How To Grow A Small Agency Into A Billion Dollar Company (#414)

Sam Parr

His company, which is called Tiny, buys businesses. It's going public, and Andrew owns roughly 71% of the shares. It's going public at a nearly $1,000,000,000 valuation. Who knows what it's going to actually trade at, but if it trades at what they want it to trade at, that's about $700,000,000 to $800,000,000 that Andrew will have from it—all starting with a bootstrap agency. I want to walk through his journey, and I think this is amazing. It's pretty mind-blowing. Alright, let's do it!

Shaan Puri

Fancy shirt, fancy shirt! All I gotta say is fancy shirt. I now do this thing where if somebody does anything that makes me feel like they left the house today feeling good about it, or they got a haircut, I'm not subtle about it. I'll just act like a dog barking and say, "Nice haircut! You changed your face!"

Sam Parr

The thing that the audience is going to call me out on is... I couldn't find my other glasses, so I have to wear these glasses. The problem with them is that **asshole** Jeffrey Dahmer decided to wear the same ones.

Hubspot

yeah so it looks like I'm gonna ask you like

Sam Parr

Do you want to come back to the apartment to take some painful pictures and have some beers? It'll be really nice.

Hubspot

like that he ruined it for me

Shaan Puri

some people are into that

Sam Parr

I have a meaty one: another publicly traded company. This is a big deal, and it kind of has not been made a big deal in the media because it's, I guess, not that big a deal to them. It's a $1,000,000,000 company. Basically, our friend Andrew Wilkinson, friend of the pod and friend of ours, we're going to be with him in Vancouver on February 16th. So if you want to come see us live, he basically... and by the way, I gotta preface this: now that he's a publicly traded company, everything that I'm going to say, I just Googled it. This is all just from Google. I didn't ask him anything, and a lot of it's guesses, but not all of it. He basically had a company that was publicly traded called WeCommerce, and it was not doing great. It peaked at about $500,000,000 and went down to $80,000,000. Anyway, he's doing a reverse takeover—no, sorry, he's doing a merger. His company, which is called Tiny, buys businesses, and it's going public. Andrew owns roughly 71% of the shares, and it's going public at a nearly $1,000,000,000 valuation. Who knows what it's going to actually trade at, but if it trades at what they want it to trade at, that's about $700,000,000 to $800,000,000 that Andrew will have from it—all starting with a bootstrap agency. I want to walk through his journey, and I think this is amazing. It's pretty mind-blowing.

Shaan Puri

Okay, by the way, the $1,000,000,000 is this one problem. All his numbers were in Canadian dollars; it was all CAD instead of USD. So, is this $1,000,000,000 CAD or is this $1,000,000,000 USD?

Sam Parr

Everything I'm going to say is Canadian, and I don't know what the conversion rate is of Monopoly money to USD, but it's somewhere close enough that we're still in the same ballpark.

Shaan Puri

Yeah, so I think it's a little bit more like **$700,000,000**. That's the number that basically just discounted something like **20-30%**.

Sam Parr

andrew's in cad is canadian andrew's in canada

Shaan Puri

Ever really want to inflate something? Right, like if you're 5'9", you're 5'11" CAD. So just go CAD and you'll get that extra little boost that you feel you've been missing your whole life.

Sam Parr

So, dude, this story is really impressive. Andrew comes in the pod and we mess with him, but we treat him like he's one of us. What he's pulled off is like not one of us, man. It's pretty epic.

Shaan Puri

he's he's actually more like 20 of us if you add it all up

Hubspot

he's the brian scalabrini of rich guys

Shaan Puri

you know

Hubspot

what I mean like this is

Sam Parr

the scallage

Shaan Puri

He's the worst billionaire I know, but he's the best millionaire I know. Yeah, for sure.

Sam Parr

I mean, he's killing it! So listen to this: basically, the company that he's taking public has... and this stuff is actually public. It's doing about $150 million in revenue and $50 million in EBITDA. So here's the story: in 2006, Andrew was, I think, 19. He started a web design agency called Metalab, and Metalab is like the core of all this. In year one, it had $250,000 in revenue. Basically, what he's doing is design work. One of his big famous clients was, before Slack was Slack, Stuart Butterfield. He reached out to Andrew and said, "Hey, help me design Slack." I don't know... it's web interfacing, which frankly, I don't even know entirely the whole scope of that work, but it's more than just logos, including logos, I believe.

Shaan Puri

more than logos that should be their tagline

Hubspot

no it it was definitely draw goods we draw we draw good

Sam Parr

More logos and... no, it was web interfacing, so it was actually fairly technical. In year one, it did $250,000 in revenue with a 50% profit margin. In year two, 2019, so three years in, it was doing about a couple hundred thousand in profit. It doubled for a couple of years and then grew by 30% a year. So, by 2012, you're six years in, and it had $3,000,000 in revenue. Not like, right, crazy out of this league. You know, he's kind of like what people say about us: "You're relatable." And whenever people say that, I'm like, "I don't want to be relatable."

Hubspot

I wanna be way out of your list yeah

Sam Parr

because they say you're so you're so authentic you're so relatable I'm like what

Shaan Puri

I like about you guys is you're not that successful. Yeah, and you're pretty dumb. So it just feels good. You guys do.

Sam Parr

It’s so bad, and that’s exactly how I feel. He was relatable. So, in year 6, there was $3,000,000 in revenue. But after that, it grows 30% a year. If you add up 30% annual growth, by 2020, you're at something like $20,000,000 in revenue. By 2023, you're in the $40 or $50 million range. The reason why Andrew's agency works so well is... and I actually think this doesn't work as much anymore... is he's based out of Victoria. I don't even... I'm so ignorant, I don't even know what state or province that is.

