.

Shaan Puri

And then what is actually happening under the hood? You didn't show like a demo or search engine, or how somebody actually does this. Are there APIs? Are you just calling the airline yourself under the hood? What's actually happening?

Kenny Totten

Yeah, so under the hood, we are connected with two... Are you familiar with travel technology? No? Okay, so at a really high level, I know that time is running out. We're connected to two GDSs called Sabre and Amadeus. That's how we get the flight content. Then we had to build some stuff on top to make sure that groups work because there are limitations of the legacy system. But I think our time is up, and that could be a whole podcast.

Sam Parr

Let me ask one more question. This is something that I love asking everyone that I invest in. In 5, 10, or 15 years down the line, how big will this be? How much revenue are you going to be making, and how am I going to get my money back?

Kenny Totten

Yeah, I think that we can be both the storefront and the underlying pipes for groups. So, if you were thinking about getting a ride, you would open the Uber app. If you were thinking about booking flights for 10 or more, I think that you would come to BatRide.com.

Sam Parr

But how do I... and how? So, how big do you think the business will get? What's going to happen? Is someone going to buy you for $1,000,000,000? Or maybe for $100,000,000? Are you going to go public? What do you think will happen?

Ali Moiz

what's your aspiration

Kenny Totten

There's a really clear path for us to reach $50,000,000 in revenue in the next 5 to 6 years. Beyond that, I'm not totally sure, but the path to 50 is pretty clear.

Sam Parr

that's a good answer okay

Shaan Puri

Yeah, that's a great answer in general. Fantastic pitch, actually. The thing I was saying before: gotta be clear, gotta be compelling in the first minute. You were extremely clear, extremely compelling. I think it's pretty clear you know your stuff. As you were asked questions about it, you had good, honest answers. You didn't oversell, but you got to the point on each one of those questions. So I think it's a really strong, really strong pitch as far as I'm concerned.

Sam Parr

yeah I would I I I'd I'd love to learn more

Shaan Puri

awesome

Sam Parr

That was a good one, and it was very, very, very clear. One thing that wasn't clear was, how big is this? I mean, I don't know anything about group flights. It turns out, he said it's like $100 billion worth of tickets booked a year as group flights. Is that what he said?

Shaan Puri

130,000,000,000 of group spend which is 5% of all airline revenue is what he said

Sam Parr

yeah he buried the lead on that one a little bit

Shaan Puri

Yeah, exactly. So, you know that question we asked? That's gotta go to the front of his presentation, which is like: > "Booking group travel sucks." And by the way, this sounds like it might just be this fringe thing, but there's over $130 billion a year going through group travel. Today, that's all done still on the phone, which is crazy because most of all other ticketing - 90% or 80% of the other ticketing - is just done online now. That's gonna happen for group travel, and we're gonna make it happen, right?

Sam Parr

I would have been like, "Alright, so group travel is defined as 10 or more tickets. Guess how much revenue is booked per year during that?"

Shaan Puri

"Yeah, guess how much revenue" is a nice one: a) It's confident b) It makes the other person insecure c) They're almost always gonna guess wrong when you have a really high number because they just don't have the right frame of reference

Sam Parr

You say $128,000,000,000. That's 5% of all tickets booked that way. And guess how they book it? They have to call the airline and book it all manually. It's a pain in the butt. That's how I would have done it, but he did really good.

Shaan Puri

And I would put a screenshot of the website. I'd be like, "This is... you know, if I go to like Delta or I go to Expedia, look at all the... there's a million buttons on the screen." There's not one... if you want to find the group button, go to help, go to phone. This is where you go for that.

Ali Moiz

this is

Shaan Puri

Where $130,000,000,000 flows through, right? I really emphasize that problem. Then, I'd show my screen, which is like a Google search engine. It's like, "Here's how it works." On Fly Together, you just go here, you just say how many people and where you're going, and then we take care of the rest. We do a bunch of crazy stuff under the hood to make that automated, and it's working. We have done $4,000,000 in bookings so far, which translated into $150,000 a month of revenue for us. So, we're on a $2,000,000 run rate, and by the end of the year... blah, blah, blah.

Sam Parr

Dude, I agree. There are two things that bother me when I'm talking to startups. The first is when they use ARR, and it's not actually Annual Recurring Revenue. They're like, "Well, it means Annual Run Rate." I'm like, "Come on, none of us use that term that way." The second thing is when they say revenue, but it's actually GMV, which stands for Gross Merchandise Value.

Shaan Puri

merchandise volume

Sam Parr

So, it's like if you're eBay, you sell technically like, let's say, $100,000,000,000 worth of stuff. But eBay only captures 5% of that. You know, I'm making that up, but I need... it's so confusing to me when they say that.

Shaan Puri

I wrote this note during the thing. I have this little whiteboard here I'm writing on. I wrote "revenue presented weirdly" because he wrote 4,200,000 in sales, but it was like that's an aggregate over 5 months. Then he wrote "we take 1.7 per customer." It's like, dude, just say how much revenue you have. Make that the first one: - We do this much per month or per year - That's our current run rate - That's not GMV, that's what we take home - In terms of GMV, we've done this much Right? Like that would be a big improvement over the traction side.

Colton Woodard

but

Sam Parr

Very, very cool company though. You wanna do another one, Mister Hancock? Where you at? Hello?

Shaan Puri

what's up

Oren Kandel

all good and thanks for doing that it's actually pretty fast fascinating so my name is oren I'm the cofounder and ceo of munch and I'm accompanied by peter my cofounder and cto we both have some I have too many years of experience in business and tech leadership roles and we've been building munch for the past few months getting out of the validation phase and into our mvp and initial traction so what is munch think about your favorite youtuber apart from results let's say this person has 1,000,000 subscribers on youtube now what if I tell you that chances are that this person has almost all of of other content professionals has only 1 to 2 successful distribution platforms I mean this is mostly the case in in almost all cases this is because it takes a lot of time money professional know how to succeed on each and every social platform it's actually pretty different to be successful on tiktok or facebook or instagram or youtube totally different platforms and different audiences due to that most of them don't even try to to put it in that effort and kind of give up even though it can grow their revenue streams and their monetization potential quite quite you know in quite reasonable numbers so we are a team of builders dreamers and content creators on a mission to build the first platform that we serve as a home for content create content professionals there are no other platforms currently serving as a home as a place that the content professional can do everything from creating their their new content based on data driven processes repurposing the content for different types of platforms doing research on what's the next next content that they want to create and actually distributed on all platforms and monetize the current creation market is currently estimated at around $65,000,000,000 with an annual growth rate of 15% this means that it will get to $140,000,000,000 by 2026 and combine that with the creator economy we're talking about $200,000,000,000 market it's rather big market and we are currently raising $500,000 on top of the $900,000 that we already raised we have 250,000 already committed and we're looking for 250 more the idea is to take this money and use it to boost our dev team and create the the first version of the product by this november increase our traction and start and and start testing different pricing levels with their initial paying customers so we're looking so far some new partners that can actually teach us a bit more about the media business

Sam Parr

Okay, first of all, let me say the people who are not English speaking in pitch are *fucking awesome*. I cannot imagine how hard that is.

Sumorwuo Zaza

it's not easy

Oren Kandel

it's not easy

Sam Parr

I could tell it wasn't easy. You did pretty good, but golly, that seems like a rough thing to have to learn how to do. Congratulations!

