How Logan Paul Made $250 Million With PRIME In 2022 (#422)

Sam Parr

Here's the exact quote: "Do you want the numbers? Alright, in year 1 we cleared $250,000,000 in retail sales and $110,000,000 gross internally."

Shaan Puri

alright we're live what's up what's up dude

Sam Parr

Have you been following this Prime Energy drink thing? Or Prime... I don't know what the heck it is. It's just an alternative to Gatorade, right? Have you followed it?

Shaan Puri

Yeah, I followed it because a while back, I don't know, like a month ago, Ben, my business partner, told me he met some guy who was involved with it. He was like, "Dude, the numbers are insane for Prime. They're selling, you know, a blip amount of just this one SKU, and let alone the main drink." I was like, "There's no way that's a crazy number." Then I think recently they came out and shared some more numbers.

Sam Parr

Yeah, so there are two takeaways here. The first takeaway is the numbers. Logan Paul said that the beverage brand he launched with KSI, on January 4th—so about a month ago—did $250,000,000 in revenue in the first year. It also did $44,000,000 in revenue just in January of 2023, so recently. Then he also said, "But then check this out. Here's the exact quote: 'Do you want the numbers? Alright, in year one we cleared $110,000,000 in retail sales. Sorry, $250,000,000 in retail sales and $110,000,000 gross internally.'" So the takeaway here for me is: one, that's huge numbers; and two, what the hell does that mean? This guy doesn't even know his numbers. Yeah, that's a takeaway.

Shaan Puri

bro you're off by half like that's crazy

Sam Parr

also what the hell does a 110,000,000 gross internally

Shaan Puri

What he's saying is they sell wholesale. Because they sell this thing, let's say at Walmart, it did $250,000,000 in sales. But to them, they're getting bought at wholesale prices, so the markup is... you know, they basically sell at half price, right? So they sold $110,000,000 worth to Walmart. Their company sold $110,000,000, and the total product sold is $250,000,000, which is what I think that has to mean.

Sam Parr

Well, it's crazy that this is that big. I've actually seen a few interviews with Logan, and he says what the numbers are. Then someone from behind the scenes goes, "No, no, no, it was this." He goes, "Wait, what? Oh, my bad, it was this." It's pretty wild that, like, I think Logan's a smart guy. I would love to have him on the pod and everything, but it's pretty wild how he's really just focused on the content thing and probably doesn't know much about the business side. It's pretty interesting. I've seen him ask Mr. Wonderful or something about different stocks and things like that, and he has a pretty rudimentary understanding of certain finance topics that I thought for sure he would be somewhat on top of. But I guess not. You can crush it without knowing that.

Shaan Puri

Well, I don't know about that. I think he’s like anything else. We’re probably good at business, but we’re just enough to be dangerous at the kind of content. You know, like when we see a YouTuber, both of us have had this reaction where we’re like, “Oh, we’re horse carriage operators and a Tesla just drove by.” This is when I see somebody on TikTok. You might as well be at Hogwarts with a magic wand. I'm like, "Yeah."

Sam Parr

we're not doing something

Shaan Puri

I don't know how to do those things, and I will never know. It's awesome, but I just can't imagine myself really doing those things at the level you can do them. I think he's good enough to be dangerous on the business side and smart enough, obviously, to know what categories to go into and who to partner with. So, if you look at their moves, right? Just zoom out so that you can't hear what he's saying or whatever. If you look at their moves: the transition from Vine to YouTube—great jump. The transition from YouTube canceled to YouTube rejuvenated—that's a good move there. Then from YouTube to boxing, celebrity boxing. He ended up boxing Floyd Mayweather for a while.

Sam Parr

did alright

Shaan Puri

He did alright, yeah. His brother's doing well; he's one of the highest-earning boxers out there. He's like, "not a boxer." So that's incredible. Then the next jump for Logan was WWE. Now, Logan is one of the big stars in WWE, but he does it on his terms. He then transitioned his YouTube content into podcast content. He's like, "you know, I'm maturing."

Sam Parr

by the way have you seen him in wwe he's really good he's really good

Shaan Puri

Exactly. If I was 13, I'm pretty sure I would think Logan Paul is the **fucking shit**. Because I'm 34, and I think Logan Paul is the **fucking shit**, you know?

Sam Parr

He's good. Like, he's got the acting down. He looks ripped. He's good.

Shaan Puri

And people love to hate on these guys for, you know, good reasons. They've done some things that are, like, you know, whatever. He did the stupid video in Japan and he's gotten in some trouble for his NFT thing. But, like, I don't know. I think there's a lot to learn from and admire in these guys. I'm not saying they're great people or perfect people. I don't know them personally, so I can't say either way on that. But I think from a marketing perspective, yeah.

Sam Parr

they crush it

Shaan Puri

15 out of 10, right? Like, from a brand-building perspective, and in terms of learning how to keep riding new waves and stay relevant, I mean, these are phenomenal. They're phenomenal in the same way that the Kardashians are phenomenal. You could disparage them for a bunch of reasons, or you could look at the things they do great and say, "Cool, I'm just going to take inspiration from the things they do great," rather than hate on them in a very common way about, you know, the same stuff everybody else does. So, yeah, I think what he's done here is pretty phenomenal. I think he and KSI are kind of like minor partners.

Sam Parr

in this business I think it's like a like a like a third a third a third type of thing

Shaan Puri

the operators get a third here

Sam Parr

Yeah, I mean, I saw an interview and it was either a third or like 20%, but yeah, a minority, but meaningful. I mean, this can be a $1,000,000,000 brand.

Shaan Puri

Dude, I invited him to Camp MFM, by the way. I was like, "Yo, you should come! It's gonna be awesome." He was like, "Dude, I can't get hurt." He's just like, "I'm doing the WWE. If I go play basketball, I'm gonna get hurt."

Sam Parr

why did he reply to you

Shaan Puri

Can't sprain an ankle or twist a knee and not be able to go wrestle at WrestleMania in a month.

Sam Parr

what what platform did you speak to him on

Shaan Puri

you know actually what happened was

Sam Parr

what had happened was that's not true was

Shaan Puri

I jumped into Twitter Spaces where he was there, and I just started talking. Then he DM'd me afterwards, and I was like, "Hey, you know, you actually talked about my Clubhouse or Metaverse tweet on your podcast too." I was like, "Yo, you actually talked about my other thing, you know, that I'm that guy." He was like, "Oh, cool." So, you know, a Twitter DM is kind of where we talked.