Shaan Puri

minnesota but a little higher yeah

Sam Parr

so yeah yeah he's in like yeah he's in like the boise of canada

Shaan Puri

yeah upper idaho I guess

Hubspot

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Shaan Puri

I think I

Hubspot

love our new crm our software is the best hubspot grow better

Sam Parr

and so what that means is he's paying those wages but he's charging silicon valley british columbia ben just corrected me there you go british columbia whatever that is I don't know what piece that is on the monopoly board but it's somewhere around there and so he's charging silicon valley prices to like the slacks of the world so these high end prices but he's paying canadian wages so that margin is fat and so that's why he's able to take make all this profit and he starts taking his profit and he starts launching companies and it doesn't work so well he launches one little software company I forget what it was called flow I think it was basically like an asana competitor doesn't work out he's like I invested too much money he goes fuck this what if I just buy a company he reads a book on warren buffett and he's like yeah yeah yeah I could do this and that's his new hero he turns into a a buffett guy and he starts buying businesses and he buys a couple that are doing okay but then he buys one that becomes like the crown jewel of this whole business so this whole thing tiny there's I think there's 2 crown jewels there's metalab which we can guess is doing 40 or 50,000,000 in revenue 20,000,000 in profit that's the cash flow engine of this whole thing of being able to buy these companies then he buys dribbble which is basically like github for designers so designers go to this website and they upload their portfolios other people can share your portfolio you send it to employers they can comment you get inspiration whatever now I don't have all the details on this but I if I had to guess dribbble was launched by 2 founders who weren't very business savvy and had a lot of traffic but they're like dude we don't know how to make money off this and andrew buys it from them I imagine if I had to guess I bet you he buys it for $5 to $10,000,000 turns this thing into a behemoth now it's making many tens of 1,000,000 of dollars if I had to guess it's worth $200,000,000 or higher this is just pure guess and that becomes the crown jewel of this company tiny and so now he's got these 2 agencies or metalab and dribbble and then he's also has now what do they own like 15 other companies and he's taking it public and throughout this whole.

Sam Parr

He's bootstrapping this thing. So, Metalab is the one that's paying for everything. He hires the CEO to run Metalab, and because of that, he basically owns like 90% of Metalab. Now, he owns, what did I say, 70% of these tiny shares, and then his other partner in the business owns like 10%. So, him and Chris, his partner, own 80% of this publicly traded company that's hoping to go public in the $1,000,000,000 range. This is just a crazy, fascinating story, and I can't believe he's pulled this off.

Shaan Puri

Yeah, I gotta be careful what I say because I invested in Tiny recently when it was private. So, I kind of know more of the numbers, but I don't know what's public versus what was private.

Sam Parr

am I in the ballpark of everything

Shaan Puri

Yeah, I think you're in the ballpark. I think that maybe the Dribble valuation may be a little bit high, but you're right that those two things make up... you know, it's like... Because I guess here's my... here's where this kind of broke for me, and this is maybe not that interesting, just my personal [perspective]...

Sam Parr

framework broke in a good way

Shaan Puri

In a good way, I thought he'd been around doing this for way longer. It's actually 2016 when he started buying other companies, and that's not that long ago. We met him in... I don't know, I met him in, I want to say, 2020.

Sam Parr

you know that's only 4 years

Shaan Puri

in and and it was but I know about him

Sam Parr

He was like a personality. Yeah, exactly. He always had this cool-looking avatar. His pictures always looked cool. He was like a designer, so his hair was always slicked back. While we all looked like dorks, he was kind of good-looking in his pictures and stuff like that.

Shaan Puri

yeah it just shows what a good head of hair can do for you and you know I think that's the real takeaway number 1 number 2 number 2 this segment is brought to you by himss number 3 no so so I think that that was the first thing which was wow this was actually built up in a relatively like on one hand it's a long. Of time because he'd been starting metalab a long time ago so that part you gotta give credit for the oh wow 2006 and then he grinded it out year after year building the service business up but on the other hand the portfolio side of things was relatively new so I thought that was really interesting the second thing I assumed that the portfolio was a lot more a lot flatter a lot more parity so maybe like there were you know 5 to 10 companies all of sort of equal value pitching in each one like you know 5 to 10% of the overall value of the pie and that's how you get like you know 70% or something like that and the rest was metalab and in fact it was kind of like like a venture portfolio in a way where a couple of the companies were really the standout ones that were driving most of the value and I think for them it was actually 3 there was the the one they took they originally took public so we commerce which is basically their shopify apps roll up so the shopify app roll up I think was was one winner dribble is another winner and metalab is another winner and to me everything else is nice but now that those are such big winners that they make up so much revenue and so much ebitda that the others are almost like rounding errors at the moment that's a little bit harsh I would say but you know so maybe that's maybe that's a little too harsh but just comparatively it wasn't like this portfolio of a dozen equally sized companies which maybe was I never should have assumed that in the first place but when you hear somebody's doing a portfolio you sort of think okay it's gonna be sort of more smoothly distributed out but but it was actually a little bit more concentrated in a few key key winners that just really kept compounding at a high rate and so yeah so I think that's that's amazing I think what he's done is amazing like to build this level of a of a sort of empire in this short of amount of time is is pretty awesome and I the the biggest thing is I love that he did it his way like there really wasn't anybody doing exactly what he was doing of course there's private equity right but he wasn't doing it like private equity because he wasn't looking to flip he's looking to buy and hold so then you have sort of okay okay who's doing permanent equity who's doing a buy and hold strategy okay there's some people doing it but they all raised money he used his own company's profits to do it so that's pretty dope and then he branded it and was more public about it versus these kind of more under the radar it's like oh you you're part of like maple oak capital what is that you know I go to your website it's got two lines it just says we acquire software companies and it's like okay I I don't know what this means whereas he built kind of like a sexy brand out of it so I think there was a bunch of things he did that were pretty cool like even his term sheet he's like oh I read that warren buffett basically you know will meet a company understand it and then write a one sheet a one page you know like term sheet for them to just you know are they gonna take the deal or not he doesn't do this like complicated lawyer process if he can buy a $1,000,000,000 company with with a 1 or 2 pager then I should be able to buy this $3,000,000 company with a 1 pager and so he took you know he took that approach and I think did a good job branding what he was doing along the way

Sam Parr

Yeah, and so here are a few more takeaways. Then I want to hear yours if you have any extra ones. The first is that you said he did this quickly. Yeah, kind of, but he also did it really slowly.

