Just found out my neighbor’s business sold for $450M

Shaan Puri

I talk to my barber, and he tells me this story that's pretty crazy about *Muscle Milk*. He's cut my hair, and he knows I have the **podcast**, so every time I go in for a haircut he just gives me research, and it's great. Dude—my handyman knows I have... [sentence trails off] </FormattedResponse>

Sam Parr

the podcast and he always asks me what stocks he should buy and I'm like that's not the. Bro

Shaan Puri

he thinks you're jim cramer

Sam Parr

yeah he's like so what stocks what stocks should I buy I'm like I I don't know I don't know don't ask me that just change the light bulb please

Shaan Puri

If he asked you, "What's the best way to increase my testosterone right now using an illicit drug?" I feel like that is what he should be asking you.

Sam Parr

yeah what like clearly he's not a listener

Shaan Puri

What can I buy from a forum that will make my *tendons* stronger? Like, Sam has answers to those types of things.

Sam Parr

I'm like do you wanna know some really cool subreddits or an illegal place to download books I got you bro alright go ahead

Shaan Puri

I talk to my barber and he's like dude you know whose hair I was cutting he goes he's your neighbor I am my neighbor and he goes yeah the guy lives just down the street from you it's the family that started muscle milk so they started back in 1998 and it actually started because he bought a sub brand called from his employer and which is like who does that who who goes to their employer and is like hey can I buy this like asset that's kinda undervalued or whatever and it's a niche product and he has this idea which is he names it muscle milk because he wants to name it after mother's milk like after breast milk and he wanted to make a drink that had the nutritional profile of breast milk because he was convinced that breast milk was the most like nutritious food ever it's not ended up it's not what ended up working but I think it's a hilarious starting? Yeah it's sort of like how spacex started because he wanted to send like a a small plant to mars and now he's like you know built like a $1,000,000,000,000 company doing this

Sam Parr

you know what's the colostrum I get so many ads on on

Shaan Puri

colostrum good stuff

Sam Parr

dude I don't is it like from a animal or a human

Shaan Puri

it's from a cow yeah

Sam Parr

damn so I'm like depriving some newborn cow from you know like her fresh milk

Shaan Puri

Well, that's how—have you ever seen how milk is made? It's pretty insane. No, no, no. It's made... it's... it's *messed up*.

Sam Parr

is it just tons of devices that hook onto you like an alien

Shaan Puri

Alright. My wife is *vegan*, so she's forced me to go down this road and acknowledge what goes on. **Here's how a lot of milk is made.** I can't say this applies to all farms, but I think this is the mainstream way: they impregnate a cow artificially. Literally, a dude sticks his hand in and artificially inseminates the cow. The cow gets pregnant and then has a baby. The baby is then *ripped away* from the cow but placed nearby so the mother can hear the crying and will produce more milk. Then they take the milk.

Sam Parr

yeah I mean that's that's sad fucked up I hate that

Shaan Puri

what kind of podcast is this

Sam Parr

yeah dude I literally drink

Shaan Puri

a sad ass vegan podcast is this I drink

Sam Parr

a glass of whole milk just last night

Shaan Puri

and now I regret it what up youtube sean here you guys know that I have started a newsletter company and sold it sam has done it too sam built the hustle got it to 1,000,000 of subscribers sold it to hubspot I built a company called the milk road as a crypto newsletter and sold it for 1,000,000 of dollars 1 year later and we've both had success with this newsletter business model so the team at hubspot got together and they did a research project called the future of newsletters and they're trying to put together some research around where they see opportunities for the newsletter industry what are some of the you know sort of checklists some things you should pay attention to when it comes to newsletters and a bunch of other data and research that they're packaged together if you wanna check out what the hubspot team has put together go to the link below this video and and download it it's free and you could check it out and you could learn something about newsletters back to muscle milk yeah okay so muscle milk not actual milk it's a supplement and it starts out as powder you put in a drink and he's like cool I think bodybuilders are into this they're willing to drink this kind of chalky nasty drink and he buys in and basically it's a family business so it's greg pickett and his his kids are involved with it and what's cool about this business is years later muscle milk becomes a household brand they end up selling the thing for $450,000,000 this I'll make almost half a $1,000,000,000 off this mussel milk thing the guy lives down the street they basically started this as a cul de sac company meaning he lives in one house the son lives in another house the sister the the his daughter lives in another house and they all just live in 1 cul de sac sounds awesome the kids play together and then they just built this behemoth that way like isn't this insane

Sam Parr

that is badass

Shaan Puri

that is badass that was like inspiring to me it's just like a family like you've heard of a family business but dude just imagine the cul de sac business I'm kind of inspired by this very much in the vein of thinking of find the people you love and do life with them like so how okay how did it win must've wait

Sam Parr

really quick have you seen landman the oil show

Shaan Puri

Hell yeah. I've seen Landman. I might have worn a cowboy hat yesterday—just feeling a little Billy Bob Thornton myself.</FormattedResponse>

Sam Parr

I haven't seen it, but this clip I just watched makes me want to watch it. Basically, **Jerry Jones** comes on and gives this amazing acting performance. He talks about the importance of working with his family and how he's proud of his wealth, his real estate, and the Cowboys. But you know what he's proud of most? He says: > "I got to spend time with my kids and we worked together. That's why they're here at my deathbed—because they loved me and we got to spend a whole bunch of time together." I heard that speech and I was all in. Two things stood out to me: first, I was completely sold; second, Jerry Jones—who would have thought—had tears in his eyes. I did not think he could act like that.

Shaan Puri

Somebody was saying, "They're like, 'I don't think... I think this is such a good performance because he's not acting. I think all of this is just true for him and he just said the truth.'" Which is great, by the way. *Landman*—fantastic show.