Sam Parr

Dude, that's actually kind of a hack. There are like a handful of YouTubers that have 5, 10, or even 20 million subscribers who I've chatted with on Twitter, and they only have like 10 or 100,000 followers on Twitter. Their fans' children aren't using Twitter, and it's such a good way to get in front of them. I've actually pulled that move a few times on Twitter. It's pretty... I'm shocked it works.

Shaan Puri

That's genius! It's just not the same without thousands of roaring fans chanting our name, signing... you know, people's backs and shit like that.

Sam Parr

hairy backs

Shaan Puri

hairy backs

Sam Parr

Sweaty backs... You want to do a recap? So basically, the gist of this is that Sean and I did a somewhat impromptu event. It was supposed to be a meetup, but it turned into a live performance in Vancouver. I don't know how many people were there—between 1,000 and 1,300, ish—but we sold out this theater in Vancouver. It went pretty great! Do you want to talk about a few things that surprised you?

Shaan Puri

Yeah, let's do that. Okay, surprisingly, it's hard to be on stage even though we kind of do this... talk for a living. There was a moment about an hour before where we were both like, "How do you use your tongue? Do you touch it against your teeth when you're making sounds? What do you do with that?" We just had no idea what to say. It was like, you know, that moment of panic where it's like, "Are these people even coming for us? Who are they? Did they sell the tickets or did people just click?" We questioned everything for a moment. What are we going to say up front? How do we make this amazing for people?

Sam Parr

There was really no thought that went into this. Like, one hour... we went and got sushi ahead of time and we were like, "So what do you want to talk about?" We talked about that for 5 minutes and then we started talking to each other about family and just fun stuff, but...

Shaan Puri

Yeah, we had like a 10-minute powwow to try to figure it out, but I think it turned out okay. We were pretty tough critics of ourselves. I think we gave the overall event an 8 out of 10. It was not a 10 because I think it was a little poorly structured. The opening part had a lot of intro, like "Welcome to our spa," and thanking our sponsors, that sort of thing. Also, we weren't as well prepared as we could have been. We could have come up with things that play better live than on stage. I had a moment of clarity afterward. I was like, "Oh, it's a show that's live with the audience. We should be doing things like A, B, and C."

Sam Parr

yeah yeah yeah

Shaan Puri

And we didn't fully get that, but we did a little Shark Tank pitch competition. We did a Q&A and some stuff with the crowd. Do you think that was good?

Sam Parr

All things considered, I thought it was actually a 9. Given the amount of preparation and the fun people had, another shocking thing was that people came. I think the value in order was to see us, to meet one another, and then to actually hear what we had to say.

Shaan Puri

Yeah, right, exactly. I think there was some benefit in doing it in Vancouver, where there's probably just not a lot of events going on for entrepreneurs or tech people that are exciting. Versus, I think if we had done this in San Francisco, we probably would have gotten more numbers, but they wouldn't have cared as much. There were a lot of people at this event in Vancouver who traveled from Toronto, Portland, or different places to come see it because, "Oh, might as well! It's a couple hours away." You know, there's not going to be another thing like this anytime soon where I'm at. So, anyway, those are some quick recaps, I guess, if people weren't there. What should we explain? What did we actually do? So, it was me, you, and Andrew Wilkinson on stage. It was in this theater with balcony seating. It was a giant theater where a comedian would normally perform. In fact, backstage, as we were walking up, it was truly humbling. I mean humbling in the most "shit on myself" way. We were walking up to the stage, and there were these framed pictures of guys who were in that same green room before us. It was like Jerry Seinfeld, Dave Chappelle, and all these legendary comedians. It was like some of the best podcasters that you've ever seen in the entrepreneurship category on Apple Podcasts.

Sam Parr

Dude, it was humbling. Another thing that was humbling was after it happened. We left the stage and went to hang out with people. There was this huge line, and what it made me realize was that a lot of people don't realize this, but it's basically Sean and me, and producer Ben, and Jonathan sometimes. We are sitting here just recording and talking to each other. You forget, or we forget on a regular basis, that it's being recorded. When the podcast gets published, we don't see comments. We don't know... we could see the numbers, but it's just like an analytics screen. I don't know who's listening or why they're listening. I don't know any of that. So, you forget that this stuff actually kind of matters to some people. It's really fun to go and meet people who consume your content and realize, "Wow, this actually matters to them." That was humbling as well. And then, yeah.

Shaan Puri

There would be like a father and son who say, "We always listen to the pod together." Then, we brainstorm. He's 14, but he wants to be an entrepreneur like you guys. So, after we listen to the pod, we brainstorm and do stuff. It's like, "Oh, that's really cool." This is embedded in your family a little bit. There were examples like that that were very surprising to me, but also cool. I should say, you were good at that. You were really good on stage. Sam, I don't know what happened, but I think the nicotine pouch kicked in and Sam went to another level. I'm going to start doing nicotine! Dude, that was a great ad for that. Sam had great jokes. Then afterwards, I feel like in the meet and greet, you were good at being kind of the celebrity. I didn't know what to do with my hands. You know, people would come up and be like, "Can I take a picture?" My response was like, "Why? Oh yeah, sure."

Sam Parr

I

Shaan Puri

Guess, and then they would stand next to me. I would do this thing to each one of them, like this guy. If you go look on Instagram, every picture with me, I'm just doing... nah, it's about this guy right here, whoever the fan was. You were giving them the "billionaire hug," which I don't know if people picked up on, but you taught me this afterwards. I didn't know this trick. Explain the billionaire hug.

Sam Parr

So, I have a theory that once you hit $1,000,000,000, you get invited to this seminar. They teach you how to do a "billy hug," which is basically when you hug someone, your hips and ass are in one direction, but then your shoulders and arms lean hard to the right. So, you could be touching them shoulder to shoulder, but ass to ass, you're never touching them. This is like a way to say, "Look, we're touching, and I'm being affectionate, but my crotch isn't in the vicinity. Therefore, it's safe. It's all good. This is PC." I do the billy hug. I also bring my wife along to all these things as well because it always freaks me out. I'm like, "I don't know, man. I don't want anyone to get the wrong idea sometimes." You know, it can just be uncomfortable every once in a while. So, I do the billy hug. I'm not a billy, but I do the billy hug because I've learned the billy's way.