Sumorwuo Zaza

I think that's

Shaan Puri

We can barely speak when it's our native language, so you know, respect for that. Okay, now I could be mean; that was a horrible pitch, though I respect the attempt. But the actual structure of the pitch was just not great. In the chat here on Stonks, on a scale of 1 to 10—10 being "that was super clear and compelling" and 1 being "as cloudy and not compelling"—give it a score from 1 to 10. I'm curious what it was for you guys. Type it in the chat!

Sam Parr

and they're on like a they're on like a 15 second delay by the way

Shaan Puri

so it's gonna start comes through

Sam Parr

it's gonna start coming in

Shaan Puri

So, I'm seeing an 8 and then 2, 2, 3, 2, 1, 2, 1, 2, 1, 2, 1, 1, 1, 1. Right, okay, so your job, Oren, is to get that 2 into an 8. Right now, I can barely even give you kind of feedback on the business itself. I went to your website, so I went to getmunch.com, and it looks like basically what you're doing is this: a creator spends a ton of time, let's say, making a video or a long-form post. They're kind of drained by the end of that. So, they post it on one platform, they post it on YouTube, and you take that content, you turn it into clips, you put it on TikTok, you take that content, you turn it into tweets. You basically repurpose the content, you chop it up and repurpose it so they can get more juice out of the content they made. Is that right?

Oren Kandel

This is the penetration product. This is what we currently do. We currently have it online. If you want to see an example, I allowed myself to take one of your episodes. Do you like to see that?

Shaan Puri

can you see that yes

Oren Kandel

Okay, so let's take, for example, this episode. It was from April 6th. I kind of played around with it, and what you have here is our system for choosing between 3 to 5 of the most engaging parts of the original video. What do we mean by engaging? We do analysis on both scenes and visuals, as well as different types of audio effects. We also analyze, using AI, the actual spoken words in the video to understand what would be the best clips that can fit into, let's say, a 1-minute TikTok, a 3-minute TikTok, or a 1-minute Instagram reel. So the idea is that you, as a creator, can get your original video chopped up into, like you said, a few clips and then turn it from landscape to portrait so we can publish it directly to the other platform.

Sam Parr

doing this go ahead yeah

Kenny Totten

I'm I am human optimization

Sam Parr

I... Sean, have you ever heard of Jelly Smack? I'm shocked, Oren, you didn't talk about them. You've heard of Jelly Smack, right, Sean?

Oren Kandel

Waiting for you to raise the name... Yeah, we heard about it. It's Smack. Actually, we love Jelly Smack. We love what they're doing, and we appreciate the fact that they are doing all the market education for us. They are talking to content curators about content repurposing and the fact that you can be successful equally on all platforms. But Jelly Smack, again, we really admire what they're doing.

Sam Parr

oh come on orin

Oren Kandel

We really admire what they're doing, but they've been around for six and a half years and they have 500 customers and 2,000 employees. Manual labor is not really the high-tech new kind of solution we're looking for. Using NLP (Natural Language Processing) and computer vision, we can do what JettySmack does fully automatically, on a self-service basis, and in a fully scalable way. This is a whole new level of content management. Just to be clear, we're starting with content repurposing. My idea is that we used to do the content for the content creator on their behalf across all platforms. We can take back the analytics that we get from the platforms and then create a kind of cockpit in which the content creator sees everything that is going on. They can understand what exactly they need to focus on, where their niche is, and what topics they need to talk more about. This way, every content piece can become 30 to 50 different types of content pieces that create more data, which you can then analyze to create the whole fabric loop. So yeah, this is the idea.

Colton Woodard

well we

Sam Parr

have a

Tarush Aggarwal

good answer

Sam Parr

Real quick, what's stopping this? To me, maybe there's a world where this kind of becomes like the way Buffer.com started. Buffer began by allowing users to schedule tweets to go out, and then everyone kind of offered that same thing. That feature became somewhat of a commodity. Is there a world where this thing that you've built becomes a commodity, and you actually have to offer more stuff? For example, I don't actually know if this is true because I don't entirely know how they work, but it seems like Jellysmack—one of the ways they make money is they actually don't charge the creator. Instead, they put ads on the creator's videos and take a cut. So, it's like the technology they're offering is just a feature, and the real value is that they are giving the creators more revenue by providing them with an ad split.

Oren Kandel

always be the moneymaker yeah

Sam Parr

Yeah, so is there a world where this technology you have really just becomes a commodity? And you’ve got to offer other stuff in order to keep people on?

Oren Kandel

Yeah, so the idea is that, you know, like dropshippers have Shopify, marketers have apps like HubSpot, and content creators will have Munch. The idea behind that is that currently, there's no platform like this. There's a lot of vacuum in this space, and currently, this vacuum is being filled by hundreds of thousands of freelancers on Fiverr, Upwork, and little to medium agencies. This is something that people already consume, but either they're paying premium money for their services or they're giving up, and these are real numbers, 30 to 50% of the revenue that has been generated by the agencies. So, the idea is that it's going to be the central platform for content creators, the central copy they can use. In terms of the business model, if this is what you're asking, we have two options. We are currently still proceeding and planning to experiment with the business models. We can do both things: we can charge a premium fee for the premium features, and there are a lot of things that we can charge for, like taking your podcast and creating Twitter threads for the next month that we can distribute at the right time. Alternatively, we can use this inventory that is being created via Munch, integrate brands into it, do brand deals, and get money from brands to pay the creators. So, we're still not sure which business model would win, right? We can experiment with both in the next few months, but yeah, it looks like a huge potential.

Shaan Puri

so so I would not be interested in investing in this business for a couple reasons but I I would say like you know the main the main two is like I feel like it's going to be based on how difficult it was to get us interested in the business I think you're gonna creators are super busy a 1,000 opportunities coming at them at all times and it seems like you're gonna have to really punch through the noise in order to be able to get there and I don't really have confidence you're gonna be able to do that that's kind of the first piece second is like any of the time somebody's using ai I'm like oh okay you know I gotta see it to believe it now I what I will say is your pitch with the slides was putting me to sleep but the pitch where you showed my face I'm like oh wait this is me great of course you know so so I would I would definitely lead with the demo but and that's not just for us because we create content a lot of people create content a lot of investors do but even if it wasn't us hey this is a popular podcast blah blah blah so here it is it's the 1 hour thing not everybody's gonna watch it today they pay you know editors and social media people 1,000 of dollars a month to go find good clips cut them out post them on tiktok post them on whatever cause they know they're leaving so much growth on the table if they don't do it but with munch they'd either be able to do it themselves or they can hand this tool to their person so they can make 10 times more clips you know and and not have to hire as many people and so then you're explaining you know the the fit like your demo was the most impressive part of your thing where you're like look long video push a button I get a properly formatted clip option and I have you know 10 of these that I could choose from and we're trying to do this all automatically right so so I think that you can you can make your thing more compelling if you kind of like work on how you explain it versus like it was all intellectual it was all theory based whereas you want it to be story based right so instead of saying you know content creators fit you know have complexity when it comes to managing multiple platforms that's intellectual you wanna make it a story which is like here's these guys they do this stuff they record this 3 hour thing the last thing they wanna do is this or hey for your podcast right now we have a $5,000 clip contest running it's like you're paying $5,000 just for somebody to cut clips of your of your video into into tiktok what if I told you that I had a tool that would do that automatically for you and you a producer could just go do this you know in 10 minutes after their thing they don't have to rewatch the video they don't have to do blank blank blank they don't have to resize it they don't have to export it we've done all of that for you and the best part is you know blank and so I think you can make this a lot more compelling but as it is right now I would not be interested in the business

Oren Kandel

well thanks for the feedback

Shaan Puri

for that reason I'm out do we do the shark tank thing I don't know

Ali Moiz

yeah yeah yeah

Oren Kandel

Yeah, thanks for the feedback. Regarding customer acquisition, this is exactly what we're doing. We are creating preemptively the videos for them, and then we send them via an email marketing machine that currently has a 4 to 5% conversion rate. At the base of 800,000 content creators on YouTube, we're using influencer marketing. It turns out, after talking with more than 100 content creators, the way they learn about new tools and platforms is by watching bigger influencers. So, we're using influencers in order to reach more customers. It's kind of neat because we just got to 2,000 users in less than 2 months. So, yeah, it's starting to grow.