Sam Parr

yeah it was such a good scene alright so tell me about milk and muscles

Shaan Puri

milk and muscles alright so they start the business pretty humble plan they bought this like kinda supplement and it's powder you mix into drinks and they were like look if muscle bodybuilding enthusiasts drink this this would be great we think we can make this more mainstream but we don't really know how we just kind of are believers in the general idea and they were like look if this thing ever got to like 18,000,000 in sales that would be like imagine that that would be crazy and they that was like at the dinner table talk by the time they sell this thing is doing over 200,000,000 in revenue and about 60,000,000 a year in profit before they they sold so they they had built like a really sick really successful company how did they do it they eventually and and what I love about these stories is you hear about the story and you're like you nod your head you're like yeah yeah that makes sense how that happened but then you look at the timeline and sometimes I'll force myself to literally draw out the timeline so it'd be like alright 1998 they start the company and then I'll draw 99 2,000 2,001 2,002 2,003 2,004 it's like 2,004 is when they actually made the product that hit which is the ready to drink like we've all seen you know the muscle milk carton and so you when you hear that you're like okay cool 2004 then really took off and you just sort of read the numbers and the revenue ramp and it looks good but then you think you zoom in and you you force yourself to look at that like 5 or 6 year time.

Shaan Puri

And you're like, "They don't even talk about what they were doing during that time." It's just the **forgotten**—the forgotten, grinding-out years of trying to make shit happen and staying in the game long enough to get lucky.

Sam Parr

and what were they doing

Shaan Puri

They were just selling. They were selling to really small niches but gradually expanding out of those niches. Eventually, he—the dad—had an insight. The insight was basically: "Hey, you know what? *Flavor matters.*" He thought, "If more people are going to drink this, it's going to be because I can get this to taste like dessert." He realized the initial market they were targeting—bodybuilders—took pride in drinking nasty stuff. So anytime you tried to make a fruity, better-tasting, sweeter product, they almost kind of rejected it because it felt less hardcore. They were super hardcore, and that was who the market was.

Sam Parr

a lot of people who like take testosterone or steroids or ozempic and a lot of doctors will offer you a pill a cream or a syringe and I've asked the doctors and they go they all want the syringe because it feels more like this works better it's going through my veins I could feel it

Shaan Puri

right so exactly and and I think that's true for the early markets the hardcore markets you know ben is like this ben is an early adopter of every product as soon as a product gets popular his interest like completely drops in it right because the fun part was doing the hard thing getting the edge being ahead and so same thing for bodybuilders so what the the genius of the business is that they saw that hey okay the market we see today the people who are buying it today actually is different if we wanna reach this other market we gotta like ignore all the signals we're seeing today so he goes in the lab and he starts doing small batch production and everybody else was so big that they could only test flavors in basically bigger batches and so that meant slower cycles it meant kind of like getting less like tight feedback loops so what he did was he goes to la and he starts testing flavors in like 15 gallon increments and he pours it and he gives it to people and they're like too chalky then he gives them another one they're like too sweet he gives another one and he finally makes this vanilla flavor that they're like this tastes like dessert I love this and so he brings those flavors into the ready to drink beverage and it just takes off it goes nuts and eventually like walmart starts knocking and walmart's like hey we wanna carry this he's like dude we can't even fulfill walmart but he's like all the specialty stores the g and c's it's flying off the shelves and for like the 1st year they're like so inventory constrained because he nailed the flavors so what my barber was telling me which is fascinating what caught my attention about this he goes so this dude down the street they created muscle milk sold it for like $500,000,000 but the cool part is he goes he didn't sell the flavors I go what do you mean he goes yeah there's some story he goes it's not out there but the guy he's like cut my head yeah I've cut his hair he's telling me the story

Sam Parr

barber on blast

Shaan Puri

it's not like insider trading he's just telling me it's a really cool story but he's like you know when you go and research it's not this part's not as reported so maybe he got some of the details wrong that's my caveat but here's what he explained which was basically the when they did the sale they sell the brand muscle milk they sell the operating business they sell all the distribution and then the buyer was like cool and the flavors and they're like actually we have our own separate company that does flavors and we're not gonna sell you that company and they're like well we need the flavors like cool yeah we'll do a licensing deal like well we could provide flavors but we won't sell the flavor company and again this is where the details are not reported so either that's what happened or right after they sold they started a new flavor company because now this is what the family does they have this flavor house that they created and they were like we're not gonna do any brands anymore but we will do flavoring that's what made muscle milk successful and that's what we're gonna do now as a service and now they've got a bunch of customers for this flavor brand that this flavor house that they've created and if you look at their facility it's like this insane like you know huge facility with like a fucking vacuum sealed room and they're like oh we do this technology like spray flavoring where you can add flavor to things that doesn't add any calories and they're basically it's all about flavor tech and I'm just like fascinated by flavor houses and flavor technology

Sam Parr

it's called flavor insights it looks awesome and I see like the they have a video with the father and his son and on the about page it's the whole family this is my dream by the way this is something that I'm gonna do

Shaan Puri

Why is this even more your dream? While he's building *Muscle Milk*, he's got a hobby — and I know that you love a man with a real hobby. His hobby is racing cars. He has his own racing team that he created, and he races himself. I don't know shit about racing, but is it *Le Mans*? *Le Mans*?

Sam Parr

le mans

Shaan Puri

something like that

Sam Parr

it's like a a famous I guess

Shaan Puri

loulou lamont

Sam Parr

The track... but it's the famous thing: it's a *24-hour race*, and so—Ford versus Ferrari.

Shaan Puri

all these other things I think he like won the race or he performed really well how impressive is that is this like just rich guys doing it or is he competing against like real racers

Sam Parr

I'm not a real race enthusiast so I could be wrong but yeah it's like dude like the story ford versus ferrari it was about the time that ford beat ferrari at le mans like it's like a big deal yeah it's like a movie worthy deal you know like rudy style movie of an underdog winning le mans

Shaan Puri

right so yeah dhh the guy that jason fried's cofounder

Sam Parr

he competes in that did he I don't think he won did he

Shaan Puri

he won yeah he won I think he I think he won the race and he said he's competed in it 11 times

Sam Parr

yeah it's sort of like and oftentimes like the company that wins they win for some innovative reason and then like 10 years down the line that car part that helped them win becomes like the norm

Shaan Puri

gotcha gotcha

Sam Parr

yeah so that's like a big deal

Shaan Puri

isn't this a it's it's a total like life goals story build a killer brand you stuck with the thing you built it with your family you do it in the cul de sac I just think it's it's amazing sell the thing for $100,000,000

Sam Parr

none of his kids are yoked right like these guys they don't look very yoked I'm looking at the family now

Shaan Puri

Well, as their public defender, here's what I have to say about that. One of the things they talked about with **Muscle Milk** is they go: > "We wanted to build a product that everybody would look at and see a different thing." > "Women see it as a weight-loss product; men see it as a muscle-building product; some people see it as a snack; some people see it as a meal replacement." Our **goal** was to build a product that would basically, you know, solve multiple problems for different people at once. </FormattedResponse>