Shaan Puri

Is it a sexual thing? Is it like, you know, you're keeping your wallet away from them? What are you doing? Why do the hips need to be away? Is there even an explanation, or is it just something that only billionaires would understand?

Sam Parr

It's just a time-honored tradition. I don't know, I'm not there yet, so I can't say for sure. But, you know, it's like singing in the shower. I copy my heroes, and that's why I do it. This is a man and a woman thing, by the way. I've noticed that sometimes we have this relationship with people where they hear us talk and think, "Oh, you're so approachable." Sometimes they'll come up to me and say, "Dude, let's... let's do this." And I'm like, "Whoa, you're coming on too hard." I know I say this stuff, but you're coming on too strong. So, sometimes you need to set some boundaries, and that's my mini boundary—it's the crotch boundary.

Shaan Puri

Right, we had our buddy Andrew on there. Andrew was really funny too. I gotta say, Andrew, who's been on the pod a bunch of times, I had never met in person. So, I've talked to him on the phone, we've done Zoom calls, and he's come on the pod. But in person, I gotta say, he's got a lot more juice than I expected. And dude...

Sam Parr

tell the story about dinner or lunch

Shaan Puri

So, we go to lunch. Before the show, we're like, "Oh dude, we gotta hang out." Ben, he's kind of from this area. I thought Vancouver, BC, was all the same thing. Actually, you gotta take a seaplane or a helicopter. So, he took a chopper.

Sam Parr

to come meet us

Shaan Puri

Which is honestly one of the more big dog moves anyone's ever done to me.

Sam Parr

Well, the reason we knew it was a big dog move is because he was like 5 or 10 minutes late. Instead of saying, "My flight was delayed," he said, "I was late for my flight." I was like, "Wait, what?"

Shaan Puri

Yeah, that's subtle. I didn't pick that up. I just heard over the phone when he called. It was just... I heard the chopper going and I was like, "Hey, wait a minute. Is there a fan on near you? What's going on?" So he lands, and before he lands, he goes, "I'm gonna be 5 to 10 minutes late again. I was late for my flight." Then he goes, "Just order me..."

Sam Parr

and he had a list

Shaan Puri

Just ordered to me and Sam. He goes, "8 oysters, 2 salmon nigiri, this like, you know, whatever wagyu steak, you know, a miso soup." I have a nut and shellfish allergy. I'll die if somebody does that! And then he just signs it off, "Thanks," but just "thx." I see this and I was running late too, as per usual. I was in the shower at this time. I just started laughing. Sam replies, "What did you say, man?"

Sam Parr

I was like, "Did you just say thanks to me?" He was like, "Yes, sir." I mean, it was ridiculous, and he was like, "Sorry."

Shaan Puri

He tried to blame it on autocorrect. We're like, "No, bro, you're just used to talking to people too much." You have people who let you get away with that. That shit might fly in Canada, but you don't bring that weak "thx" shit to the United States of America. We reject that; we send that back. So we go to lunch and we're having a good time. We're just catching up. Andrew's got the juice. He's got the juice in the way that my best friends, who I look up to the most, have that juice. You have that too when you hang out in person with Sam. He's got a little bounce in his step, and it just seems like he's eager, he's excited, he's got a plan. Wherever you go, it's not going to just be a default normal experience. Something a little more fun is going to happen. Something a little extra is going to happen. A little more laughter, a little more learning—something extra is going to happen. So Andrew had that, which was awesome to see because he's quite, I don't know, would you say like reserved or calm? He's got almost like a calm brand, but in person, his energy was a lot more kinetic, freewheeling, and I liked it.

Sam Parr

he had a very kinetic energy where he was physical you know he was moving

Shaan Puri

and he must that's a great way of putting it

Sam Parr

Yeah, he was kinetic. He had that energy. I have that too. People always yell at me because I've got big thighs, and I shake. Whenever I shake my thighs, the table moves, and they're like, "Dude, you're too kinetic." So, yeah, he's got that kinetic energy. We're having this wonderful lunch; it's probably an hour and a half in, and then we're not quite done eating yet, or at least it doesn't feel that way. Then, all of a sudden, he goes, "Oh shoot!" We're like, "What?" It's like a panic. He goes, "Dude, my Uber's been outside waiting for me for 10 minutes. I gotta go. Bye!" And he just stands up and walks away, and we're like...

Shaan Puri

No, he was even better than that. He just stood up like he was stretching for a second, then he picked up his jacket and said, "I'll see you guys at the place." We were like, "What?" And he goes, "Yeah, sorry, I gotta go. My Uber's been outside for 10 minutes." We were like, "When did you call an Uber?" And then he floated away like a balloon, like he was the grandfather in *Up*, and he just went away. The house flew away, and then Sam and I were like, "Okay, yo, was that weird that he just kinda floated away like a balloon?"

Sam Parr

Yeah, it's like, "We'll work on conversation skills later, Andrew. Have a nice day." He just kind of bounced.

Shaan Puri

I had to blow him a kiss. He was floating away so far. It was the only appropriate goodbye.

Sam Parr

But in general, the thing was awesome. Now, I don't want to put you on the spot, but I would like us to do a "3 in 5" thing. I want to go to like C and B cities, so not the New Yorks or the San Franciscos, but something like Denver, Toronto, or Kansas City. Something where they're... you know, what did you call it? Small pond syndrome. That's what I want to be. I want to be.

Shaan Puri

a a

Sam Parr

a big fish in a small pond because these people were

Shaan Puri

so piss in a

Sam Parr

small pond that's a hard word to say but you wanna do it

Shaan Puri

You have a little something on your shirt here. I think you got a little taste of fame—a little dribble of that fame that just stained the shirt. You liked that taste of fame, didn't you?

Sam Parr

well here's why I like it we've talked about this

Shaan Puri

why you like it yeah

Sam Parr

I

Shaan Puri

because being famous is awesome

Sam Parr

It is awesome, but it is exhausting. Now I understand why, like the touring bands who last a long time, they show up, do the concert, and then go home to bed. I was like, I couldn't sleep because we were like, "Dude, we hung out with everyone!" Then we had breakfast the next day. But anyway, I liked it because it was a challenge. I also think that in our little tech world, we assume that we're these little niche internet nerds, which we are. But it's actually cool to flex and see the people. Honestly, it felt like a movement. There were times where I felt that you and I were great at what we do, but in reality, we were just an excuse and like a steward of a particular type of movement. These people are all on a journey. Some are further ahead, some are not there yet, and some don't want to go far, but they all are going someplace. It felt like we were just an excuse to gather those people, and it really felt beyond and bigger than us. I know that sounds woo-woo and stuff like that, but that's truly how it felt. That's why I thought it was cool.