Shaan Puri

cool sam anything else on your side

Sam Parr

The same question that I asked the other folks, and I don't know why you guys aren't doing it, but paint the picture of how this is going to make me wealthier. You know, like, I want to get down to my primal desire here. I'm giving you money, so how big is this going to get? How do you sell or go public, and how do I get paid more than what I gave you? You know, paint that picture for me.

Oren Kandel

Yeah, so once we have 5,000 paying users, we're going to hit the $1,000,000 ARR. It's actual ARR because it's recurring revenue once you charge them on a monthly basis. There is a serious virality and momentum in the area of content creation. It's kind of a PRG because once you create content with Manj, we have our logo and some mention of Manj on the content. The idea is that other creators are watching and getting into the game. So, it's going to be very, very quick growth in terms of size. The current market is $65,000,000,000, and it's going to grow aggressively in the next few years. So, you know, the sky is the limit. It's going to be a unicorn; it's going to be a big company, and this is what we're aiming for.

Sam Parr

good I appreciate you thank you very much thanks for coming

Shaan Puri

thank you see you oren bye

Sam Parr

I, Sean, man, like what I was saying to him about the English thing. Dude, if you don't speak or if you have an accent, you're at such a disadvantage in terms of logistics and understanding everything. It's a really, really hard thing to overcome. I mean, it's cool that people are overcoming it, but holy moly, I would not want to be in that position. It is tough, right?

Shaan Puri

It is really hard, and you know, I feel like that's why I think the deck and the story need to be crafted well. They can be the kind of universal language that you're working with as you go through this.

Sam Parr

I like, as an investor, and even just when I'm trying to suss out anything, I have to work extra hard to be like, "Okay, this person..." A lot of times when we're investing, sometimes we're investing just on charm. Like, "Alright, this person is charming enough that I feel as though they can convince other customers to buy or they can convince employees to join their company." You know, that's kind of like that Adam Neumann, WeWork guy thing. Then there are other times where I'm like, "Okay, but what's the idea here? Is the idea good?" I have to challenge myself to look beyond where they currently are because of maybe a lack of understanding. It's just hard to understand, man. It makes a difference, and I have to overcome that a little bit.

Shaan Puri

Yeah, and I would say some of my best investments have come from very charismatic CEOs. And some of my absolute worst investments have come from charismatic CEOs. It cuts both ways.

Sam Parr

that side by the

Shaan Puri

way I can't get into stocks it's like dead for me so I don't

Sam Parr

know if it's I had to refresh it as well and everyone in the chat is saying they had to refresh it too

Shaan Puri

yeah when I refreshed them let me in but alright either way that's okay I don't know I don't need that open

Sam Parr

Do we want to do another one? I think one more or two more. One more. There's Allison Nickelpas. Alright, or Zaza. Sorry, I don't know who's presenting.

Sumorwuo Zaza

Alright, that's me. Hey guys, how are you? You guys can see my screen, I think they can. Alright, what's going on? My name is Zaza, CEO and co-founder of NickelPest. Before this, I was the Head of International Expansion at Huffington Post. After that, I was groomed to be the CRO, where I discovered we were not profitable. We were the largest news site in the world outside of China, and I didn't know before I took the job that we actually hadn't found a way to monetize the 200 million people coming to our websites globally.

Allison Paz

I'm Alison Pao, COO and co-founder. I was actually a banker for about 10 years. Our way of sharing news and information on the team was to have my EA print out an article, leave it on the center conference table, and say, "Please read." That's certainly not a way of sharing news and information that scales when you're working with remote teams, distributed teams, and asynchronous teams. So, Nickel Pass really solves for all of that.

Sumorwuo Zaza

And awesome! I'll just jump in. One of the things that we've come up with is what we call the **cocktail party pitch**. When we're at a party, people ask, "What does Nickel Pass do?" What we say is, "You know how you get an article from a friend shared with you, and you get that pop-up that says, 'Pay for the full site?'" Well, we invented a product where you never see that again. The way our business works is we sell it to enterprises, which allows them to get up to **70% off** of retail. We customize the pass based on what each department, team, and user needs to be successful. Here's the Nickel Pass: I'm in front of a Business Insider paywall, and I click a button.

Allison Paz

oops yes I don't think there we go okay

Sumorwuo Zaza

there we go through the paywall

Allison Paz

So, I hit a paywall. I go to my Nickel Pass, which is a Chrome extension, click on Business Insider, and that's it. I never see a paywall again.

Sumorwuo Zaza

So, it looks like we're having a little bit of confusion about who's sharing what. But you guys saw the product, and I want to share a couple of things about the business. Because of our background, the chairman of the company is the former head of strategy at CNN. We've been able to collect a network of over 200 publications, including the LA Times, Crunchbase, Pro, Time Magazine, and we always like to point out that Beer Business Daily is on here for a reason. If I'm an enterprise, we work with Anheuser-Busch. They don't just need the New York Times; they also need Beer Business Daily, which tells them about how the craft beer market is doing in the Pacific Northwest. In terms of the business, we've booked over $1,000,000 in revenue, so that's $1,000,000 of hard revenue and $1.2 million of bookings. Some of the companies we work with include Anheuser-Busch, as mentioned, Visa, and also Publicis and Havas, which are respectively the number one and number two marketing and PR agencies in the world. In terms of why people come to us, if you wanted to get these subscriptions yourself, be our guest. It costs you over $1,000 a year just for five different sites. Obviously, that's not going to scale if you're an enterprise. Some of the other problems in this space, and the reason we've been able to gain some traction in the 18 months, are as follows: 1. There is no tech-enabled way to buy group subscriptions. So, if you wanted 10 licenses from the New York Times today, you're essentially filling out a form. 2. Now, three out of every four news sites require a subscription or have a paywall. When we started the business a little over three years ago, that number was at 30%, so about one in three sites. So, we'll stop there.

Sam Parr

this is awesome this is awesome

Shaan Puri

So, let's recap because I think some people are having trouble in the Stocks platform. They might have missed the beginning of the pitch, but basically what you did is: I work at a company. I go try to click some article to read some important news story that one of my coworkers sent me. I'm hit with a paywall. I'll shout, "Hey man, what did it say? I don't have a Business Insider subscription."

Colton Woodard

uh-huh

Shaan Puri

And our company, which is... let's pretend we work at Google. Oh, Google uses Nickel Pass, so I can just use the Chrome extension and bypass the paywall because Google has paid for a multi-seat license to Business Insider. So Business Insider is getting this huge bulk subscription buy; they'll give it at a discount. Google wants its employees to be able to read news, and employees don't have to pay for it out of pocket. That's what happens.

Sumorwuo Zaza

that's that's that's

Allison Paz

exactly right

Sumorwuo Zaza

I'll add some other things. Publishers right now convert less than 1% of the people that come to their website to pay for the full subscription. So, it's a win-win for everyone. They're basically getting all of these people that they would be monetizing at cents on the dollar per year from advertising.