Sam Parr

I'm just saying that I wanna see some bigger buys and tries on this family photo they look great they look very healthy more importantly they look happy the founder's teeth are beautiful like he's got a really nice smile I just think that we should see a little thicker neck

Shaan Puri

can I tell you one other thing so this company that bought them originally I know they're owned by pepsi

Sam Parr

yeah

Shaan Puri

pepsi owns it now but before that they it was bought by something called hormel foods it's one of these companies that you've never heard of this company does $12,000,000,000 in revenue they do like a a 1000000000 and a half dollars of profit a year and if you go to their website they the like the the headline like tagline for them is like we sell more pepperonis than anyone on earth

Sam Parr

and they're

Shaan Puri

just like food holding company they own skippy peanut butter they own planters

Sam Parr

they own spam

Shaan Puri

they own spam and then they sell just a shit ton of ronis dude they just sell pepperonis worldwide

Sam Parr

they own applegate they own justin's they own planters skippy chi chi's I don't know what chi chi's is I don't know what

Shaan Puri

is that black label bacon they own a lot of I mean literally spam is like on their home page as like their like their their pride and joy like the way my parents pin like pictures of me up on the fridge that's what this company does with with spam

Sam Parr

which is like it's pretty pretty good horrible for you but oh dude yeah hormel pepperoni I know them that's one of my snacks one of my snacks is like 8 pepperoni with a little bit of mozzarella cheese on it microwaved

Shaan Puri

it's a pizza without the the pizza

Sam Parr

yeah I just call it like so

Shaan Puri

does pizza hold the dough just just pepperoni and mozzarella

Sam Parr

redneck fitness food

Shaan Puri

dude this should be your brand a line of of not that bad for you redneck snacks it's like it'll it'll make you farm strong

Sam Parr

yeah or do you know like pb dip you know your I call it dip

Shaan Puri

but you know pb powder the powder yeah

Sam Parr

yeah you get a spoon of that and you get straight and you chuck it up on your the top of your roof of your mouth and you suck on that thing for 60 minutes I call it like fitness dip so like instead of like having like a fat lipper in you just have a pb dip you're just and your tongue just rub it against that the the dehydrated nut

Shaan Puri

oh boy oh boy you wanna have

Sam Parr

a good time put a little pb dip on the roof of your mouth

Shaan Puri

alright we got our we got our cold open for the episode

Sam Parr

by the way let me show you one thing you said something that I do religiously I've just sent ari a document that I I just sent her one of the tabs I have dozens of tabs on this ari can you share your screen so whenever I read a book I have this Google doc that I've used since the year like 2010 alright so check this out whenever I read a book I do a few things 1 I make whenever there's like a year and a money term or some type of milestone I write it down in a sheet and the reason why I write it in a sheet is because a lot of times when you're building a company or doing anything that's like really challenging you you'll read about someone else and you're like that was easy and so I like to do timelines and you'll see like oh okay like they went 4 years with nothing happening so for those listening I have got a timeline of koch industries which is like the largest privately held company in america I read the biography of the family and I like did a timeline where every everything major happened in their life and then I converted the dollar amount into $2,019 which is when I made this particular one and it's really fun to do because you could see that things took like in this case like 30 years

Shaan Puri

right

Sam Parr

and so if you like if you scroll all the way to the left I did this with kirk kerkorian another one of the a guy who I love and I've I every biography I read I I create one of these

Shaan Puri

just another man you love can I just? Out a couple things about this what we're seeing jerry here that are just just fantastic this is it's just a peek into the mind first of all it's a Google sheet that's just called sheet which is just a great title okay scroll over alright here are some of the milestones that sam wrote down alright so it starts for for koch industries 19 1900 fred koch born 1924 so 24 year gap big break finds mentor okay so then it goes 1927 just a quick update still broke then it goes 20 1929 see success 1931 big success with 2 g's just a big double g success right here it's amazing

Sam Parr

and then 1940 he buys a company and that company he buys it for $4,000,000

Shaan Puri

You also should just have pictures on here where it's them and the *cavs*, and it's just your cavs—just for reference. You're just comparing cavs. Because I feel like... tell me that's not part of your research process. Is it looking at photos and judging their looks?

Sam Parr

yeah particularly the koch brothers because they're like these tall waspy guys and I definitely am sizing myself up to them

Shaan Puri

yeah the the the total picture of success includes a picture

Sam Parr

for sure yeah it's like tennis sweaters it's like oh they're into tennis sweaters therefore I will wear tennis sweaters but yeah I definitely like 2 guys that are both 62 from the midwest with blonde hair blue eyes like we there's definitely like a there can only be one of us in this room

Shaan Puri

dude there's this girl who keeps going viral on twitter and it's the same tweet she does every time and she just goes my dad goes to a bar with his friends every friday and he makes a list of topics to discuss yes and then she she puts she has a photo of him holding a printed out agenda and I'll just read you one of them ted perry's fun capital story shown on fox news 6 next one what's going on with the bucks? Nfl overtime rules take ball first or second? Bahama breezes how close is too close to an alligator do you think people that throw garbage out of their car window are the same people that don't pick up their dog poop when walking through my subdivision and then it read at the bottom and goes please be on time as you can see we have another week of a packed agenda and it goes super viral every time it's like a 100,000 likes and I think everybody who sees this is like yeah that's part of the winning life I'd like to go to the bar with my friends every thursday and have like an agenda that we print out and we talk about while wearing our new balances

Sam Parr

do you know who does this and he's not joking

Shaan Puri

I already know because you're talking about a legend a social legend and I know it has to be nick ray tell me I'm wrong no I'm wrong is it not nick ray

Sam Parr

The second time I hung out with Nick Ray, we went to a bar called Lazarus. Sarah and I came, and he goes, "Hey guys, I would love to hang out. This is our second time hanging out. I thought it'd be nice to have an agenda so we could stay on track." There was a 13-item agenda list where it was like, "Ask Sarah about her job; figure out how that's going; explain my dating life and get opinions from it" — like it was a... and we stuck to that agenda, and he took notes, and it </FormattedResponse>

Shaan Puri

was thrilling because I think I'm gonna absolutely start doing this

Sam Parr

it was thrilling you know how like you know how like

Shaan Puri

was it the agenda that was great or the fact that he had an agenda that was great which which of the 2

Sam Parr

was great here's why so look in a world everyone wants to be a tough guy it feels good to be a leader but you wanna know something everyone likes getting led and like we'd like the assertive person

Shaan Puri

I'm just a leader who loves being led that's me like that's on my linkedin

Sam Parr

I like leading some stuff, but there are other times when it's: just tell me what to do. *Small talk* is one of those things that nobody really tells you how to do. When there's an assigned leader who has something outlined for small talk, I'm just like, "Yes sir — I'll do whatever you like me to do. Thank you, may I have another, sir?" It's the best way to go about doing things, and that's what **Nick Ray** does.