Shaan Puri

the acquisitions part only yeah

Sam Parr

The acquisition part... but he basically started in 2006, and then he didn't really hit his stride until 2016. So that's 10 years of having an agency. Now, he didn't run the agency the whole time; he ran it for a little while and then he also hired people. I'm sure he was managing it to some extent, but slow is good in some cases. The second thing is that he didn't raise money for an agency, and because of that, he had so much freedom. The second you raise money, your cap table is one of the few things that you can't reverse, or it's really hard. He didn't raise money for a company that Metalab should not have raised money, and it did not raise money. Because of that, he was able to use the profits to invest in things. Versus if you raise money, they're like, "No, don't use those profits to do other things. Reinvest them and make this thing bigger." The next thing is financial maneuvering. You know, I joke that I like don't know anything about finances... it's kind of like his thing.

Shaan Puri

I think he's built that skill up over time, right? He didn't know it initially, but yeah, he can create a lot of value. A lot of people do this now; they can create a lot of value by increasing their financial IQ. For example, taking WeCommerce public via SPAC in 2020, when the timing was perfect, required some combination of being prepared with a good business. Secondly, it involved identifying the timing and saying, "Now is the time to go aggressively." Third, it requires having the financial IQ to go with the guts to be able to actually pull something like that off.

Sam Parr

100% the next thing is where you live. It can actually matter a lot. Now, I think that this gap between Silicon Valley wages and Victoria, Canada wages might be closed a little bit. It's closer at least than it was before; that gap is smaller. But this still exists in other places. I know I have friends that have built pretty big businesses or are building them right now, and they're using Indian talent versus American talent. They're getting great products.

Shaan Puri

that's what you do with this podcast

Sam Parr

Guilty. And then the final thing is hiring and negotiating. The way he negotiated with his CEOs and kept them happy while also retaining equity is impressive. I don't know how he pays people; I imagine he pays them with just tons of cash. So, you're like, "Well, that's easy, you just overpay people." But anyway, it's still really impressive how he's able to negotiate, hire, and manage people. I've heard from a bunch of his CEOs where they're like, "When things are going fine, I don't ever hear from him, and I love that." Then, of course, I imagine there are times when things are going fine, and he's like, "Alright dude, come on, we gotta push this a little harder." But he's done a really good job of hiring. Anyway, this whole thing that he's pulled off... I messaged him and I was like, "This sounds like an insult." Yeah, we gotta clap for him! I was like, "Dude, this sounds like an insult, but do you ever just sit with like a shit-eating grin and just laugh, like a little evil laugh, and be like, 'Got him! I pulled off this caper!'" Because that's kind of what it feels like. He makes it look easy, and of course, it's never easy. There are times when he'll message me, and he's like, "Dude, I feel like I'm in the dumps," or "I feel overwhelmed." He's human, but he's done a really good job of doing it his way. Almost to the...

Sam Parr

Where I'm like, "Dude, you gotta be smirking right now." It's that feeling when you get successful and you think of all your ex-girlfriends who made fun of you. It's like, "You've... you're fucking... no, no, no, I got you, bro."

Shaan Puri

don't don't worry you don't like you don't like that shell you know that that that shelf you have with like the names of

Hubspot

all your

Shaan Puri

enemies marked on like champagne bottles

Sam Parr

you know like when you

Shaan Puri

pop that

Sam Parr

cork off

Shaan Puri

whatever you

Hubspot

like to of their hair and

Shaan Puri

you just set it on fire with with the lighters yeah dude what are you talking about

Sam Parr

but he's pulled it off he's let

Shaan Puri

Let me also say another thing. You know, there are people who are masters of engineering and fantastic leaders. But, you know, I'm the dawn of storytelling, and Andrew is a great storyteller. So, people should go read his "Dribbble 2.0" blog post. It's on Medium, so just Google "Dribbble 2.0 Andrew Wilkinson." And here, okay Sam, how do most people announce an acquisition? Go, just give me your generic thing. Yeah.

Sam Parr

There, it's like... We are so... It's a press release: > "We're so pleased. They built a really nice business, and we're happy to be stewards of this business. We're really looking forward to the future." And then the sellers are like: > "You know, we were looking for a nice home for [Company Name] and this is a perfect partner. We're excited for the future." Just nonsense.

Shaan Puri

none absolute absolute soulless drivel so here's here's what he he did and said so here's I'm just gonna read a little snippet of this because I think people should pick up on the storytelling too I think that helps so he goes when I first started metalab dan cederholm was my hero a great opening line a great because I don't know who this guy is and now I'm like why is this person your hero he goes this bulletproof web was the first book I read I used to reverse engineer his style sheets on simple bits to learn his css tricks anything he did I did and I drove my front end developers nuts trying to get them to implement every little one pixel detail that I learned from dan so already you're like okay this is interesting he's basically setting the context of like that's the guy who started dribbble and he's like it's not just I bought dribbble and I'm pleased to to you know raise prices in 6 months he's like you know I I've admired this guy this guy is my hero I learned from him and so when he so so let me keep going so he goes I reme I remember meeting another favorite designer dave dave shea at a conference back in 2008 he mentioned that he knew dan my floor my jaw hit the floor wait what those css drop shadows the quark logo he's the best what's he like I was gushing blah blah blah I wasn't just a fanboy I was his web standards fanboy blah blah blah then he keeps going he goes one of the projects that dan did was dribbble which he cofounded with whoever I had used it blah blah blah which is why I'm excited I'm excited to share the big news right so just that little paragraph of setup it it draws you in in a way that like he could have just done a standard boring eye roll press release and instead he decided to do it this way and then he he talks about kinda like that it wasn't just like therefore we've acquired it and it's done he's like I was bugging them and bugging them I kept emailing them every month asking them if they would let me in he's like this september my moxie finally paid off he emailed me think saying they would think to do that they might do it they cared about these three things I wouldn't mess it up I have a long term view and I want them to stay involved and own a piece of the business we shook hands and made a deal blah blah blah and then he tells the rest of the the you know then he then he does the standard stuff about we're excited it's gonna be great and I just thought that was just a way better way of doing it than the average person would do it and if you add up a lot of doing things better than the average person would do it you end up with this type of exceptional outcome

Sam Parr

Dude, it's just great, man. I have a lot of respect for him. There's always this little bit of envy in me when I talk to Andrew because he's my friend and I consider us peers. Then he'll make jokes about what he's doing on the weekend, and I'm like, "Oh, that's sick." But I'm proud of him. I feel a lot of pride for him, and I'm very happy that he's pulled this off. I think it's really impressive, and I think that it's badass that there are people bold enough to do things their way, regardless of what the nerds at Stanford tell you about how you should do it. I imagine that along the way, he got a lot of flack and people making fun of him for being in Canada and not raising money for buying these little, quote, "little things." I guess that's the name of the company, Tiny. But he just pulled it off, and I appreciate that gumption. I appreciate that boldness, and I find it inspiring. I'm happy that we have him in our life. So that's my little love note to Andrew. Yeah, good job!