Shaan Puri

I agree 100%. At first, I felt so excited. I was like, "Man, I can't believe we sold out this theater! There's 2,000 people on the waitlist; they came to see us." I think there was a small part that was like... or that's like the stated excuse. But the reality is that the value was just... if you like this podcast, that's put you through a bunch of filters. And the filters are like...

Sam Parr

a lot of our our of our sayings

Shaan Puri

Right, so it's like, you know, no small boy stuff. It's about people who want to think big for themselves, but they define what "big" means for them. It's also about people who don't take themselves too seriously. If you want the smartest podcast, you should go listen to "Invest Like the Best," "All In," and a bunch of other podcasts with people whose intellectual horsepower outruns ours. The oven burns a little hotter for those guys than it does for us. If you want someone who will celebrate a dude who's a plumber hacking the Yellow Pages to get more leads, as much as we will celebrate a guy who's building a new city or a new country from scratch, then you're in the right place. There’s a set of people who appreciate the same things we appreciate. When you put them together, it’s probably not easy for them in their day-to-day life to be around a bunch of other people who are like them—the sort of schemer and dreamer archetype. So, that’s what I saw as the best. I was like, "Oh man, sorry you guys had to wait." They were like, "No, it was awesome! I was in line with a bunch of other people. I met this guy who's doing this and this guy who's doing that." I said, "Oh wow, okay, that makes sense to me." The real value here wasn't coming and getting a selfie with me as I do my awkward...

Shaan Puri

It was actually just getting to be in a community of other people who have the same sort of freak energy that you have. Once I saw that, I was like, "Okay, this makes sense. We should do more of this."

Sam Parr

Dude, I met a guy. There are a couple of billionaires in the crowd; I don't know if you know that. I'm not going to call him out, but I met one of them, or at least their stake. They own multiple large stakes in multibillion-dollar companies. I remember I met one of them, and he was like a typical dorky guy. Then I met this other guy who had a sheetrock business, which is a blue-collar thing. His hands were just so meaty and fat. I remember shaking his hand and I told him, "Dude, I can wrap my hand around your hand," and I'm not small. I was like, "Dude, that's sick!" We got the neck beards and the calloused hands guys. One of the guys I go, "Yeah, just DM me on Twitter." He goes, "Okay, cool. You'll see me; my Twitter handle is called 'Fucking Manly.'" That's what he said to me, and I was like, "Alright, that's badass, dude."

Shaan Puri

Guy, give us a hat. Yeah, he said something like, "My wife has a big Instagram following for women's stuff, so I decided to create something manly to counteract that." I thought that was awesome. I want to tell you about one woman who I thought was real and had a really...

Sam Parr

interesting story well I know her well

Shaan Puri

So, I was at a dinner the night before that the Tiny Guys hosted. At the dinner, I met some people; whatever, it was good. One woman came up and she goes, "Hey, my name's Anya. I'm a big fan of blah blah blah." Then she gave me a quick high five and said, "I just made my first million." I was like, "Nice! What do you do?" She replied, "Well, I created this app for people with panic attacks. It's called Rooted." I was like, "Panic attacks? Is that... do you have an app for panic attacks? I never would have even thought about that niche." She said, "Yeah, you know, I struggled with it like crazy, and so then I created this app." So, she pulls out this app called Rooted, as in feeling grounded instead of having, you know, a panic attack. There's a red panic button you can hit if you're feeling something in the moment. But there's also just like sleep features and lessons where you can learn about, like, "What is this thing and why does this happen to me?"

Sam Parr

drills and breathing exercises

Shaan Puri

Exercise, breathing exercises, and so on and so forth. She said she has had 2.5 million downloads of this app, and I thought, "Okay, that's pretty great."

Sam Parr

that's not even the crazy part

Shaan Puri

Then I was like, "Wow, are you just really good at Facebook ads or what?" She goes, "No, I don't do any paid marketing." Yeah, and I was like, "So how do you get 2. Something 1,000,000 downloads off this?" She goes, "Well, I think, you know, it solved a real problem. Also, I dominate the app store search for this because everybody else went really broad. They tried to go for sleep, anxiety, or breathing, and I went for panic attack because everybody else thought that was too narrow. I just really did a good job owning that in the app store ASO (App Store Optimization), right? Instead of SEO. Then I started getting good reviews, and it just snowballed. Now I'm like the top one in that."

Sam Parr

did she tell you how big of a team was

Shaan Puri

Exactly. I was like, she's already halfway to being my hero at this. And I go and...

Sam Parr

this is her first business this is her first business

Shaan Puri

I go seal the deal for me how big is your team she goes it's just me

Sam Parr

yeah crazy

Shaan Puri

Right, I go, "What?" And she goes, "Yeah, it's just me. I have a couple contractors that, you know, help me with things, but there's no employees. I don't want any employees." I was like, "I wanna be you." You're, you know, she's building something that has an impact. She dominated it her way. When anybody else would have, like, if she went to ask, you know, smart guys like us, or, you know, they go ask a mentor, "What should I do?" They'd either say, "Go ask an investor," and they'll say, "It's too small of a market." Or they'll say, "Well, you need to, you know, what's your growth strategy?" And she's like, "I don't know. I just wanna build a useful product, and I'll figure it out as I go." The third is like, "You need to scale up." No way! Because she's closing these deals now with, like, healthcare companies where they'll just provide it for, like, you know, all of the members of their gold plan. So, like, they'll pay for it for 50,000 members or something like that now. And, you know, do you need a business development rep and a sales team and all this stuff? She's like, "No, I just go take the meeting myself." It took some time, but we got the deal done.

Sam Parr

she said she meets them on linkedin she goes I just messaged them on linkedin

Shaan Puri

Fantastic! So, I thought of Anya. You know, shout out to her. She's got the... I don't know, not "Billionaire of the Week," not "Blue Collar Side Hustle." She's something else. But, you know, the "Riches and Niches Award of the Week" goes to her because I thought it was a pretty amazing story.