Shaan Puri

okay and by the way that's how we do this podcast actually we both bring some agenda items and then we discuss in bullet. Form

Sam Parr

yeah I think it's good I and he's done that for years and it's awesome alright

Shaan Puri

we're gonna normalize having conversational hangouts with an agenda okay let's do more I have a business that's pretty cool can I tell you about it here's my here's my opening for this business sam I found the business that you should have started instead of wasting your goddamn time with the hustle

Sam Parr

okay I like that

Shaan Puri

So you built **The Hustle**, and if you recall, one time you came to me *hat in hand*—absolutely begging for an investment. You needed the money, and you got down on your knees and said, "Please, sir, invest in my company." I looked at it. I flipped through the business plan like it was a flip book, and I just said, "No thanks."

Sam Parr

no that's not what you said you said look sam you're coming to a knife fight with a knife I don't even want you to come to this knife fight with a gun I want you to come to this knife fight with a magic fucking wand and and that

Shaan Puri

clearly turned away on my heel with a dramatic spin and I left through and and then you tried

Sam Parr

to pull the door to open but it was really a push door

Shaan Puri

exactly totally blew it at the end did not stick the landing

Sam Parr

"You clearly had just read that on whatever the equivalent was of Twitter, and you're like, 'That is **now** my line.'" </FormattedResponse>

Shaan Puri

yeah exactly this is back when I was like I had it written on the inside of my palm and I was like peter thiel says this magic wand they say that somebody totally owns them no matter what they're doing so but you know the reality was I looked at the business and you were like here's what I'm doing I am creating a media company so every day we're gonna write the news so every every day you had to recreate your product

Sam Parr

yeah it sucks

Shaan Puri

oh that sucks

Sam Parr

what did they did

Shaan Puri

"Did you get any— is there any benefit to all the work you did in the last three months?" "It's like, not really. We have to recreate it again. *We gotta bake that cake every morning.*" "Okay, sounds good." And then I was like, "Cool. So then people pay you—certainly for the service that you're doing?" "No—it's free." "Oh, okay. But then the ad revenue... then we have to do a separate business, basically a separate customer—selling to advertisers. And they're like, 'Okay, but certainly they're on retainer and it's going to be recurring revenue that's going to stack up.'" "You're like, 'No, no, no. They're just going to—if they feel like advertising, they will; if they don't, they don't. Every month we're going to start back at zero.'" "Yep. And I thought, 'Damn—this is a tough business to win.' And that's when I hit you with the knife and the knife fight and... blah, blah, blah."

Sam Parr

which it is tough ish to to do well

Shaan Puri

Yeah, and by the way, the *best pun story* of the whole thing is: five years later, after you successfully sold the business and got rich doing it, I copied your business model and did the same thing for crypto. I basically came back to you like, "What was the business plan again? How do you do this?" So that's the end of that story. Now here's a better business that somebody created five years ago that has the following profile: they don't recreate the product every day; people pay them for the product on a subscription; it's in a hobby that you love doing; and it's a thing you were doing anyway for free. I think you would have been great at it. Also, it uses your gift, which is making things simple—summarizing things, making them easier to understand, and saving somebody time doing it. This person has bootstrapped the business to $200 million in revenue with 30% profit margins.

Sam Parr

I have no idea what is this

Shaan Puri

it's called headway app and it is a book summary app so this guy in the ukraine created this company where he takes popular books and he summarizes them and the promise is basically instead of reading the book I already read it I summarized it I could tell you main? 1 I could tell you main. 2 I could tell you the main. 3 and in under 15 minutes you can get the gist of what's in this book you'll get you know the the big ideas and you'll get them explained to you you could either read it or we have ai that turns it into audio and you can list listen to like a 15 minute summary of this book and we've done it for 1500 of the most popular books and people pay a simple 12 $13 a month for this and this has become an absolute juggernaut so I did not think that these book summary apps could get this big but damn if that's impressive 200,000,000 in arr 30% profit built this thing out of the ukraine

Sam Parr

they just raised funding at a $2,300,000,000 valuation

Shaan Puri

right right

Sam Parr

holy crap

Shaan Puri

so like you could've done that instead and I think you would've been great at this by the way you know here's why I said that this this like you could've done this because when I went and looked at their ads right the bay the way this business grows they run ads on tiktok on facebook whatever and the hook of their ads tell me if this sounds familiar my boss thinks I'm a genius but and thinks I read a 150 books a year but actually I just use headway

Sam Parr

that's their ad

Shaan Puri

it's not word for word I just wanted to really bait you with that one but it's basically the it's basically the gist of their ads it's it's the same way we post the same quote

Sam Parr

ad I invented that ad I stole it from someone else and I invented that ad that's my ad

Shaan Puri

that's the ad that's my ad that I took

Sam Parr

yes I stole that from the scim and I invented that ad

Shaan Puri

their ad is a little bit more like it'll be the average ceo reads 52 books a year how many do you read right so they're basically making you feel like a shitty ceo or it'll say everyone thinks I went to harvard with the amount of books that I know but actually I just use headway or it'll be meet the app that all the intellectuals are using stuff like that and so those are the sort of hooks that they use to get people to do this where they're not saying here's a book summary they're basically saying be a smarter person and be seen as a smart person because you seem so well read and here's your hack to seeming so well read

Sam Parr

so what's interesting is thrive thrive

Shaan Puri

we should do this for the podcast it's like my boss thinks I'm kind of retarded but know a lot about business the secret is I just listen to my first million