Sam Parr

But do you... if Google buys 20 seats, do they only get Business Insider, or do they also get all the other publications you had listed there? And if they do, how do you figure out which publisher gets paid what money?

Shaan Puri

right

Allison Paz

Yeah, so we have over 200 publishers in our network, and we add more every day. We create bespoke packages. We have an initial package where you pick 6 out of 10 publications. It includes *Business Insider* and many others, and that's $23.95 per user per month for that package. After that, we'll upsell from there. We work with customers to design custom packages based on the industry you're in and the role you're in within that industry. For example, if you work at a big bank in marketing and PR, you're going to need a very different set of publications than someone who's on the comms team at Google. We'll be able to work with you to customize that, and a lot of that you're now able to do on your own through our administrative panel.

Sam Parr

But then how does it work? If let's just use round numbers, let's say it's $30 a month. Does Business Insider get $10, The New York Times get $10, and you guys get $10?

Sumorwuo Zaza

So, what we do is work with the publishers to either take the rate cards they have or create ones from scratch. This way, in the custom package, the publisher is always made whole. In your example, it all depends on the number of seats that Google signs up for. If they sign up for 10 people or 1,000 people, the price may go from $10 a month, which is a 20% discount off of retail, to $2 a month, which is much more off of retail. Then, we bundle that and charge an administrative fee on top of that, and that's the bespoke package.

Sam Parr

what's the fee%

Sumorwuo Zaza

So right now, the gross margin is anywhere from **44% to 55%**. That's a combination of not only the seat fee, but we integrate with **Okta** and **Microsoft Active Directory**. So it's really single sign-on for news publications, and we basically handle all of them for both the enterprise and the publisher.

Shaan Puri

That's amazing. Let's talk about the traction, okay? So you showed a bunch of publications that you guys have gotten to agree with this. How many companies are paying for this? I don't know if I missed that part or it wasn't in there.

Allison Paz

Yep, so we have over 125 companies that we currently work with, and we're adding more every day. This includes both smaller companies as well as large enterprises.

Shaan Puri

and what does that mean for revenue for you guys

Allison Paz

Yep, so we're at **$1,200,000** ARR, and we're on track to be **$3,000,000** by the end of the year.

Shaan Puri

and you're raising

Sam Parr

At a $15,000,000 valuation, and that's correct, that's $3,000,000 as in net revenue. And you get... or is that $3,000,000 as in... there's $3,000,000 for the bundle and you take 45 to 50% of it, correct? The second one, correct. So more like $1,500,000. Is that in real net revenue? Is that right?

Allison Paz

in net revenue yes 1.5

Shaan Puri

And okay, great. So, how do you onboard customers? What do you do to go get the next 25 to 50 customers? What happens?

Sumorwuo Zaza

Well, I think one of the things that we're really excited about is the 120 companies we have. They have over 400,000 employees. What we found is that it's much easier to upsell within an organization once you land them. So, what we're seeing is that our growth trajectory, if we go from 1% to 3%, that's how you get to the 3. That's why I'm only focusing on two segments right now: marketing and PR, and then consumer finance. That doesn't count telco, and it doesn't count some of the tech companies you mentioned. It also doesn't count international, which is actually my background.

Shaan Puri

Gotcha. So you're just gonna expand within the companies you're already in to get to 3,000,000 gross. Okay, but how do you get more customers from here? What is the strategy? Is it outbound? Is it inbound? Is it... yeah, some referral program? What do you do?

Allison Paz

Yeah, we primarily have a cold outbound marketing strategy. So, we do a lot of lead generation, and then we do some organic search and organic social.

Shaan Puri

And now this is a cost to companies at a time when a lot of companies are cutting costs. Right now, they're just not paying for this and employees are not getting the benefit, or they're paying... you know, employees pay out of pocket. If I do this and I have, you know, 1% of my employees doing this, all of a sudden I've added a... I don't know what your average volume is, but let's say $10, $10.10 a year. What is the average cost to a [company]?

Sumorwuo Zaza

The company has grown significantly. When we first started, it was roughly $7 to $10 a year. Now, what we're seeing is $50,000, and we have the opportunity to grow even more. Here's the thing: people see it from two lenses. First, there's the cost savings. They look at our cost and think, "Well, it's better than everyone buying it at retail and then expensing it back to the company." That's one perspective. The second perspective is that in a time like this, if you miss a critical piece of news in your industry, the opportunity cost for that is much higher. You're going to feel some type of way for not paying the $50 per person, per seat. You might think, "Oh, I was trying to refine the cost." We like to say that what we're going after is the budget people used to use on soda machines because this is one of those...

Sam Parr

uh-oh

Allison Paz

Oh, I think we lost those out there. But yes, this is an expense that people actually already have; they just don't realize it. Frequently, it's being put on personal cards and then expensed back to the company. So, the other thing that we're doing is actually giving finance and procurement a single line item. This way, they really understand how much they're spending on news, information, and data, which is extremely important for the 40 million professional services workers in the U.S. to know.

Shaan Puri

Okay, great. I also feel like there's probably some strategy where you go to Anheuser-Busch and... you know, once they have their 1% of people on, you go to every other beer company out there and you say: "Hey, Anheuser-Busch does this so that their employees can read Beer Journal daily and this and that. Would you guys be interested?" There's a... I think within industries you could sort of play off each other a little bit.

Allison Paz

Exactly. We've seen that social proof model work extremely well with marketing and PR firms, as well as with financial services firms.

Sam Parr

Allison, how big is this going to get? You know, what are you going to get to? A hundred million in recurring revenue? What's going to happen?

Allison Paz

Yeah, without a doubt. We see ourselves as really the next version of cable. How we access news content and information digitally is going to change drastically from how it works today. Nickel Pass is going to be the single-stop solution for that.

Sam Parr

what how many employee

Shaan Puri

Let me ask that same question a little bit differently because Sam likes to hear the kind of "how big is the dream?" I like to hear it a little bit differently, which is: **What would I need to believe for this to be at $100,000,000 in revenue?** Meaning: - How many companies? - How many people? - What...? How do you work your way to $100,000,000 in revenue?

Allison Paz

Yeah, so our goal has always been to get everyone access to quality news and information. By "everyone," we don't just mean professional services workers; we also mean individuals. There's a certain price that individuals can pay for access to quality news and information, so we're exploring what that is. But I think it's extremely important to note that over the past five years, we've understood, and I think the general problem...

Colton Woodard

so actually

Shaan Puri

Could you just give me the math? So like, this many companies paying this much a month is $100,000,000 in revenue. And then I need to know: is that a believable number of companies? That's like, you know, out of the total universe. So how many companies would you need to be paying you to for you to be at that?

Allison Paz

Yeah, so we'd need to be at about 10,000 companies based on our initial math.

Shaan Puri

So, 10,000 companies. And you think that those will... you know, right now you're at whatever, 25. You think by the end of the year you can get to maybe 40 or 50, something like that?

Allison Paz

how oh no no so we're at a 150 right

Shaan Puri

I'm sorry

Colton Woodard

you're at

Shaan Puri

a 150 great

Allison Paz

yeah we're we're you know well beyond the that that initial group

Shaan Puri

And what are you guys going to have to do to go from 150 to 10,000 companies? What will actually need to happen?

Allison Paz

Yeah, so it's a two-pronged approach. We have to increase our penetration rate on the existing companies from 1% to 3%. That number is even achievable up to the 5% or 10% range. Then, we have to increase our penetration in the specific sectors from currently 0.1% to closer to 1% in each sector, such as financial services, marketing and PR, as well as universities and associations.