Sam Parr

No, it was amazing! This is her first business, and everything she said or has done is impressive. If she told me her idea, which is, "I've never done anything tech-related before, and I can't code. I'm going to hire contractors overseas to do this. I don't know anything about marketing," I would have thought, "Oh, everything you're saying means you're going to lose. This won't work." But she has completely pulled it off! If you go to the reviews, did you look up her app? I mean, it's legit! I think it has a 4.9 rating, which is really high, with thousands of reviews. She has completely pulled it off. I'm almost positive it's only about 2 years old; it's not that old. And she also just went full-time as of recently, so this was like a... and she...

Shaan Puri

Just started monetizing. It's like most of the app is free. She's like, "Yeah, I want most of the app to be free," you know, because obviously I'm trying to help as many people as I can. I'm trying to find that balance where it's a sustainable business, but also most of the app's free. I just thought that was a badass story. There were a bunch of people there that had really big stories, but to me, that was a really... I'll just say incredible, incredible win. She had a kind of intensity about her.

Sam Parr

oh yeah

Shaan Puri

You could almost tell when you were talking to her. Like, okay, even though on paper she had no attributes, right? We all know the rule: you gotta have some attributes if you want to win. She didn't have the experience; she didn't have the skill in certain things. But she did have a certain level of intensity, and you could see that just in talking to her. It was in the way she came across.

Sam Parr

she came across like a person to be taken seriously

Shaan Puri

And like, she was a very small person. It wasn't her stature; she didn't have a natural knack at that. It was just the way she was talking that stood out to me.

Sam Parr

did you did you meet the vessi guys so v e s s I

Shaan Puri

yeah we went out for lunch

Sam Parr

So, I don't know if I can say what they do. I don't... maybe you could say, but based if they told you the numbers.

Shaan Puri

I'm not going to say any numbers, but Tony was the guy who's there. He's the founder, and they make awesome shoes. Apparently, I haven't tried them, so I can't...

Sam Parr

Say anything yet, but they're hardcore in Vancouver. The lady at my hotel saw me wearing them and she goes, "Oh, you're wearing Vessi's! Those are cool." She didn't say they're happening because she's not 60 years old, but you know, she said they're cool.

Shaan Puri

those are jazzy fresh yeah

Sam Parr

But anyway, it's a shoe called Vessi. They look just like tennis shoes, but apparently they're waterproof, which is a big deal in Vancouver because it rains a lot and it's wet. The guy bootstrapped the company, and he told me the top line revenue, which I don't know if we can say or not.

Shaan Puri

just say it and we'll bleep it

Sam Parr

Oh, okay, fine. We'll say it and bleep it, but... So basically, you guys didn't hear what I just said, but we're talking in the same ballpark as an Allbirds or something like that. It's a publicly traded company, quite huge, and completely bootstrapped. I started talking to him, and he's like, "Hey, I want to get popular on Twitter." Then he started talking to me, and I began giving feedback. He told me about the company and its size, and I was like, "Wait, wait, wait. Why do you want to be on Twitter? You realize this is totally not worth your time, and you are way better than any of the thread boys, including me. Don't go on Twitter, dude. Just keep crushing it." The company he had was entirely bootstrapped and started as a Kickstarter. I asked him, "Why are you guys so good?" He said, "Negative cash flow, like a negative cash cycle," which means, you know, people...

Shaan Puri

sell the stuff before they have to pay for the goods

Sam Parr

Yeah, he's like, "We just have good terms with a manufacturer, and we started as a Kickstarter, so it's been profitable since day one." This is another thing where it breaks all types of patterns that I thought possible. Starting in Vancouver, Vancouver is not a big city. I think the metropolitan area is about 2,000,000, or sorry, the metropolitan area is 2,000,000, while the city itself is only 800,000. So it's not like an episode...

Shaan Puri

I went for a run and I like ran across the city and I don't run so it's not that big

Sam Parr

Yeah, and it's not that big of a city. It's in Canada, which I didn't realize is kind of podunk. It's like, there's only about 30 million people in that whole place. It's like...

Shaan Puri

yeah canada has the same population as california

Sam Parr

it's crazy in the same population as like the metropolitan new york area I mean it's right

Shaan Puri

But the size of that is bigger than the United States in terms of the actual landmass. So, it's just a lot of empty space, or a lot of space per person.

Sam Parr

Yeah, like it's not that big, and it's a little behind in terms of sophistication. Visigian isn't bad, but I remember I went to the airport and they checked my passport in such an odd location. They checked it as I was going through the security thing to scan my body, not ahead of time. I'm like, "Oh, you guys know it would be way faster if you do this..." So anyway, I met this guy and his company kills it. It's a huge company in Vancouver that dominated the market there. They loved the shoes; everyone was talking about it. It was incredibly quiet and nice, no frills. They opened...

Shaan Puri

up they opened up a a physical store in vancouver you

Sam Parr

saw you saw the video of that

Shaan Puri

Yeah, the video of the line... there's like a line, like half a mile long. I was like, "Yeah, so you like this is a marketing stunt? You paid people to stand in this line?" He's like, "No, these are actual customers."

Sam Parr

no he's like it's monday

Shaan Puri

sweep this too but he said they're gonna do out of their retail location this year

Sam Parr

I was like

Shaan Puri

what the hell that's a absurd number

Hubspot

It's crazy! This guy was really, really cool, so I'm happy I got to meet him. But anyway, we had a good weekend. We had a good time, and we'll do it again. Our software is the worst. Have you heard of HubSpot? See, most CRMs are a cobbled-together mess, but HubSpot is easy to adopt and actually looks gorgeous. I think I love our new CRM. Our software is the best. **HubSpot: Grow Better.**

Shaan Puri

do you

Sam Parr

wanna talk about you have another topic or you want me to go

Shaan Puri

I got one. But let's do this one first. So we went international. We went.

Sam Parr

abroad

Shaan Puri

Some might say... some might say offshore. You know, they'd be wrong, but you could say offshore. They got me thinking about offshore companies, offshoring money, and like, I don't know about you, but I've always heard about this. However, if you had ever asked me to explain, you know, "Wait, how do companies offshore? What is a tax haven? How do these things work?" Do you actually know how this works? Because no, I went down a random rabbit hole last night, and it's pretty interesting stuff.

Sam Parr

dude I have no idea what the tax statement is

Shaan Puri

really how this actually works

Sam Parr

I don't know what it means, but I like using it. You know what I'm saying? Like, I don't know. I don't want one. Yeah, yeah, yeah, yeah. Like, it's right under "shell corporation" when people talk about it.