Sam Parr

but I still sound a little retarded

Shaan Puri

my boss is so impressed that I know all these numbers but then he wonders

Sam Parr

but then he fact checks me

Shaan Puri

my boss is wondering why I have pepperoni in my mouth

Sam Parr

this is ridiculous these guys so they raised money from thryv which thryv is a big vc investor in chat gpt are they not worried that chat gpt just does all this

Shaan Puri

well they're themselves using ai for a bunch of stuff like if you go look at a bunch of their ads they're all like ai generated ads I think you know businesses like this that are like super laser focused on one thing you know even if you can use chat gpt to generate a summary that's not the same thing and I think you know

Sam Parr

dude they're not even old they started in 2019

Shaan Puri

I know, right? Super impressive. They also made this other app. There’s this one ad that was *so frustratingly good* it made me pissed that I didn’t think of it. It’s a simple-looking puzzle — tell me if you’ve seen this. I don’t know how much you use these, but it’s in a lot, a lot of games. This ad pops up on TikTok. It’s basically a maze: you start on a dot and have to get across without lifting your pen. It just shows somebody trying to do it, and they keep messing up.

Sam Parr

yeah yeah yeah

Shaan Puri

and it's like try see if you can solve this only 5% of people you know can solve this but 50% of 5th graders can do it or whatever and you're like I gotta see if I could do this so you download the app by the way that puzzle is actually impossible if you there's there is no solution to it they just put it in they put a thing that looks simple but you can't figure it out you can't figure it out because it is actually an optical illusion it's actually impossible

Sam Parr

but it that

Shaan Puri

They use it to get to the game. Yeah, they have another app called *Impulse* that has been downloaded about 70 million times. It's a brain-training app. The framing is basically "keep your brain sharp" with these little mini mind games. My mom likes a lot of these things because she feels, "Oh, I'm getting older; I should have these little things on my phone to keep me sharp." So she plays Sudoku and crosswords and downloads apps like this. </FormattedResponse>

Sam Parr

So they're still set. They're just, like, *crazy good* internet marketers and really good at creating apps that retain [users].

Shaan Puri

apps that first and foremost get you to convert and become a subscriber and then yeah obviously you know the retention helps and you know this guy talks about it he frames it as microlearning he's like microlearning is this how do you get somebody to spend 5 to 15 minutes a day getting smarter what if you use your phones to get smarter instead of just to waste your time and so he makes it sound like this grand noble mission and at the same time on the back end it's just this ruthless funnel that is like run it

Sam Parr

buy now buy now

Shaan Puri

get the download convert convert convert convert convert and like that's the game that's what you gotta

Sam Parr

be focused we talked about was it remember the. App or flow were they flow yeah were they ukrainian as well

Shaan Puri

yeah so we did this call have like a a cruise flow eastern european app makers where they have these family of apps and you go look at their website and they're like no raise no funding and then they'll have like 300 employees and then their apps will do like you know a 100,000,000 downloads a year and it's like based out of kyiv or whatever right like this just seems to be a pattern I think there's like a just a very high density of talent that knows how to build this specific type of company

Sam Parr

Yeah, they're just all homies, and they all have this... I don't know, this idea that it feels fun to get one over on someone. But then they're like, "Alright, if we're gonna have that attitude, we should also provide value so we stick around for a long time." This is *what every internet marketer ever has*: they're like, "I'm gonna do something shady," and when they win they're like, "Oh, but it'd be a lot cooler if customers came back to us, or if we didn't have to refund people constantly. So let's still do the shady stuff, but I'll do it for something."

Shaan Puri

like if I could tell my mom what I do without shame

Sam Parr

which is like what every internet marketer ever has done but this is badass how'd you find this

Shaan Puri

how did I find this actually that's another good story have you seen this twitter account arthur rock

Sam Parr

well arthur rock I know that arthur rock was

Shaan Puri

It's a parody account. **"arfurock"** is his account. Have you not seen it? This thing is amazing. Alright, so how do you spell **"arfurock"**? Bro, just try to spell "Arthur" naturally and see what happens—you'll land exactly at the right thing. [spelled aloud: "a r f u r"] Got it? "Rucker"? Okay. So it's this guy—like an anonymous **VC**. He created a **Twitter** account where he tweets numbers from companies that are raising money or trying to sell, and he leaks information. He's just this giant leak. He tweeted out the numbers for the **Headway** app. If you just look at his feed, his feed is pure signal because it'll literally just be like: **PostHog**, 13,000,000 in **ARR**, growing 2x year over year. They're currently...

Sam Parr

raising crazy

Shaan Puri

It'll be like—someone will say, you know, the founder will be like, "We're pleased to announce that we've raised our **Series C** from **Excel**. It's a huge milestone and we feel so validated." And then he'll just quote-tweet: "*50,000,000 ARR as of November — up 1.8x year-to-date. Congrats.*"

Sam Parr

Or there's another one where they raised **$400,000,000**. After that, they did **$6,000,000** in 2024. Congrats.

Shaan Puri

Yeah — exactly, exactly. How amazing is this? This is *like* the best Twitter account, right?

Sam Parr

This is really good. And, you know what's funny — we've seen this again and again — these meme people, anonymous meme jokers, are right a lot, you know what I mean? It's sort of like *Esquire* or... what was it called — *American*... what was the tabloid that's in the grocery store? "The National Enquirer."

Shaan Puri

yeah the national enquirer

Sam Parr

They say a lot of bullshit, but they also predicted the Bill Clinton stuff before everyone — and the John Edwards affair. So I do love following these Anand accounts [unclear: "Anand" may be "anon"]; this guy is great. He says **Hallow**, a Catholic prayer app, is doing $60,000,000 ARR, growing 3.5x a year. [ARR = annual recurring revenue]

Shaan Puri

yeah like he did in he'll also post updates so in may he'll be like suno the ai music app just closed around 15,000,000 arr in the 1st year lightspeed invest that 500,000,000 post congrats and then he'll then you know that was may and then in october right so like you know 5 months later he just wrote at 40,000,000 arr now right this guy's just providing I don't know you're not you're not as big of a like a basketball fan but like in basketball there's these 2 guys who were like famous on twitter for just like they just have sources everywhere so it'd be like shams and it'd be woj and they would just always have intel and there's all their entire twitter feed is literally just inside info it'd be like you know sources say jimmy butler wants trade his list of teams that he wants to go to are these 4 or it'd be like like during the nba draft like you know 45 seconds before every pick they just say they're taking this guy it would just spoil the draft

Sam Parr

If I'm one of these Ukrainian guys... I don't have the skill set to do this; I'm not technical. But I wonder—do you ever wonder why there aren't more people just copying fast-growing companies? We'll just...