Shaan Puri

gotcha okay

Sam Parr

alright

Shaan Puri

thanks I think we might be

Sam Parr

out of time I had one more did you have you raised any money so far and from who

Allison Paz

Yep, yeah. So we've raised about **$5,000,000** so far. Our last round was led by RiverPark Ventures, the seamless food ordering company co-founders, because they took the same B2B model to get to a B2C model. We have a number of other institutional investors as well, including **68 Capital** and **Rain Ventures**.

Sam Parr

damn you raised 5,000,000 at a $15,000,000 valuation

Allison Paz

No smaller valuation in the past. So, this new round is $15,000,000 pre-money.

Shaan Puri

oh so you gave up a lot of the company yeah

Sam Parr

what are you how are you gonna stay motivated you gotta

Allison Paz

Yeah, so I understood. We are reworking the cap table as we speak because basically, we pivoted the company from blockchain micropayments. And so that's total... over the pivot.

Sam Parr

that's

Shaan Puri

By the way, respect for pivoting away from blockchain. That sort of shows me that you're a clear and independent thinker that didn't just go, "Oh, here's the trend! We are a Web 3 company for micropayments. You can crypto lightning!" And it's like, what do people... what do our customers actually want? And in this case, you found out what they actually wanted, which was not that, not that, or something else.

Allison Paz

Yeah, customers hated it. Publishers loved it, but it wasn't selling to anyone as recurring revenue. We could have raised it at a much higher valuation, but we chose to pivot.

Sam Parr

I think your product is awesome. It sounds like your cap table is, to be blunt, not great. I would love to hear a little bit more about how you... I don't want to hear about it now, but how you're going to get out of that situation. I think it's hopefully fixable because this product sounds pretty sick.

Shaan Puri

and we gotta ask people are asking why what is nickel pass what is its name why are you named after nickelback

Allison Paz

news used to cost a nickel so that's why

Shaan Puri

okay alright great now it costs $20.23 per person per month

Ali Moiz

$23 a month yep

Sam Parr

Congratulations! This is sick. I think your pitch was awesome. I said what I thought about the cap table; the product's badass. Yeah, it's one little thing between you and getting it together though.

Shaan Puri

Between you and your co-founder, you guys should figure out who's going to answer questions and which types of questions. This way, you automatically know when to defer. It's a little bit of a signal when you're doing a pitch. Both of you might talk over each other a little bit, which is okay in a podcasting realm, but as a company, you kind of need to know: "Okay, technical questions, this person's going to answer; growth questions, this person's going to answer." Alternatively, one person could answer everything and then say, "You know, Allison, why don't you talk about that? You know this better than anybody." This will help you defer a little bit better in that sense. But overall, really good job with the pitch! That's my only kind of pitch feedback for you.

Allison Paz

great thank you guys

Hubspot

this data is wrong every freaking time

Hubspot

Have you heard of HubSpot? HubSpot is a CRM platform where everything is fully integrated.

Hubspot

Woah! I can see the client's whole history: calls, support tickets, emails. And here's a task from three days ago that I totally missed.

Allison Paz

hubspot grow better

Sam Parr

Sick, sick company. Goddamn, man, that cap table really messes things up for her.

Shaan Puri

Yeah, I think that's okay though. I think it's recoverable. You know, like some people... How are you gonna stay motivated? Some people are motivated, you know, whether the number is 50% or 35%. They sort of feel the same about it. It's their baby, and also they can be motivated by the regret that they're giving away so much of their company.

Sam Parr

In the first... that's crazy to me. I am friends with this guy who sold his company for $1,000,000,000. He had $990,000,000 in value, and he walked away with $3,000,000 because there were 4 or 5 of them involved. They raised all this money, and he walked away with $3,000,000 on a $1,000,000,000 sale. Ain't that crazy? I can't understand how you get motivated when you're not going to get paid.

Shaan Puri

Yeah, well, some people are motivated by the mission. Some people don't do the math. Some people are like, "Well, fuck, I'm stuck now. I made that mistake, and now I guess I gotta live with that. I guess I gotta eat that one." And by the way, shout out to her. We don't do public math, but we sure as hell make founders do public math when they pitch us. Because, you know, you gotta be able to answer that question. In fact, I don't even care what the... like some people think that when I ask that question, "How do you get to $100,000,000?" or "How do you get to $10,000,000 ARR?" I'm judging whether that thing sounds feasible or not. And that's part of it, but the bigger part of it is, does this seem like the first time they've done this math, or have they done this before? Because if they haven't done it...

Sam Parr

if they haven't done it before I'm

Shaan Puri

Like, "Oh, this person is not actually thinking of plotting how to take over and how to build this into something big." They're just kind of buried their head in product, and if they haven't thought of it up till now, they're probably not going to be thinking about that in the future. In this case, I thought that she had an answer. I haven't done the math... could go check if that answer was, you know, bullshit or real. But she had at least thought about it: "We need 10,000 companies at our current pricing and scale to be at that revenue mark."

Sam Parr

Well, I think people often view this as a trick question, like, "How does this get big?" or "How are you going to exit?" Then they'll say something like, "Well, we're not thinking about an exit." It's like, dude, come on, just talk real. A good answer would be: "Well, the worst-case scenario is I think we'll get to $5,000,000 in this many years, and someone's going to buy us for $50,000,000. You'll get a 2 or 3x return." I think that's a likely worst-case scenario. As for the best-case scenario, I actually believe we have a clear path to $75,000,000. We're going to figure it out as we go, and I think these possible doors might open up. Then we could either go public, which I would love to do, or we could sell for this much money, or we just own the company forever and continue to grow it.

Shaan Puri

See, I think that answer works for you because you invest your own money. For most venture capitalists, investing other people's money, they don't care about the 2 to 3 times return.

Sam Parr

I know but I think

Shaan Puri

The downside protection is like, to them, it's either a 0 or it's huge. So, you're better off focusing most of the energy on how this ends up huge. You might say things like, "Oh man, I can't wait to go sell this for $1,000,000,000," but I think you could say, like, we had a buddy, Ramon, who was telling us about this. He said, "Look, right now I have, you know, I don't know what it was, like 100,000 pet owners who have bought from me. I know their name, their address, their dog's name, their dog's breed, their dog's age. I know everything about them." He goes on to name the big companies, you know, Chewy doesn't know any of that because they sell on store shelves. But I have the largest database of this. I think that asset's going to be worth a lot of money to one of these companies. And I think that, you know, that's beyond just the sales that we're already doing. So, you can kind of say your downside protection is that we're building a valuable asset.

Sam Parr

Kinda what I mean is that it's okay to show weakness and it's okay to show uncertainty. But at the same time, you also want to have a "yeah, but I think this could happen, and here's how."

Shaan Puri

What the flight booking guy said is also perfect. You don't have to say, "This is going to be a $1,000,000,000 company." You're just going to autopilot like a, you know, venture capital robot. What he could say is basically, "I don't know where the ceiling of this is because nobody's ever done this before, but there's a clear path to $75,000,000, and we're going to get there. Then we're going to look up and figure out what's next." I think that's a totally honest but also exciting version of that answer. It’s to say, "Look, we don't know how high this thing can fly, but I know there's a clear path to this." I'm just laser-focused on $50,000,000 ARR. Before I go to bed, I kiss my daughter goodnight and I say, "$50,000,000 ARR." When I wake up and I'm brushing my teeth, I say, "$50,000,000 ARR" because I know that that's what's in front of us. I can't sleep because it's so obvious that there's a step-by-step path to go get there. You can say some bullshit like that, and people start to believe that you believe it. That certainty that there's a clear path to it makes them certain there's a clear path to it.