Shaan Puri

love letter to andrew wilkinson yeah yeah

Sam Parr

And if you want to... if we're going to Canada, we're going to be there February 16th. And Andrew, if you're listening to this, you want to fly us up there privately, that's cool if you want to celebrate.

Shaan Puri

we know how much money you have now so

Sam Parr

you

Hubspot

know look let's celebrate my thing take

Shaan Puri

one friend invite another over

Sam Parr

Yeah, yeah, yeah. Let's celebrate by flying private together. Except we'll be like, you don't have to be there. Sean and I will each be in different planes.

Shaan Puri

can we have an allowance can he just send us a card with just an allowance that would be tight

Sam Parr

anyway that's my breakdown of tiny he deserved it

Shaan Puri

Dude, I got roasted so badly by my daughter last night. I was like, "Oh man, this is..."

Sam Parr

your 4 year old daughter roasted you so badly nice

Shaan Puri

33 years old, we play... so she can't play many games. We play rock, paper, scissors, but she always throws scissors. So that's like, you know, fun for her, not for me. She plays hide and seek and always hides in the same spot. That's what kids do; they just play the game but they don't know how to play. Then I taught her "I Spy." I was like, "Oh, here's a game we could play in the car: I Spy." She loves "I Spy." So I say, "I spy something green." She's like, "Is it the tree?" I'm like, "How'd you get it? It's always the tree, that's right." Then she goes, "I spy something yellow." I'm looking around the house, thinking, "Wait, what is yellow? I don't see anything yellow." She says, "Your teeth!" Oh, and she was just not aware that that's the sickest burn! That's just... anybody would be like, "That's anybody!"

Hubspot

hey I smell an asshole

Shaan Puri

Yeah, exactly. I was like, "Wow, that is just like natural. That's a natural burn." Oh, that's good.

Sam Parr

Can I tell you about something cool that you probably know about? I saw it, and I can't stop thinking about it. Have you heard of the Scallenge?

Shaan Puri

I don't know about this tell me about this

Sam Parr

Alright, this is, you know, I don't pay attention to sports. This is your league, so you know, Brian is Brian.

Shaan Puri

Oh, oh, Scalabrini. Okay, I didn't know he called it the "Scalenge." That's a good name. Well, explain who he is. People probably don't know.

Sam Parr

Brian Scalabrine. He played for the Celtics. He's like a redhead. He's 6'9" and he's huge, but I think...

Shaan Puri

he looks like will ferrell but actually was an nba nba player

Sam Parr

yeah so easy to make fun of but I think he was like okay right or was he always kind of bad

Shaan Puri

Yeah, he was okay, but then it was okay. He didn't take himself too seriously. Over time, you know, he had a few years where he actually played, but for most of his career, he was on the bench as a scrub. Yeah, yeah, "Barshaf" is his nickname. You know, Kobe was the Black Mamba, and he started calling himself the White Mamba. He was a goofy dude who was basically a bench warmer for the last, whatever, seven years of his career. But he was a great locker room presence and, you know, a warm body, so people kept him around.

Sam Parr

And I think at one point, he called himself, I don't know if it was a joke or what, "the worst player in the NBA." Obviously, it was a joke. Anyway, after he retired—so I guess he retired from the NBA somewhat recently—but he's still 69 and athletic, or athletic for, you know, a basketball player. Compared to the other guys, he wasn't that athletic. He starts playing in rec leagues, like at the YMCA and on playgrounds, and he scores, you know, like 60 points a game, just crushing these guys. He doesn't brag about it too much, but then online, at one point, he mentions, "Yeah, I got 60 points last night in my rec league." Then just people online start chirping at him hard. They're like, "Dude, you suck! I could beat you!" or "I don't even know how you made it in the NBA," you know, yada yada yada. They start chirping at him, and he goes, "Wait a minute! No, I may suck compared to Derrick Rose, but I don't suck compared to any of you guys." So he starts doing this tour where he goes to all these basketball courts. He says, "I want to go to the hoodest of the hood basketball courts. I want to go to the best YMCA. I'll go all around the country." And he starts doing this, and he crushes these guys.

Shaan Puri

he challenges people he says come play me 1 on 1 you think I suck come play me 1 on 1

Sam Parr

Yeah, and he destroys them. He's like, "I'm not even doing this for social media," but some people recorded a couple of these things. He would beat them like 10 to nothing. He was like, "I let them get one just to figure out what they're gonna do, but I just destroy these guys." He's got this awesome quote that he said to one of the kids, an 18-year-old who was playing against somebody. He crushes this kid and goes, "Let's get something straight. I'm closer to LeBron than you are to me." I read that and thought, "This is the greatest thing I've ever heard. This is awesome!" It's such a good story. He called it the "Scallenge," and I thought it was so good. It just shows you, you know, there are levels to greatness.

Shaan Puri

Yeah, there are levels to this. I think that's the perfect takeaway from that. Also, he's hilarious. He is so good! I don't remember this, by the way. When we did our Camp MFM getaway, the guy who came to train us trains a bunch of NBA stars. He trains Kyrie Irving and Trae Young, and he was there. His wife is in the WNBA, and she's one of the best players in the league. We were talking about the WNBA and how the players are awesome, but they also don't get high viewership. It's not like the league does that well; it's kind of subsidized by the NBA and loses money. But, you know, it's good overall for the sport to have a women's league. So we were like, "Yeah, well..." we had kind of an impromptu brainstorm of ideas.

Sam Parr

the only thing everyone says which is

Hubspot

can I beat her up

Sam Parr

you know like it's like it's what everyone says like

Shaan Puri

not beat her up just beat

Sam Parr

Her fast happens when a bunch of drunk idiots at Buffalo Wild Wings are watching like Rose, Naomi, and these female UFC fighters. Everyone thinks, "Can I kick her ass?"