Shaan Puri

there are that happens a lot

Sam Parr

it doesn't

Shaan Puri

but I think your I think your answer is actually pretty good which is why aren't there more so actually I think I answered your question wrong I was like no some people do do that and I think your question is actually correct which is why aren't more people doing this because I think

Sam Parr

I don't want to do this because I kind of have a reputation, and I don't really want to do it. But if I were a little bit younger and if I had the skill set—which I don't—like, if I see a company that's growing at, like, *400x a year* (which this guy does), he's like, "Here's some app that was only doing $5 million in revenue, but they're set to grow 4x." I'm like, "Yeah, just go to their website and copy that."

Shaan Puri

yeah I mean it's not so easy right like you could copy a product that doesn't get you to the customers and so you have to not only copy the product you have to figure out how they grow and be as good at growth

Sam Parr

as them figure that out you you can use all this technology like here's what their ad say I'm just gonna do that exact same ad

Shaan Puri

you can but you know most people who have that ability if you're if you're that good you're also able to create new things from scratch and I think also what ends up happening is that a lot of things look similar but they're you know they're 80% the same and they're 20% different but that 20% difference is actually a huge difference right it's just like if you've ever looked at we were talking about flavors earlier it's like the difference between 2 flavors is like a 0.1% change in a certain you know certain chemical but it'll change you know from vanilla that's that's the difference between you know vanilla and and you know orange soda or whatever right it's like there's it's not that big of a difference on the on the whole right you're doing 80% the same but it's 20% that's different and so you know I actually advise this and and talk a lot about this which is if you see something that's working not as a company maybe but like let's say a trend or a business model like you know let's say ecommerce or whatever try to figure out what's working better or worse in a category and then you know if you're gonna go into that category you're probably gonna end up even if you're trying to be super original you're probably gonna end up with 80% of the things the same because that's how business is you're not a 100% different but the key is to figure out what is your 20% difference gonna be and how how well can you execute on that 20% innovation and I think that's a more humble honest way of going about things versus I think most people believe they're doing everything a 100% original and unique and that's just not true right like even this is also for content or wisdom right like how many truly original wise thing you know I love naval but how many of naval's things are a 100% homegrown not inspired by anything not not not similar to anything else that was out there which is very rare right like that's not how anybody does things tony robbins talks about this he's like yeah I I learned under jim rohn and jim learned learned under zig ziglar or whatever and like it's the same school of thought but like me putting my twist on it is the is what makes all the difference then you have people like rocket internet which are literally like pixel for pixel clones but even they operate in different markets so they'll be like cool we're building

Sam Parr

amazon and thailand amazon for

Shaan Puri

for brazil or thailand or whatever and turns out once you try to do that you're gonna like over time a a lot of things are gonna end up different

Sam Parr

Alright. Let me tell you a story, really quick, about some investment thing that I heard about that I would never do. You would do, but it's a *thrilling* story.

Shaan Puri

Okay. Let me guess: it's **obscure**, **overly complicated**, and **doesn't really make a whole lot of sense**. Too much risk, and we'll end up netting less than the S&P 500 in the long run.

Sam Parr

No—this one, he came out on top, actually. So the story is this: first of all, I was just listening to **Scott Galloway**'s podcast while I was driving somewhere. I think it was over **Christmas** break. Something happened at the very end of the podcast, and I was with **Sarah**. I literally pulled over to the side of the highway and said, "Are you listening to this?" She said, "Shut up. No." I replied, "Alright, but this is actually amazing."

Shaan Puri

"Can we get an instant replay on **YouTube** of your *wheel diagram* you just did? How big is your wheel, dude? You're like literally driving a school bus. What was that?"

Sam Parr

it's like a ship

Shaan Puri

armed ship fully out loud it's like a tractor that you're driving

Sam Parr

it's a ship I pull the ship over and I literally had to sit down because she yells at me when I use my phone and I had to like type this out so I had this note I remembered it but Scott galloway had michael lewis on so Scott galloway is an investor and podcasters michael lewis is an amazing author wrote about ftx's downfall and he was with sam bankman fried when this all happened and so he he you know he has a unique perspective in the 45 minute part of this like 50 or 55 minute episode Scott galloway just mentioned something where he's like yeah I bought some of the the the bankruptcy claims against ftx and michael lewis started talking about something else and then michael lewis goes wait wait wait wait wait what you made a good investment where you bought the ftx claims what was that about and Scott like just casually throws this out there but the story is actually pretty amazing so the background is this so in 2022 ftx goes bankrupt because sorry ftx goes bankrupt because sbf sam bankman fried he's overleveraged and he spent all the money and whatever it didn't work out because of a bunch of different reasons and because of that $10,000,000,000 in customer funds are lost you know they're just gone and people are distraught they're freaking out but when a bankruptcy happens one major thing happens which is the person who had the money in ftx so let's say I stored $1,000,000 in ftx I now am I'm gonna have a claim against that company for $1,000,000 so it's gonna go to court and we're gonna figure out how do I get my money back somehow and in a lot of cases you get no money back and so what happens is these kind of vultures I mean I don't know what you wanna call them but they come along and they go hey ftx owes you a $1,000,000 you're probably not gonna get that back you might get that back but I'll tell you what you have a $1,000,000 claim I will buy that claim from you for a $100 so you get the $100 today whereas the other outcomes are potentially you eventually get nothing or maybe you'll get a little bit more like a $100 200 300 300 grand but it's gonna be in like 4 or 5 years and you don't even know for sure so just let me buy your claim and so sure you could do that so it creates a market when that happens but Scott galloway he's kind of a he's kind of a strange guy and he had this quote on this podcast where he's like when I see fire I run towards it because when because I've known enough seeing a lot of bankruptcies that when there's when a bankruptcy happens there's opportunity and so Scott galloway he reads the paperwork about the claim or about the bankruptcy and what he notices is that sam bankman fried unlike a lot of different ponzi schemes a lot of times with ponzi schemes they're spending this money on coke hookers planes like party shit spf maybe did a little bit of that but you wanna know what he was a real degenerate about venture investing he loved investing in companies and one of the companies he invested in a few and I think a lot of them didn't work but one of the big ones that he invested in was he invested in anthropic which is like the number 2 or the number 3 best ai company and Scott looks at the numbers and they don't actually say what the valuation was of what s of what the they didn't they don't say the valuation of anthropic when sam bankman fried invests in them but what they say is that he invested $500,000,000 and Scott does a little math and he's like I think the valuation was around $5,000,000,000 meaning spf owns 10% of this company and this was happening 2 years ago he's like I think anthropic is going to raise money at a $10,000,000,000 valuation and then eventually one day at a $60,000,000,000 valuation which by the way as of today there are rumors that that's happening and because of that I think I can buy a claim for 20% so a $1,000,000 claim for $200,000 and if you do all the math I think I could actually triple or quadruple my money based just off this venture return let alone if we ever are going to claw back any of the crypto that was lost well turns out a few things happened 1 bitcoin exploded and because of that well not because of that but they were able to recap or claw back a lot of the money and bitcoin exploded and so a lot of these people are going to be getting back a lot more money than they actually had in there because the money you know the bitcoin was just sitting there growing and also sam bankman's freed investments one of them killed it knocked it out the park and so I think now the people who lost money they're getting something like a 125% of their money back which is not bad for a ponzi scheme that you are a victim of Scott said the numbers he goes I bought $250,000 worth and I sold I bought 2 a $1,000,000 claim for 2.50 and I sold it for 90% of the 1,000,000 so he like tripled his money and Scott like goes through the story and he explains like his reasoning on this podcast and it was amazing to be honest like how on earth you could find value in this way