Sam Parr

badass let's do the last one

Shaan Puri

what's up colton take it away

Colton Woodard

Hi, I'm Colton Woodard, founder of Little Duckies Pool Company. I'm a pool industry expert with a knack for sourcing companies that may not know they want to sell and creating an acquisition plan. I started out with my own pool maintenance business from 0 clients. Now, I make about $18,000 in monthly recurring revenue, all in under 3 years. My father-in-law owns a large pool resurfacing company in Orlando, Florida, and we found our first private acquisition deal from a friend who was feeling ready to retire. Instead of just letting his business dissolve, we negotiated a purchase at about a multiple of 4 months of the monthly gross revenue. Currently, we've secured 2 upcoming purchase contracts in the South Florida pool construction sector, with another in negotiation for Q4. We are projecting $10,300,000 in gross sales for 2023, with a yearly increase of 13% as we streamline processes and add in modern technology. We're looking to build a portfolio of pool construction companies in South Florida and gain a majority of the market share. Then, we plan to add pool cleaning and maintenance services to these accounts for additional monthly recurring revenue. Ideally, we'd like to secure locations in all of South Florida within the next 5 years, with 4 owner-operators in place who know the industry and how to utilize specific contractors. We're looking to take over the industry and build an empire, similar to real estate. Now is the hottest time to invest in South Florida pool construction.

Sam Parr

Sick! So, let me clarify: is this basically like a play where you're buying baby boomers' businesses that put pools in people's backyards?

Colton Woodard

In a simple explanation, kind of... yeah, I mean, it's a little harder than that because, you know, in South Florida, you dig 54 inches and you hit water. So if you don't know what you're doing, you could really muck it up. But yeah, we know the industry, we know the pool, and we know pool construction. So we can find people that are already retired, and instead of letting their business just go to the wind and the other guys pick it all up, we can utilize different contractors that specialize in, you know, form and steel excavation. Take his company, and he subcontracts out to the plumbing guys, the tile guys, and the screen enclosure guys. He's spending so much money on paying subcontractors whatever they need to charge because he has to hire them; he can't do it himself. So we buy these individual companies that can complement each other, bring everything in-house, and we can get our permits done faster, reduce our wait times, and increase profits. This allows us to turn over more projects year over year. That's why we're looking at a 13% increase in our productivity.

Shaan Puri

So, just multiple choice answer: Your company does what? Do you: a) Sell software b) Buy existing pool companies c) Invest in CUCOs d) Other Which one of those four things do you do?

Colton Woodard

b we we buy pool companies mergers and acquisitions yeah

Shaan Puri

So you're rolling up pool companies, and you're rolling them up. You are not buying them for less or anything like that; you buy them at some fair value. But you are better at operating because you do what? a) You have different expertise in-house b) You have better software c) You have economies of scale What is the advantage you have? How much do you buy them for?

Colton Woodard

A and B, we know the business, we do it well, and we implement modern technology. We use 3D modeling designs for the pools, so we can email it to customers. We don't have to go to their house with a pen and paper to show them how it's done. We can just email it over. Also, since COVID hit, permitting has been horrible; it has slowed down a lot. Now we can do digital permitting, where we can be on video chat with the county that we're working with. They could be right on the phone, and we can show them step by step to get the phases approved without having to wait for time on their schedule for them to come to the site.

Shaan Puri

So the result is, you guys build pools faster and cheaper. How much faster and how much cheaper?

Colton Woodard

We build them faster; we don't build them cheaper. Okay, how much faster? It depends on the county. You know, each county is going to be a little bit different. But if you don't have to wait on the subcontractors to get you on their schedule or if they don't show up and reschedule on you, it's going to be at least **20% faster**.

Shaan Puri

20% faster okay great and you up till now you've bought how many pool companies

Colton Woodard

Right now, we've signed two purchase contracts and we own two properties. We have one in negotiation, and we're looking to get another round of funding for that.

Shaan Puri

And then explain: when you buy a business like this, you know it has this much in EBITDA. Typically, it's been in business for 10 years or whatever, and you're buying it at some multiple and you're financing it. How...

Colton Woodard

well the first two we sold our houses

Shaan Puri

okay what are you going to do for the next 2

Colton Woodard

We're looking to raise capital, and then we're also going to make a plan using the signed contracts. Usually, you're two years out, you know, two years booked out with these contracts for the pool companies that we're buying. So not only are we buying the company, we're buying the crew. We're having the owner stay on for two years as a consultant while we put a project manager in place for him to train. Then we're getting all of those contracts, and they get paid in phases. So we use some of the working capital to put aside into another fund to use to purchase more businesses as we roll out all the locations we need. Between, like I said, foreman, steel, excavation, shotcrete, tile, marcite, plaster guys, we're going to buy all the specialty contractors and roll them all into one company.

Sam Parr

So, Sean and I, one of our best investments ever... I think we both invested at the same time into a business. Sean, you still there? Yeah, we both invested into this business that was started by our friend Cieva called Endur Ventures. His whole premise was to buy businesses that baby boomers want to retire from, and their kids don't want to take over, basically.

Colton Woodard

that's exactly what's going on

Sam Parr

And Sam Zell... Sam Zell is the guy who basically created the REIT. He owned Schwinn Bikes, he owned the Tribune, and he owned a bunch of other stuff. He's a rich guy; he owned Waste Management, I think. Anyway, he said recently in a podcast that he is making more money off of buying businesses from baby boomers who don't want to pass their companies onto their kids than he has ever made in real estate. Yeah, and so that's just proof that this is actually quite interesting. I think Ceva actually bought a pool business, didn't he, Sean? Did he?

Shaan Puri

yeah dolphin pools it's in arizona

Sam Parr

Yeah, and they're killing it. I would argue that that's probably the path you should go. For these pitches, you should entirely pitch it that way. Another way that you could maybe pitch is the guy who started... I was going to bring this up on the podcast, Sean, but the guy who started Upwork. Have you heard of Upwork? It's like the outsourcing tech company. He started this new company called... I actually don't know, it's Ergeon (E-R-G-E-O-N), and it's a fence contractor and installation and repair business. He just raised like $40 million for it, and he bootstrapped it to like 400 employees. Do you see this, Sean?

Shaan Puri

no I've never seen that that's crazy

Sam Parr

It just got relaunched, or it just got released like 2 days ago on TechCrunch. He was like, "We wanted to keep this on the down-low, but basically we bootstrapped this into a monster business and we just raised financing for it at a huge valuation." Getting someone to build a fence is a pain in the ass. Well, we just went and... so what they did is they used a little bit of technology and made the process easier and better. What Cava is doing is he's just saying, "No one wants these businesses. We're gonna buy them for cheap, install a manager, and let it run." So anyway, I think if I were you, I would go one of those two routes and I would go all in on one of those two routes. I imagine seeing your website—I went to it—it looks like it's built on Wix. Technology is not gonna be where you're gonna play; it's gonna be the PE route. But the problem is, you don't actually seem entirely bought in on that route. So that's my fairly critical feedback. Did you think I hit the nail on the head there, Sean?

Colton Woodard

yeah if I can go

Shaan Puri

ahead colin

Colton Woodard

If I can interject, I think that, yeah, that's pretty accurate. It's a little bit more difficult. You know, these guys are retiring, but it's also very difficult to get into this industry. You have to have **four years** of experience and then go in front of a board, the DPBR, to even get approved to have the license to do it. So it's not like millennials or Gen Z can just say, "Hey, I'm going to start a pool construction company today." You're going to have to work for somebody for **four years** to get that experience to even do it. So it's really not super turnkey. Therefore, there's not a lot of competition for the PE to go out and scoop them up. You know, we're poised and ready to strike.