Shaan Puri

Yeah, what would happen if I fought her? Yeah, exactly. So basically, we did a brainstorm of what we could do to get ratings up or, if we were to launch a different women's league, how we would get people interested. The problem is, I think I saw this crazy TikTok. It was about some team—whoever won the championship last year. I have no idea, maybe it's like the Atlanta Dream or something like that. They came home to do their parade in the city, and it literally just looked like, you know, if I walk to my bus stop here, there are like three people kind of loitering around, there's like a bum, and then, you know, that was the parade. There was nobody there for the parade. The team was going down in the bus, and there were just other people like, "Why is this? What is this? Why is this bus here? Oh, do you guys play a sport? I didn't really realize that." So, there was this TikTok that went viral making fun of it. The idea that we all landed on was basically that the three, four, or five best players should go on tour, like it's the And1 Mixtape Tour, and go city to city. They could challenge any five guys, you know, play pickup with any dudes at any of these places, and livestream that or cut it into clips of them basically punking guys—beating guys who think they could beat them—and put some respect on their name. So, that was kind of the marketing idea. But yeah, to our CMO of the WNBA, if you're listening, you're welcome.

Sam Parr

Dude, I love these challenges! There is another one where, like, when you're watching running... Running's not a popular sport, but I love it. It's my favorite sport to watch next to the UFC. People were like, "They're not that... they're like a 2-hour marathon." Do you remember that when the guy, Eliud Kipchoge, ran 2 hours? He just looks so smooth. He looks closer to an animal than he does to a human. His body is just... you know, running 100 miles a week for probably 20 years. You look at his calves and you're like, "I can't believe that you and I are like the same. We're both humans." It's just not even fair. He looks graceful when he runs; he looks beautiful. He doesn't look that fast. So they put a treadmill at the same speed and they go, "Here's the speed." He's doing it with ease, and he does it for 2 hours. Then they go, "See if you can do this for 15 seconds." They have this treadmill, and people can't do it for just 20 seconds. They can't even run that speed. It's basically like 4 minutes and 30 seconds a mile, which is like... I don't know, would that be like 6 miles an hour?

Shaan Puri

for me yeah

Sam Parr

Yeah, yeah, yeah. It's like a sprint, and it's a sprint for most people. It was really funny; no one could keep up with it. I love these! That's actually one of the tenets of making content viral, which is that you have to make something that is made to stick. You can make it stick by comparing it to real, tangible things that everyone can understand. When you put one of these treadmills at that speed, you're like, "Oh, I can't keep up with that for 10 seconds, let alone 2 hours."

Shaan Puri

Totally, totally! Somebody said this about the Olympics: "There should be one civilian in every event, just a normal fit guy from the gym." It should be like a baseline comparison. Here's the average person, you know? Here's even like an above-average person, and then here's the Olympians. Let them all just line up in lane 11 and see what happens.

Sam Parr

Dude, I would love that! I have a big, meaty topic. What do you have?

Shaan Puri

Alright, so this is a story of a multimillion-dollar opportunity. Easily multimillion. Type in the chat how to calculate how much I lost doing this. Let's see... I would have invested in a company at $5,000,000, and it's now a $3,000,000,000-ish company. So, you know, I basically missed out on a chance of probably turning something like $25,000 into tens of millions of dollars. Yeah, okay, so here's what happened. But there are kind of some interesting things baked into this, so it's not just a "oh, I missed it, big deal." Everybody misses opportunities. This one is interesting. Back in 2015, which is kind of when we met, I was not an angel investor, but I liked the idea. I thought it sounded cool. I was a founder of a company, and I was making, I think, $100,000 to $160,000 a year. So, $160,000 a year.

Sam Parr

Back then, you told me you were making $1.60, and I was like, "Oh, you're the richest person I know." I remember you told me you were making $150,000, and I was like, "Oh my God!"

Shaan Puri

yeah I I may I remember I was like man find a find somebody who looks at me the way sam looks at me right now the way that sam looks at my pay stub and so so yeah I I I was making 1.60 a year but in in california you know you've kind of after taxes now you're at like 110 you're netting you know and then you pay for life it's pretty expensive blah blah blah you don't save much so I didn't have much of a bankroll but I liked the idea of being an angel investor and people because our office was so dope when a founder would come they would think that I'm a lot richer than I was just because our office was so fancy which was only fancy because our main investor owned the building and decked it out for himself and like that's why the office was so fancy it had nothing to do with me so anyways I I meet this kid we're building a product and I meet this kid he's 13 years old and he uses our app every day our app was like a clubhouse type of app he used to use it every day after school come home use the app and he's hanging out in the silicon valley chat rooms and we're like dude you should be like going and go try to have a kiss like you know that should be your mission not like sitting in on this room talking about raising your series a and and so 2 things happened 1 he's like dude I wanna come work with you guys we're like dude you're in middle school like I can't your parents are gonna kill me I can't help you work for us but I go here's here's what you can do he goes I wanna be a scout for you I said okay go ahead k be a scout for me he goes he goes he goes what do you want me to do I go every week I want you to send me a company that you think is awesome and that you think I should invest in and just write why you think I should invest and send me the company now I have zero hope or really even zero plan to read this email at the time I'm just basically giving this kid a homework assignment I'm like yeah this will help you think and most likely this is gonna be too much work for you you might do it once you might do it twice but you're gonna give up by the 3rd time for sure so I give him this homework assignment very first company he sends me is a company called applyboard and so here's this was the second this is sorry this is the second one hey sean here's the second company I wanna introduce applyboard what they do they help international students find the right university for themselves and apply there on their behalf they have 11 schools contracted to pay them a commission for every for a student that gets that signs up and they have 14 more schools in the funnel they have over 1500 students signed up a 160,000 facebook likes and this is all with $10 in paid marketing this is actually pretty interesting right like that's actually a a a kind of a really good analysis and that's you know simple two lines so I'm like wow this kid's 13 he's like you know he's this is a good find and he's explained it well he goes why you should invest now this is where he got a little off but that's okay he goes they started 4 years ago with offline consulting and then pivoted into a software business they know the space well they have 4 cofounders they have a very very diverse skill set blah blah blah they have an algorithm something something and he says their customer acquisition cost is only a few dollars their ltv is 1,000 so they have sustainable growth he goes I'm trying to correct my shots so that one day I can hit the bull's eye for you if you have any feedback on the company I would love to hear it because the first one I didn't even respond I said or I said like this is bad so this is his second one and I'm like you know what this is actually pretty good I'm gonna take this meeting so guy is in san francisco he comes to my office love him super charming this guy martin you you've probably met like a bunch of these guys who are like there's there's something that's really just like I don't know charismatic or charming about dudes from like you know israel or something like that like anyone who's like israel persian turkey there's like it's like they're just so goddamn charming like they're just dripping with sauce

Sam Parr

And what's Cliff's company? Effortless. What's our buddy Cliff? Cliff W. Weitzman.