Shaan Puri

Yeah, that's super impressive. I actually happened to hear this segment too and had the same... I wasn't driving a bus, but I had the same sort of snap reaction where I was like, "What?" What's funny is you said a couple of things, but I don't think— a couple of things... I think we have to correct a couple of things. **First:** *it wasn't a Ponzi scheme.*

Sam Parr

no I meant like

Shaan Puri

a lot he stole customer funds

Sam Parr

I I guess I wasn't mean that this was a ponzi scheme but it's in that category of like schemes where you know a lot of people are like how do I get my money back

Shaan Puri

scammed you lost your money yeah exactly the other thing is that he was saying you know I valued ftx's stake in anthropic at 4,000,000,000 but that's not really what happened so they sold their stake for 800,000,000 so I think he put in 400 or 500,000,000 and they sold it for 800 or 900,000,000 in the liquidation and so it wasn't the anthropic investment that really paid off

Sam Parr

he was using the anthropic investment as a downside protection where he was like doing the math where he was like alright that gets me that gets my investment up just a little bit to like a safe zone but then what else can there be

Shaan Puri

yeah exactly so I but I I think his math was wrong so he said in the thing he goes I valued the anthropic based based on the anthropic stake I thought it was worth 4,000,000,000 the total claims were 9,000,000,000 so I thought anthropic was giving me 44¢ on the dollar for every dollar of claims that I would buy claims were selling for 22¢ on the dollar so he says to me that was the easiest trade I ever made but the reality is that the anthropic stake ended up being worth less than 1,000,000,000 right so it would have been 10¢ so he got it right even though his logic was wrong and we had sheila on the other day and he basically said his 2 best investments kinda worked out the same way he's like I bought nvidia in 2017 because I thought that crypto mining was gonna take off and nvidia took off but not because of crypto mining at all it turned out it was ai and it you know kind of like I was wrong but I was I got massively right you know same thing with bitcoin he's like I bought bitcoin early on because I thought it was gonna be this fast peer to peer transfer thing turns out that was all wrong but bitcoin went up anyways because of this other store value gold you know digital gold use case and so I think what ended up happening is that he made a great investment but I think his underwriting was wrong I think that's one of the hard things about doing this like what up you know the smart money investing is that when you're right you feel like such a goddamn genius and when you're wrong you chalk it up to you know whatever you sort of either mentally block it out you either say you were wrong or or you think maybe one of your assumptions got got a little off but this there's also this weird state where you can end up right even though your underwriting was wrong and you conflate kind of like luck and skill and I guess the question is I guess that's one of my my observations I've had in this process of of like as I do my own investing and get something's right get something wrong I talk to other people it's very humbling to realize how much of this even your wins aren't your aren't yours they're not your wins because you got so much of it wrong

Sam Parr

well and there's an another learning that I had which is finding value in crap like this story like this was the worst the the like this was the worst asset the worst company like you don't wanna touch this because a it's like a scam so like there's a no go there and b it's like a reputational ruiner like who wants to be involved in this guy and then it's like I have so much better things to do why would I waste my time with this pile of shit and what was interesting was seeing Scott walk through his reasoning on how he can still capture value from a horrible situation and I thought that that was really intriguing because that is not how I tend to do things like what did they say try to trying to catch a falling knife like yeah when something's bad it's just going to get worse and just stay away but that's not always the case

Shaan Puri

Dude, when I went to Mohnish Pabrai's house and we recorded that podcast together, we did the podcast and then, at the end, he kind of just toured me around. I went to his desk where he works. I like seeing literally where you sit when you work — I think the environment tells a lot. He had this placard on his desk, like the nameplate you would see in a bank. Instead of a name on it, it just said: > "Trouble is opportunity." He told me he wanted that on his desk because in those moments of panic, where there's trouble, he wanted the reminder that *trouble is opportunity*. Not all trouble is opportunity, though. One of his isms he took from Charlie Munger and Buffett is that he puts things in what he calls the *"too hard pile."* He said, "I look at 100 opportunities. I can probably tell you the three obviously good ones and the ten obviously terrible ones, but the other 77 I just put in the too hard pile." He's sure some of them are really good, but he throws things in the too hard pile when they're too hard. For example, I asked him his thoughts on crypto. He said, "Well, I think there's a case for it. I think there's a case against it. But I just don't do anything because I put it in the too hard pile." He doesn't need to win in that — it's too hard for him to figure out, so he's not going to bother. I think the concept of the too hard pile is so valuable because I used to be very black and white about everything — either it's good or it's bad. If I thought something could be good, I would smash my head against the wall trying to make it work. If it was bad, it had to clearly be bad for me to discard it.