Shaan Puri

okay yeah I would say I'm just gonna give you some pitch feedback because I think your pitch was confusing and therefore hard to raise money which is what we're here to do right so number 1 like use a you you had a slide up there that had a bunch of text but then you talked a bunch and you weren't talking exactly you weren't just saying the points on the slide you were telling a story which is good it's good to tell a story but if you're gonna tell a story just put like a picture on the screen so it's like you know this is you know this is my pool company we've been doing this this business spits off this much cash and we're you know we're not alone there's 400 of these just in the florida area where I you know where I'm from and I bought 2 more of these and these are great businesses to buy in fact I sold my house to buy these because they're such better investment than my home and you know this first one we bought we bought it for this much it's already paid itself off in 2 years and blah blah blah the second one blah blah blah same thing and for each one of these we have a playbook of how to buy it grow it and like improve it from where it was we improved each of these businesses by over 25% within the 1st year okay great so we're gonna keep doing this we have a plan that is working you know but I don't have any more houses to sell so it's time for me to go raise some money and what I'm gonna do is I'm gonna raise $5,000,000 I'm gonna go buy $20,000,000 worth of of pool pool companies and we're gonna start rolling these up you've probably seen these roll ups get pretty big this roll up in the dental space got this big this roll up in the pool space got this big in a different state you know sam zell the guy who invented the reit is doing doing these roll ups the guy who started upwork is now doing this with fencing companies this is a strategy that works now the problem is most people don't have what I have they don't have 15 years of pool construction experience so even if they wanted to do this they wouldn't really know where to start they wouldn't know the nuances of permitting and I could say a bunch of words you're not gonna understand but the the those are kind of 15 years of hard worn lessons and so today I'm coming here to I'm gonna raise this I'm gonna build a $1,000,000,000 pool roll up company and like you gotta say the category of your company the size of the all of that I think would be like I don't know if you heard that in the chat I know it's not having some problems right now but if you heard that in the chat go 1 to 10 where was my pitch on a scale of 1 to 10 of clear and compelling because that's where you need to get this to because I think you actually have a really good idea well I don't I don't think you're pitching the justice

Colton Woodard

We need a smart investor like you, Sean, because, man, you said it perfectly. You... yeah.

Sam Parr

but he didn't wanna do the work he wants you to do

Shaan Puri

The work... yeah, I want you to be the one who says, "You know, I want to invest in people who figure these things out." If I'm... if you need me for help, honestly, it's usually a bad sign for my investment. Like, I want to be helping a rocket that's already going and not pushing something that's at a standstill. And so...

Colton Woodard

Well, you know the investment industry and the roll-ups, and you know the comparables. I'm out here doing the hard work, managing the crews.

Shaan Puri

Fair enough, fair enough. So, I think we should take that and basically say, "Okay, the problem was I wasn't clear on what type of investment vehicle this is. This is a roll-up." Second, I need to weave in a bit of my story, which is that I have tons of experience doing this. I've already started my roll-up. This is not just an idea that's pie in the sky; I already have the first two under my belt. I did those myself, bootstrapped, and they're working. Now, I just have to tell you how we're going to go from 2 to 20. When we have 20, it's going to be worth this much because I can just do some math. Say 20 times each one is worth $10,000,000. Now I have a $200,000,000 roll-up if we can pull this off right.

Colton Woodard

beautifully said the other

Shaan Puri

The thing is, you didn't say anything about debt. Are you taking on debt for doing this? You said you're kind of raising money to buy the next ones. Why aren't you using debt?

Colton Woodard

We haven't taken any loans. We thought about it; we considered doing SBA, but it just made more sense to use seller financing. So what we actually did was negotiate a 10% down payment with seller financing over 5 years, with a balloon payment. It's so cheap, we can just do it.

Shaan Puri

it by didn't you say that that's a that's a great. I'm buying these for 10% down

Allison Paz

I'm like I'm giving you

Colton Woodard

I’m not giving away my secrets over the internet to thousands of people, and now millions of your podcast listeners. So here you go, they’re gonna...

Sam Parr

do it gonna you you said

Shaan Puri

It's not a secret. As soon as you start selling finance, it's not a secret. In fact, you kind of made it sound like you don't know what debt is because you didn't say anything. But now we've revealed the truth. Okay, great. Honestly, again, I think you actually have a very good business idea presented slightly differently. I think it could be very investment-worthy, especially right now. You see stocks going down, you see crypto going down, and these private companies are raising at huge valuations with, like, you know, software and a dream. Whereas you're like, "Actually, I buy successful, profitable companies, and I'm just a better operator than the mom-and-pop businesses. I'm going to aggregate these because I just have a playbook that I can keep rolling out." And by the way, I buy these for 10% down. So that means, you know, my cash-on-cash return after, you know, 15 months looks like this. You have a very, very strong pitch, and you just gotta, like, you know, put it all together.

Colton Woodard

Yeah, after 30 years of doing something, they're going to be really tired. They don't want to push the needle; they don't want to make it bigger. They have a paycheck coming in, a salary, and they're taken care of. So, right.

Sam Parr

There was a guy. So right now, for the listeners, Colton is sitting in front of an empty bookshelf. Someone just said, "Peter Thiel's *Zero to One* is not on his bookshelf, and for that reason, I'm out."

Colton Woodard

This is where all of my trophies are going to go for all the wins we're about to have.

Sam Parr

oh lean startup's not on his bookshelf for that reason I'm out

Shaan Puri

Yeah, dude. You seem to be spending too much time actually building your business. I need somebody who's way more into reading about business.

Sam Parr

You don't seem like you do yoga. I'm out. You're on a gamer chair; you're not on a treadmill desk. I'm out.

Shaan Puri

you eat carbs I'm out yeah

Sam Parr

that's hilarious thanks dude thanks for coming on

Colton Woodard

thank you so much

Sam Parr

Alright, I asked... I don't know if Ali's gonna pop up, the guy who started "stonks," but that was fun. I think some people need some work on their pitch, not as much work on their business, but work on just like saying what the heck they do.

Shaan Puri

So, let's go from most interested to least interested. Let's rank the companies based on that. I'll kind of remind you what they were. So, there was **5X**, which was the first business that pitched. They were doing something that we could barely understand but had **$1,000,000** of ARR commitments for his kind of marketing stack or vendor stack that he was putting in a box. Then we had, I think, **Fly Together**—which wasn't their name; it was like **Bakari** or something like that—group booking on travel. The third one we had was **Orem**, who was doing **Munch**, I think, which was taking creators' content and letting you chop it up into bits, making it easy for them to repost using AI and some software. Then we had the last guy, which was **Duckies**, and before that, we had **Nickel Pass**. Did I miss anyone?

Sam Parr

alright I

Shaan Puri

did miss someone or no

Sam Parr

No, I don't think you missed someone. I think my ranking, from most to least, from the ones I would want to invest in, is as follows: 1. Nickel 2. Fly 3. Bakari 4. 5X Tied for the bottom would be the Jelly Smack competitor and Duckies.

Shaan Puri

Okay, alright, I like it. Mine would be **Fly Together**. Number one, I thought that he seemed great and the business seemed pretty straightforward and had momentum. I need to go look at the competition. Is it really as backwards as he made it sound? Is he kind of the only real one doing this? But I like the sound of that one. I actually think that **Duckies** is probably the second or first best investment. However, I'm not sure I would want to invest in Colton. You know, he seemed like I would want to hang out with him, but I'm not sure I'd want to invest in him. I feel like I'd just be frustrated because he speaks a different language than me. He speaks like digging holes in the ground and building pools, and I speak like frameworks. It's like...