Shaan Puri

yeah the it's the audio one

Sam Parr

I think he's Middle Eastern. I met him when he was just starting, and I was like... oh, he's Israeli actually. He had that same vibe. In the office, I go, "What's interesting about you?" or something like that. He goes, "I can do a backflip." I go, "Alright, well just be good."

Shaan Puri

move that chair over that chair over

Sam Parr

yes friends yeah I said

Shaan Puri

alright

Hubspot

well move that chair over there's enough room here go do it eddie did a

Sam Parr

Backflip in the middle of my office, and his company now, Speechify, is in the unicorn territory. I didn't invest in it, but he had that same charisma when he came to my office. He lit up the room. I should've known better.

Shaan Puri

Yeah, he's got amazing energy. So, I meet this guy, and he's got the Israeli swag. I'm loving it. Now, I have never angel invested in a company before, but I'm thinking this seems like a great idea. For people who don't know, there's a messed-up part of the system regarding colleges in the U.S. They have surge pricing for international students. Basically, if I'm a state resident, I get cheaper tuition at state schools. However, if I'm a U.S. resident, I pay full price. So, I might pay $25,000 to go to school at this place, but an international student will have to pay two or three times more than that. They could pay $50,000 to $75,000 for the same exact education. They just charge them more. It's kind of insane. I don't really know how they are able to justify this, but they do.

Sam Parr

You remember in San Francisco? Was that what it's called? The University of San Francisco? I dated a girl that had ties there, and I remember walking around campus. There were only Chinese students.

Shaan Puri

And it's not even good schools like the University of San Francisco, or USF, or whatever. It's not even that good of a school. So, it's actually a bit of a trick. International students just want to come to America. They can't differentiate between, you know, the University of Utah and Columbia or whatever. These different schools—they don't know the lay of the land that well. They don't know that the school's in the middle of nowhere. They don't know that it's not actually considered that prestigious or whatever it is. It's just expensive. A lot of these other schools really take advantage of this and have a huge percentage of their population coming from international students, which makes up a disproportionate amount of revenue. So that's kind of why the schools were interested. They went to him and they were like, "Yo, we'll give you $3,000 if you can get somebody to sign up." And he's like, "$3,000? Oh, that's pretty good." I think now they take a lot more than that. I think they now take, you know, 10% or something of the overall tuition, so it's gone up since then. But anyways, he pitches, and I'm like, "Dude, I just get caught up. I like the idea. I love this guy's personality. I'm in." He's like, "You're in?" I'm like, "I'm in." He said, "Fantastic! I haven't really talked to anybody else yet, so I don't know all the round details." I said, "Brother, I'm in." And he's like, "Alright, love it! You're the first guy I've met in Silicon Valley. You're my champion on this." I thought, "I'm the first guy he's been to? Oh, wait, hold on. I didn't want to be the first guy in... you know, the first on the dance floor is kind of not exactly the position to be in." So then he goes on tour. He starts pitching people and he starts coming back to me. He's a nice dude, he's an honest guy. He trusts me. He says, "Man, they're saying no because of this." And I'm like, "Oh, these guys are idiots. Don't worry about them. Next one." They came back and said no because of this. And by the third one, I'm like, "Maybe I should have been saying no." So I start to doubt my conviction in this thing, but I'm still like, "Brother, I told you I'm in, so I'm in." Anyways, it takes him a little time.

Hubspot

dude if you if the end of the story

Sam Parr

is you backed out on him and you were calling him brother

Shaan Puri

I wasn't calling him "brother." In fact, I think he was calling me "brother" because that was like, you know, the Khabib thing where they just say "brother" a lot.

Sam Parr

you just knifed him in the back

Shaan Puri

Well, I didn't actually knife him in the back. I don't know exactly what happened; I don't even remember how it played out, but I definitely wussed out. So, basically, it takes him a little time to raise the round. He eventually does get the round together, and I'm supposed to write a $25,000 check. Not even like some crazy amount of money, but to me at that time, that was like, "Alright, well, that's kind of like my entire savings for this year going to this one random Israeli guy's company." I could lose this, but I would really hate to lose this. I start thinking about, you know, "Am I ready for this?" I don't know. So, I kind of just... I don't back out, but from what I remember, I didn't back out, but I didn't reach back out either. I think he probably emailed me once, and I was like, "Yeah, okay, let me know when it's time." Then he probably emailed me like 3 or 4 weeks later, saying, "Yo, it's time," and I just didn't reply to that. I don't think anything really happened. But anyway, long story short, I don't invest. Fast forward, you know, 5 years later, I get an email from that same kid, Soroush. Soroush is like, "Hey, remember this email? Yeah, Plyborn's a unicorn now." You know, well, what do you know? I'm curious what you think about that. I was like, "I think I was an idiot." I think I was a total idiot. There are actually a few takeaways in this for me. So, the few takeaways are: 1. Don't be a wuss. If you say you're gonna do something, just do it. That's just a lesson for myself and I think, you know, for most people, yourself included. That's rarely a problem for me; that's more of a problem. 2. I actually think I was correct that I was not ready to be angel investing at the time. So, I should have either...