Shaan Puri

well actually they're related alright so so here's the kind of the headline or the takeaway which is that companies like nike apple huge companies right the the companies that we've all heard of use this this is not just like oh I don't know shady crypto guys that are opening up a company in the bahamas or whatever it's like you know the the most blue chip of blue chip companies apple at one. Had like $300,000,000,000 offshore overseas that they weren't bringing back into america why because the the here's the general like first principles explanation so you every country has a tax rate so let's say in in the united states the corporate tax rate let's say is 21% well if you make money here you're gonna pay 21% on all your profits but if you're able to shift those profits so that they're taken in another country you can use that country's tax rate well guess what there are several countries that have a tax rate of pretty much 0 and so what these companies do is like I'll give you an example of nike so nike did this brilliant thing that resulted in nike paying like I don't know something like 3% a year tax rate on 1,000,000,000 and 1,000,000,000 of dollars of of revenue and profits and so how did they do this well what they did initially was they created a a shell company there we go bingo shell company in bermuda and the shell company in bermuda owned the swoosh like the trademark to the nike check and then what happened is company in the united states is selling shoes but the and it might rack up let's say $10,000,000,000 of revenue or even like gross gross profit so like you know after taking out into account the shoes and the shipping and all that well normally they just have to pay the tax on the 10,000,000,000 well what they would do is the swoosh company in bermuda would then charge them 9,000,000,000 let's say in royalty payments saying hey you're using the swoosh you gotta pay us for that so all of a sudden the taxable income in the us goes from 10 down to 1 and now they just pay the 20% on the 1,000,000,000 and the 9,000,000,000 that the bermuda company got pays a tax rate of 0 right so their effective tax rate goes way way down and so this is what they did initially and then and and this lasted for like you know some.

Shaan Puri

Of time, but then they kind of closed these loopholes over time. So, Nike had this setup in the Netherlands. They had some Nike international company over there, and they were doing this where, in the Netherlands, they didn't have to pay taxes on the money for some time because there was a rule that said on royalty income, you don't have to pay taxes. So, they were like, "Great! All the revenue this company is making is the royalty income from the IP, the swoosh trademark that we're renting out basically to our other companies." They were not paying any taxes on Europe, the Middle East, or whatever. Then what happens is, after 10 years, people start complaining. They close that loophole, and the politicians high-five, saying, "We did it! These big corporations are going to pay their fair share." Nike goes, "Hold on," and they get the Blackberry out. They call up the lawyer and say, "Hey, one hole closed, open up another, please." They hang up the phone, and then the lawyers get to work. They realize they could do something different. Here's what we'll do: we'll create two Dutch companies, and one of them will have a director in the United States. Because here's what happens in the United States: the law says if your company is incorporated somewhere else, it should be taxed in that country. Then in the Netherlands, it says, "Well, if it has U.S. directors, it's going to be taxed in the U.S." So, it's kind of like those goofy movies where the two guys are pointing, "He's got it!" "No, he's got it!"

Sam Parr

wait what nobody's been

Shaan Puri

Taxing this thing, and so they had what was called a **stateless company**. A company that was taxed nowhere, which is called **Nike Innovate CV**, and it paid zero taxes basically. So companies like Nike have been able to do this. **Apple** does the same thing, **Facebook** does the same thing. I don't know if you've ever seen why all these tech companies have offices in **Ireland**.

Sam Parr

yeah in dublin everyone has a dublin a dublin and I

Shaan Puri

Was like, "Wow, you know, okay, must it be the great, the fantastic, world-renowned engineering talent of Dublin? What is the reason for this?" The reason is because there was something called the **Double Irish Strategy**, which said if you have one Irish company that owned the IP and then another one that was just like a subsidiary of it, and that one had a U.S. director, the same thing applied: zero taxation. So, for five years, I think Apple made $30,000,000,000 through their Irish companies and paid zero taxes on it. I just think this...

Sam Parr

is are you gonna do this

Shaan Puri

How they do this stuff... By the way, Tim Cook goes and he stands in front of Congress. There's this amazing clip where he says, "Apple pays every dollar that they owe in taxes. We don't depend on tax gimmicks. We don't stash money in some Caribbean island." It's like, "Yeah, you stash it in Ireland instead. What are you talking about here?" And then, you know, they've kind of shut that double Irish strategy down. This all got leaked from this thing that you probably remember called the Panama Papers.

Sam Parr

yeah yeah yeah

Shaan Puri

when that got leaked

Sam Parr

yeah

Shaan Puri

do you know what actually happened there

Sam Parr

A bunch of... Panama was a country where this happened. I don't know how it got leaked. I think the accounting firm that did a lot of the work for people got hacked.

Shaan Puri

Exactly. The fourth biggest law firm was something called Mosaic Fonseca. Basically, this is the fourth big law firm. They're known for creating shell companies and all this stuff. They got hacked, or so... not hacked actually. Somebody just leaked 11,000,000 documents.

Sam Parr

oh my god

Shaan Puri

They don't know who leaked it, but somebody was like a whistleblower who leaked this thing. There was a team of journalists that looked at it for a year before finally going forward in publishing the Panama Papers. Well, after that, there was something called... and that's where the sort of Epstein and Putin stuff came out of the Panama Papers. Then there were the Paradise Papers, which came after that, and that was leaked from an accounting firm called Appleby.

Sam Parr

interesting name applebee

Shaan Puri

you're familiar

Sam Parr

you're you're

Shaan Puri

a client of theirs

Sam Parr

Is there a Hooters LLC that can handle my egg cook tax? Like, what?

Shaan Puri

yeah these guys do shell companies and

Sam Parr

Soft shell tacos, skillet... We like all types of shells: shell macaroni and shell companies.

Shaan Puri

Exactly. So, you know, they basically got leaked too. That's when the company stuff came out. You could see Apple going to their law firm, then they leaked the email saying, "We've... you know, the Irish thing is coming to an end. We'd like to find another country that has this favorable advantage. Can you find us something in the, you know, maybe in the Caribbean?" Like, dude, that's pretty much the exact opposite of what he said in front of Congress.