Sam Parr

the so you said a 100 ideas

Shaan Puri

The story is this. He's at lunch with Warren Buffett and says, "Warren, I think one of your great gifts is you're a great judge of people." He was talking about Ajit, who runs their insurance business. He continues, "I just think you're a great reader of people — judge of people. How do you do it? What's your secret?" Warren replies: > "I don't think I'm a great reader of people. I'm not trying to be humble. I just approach it differently. It pays to be a *harsh grader* when it comes to people. The cost of being optimistic about somebody who turns out not to be great — letting them into your circle of friends or doing business with somebody who turns out not to be great — is so costly that I just rule a bunch of people out. > If you put me in a cocktail party and let me have 5 minutes with 100 people, in that 5 minutes I could probably tell you the 5 people who are really outstanding. I could tell you the 5 people who are really lousy, and I just don't want anything to do with them — they obviously come off super bad in a 5-minute interaction. But then there are 90 people that I just can't make a judgment on in 5 minutes, so I just put them all in the 'bad' pile. They're all in the 'too hard to know' pile, and I just rule them out because it's not worth the brain damage to try to figure it out on a case-by-case basis just so you don't miss a good one. > The cost of a bad thing is much higher than the cost of missing out on a good thing. There are more good things that I can filter for, and I'll find those good things over time — they'll obviously be good. I'll just focus on the obviously good things." He does this with investing and with people. It's a useful heuristic because most of us try to be accurate about all 100 people. We spend time on the hard-to-judge cases and get many of them wrong, taking on too much risk. His approach is: don't take too much risk — act on the obviously good, throw away the obviously bad, and put everybody else in the "too hard" pile and ignore them.

Sam Parr

Can I dumb this down? Let me explain why *I'm a genius*. When I go to a restaurant, there are two columns of entrées. I start at the top and skim down. The first one I see that's a seven out of ten—I go, "Oh, that's it." *Menu over.* I don't look at the menu for the rest of the meal. I don't second-guess it. I just pick the first one that's a seven; that's done, and I'm able to do that right away.

Shaan Puri

Does this apply to everything? Is this *marriage advice*? Is this—what other things does this apply to? Where does this not apply?

Sam Parr

I mean, yeah. I think it could apply to marriage — *the idea of settling* is good. You settle for something that's pretty good, and you can make it great. I don't know... is there any data on Indian couples who have been...

Shaan Puri

Yeah. Arranged marriages have the same "success rate" as American marriages, which involve dating, selection, courtship, and then, eventually, engagement and marriage. By contrast, the way Indian couples do it is very much like scanning a menu or a listing. </FormattedResponse>

Sam Parr

that'll do

Shaan Puri

Engineer. Good family. Full set of teeth. **7 out of 10** — let's go. "Yeah, I will see you at the altar for the first time." "Yeah, yeah, and then do a high five."

Sam Parr

I just think that's how I order — I've done that for years. I just don't want... I want less choice. I think what **Warren Buffett** is actually saying is similar: "I know for certain that these three are fine enough; therefore I don't care about the rest."

Shaan Puri

Yeah. You know that book by Mark Manson, *The Subtle Art of Not Giving a F*ck*? I think it got so popular that it sort of got written off, you know what I mean. Do you ever hear a smart person say, "Man, I learned so much from this book, 'The Subtle Art'?" It's not a cool intellectual thing to reference because it's pop — it's pop culture.

Sam Parr

so popular

Shaan Puri

"It's made of shame. It's like, if I'm like, 'Oh, I really like Justin Bieber's music,' it's like, 'Okay, what? That's a low-status thing to say.'" He brings up one good point in the book. The book is basically around one idea: life is not about caring about everything or not caring about everything. It's about choosing. Assume you have a limited set of **F's** to give in your pocket—like you've got **five** to give. Choose wisely. Choose the things you're going to care about. So the menu—you just don't have to care to get that right. And that's kind of like the **Warren Buffett** idea: you can throw a bunch of things in the *"too hard"* pile and ignore them. Then there may be a few decisions where actually getting it right really matters, and you'll have enough bandwidth to actually care about those things because you're not caring about everything.

Sam Parr

yeah I think that's good shit what do you wanna do now

Shaan Puri

I want to give you one other story. Have you heard the **Bill Ackman** story of his "running into the fire" when everybody else is running out? It's the story of his four-hour investment decision.

Sam Parr

do you

Shaan Puri

know this one

Sam Parr

oh man I thought it was like literally a fire

Shaan Puri

well kind of it was the o eight crisis which I think to people on wall street felt like you know the the giant fire

Sam Parr

oh you mean bill ackman the famous twitter influencer he invests wait he he he's an investor

Shaan Puri

we're joking I hope you're still coming on later alright so he tells the story of it's 0 8 the financial crisis happening banks are failing the bear stearns fails and then this other bay bank is gonna fail people don't know what's gonna happen widespread panic and the bank wachovia was on the brink and basically what he did was he did a 4 he's like I had 4 hours I I spent 4 hours just looking at the business of wachovia and came to a decision in 4 hours that the panic was overblown and that wachovia would be saved and that wells fargo which ended up buying wachovia was you know far healthier than the market believed in that moment of panic and so he made a huge investment and it was like you know one of his most lucrative investments ever it was a 4 hour decision and it was made at a time of extreme panic when trouble was opportunity and when everybody else was just running out you know screaming he was calm and basically looked at the situation and assessed the risk return differently which is sort of like what you're talking about with the Scott galloway when when ftx just feels taboo in every way and it feels like you know the worst possible situation and he's like cool it's the worst possible situation at a price and there's a price for everything and the price you know for him to buy those claims at 22¢ on the dollar turned out to be the right price

Sam Parr

Dude, **Bill Ackman** is also, like, *64 years old*, I think. That's pretty cool. We should create an index for **CEOs above 62**, and I bet it'd do alright.

Shaan Puri

Alright, so he bought—let's see—178,000,000 shares at $3.15 per share. So he spent $560,000,000 after four hours of thinking, and his estimate was that it was going to be worth more than double that. The next week, Wachovia bought it at about $7 per share, so he basically doubled $500,000,000 in a week.

Sam Parr

"*That's insane.* Alright—well, that's cool. **Bill Ackman's great.** Alright, great story."

Shaan Puri

great story alright

Sam Parr

I think that's a pretty good podcast what do you say

Shaan Puri

I think that was alright huge huge alright that's it

Sam Parr

that's the pod