Sam Parr

you could've done like a $5,000 check

Shaan Puri

Yes, exactly. So, what I should've done is say, "Alright, look, I don't have the bankroll to place 20 bets," which is kind of what you'll need. You need 20 to 30 bets for angel investing to work. Realistically, I do not have the bankroll to do this, but that's okay. That doesn't mean I can't do what I want; it means I have to be resourceful and find a way. So, either let me come in at a smaller check size. That makes it my version of, you know, if an angel investor writes $25,000 when they have $5,000,000, then I need to write the proportional check for me and see what happens. Or, I should have gone to somebody and said, "Hey, I actually found this deal. I think it's really good. You have the money," which is what I did later with Lambda School. It was like, "Hey, I like this company. They haven't really raised much money yet. It's not proven, but I think it's worth a shot." I convinced somebody else to write the check and give me some carry. So, that's really what I should've done to make this happen. But at the time, my fear overrode my ability to think clearly and say, "Okay, well, it sounds like there's just a little obstacle here. Let's figure out how we're going to get around it."

Hubspot

I paid for it

Sam Parr

Are embarrassed. They're saying, "Well, can I do $5,000?" I remember doing a deal for $15,000 or $25,000 when I didn't have a lot of money. Thankfully, on paper, it's turned into a bit. But I remember thinking, "I want to ask him if I could do $5,000, but I don't want to look like a punk."

Shaan Puri

Right, yeah. So, I think I should have found a way. That's been a common theme in my life. A lot of good opportunities come my way, and I say, "I don't have the time, I don't have the money, I don't have the skill," or whatever, and I rule it out. Even though objectively, I'm like, "This is a great opportunity." The real answer is to find a way to get the time or find somebody who does have the time. Find a way to get the money or find somebody who has the money to help you out. Right? Do one of those things to get there. This is not a small thing. The difference between doing that and not doing that would have been, again, tens of millions of dollars in this case when it worked out. So, that's one takeaway. The second is this guy, Sarush, has now become a general strategy for me. I always want to have, like, I don't know, four or five people who are kind of like... it's like an anti-mentor. You know, it's a mentee or something like that, right? I want to have people that are young, hungry, and ignorant. Naivety can be an asset for them because they're young and hungry. I want to have them more in my orbit. I need to find some excuse to have them in my orbit, hang out with them, hear what they think is interesting, meet their friends, and whatever. I think that is an actual strategy that most people miss out on. Everybody wants to sort of climb up. They're like, "Oh, how do I meet the person who's done more than me or is more successful than me, has more money than me?" Whatever. They're focused constantly on reaching up and trying to pull themselves up. Instead, I found so much benefit out of just having a small crew of like 18 to 21-year-olds. I'm like, "Okay, you guys just think differently than me. You're worried about different things, and you're excited about different things than me." How do I have that in my life in some way? So, that's actually become a more core strategy. Do you do anything like that?

Sam Parr

yeah so listen to this so we had this kid

Shaan Puri

By the way, thank you for not making an Epstein joke. I felt like I was treading carefully. I was like, "What you need is like 14-year-old dudes that you hang out with all the time." It's like, yeah.

Sam Parr

No, I... so I'm 33. I'm just now hitting the age where I'm no longer the youngest guy in the room. I've got about 15 years of experience, and I'm seeing younger people. I'm like, "Oh, you're full of energy. You're going to do something." But you're making an error here, and I'm just going to let... I'm just going to watch you make that error because it's good for you. I'm just now getting to the point where I'm able to be a little wise, and I'm seeing the importance of surrounding ourselves with young people. Here's an example: a year ago, Sean and I did this thing where we offered $5,000 to someone who made a TikTok video from our podcast and shared it. One kid in particular, his name was Michael. At the time, he made these videos that reached tens of millions of people for us, and we gave him the $5,000. I went to email him, and I was like, "Dude, you should do this full time." I asked him for his email, and it was like [email protected].

Shaan Puri

and I

Sam Parr

Was like, "Wait, who are you?" He goes, "Yeah, I just recorded this in my dorm room." I'm like, "Oh, you're onto something. You're going to be a superstar. Just start turning this into a company." Turns into a company. I guess $5,000 was his first money. He makes tens of thousands of dollars a month and eventually sells it to Morning Brew. Michael... what's Michael's last name? I don't even know. Yep. He comes over to my house and uses the studio. Sarah and I will be in the kitchen, and I'll just say, "Mike, come out to the kitchen and have a coffee with me." Sarah and I won't say a word; we'll just let him talk. I'm just here because he's 22, maybe. I'm just coming...

Shaan Puri

to the kitchen have some chocolate milk yeah

Sam Parr

"You want some hot cocoa? A lollipop? Yeah... sit on my lap too while you're at it." And like, he just talks, and about 60% of the stuff that he says is nonsense.

Shaan Puri

40% is absolute nonsense. Not just him, but anybody who fits this category. You have to literally just immediately throw away 60% of the words.

Sam Parr

But when I say to him, I go, "Michael, most of what you're saying is bullshit and I think you might know it, but look, here's the deal: even a blind squirrel finds a nut once in a while. Keep on swinging, you'll hit a home run soon because you're swinging. You're in the game and I appreciate that about you. If you ever want to know what you're saying is bullshit, just ask me and I'll tell you. But I'm not gonna call you out, I'm gonna let you get away with it all because I like this gumption." He tweeted something the other day that was hilarious. He tweeted: > Got bad news. Just got back from the chiropractor. They said the chip on my shoulder's permanent.

Shaan Puri

how funny is that

Sam Parr

And I was like, "This is why you're going to make something of yourself." Now, you might ruin it by saying dumb stuff, and you're going to cost yourself a whole lot of money. You're going to have a lot of headaches throughout the years until you learn to be calmer.

Shaan Puri

you know he was feeling good about that line too when he tweeted it

Sam Parr

oh you know he was feeling so good

Hubspot

but I appreciate that this

Sam Parr

Is a young kid. So, he moved to Austin. I invite him over all the time and I go, "Just talk, man. Just talk. I want to hear what you gotta say." He's telling me about what the younger generation feels about this and that. He's like, "Yeah, I have a birthday party coming up on Saturday and we're taking some new weird version of Uber." I don't even know what it is, like a party bus company. I don't even know what it is, but he's like, "This is what we're all using." I was like, "Alright, cool. I'm in. I just want to experience this stuff." So, yes, long story short, I totally am experiencing this where I have young people around me. Sounds weird, but let's get past that.