Sam Parr

You did something that I think is funny. Basically, when people discuss these topics, they use all types of words that, by definition, are not bad words and actually don't mean bad things. However, they use them in this context, and people automatically think "villain." Sometimes, I find myself using those words on purpose, almost like bragging about them. For example, "loophole." You used the word "loophole." Why don't we just call it a rule? You know, like, "We're just following the rule. This is the rule. We're going to use the rule." They use "loophole." Loopholes aren't bad; it's just a rule. Another one is "manipulate." Why don't we just use "persuade" or "influence"? People use the word "manipulate" all the time. Another one is "exploit." I love that word, "exploit." I'm like, "Oh, so to efficiently use something." Like, people talking about Amazon are exploiting their workers. I'm like, "What does that mean? Isn't that the deal? We give you money, and then we exploit you? Like, we buy something."

Shaan Puri

don't get canceled don't get canceled sam well they we just got famous bro don't don't don't ruin this

Sam Parr

Well, they use these words and I'm like, "That word... like that's the..." It's to exploit. We're going to use this in a very particular way, and we're going to use it efficiently. You just did that where you used these words, but it's like you're saying the word "loophole" as if it's a scam. Where it's like, no, a loophole's the opposite of a scam.

Shaan Puri

right

Sam Parr

this is we are playing in the rules and

Shaan Puri

Well, I think that they do mean something, which is that they're within the rules. But they're within the letter of the law, not the spirit of the law. I think that's the definition.

Sam Parr

Pro bono lawyer? You're on me, bro. There's bro science. Now you're doing bro legal jargon.

Shaan Puri

By the way, Tim Cook actually even said that too in that same clip. He goes, "We not only comply with the letter of the law but the spirit of the law too," which was... yeah, that's a lie. But yeah, I think you're right. There are rules of the game, and if you play by those rules, you should not blame the player; you should hate the rule maker. You should hate the game. So, I think that's where a lot of people go wrong. They hear this stuff, and when I'm explaining these things, I'm not saying Apple and Nike are evil. But when I explain these, what I'm really saying is I never really knew what this meant. I never knew actually how it worked.

Sam Parr

dude you're a capital you're a capital j journalist you're just saying the facts

Shaan Puri

I'm a capital man; I think we've established that about myself. So, yeah, I think this is kind of interesting. Then it's like, what's the game theory? One thing that Trump did, which is actually pretty smart—though that's another loaded thing you can't say—was he pointed out that these companies have like hundreds of millions of dollars overseas. What happens is, once they get taxed in a low-tax place, they can't just move the money back into their Chase Bank here in America. You know, they can't just go down to the ATM and pull it out because it would get taxed when it comes back. So, they leave it overseas. This is money that never reaches the U.S. What Trump did was say, "Alright, look, I'm going to make a one-time exception for you to what's called repatriate the cash. Bring the cash back to America, and I'll lower the tax rate." It's like, "Alright guys, get in here," kind of like the store owner opening the back doors.

Sam Parr

it's like a yeah

Shaan Puri

5 minutes

Sam Parr

it's like a gun give back you ever seen those where you can like no questions asked just give us your guns and

Shaan Puri

Right, exactly. I think there's some value to those scenarios. So he made it like, you know, a 15% tax on that cash. This is like a one-time only offer: if you want the cash back in America so you can invest it here and use it in your corporate activities here, here's your sort of like discount, half-price... "Come on in." And then that brought like, I don't know, $60 or $90 billion back in, but not like the full amount. He thought $4 trillion would come back in, and it just didn't.

Sam Parr

Speaking of crazy people and huge men, in terms of size, and loopholes and tax evasion, I've got a cruel story for you. I have a feeling you know about this person. This is... okay, I don't know if he's a billionaire, but he's close enough. Have you heard of Tim.com? Do you know who this guy is?

Shaan Puri

yeah yeah he's he's prolific as you like to say

Sam Parr

Dude, this guy... that's the phrase here. I was gonna say this guy is a **prolific freak**. He's a total freak! So, this guy named **Kim Dotcom** has all these interesting facts. I read about him because he's like **6'7"** and weighs **350 pounds**. This guy's massive; he's huge! He lives in **New Zealand** and he married a **Philippine beauty queen** or something like that. She divorced him, and people thought she was going to talk badly about him. But she was like, "No, no, no! I have nothing bad to say about him. The marriage just didn't work out, but he was a nice guy." So, I started reading about him.

Shaan Puri

by the way what's his real name

Sam Parr

And so, Kim Schmitz, but then he was known as Kim Tim Jim Vester or Kimble. Eventually, he legally changed his name to Dotcom. His ex-wife kept her married last name, and her name is like, you know, Sarah.com. The article refers to her as Miss.com. It's like, so that's her legal name. So this guy is like...

Shaan Puri

I'm gonna become Sean Worldwide. Okay, Mister Worldwide. This is my wife, Mrs. Worldwide. Nice to meet you.

Sam Parr

Dude, the article referred to her as "Miss.com." So, check this out. This guy, in the nineties, starts in Germany as a hacker. He claims he hacked something like $40,000,000, but this is not verified. He said he hacked into some famous bank and took $40,000,000, which he donated to Greenpeace. At least that's what he said, but to be determined if that's actually true because Greenpeace is like, "No, that's not true." Eventually, he starts building all these other programs and software that are mildly successful. While doing this, he's a hacker, doing a bunch of illegal stuff. But while he's doing this, he's trying to send a file to his friend, and the email he's trying to send it through says, "Alright, you've exceeded the limit. We can't do this." So, he creates this thing called MegaUpload, which eventually gets huge. Have you heard of MegaUpload? If you've ever downloaded an illegal movie or anything like that, you've probably come across MegaUpload, right? Of course!

Shaan Puri

Yeah, I never used it for textbooks, but I definitely have used Mega Upload online.

Sam Parr

Yeah, so MegaUpload is kind of like Napster, but you don't need a client. I don't think you need to download anything; it's just a website. So it's like The Pirate Bay, I guess, which is a similar one. But again, you still don't need a client; it's just a website where you can trade files. It went viral because all these people would share files, and he would put "MegaUpload" in the image. That's how it grew and got viral. So anyway, he creates this thing, and it swells. He launches it in 2005, and by 2010, he's able to pay himself $42 million; that was his personal income from that. Eventually, after about eight years, he gets sued. Hollywood sues him—I guess I don't know what Hollywood is, but big Hollywood sues him, and the government sues him too.