Sam Parr

hey colton I like you just change the way you look for me please

Colton Woodard

yeah just

Sam Parr

like just talk entirely different for me will you

Shaan Puri

If I invested in it, I'd be like, "Look, we're allowed to hang out, but we'll never be allowed to talk about the business. And like, in 20 years, just mail me a giant check. And just in between, I need to pretend it's gone." So... that'd be mostly decoy.

Colton Woodard

and by

Sam Parr

the way I'm colton I'm messing with you

Shaan Puri

Also, I love the name of that. Little Duckies, that's a great, cool name. I do Nickel Pass 3, and then the other two I probably wouldn't invest in. So those are kinda like 4-5. Alright Ali, you're here. The crowd is beating you up because Stonks was crashing. Ali, just... is it because we're too popular? Are we just too popular? Is that what happened, or is this something else?

Sam Parr

and this is ali moyes the founder of stonks

Shaan Puri

yes thanks

Ali Moiz

Thanks for having me, guys! Great, great show. I loved the real talk. Honestly, I think it's the best real talk we've had in stocks, and the comments showed it. So, you guys crashed on... this is one of our biggest events. We were also in the middle of a code migration, so there were more issues at this event than the last 50 events put together. The screen crashed a few times, but a page refresh fixed it. It will be a lot more stable going forward, so thank you for hanging in there.

Shaan Puri

And I can attest that people don't know this, but you and I used to compete at our previous startups. You built Streamlabs, and we were building Veeba. We were both trying to create tools for live streamers on Twitch. I've seen you execute from, you know, at first afar, then we became friends kind of towards the end. But like, you're good. When you decide to do something, you guys pull it off. You're scrappy. Actually, when we were competing against each other, I had told Michael Birch, who was the founder of the original Bebo and our investor, "Yeah, there's this company Streamlabs out there." He asked, "Who's behind it?" I told him your name, and he said, "I know these guys. You used to have some company called Peanut something." He described you as very scrappy entrepreneurs who will just find the thing that people want. He basically said you would never die and would keep iterating until you find this hook that people want, and then you would go for it with full force. Is that an accurate description?

Ali Moiz

Thank you, thank you. You are too kind, Sean. I have a lot of respect for what you did as well. Amazing products.

Sam Parr

and you guys kick their ass for what it's worth

Shaan Puri

I feel like the in the end we were competing with you guys but it really you guys kicked our ass

Ali Moiz

No, no, it's great. I mean, I have a lot of respect for you and what you've done in Birch as well. But amazing, amazing event today, guys! Our team has been loving it, and the chat's been loving it. I think Sam asked everyone, "Should we do it again?" It seems like the chat is really into it. Yes!

Sam Parr

Dude, so on the podcast yesterday, we talked about this company called Stake. They're like an online crypto gambling website. They basically give Drake a certain amount of money, like $10,000,000 a month, in order to gamble $20,000,000 a month on the website. He tweets about it, and people come and watch him gamble. They give him free house money to play with in order to attract more users. So, we'll take 25.

Ali Moiz

a gambling this is a gambling website

Sam Parr

It's called Stake.com. Yeah, it's awesome! So, it's really effective for that company, usually.

Ali Moiz

is is this a hint do we need to set up like house money for you guys like a

Shaan Puri

house exactly okay

Sam Parr

yes

Shaan Puri

exactly

Sam Parr

I think that you give us each like $10 or $20 to invest in different startups. By the way,

Shaan Puri

We will invest in random influencers as well. So we'll go get, you know, Jake Paul in here. We'll just go get a bunch of other famous people to be our "friend of the house" and give us a house budget to go invest in startups.

Ali Moiz

You know, this is actually not a half joke, half idea. This is actually not a terrible idea. This is... oh, so we have a...

Tarush Aggarwal

we're look

Sam Parr

We're smiling. Don't assume smiling means a joke. I am not joking; I'm being dead serious. We should do this.

Ali Moiz

So, the way we could do it is we have a small fund called the Best of Stocks Fund. We write checks into interesting startups, particularly those with high traction or great co-investors, similar to what you guys look for. For your next event, we could each give you one check. You can pick your one favorite startup out of the five or so that pitch at your next event, and we'll write that check.

Sam Parr

yeah but I want we we want stakes in it bruh

Ali Moiz

okay so that's that's a little more work I will I will figure it out

Sam Parr

that's alright

Ali Moiz

let me let me get back to you maybe maybe we can give you some carry on that or yeah

Sam Parr

that would be fine

Ali Moiz

something out

Sam Parr

okay that'd be cool

Shaan Puri

Alright, so also people need to know that **Ali Moyes** is not the same as **Moyes Ali**, the other guest on our podcast all the time, right?

Sam Parr

did I call him moyes ali

Ali Moiz

my no no

Shaan Puri

No, you said it right, but people in the chat are like, "Wait, is this the deodorant guy?" It's like, "No, there's Moiz Ali, that's the deodorant guy. There's Ali Moiz, that's the stocks guy."

Sam Parr

yeah I'm not

Ali Moiz

I'm the investing guy not the deodorant guy

Shaan Puri

you gotta be sick of that I I have to assume

Ali Moiz

You know, it's fine. It's more followers for both of us. People... we confuse all our followers.

Colton Woodard

it's

Shaan Puri

Great, that's amazing! Okay, and also we've been doing this bookshelf meme this whole time. Get us a book off the shelf there, something that has helped you. You've sold a company for over $100 million, I believe, and so you read books and you've had success. Go give us a book off that shelf there that you would recommend to the crowd, something that you think has helped you.

Ali Moiz

I think

Shaan Puri

bring it over go go grab the book

Sam Parr

Okay, okay. Dude, he's got a nice house. Does he live in San Francisco?

Shaan Puri

That was actually my test to just see if he's wearing only underwear on a lot of Zoom calls. No, he passed; he's wearing shorts.

Oren Kandel

if you

Sam Parr

ask him

Shaan Puri

To ring you up right now, you might be... you know, this stream might be rated PG-13 at least.

Sam Parr

are you wearing only underwear right now

Shaan Puri

I'm wearing my jammies which are

Sumorwuo Zaza

which are are more than underwear

Ali Moiz

okay so this this is what I'm reading right now it's

Sam Parr

I have the same one

Ali Moiz

dense read but huge fan

Sam Parr

So, it looks like I actually bought this as well. It's a compilation of *every single one* of Warren Buffett's annual letters from 1964 up until 2010, or I forget the year. What you'll notice is that I actually analyzed this: his words per sentence actually get shorter and shorter each year. I would argue that's because he's becoming a better writer. What's really interesting about that book is that he explains really complicated topics, like Geico car insurance, in incredibly easy-to-understand ways. So, I think that's a good book to read.

Shaan Puri

That's cool, Connor. The chat goes, "You picked the heaviest book he has. Power move." I agree, absolute alpha move of you just now to go pull a, you know, 36-pound book off the shelf. I appreciate that.

Sam Parr

Alright, well Ollie, thanks for your help. Tell your boy John Hancock and the rest of the team thanks for making this happen. This was awesome, Sean. I guess we'll do this again. This was pretty good. I think we had a few kinks to work out, but it's pretty good.

Shaan Puri

Yeah, let us know! Tweet at us if you're here live or if you're listening to the podcast. Tweet at us if you want us to do more of these, or if you think this should be a one-time thing.