Shaan Puri

The young blood strategy is a real strategy, and actually, this is my reminder to myself: I need to refresh my young bloods. They are now like 24 to 25 and rich. They've made it, like okay: - Michael is one example - The other guys who set up our initial studios here and then created that agency, Clipt They do over $1,000,000 a year in revenue off their thing, and now their content is going nuts. Their short-form videos are going nuts, like millions of views.

Sam Parr

And I had to reprimand Henry all the time. I was like, "Hey Henry, just so you know, you shouldn't talk like this when you're in this meeting or something." Eventually, I decided, "You know, I'm not gonna give him advice. I'm just gonna let him learn." But I saw the same thing where I thought, "You're making a bunch of mistakes, but you're taking a ton of swings. You're gonna hit."

Shaan Puri

The guy, the kid I talked about, Soroush, probably has more money than me now from crypto. The guy has made an absolute killing in crypto over the last few years and has done incredibly well. The guy who was my intern to start this podcast, Ishan, was just doing the video editing and created the initial brand name and all that stuff.

Sam Parr

he like invest all of his money into like a short stock a short position on a penny stock not a short

Shaan Puri

Not a short one. He went all in. He took basically $100,000 that he had saved up after a couple of years of working for me and then for a friend I introduced him to. He took the $100,000 and bought a stock that got delisted on a stock exchange. All of its shareholders were like, "Damn it, what do we do with this stock? We can't trade anymore; it's illiquid." So, he bought it all for like 10 cents on the dollar, thinking, "I don't know, I still believe." That ran up to be worth a few million dollars. His $100,000 basically turned into a stake worth between $2 million to $5 million at that time. Now, I think it's gone down a little bit, but there are articles about him in the Australian Post or whatever. I'm like, "Dude, this is crazy!" And another one is Steve Bartlett. I hired Steve when he was 18 or 19 years old—maybe he was a little older, maybe 20 at the time. I was like, "This guy is just dripping with swag." I wanted to be around him. He was cool; he wore rings and said words that I don't know. For some reason, his tweets go viral while mine don't. So, I wondered, "What does this guy know?" Sure enough, he ends up creating a social media agency, takes it public, and has this great podcast that's super popular. He's a shark on the Shark Tank of Europe. This guy is now like the Blackberry of the scene. It's like, "Dude, I just thought of six in the last 15 seconds." I don't even know; there might be even more that I'm not remembering that came from the same batch. I need a new batch—my little personal YC.

Sam Parr

This is good that you're talking about this. So, I was talking to a friend yesterday. So, Producer Ben, you can leave all this live, but you're gonna have to bleep out what I'm about to say. I want Sean to know what it is. So, my friend I was talking to, he just mentioned it. He was talking about something totally different and he was like, "Yeah, you know, like I made $30,000,000 from an angel investment." And yeah, you know, so this is how I found my accountant. I did this, this... because I was asking him for a good accountant. And I was like, like that'd be the rewind sound.

Hubspot

I was like scary like you know scratch the record reverse

Sam Parr

Tell me about this thing. He goes, "Yeah, basically I was, you know, like president of a smallish startup that wasn't doing so well. A 22-year-old kid who worked for me, he quit to start a company. I was, you know, frustrated at first, but he was really promising. So, I invested $25,000 at a $3,000,000 valuation. The company went public like a year or two ago, and it was a $15,000,000,000 valuation. It was called a market cap. This is the part you gotta bleep out. It was called, you know, that company."

Shaan Puri

no but okay

Sam Parr

It's a boring, nothing special, like B to B, whatever. And he's like, "Yeah, I had $75,000 at the time when I was running my first startup. I didn't have a lot of money, but I decided to invest all of it into startups." I did it in sizes of $10,000 and $25,000. That one check that I did for $25,000 turned into $30,000,000. I was like, "Are you kidding me?" He goes, "Yeah, basically, I knew this kid was strong and I wanted to be part of whatever he was in. I wanted to surround myself with young people, and I thought he was promising." In fact, it worked out really well, and I made so much money off of this one deal. He goes, "And then the other one he said made like a 10x return as well." He just got super lucky on that one, and it totally worked out. So it's a crazy story, and I'm like, "Well, I've invested in a bunch of companies. I'm late for that to happen. That'd be nice."

Shaan Puri

Yeah, exactly. What part do I do for the $30,000,000,000?

Sam Parr

is there

Shaan Puri

a line for that am I in the right line yeah

Sam Parr

yeah so it worked out it's a crazy story

Shaan Puri

That was good. Alright, I had another one, but let's save it for the next episode because it's getting a bit long now.

Sam Parr

Alright, that's the pod. I think that was a banger! We forgot to remind people: if you made it this far, there is a gentleman's agreement. This content that you're listening to is not free. We're like one of the only places on YouTube where the content's not free. You have to pay. What do you have to pay with? That's your cue, Sean.

Shaan Puri

Oh, I was enthralled! I was ready for you to just keep going. I thought you were on a roll. Go ahead, keep going.

Sam Parr

You have to pay something in order to listen to this channel. If you've listened to more than one thing, you have to do me a favor: go to the YouTube page and click subscribe because that helps us. You know what? What I'm going to ask people to do is, if you're listening to this on Apple or Spotify, share this. Share it on Twitter, LinkedIn, all that stuff. And we're even... So you listen to us. I just spent hours on this research, by the way, and you spent $15,000,000 of lost money in order to make this content.

Shaan Puri

to tell that story

Sam Parr

yep I believe in front

Shaan Puri

of you I believe in front of you

Sam Parr

so this

Shaan Puri

is not free my blood subscribe to the channel

Hubspot

yeah this is not a this

Sam Parr

This channel is not free. You have to click "subscribe" on YouTube because we're trying to build up our YouTube channel. You also have to click "subscribe" and "follow" on the Spot Podcast.

Shaan Puri

The way I like people go in the comments on YouTube and they just say they honor the gentleman's agreement. I go to each one and I just say, "Firm handshakes. Firm handshakes to you!" From handshakes to you too.

Sam Parr

so that's what you have to do and by the way I read every comment on those youtube things

Shaan Puri

alright we're out of here