Shaan Puri

the sign

Sam Parr

Yeah, the sign says that he made close to **$200,000,000** in personal profit from this whole thing. And all during this, he's doing like this other crazy stuff. Out of **50,000,000** Modern Warfare players, this guy was ranked number 1. He was the number 1 player for Call of Duty. Yes, in **2012**, he was the number 1 person in the world at Call of Duty. He also finished 1st in the Gumball 3000. You know what that is? It's like a car race across Europe. He finishes 1st. Then, he releases an album of original music with collaborations with other artists. It's called *Good Times*, and it's not that bad of an album, to be honest. Then he creates the Internet Party, which is a new political party in New Zealand. It kind of gained some traction. And he's doing all of this while running Megaupload. Well, Megaupload gets sued, and he actually goes to jail for the second time. He's already been in jail for a few weeks, a few months before for his hacking stuff. This time, he gets locked up for a longer period.

Sam Parr

Of time, when they arrested him, they went to his house and his compound. They just swarmed it, SWAT style. In the house, they found like 40 cars—some of the nicest cars, you know, like these fancy Mercedes AMGs, Bugattis, all this stuff. They found all this art, but they also found **$175,000,000** in cash. This guy had that much money in cash in a room in his house. He's kind of like a proper gangster. I mean, he's like the gangster of gangsters. To give context, Megaupload had **50,000,000** visits a day. It was like the 7th most popular website in the world at one time. It accounted for **4%** of the total traffic in America and had **180,000,000** users. People were transferring **800 files** a second on Megaupload. This thing was huge. It was run almost like a proper company; he had **155 employees**—you know, engineers, customer service, admin, all this stuff. It was wild. This is a wild story that I just came across because I was reading about Miss.com, his wife or ex-wife. Very fascinating guy. This guy's super prolific. He even created this thing called a "Mega Car." He was trying to launch a car company that was like internet-connected, and it didn't work out wonderfully, but he built like a handful of the cars. Super prolific, very interesting, and I thought that you might have a little bit of stories about this guy. He seems like he runs in your world a little bit.

Shaan Puri

I'm gonna send you this. I can't say this on the pod, but we've DM'd before, and I just have to show you what's in this DM. We can't... this is not gonna be good content, but you have to see this.

Sam Parr

what what what was it just like crazy inappropriate stuff

Shaan Puri

I'll send it to you after this, but yeah, this guy is prolific. I feel like he's kind of like the rogue Marc Andreessen. Totally! Marc Andreessen is also surprisingly massive—a prolific internet guy who had a bunch of ideals and took a more straightforward path. This guy went rogue. That's kind of how I think about him. I can't... I'm blown away by this Call of Duty thing.

Sam Parr

Yeah, like, this isn't a "he said, she said" thing. I mean, this is like rankings. You can actually see leaderboards, and he was number...

Shaan Puri

Does he just have like a basement of, you know, 15-year-old Korean boys that are playing for him or something? Do I really believe that this guy was the number one worldwide Call of Duty player? That is insane! That is so crazy. That's like the story about the Uber guy, Travis, where he was the number one Wii tennis player in the world or something.

Sam Parr

Like, that was like two. So basically, the story is about Chris Sacca, this famous investor, and Travis. They were at Chris Sacca's vacation home. Mr. Sacca was there, and Travis... well, you know, that's how we gotta explain the story. So, you know the difference between the two Saccas.

Shaan Puri

they're so so kind and polite

Sam Parr

So, Mister Saka and Travis are playing Wii Tennis. Travis crushes the dad, Mister Saka. At the end of the game, Travis goes, "Mister Saka, I've got a confession." He kind of like... you know that princess movie? I don't think the word means what you think. It's *The Princess Diaries*. He kind of throws the Wii controller into his right hand and says, "I've been playing left-handed the whole time, but I'm really right-handed." He just obliterates him even more. Then he says, "I have another confession," and he goes to the game rankings. He's like 2 or 3 in Wii Tennis.

Shaan Puri

and so like the lift of we tennis

Sam Parr

7 out of 10, we'll give him. And so, yeah, this Kim Dotcom guy, he's crazy, man. I would love to have him on the pod. He's super interesting.

Shaan Puri

Yeah, that's a crazy story. Also, I feel like he didn't launch his own crypto token. The odds of him not doing his own token in the last 5 years had to be like a 1 in 1,000,000 chance of him not doing it.

Sam Parr

He probably... I mean, he was like indicted by the U.S. about it. But yeah, he probably had... I bet you he was like banned for, you know, selling securities. I bet you he had some... I didn't look into what his ban was and what the verdict was, but I mean, he was in like legit trouble. I mean, he was in prison, right? And so he probably can't... But what's crazy is, number one in Call of Duty, number two, that he had $175,000,000 in cash in a room in his house. That's wild! I don't even know... I would like to know how much physical space that takes up, but that'd be a lot.

Shaan Puri

isn't it like always disappointing it's like that's just 2 briefcases

Sam Parr

Yeah, dude. On *The Sopranos*, I was watching last night. They gave a guy $75,000, and it was in an envelope. Not a manila envelope, not even the type that you have to go to FedEx for—the type that you have in your home.

Shaan Puri

I can't tell you how disappointed I would be if I were ever involved with any kind of ransom or if I won some sort of prize. I need the giant check if I win a prize. If you're going to give me some cash, just get it in the smallest bills possible. I want duffel bags. I want a Costco trolley bringing me the cash. If I get something and it's in an envelope, I don't care what's inside—I'm throwing it away.

Sam Parr

Yeah, if it fits in my jacket pocket, I'm out. And if, like, yeah, exactly, it was like the side pocket of a suit where you reach in. You know those pockets are small, and they fit. And that $75,000 would never fit in that jacket. Very... keep it, yeah.

Shaan Puri

I bought a lottery ticket in canada I didn't win by the way

Sam Parr

you buy lottery tickets

Shaan Puri

Yeah, I have this moment whenever I get up to the counter where my brain just goes into an instant fantasy of like, "And then this was the day." Then I'm telling people that I almost didn't buy it, but I just said, "Hey, screw it," and I bought it and I won. Dude, that's so stupid.

Sam Parr

as shit ever

Shaan Puri

I do that at least one out of three times I'm out of counter in the U.S. They require cash, so that just saves me from not buying it. But in Canada, you can buy it on your card. It's great.

Sam Parr

we're gonna wrap there

Shaan Puri

yeah we could we could wrap there

Sam Parr

Alright, that's the pod. We gotta start saying the "gentleman's agreement" every time. By the way, I keep forgetting to.

Shaan Puri

go subscribe to us on youtube

Sam Parr

that's it