Encarta | How Blockworks Bootstrapped To A +$20M/yr Crypto Empire

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And the real story block was I went home that afternoon. I was like, I'm launching a consulting firm to help companies

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figure out Ethereum.

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Hours after learning about Ethereum.

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Alright. We're live. This is it. This is how we start, man. We get in. You just rip into it, We get right into it. Where are you calling from? Your place looks nice. Is this your apartment? Yeah. Yeah. This is Blackworks office. Yeah. We got a new office, like, about a year ago in It hadn't. How many, how many people do you have? Like, sixty? Uh-huh. I think we're up to sixty

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five maybe. We had six people start this week.

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So I think I think that might put us at sixty five. What's the pitch for what you are? You're just, I mean, at at the high level, a crypto media company, what did I tell you the other day? I go, you do everything right. You do things the right way.

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Wait. Let me just

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get this straight. So is Sean not joining us? Because do you know that Sean told John d m to me one day. He gave me his cell phone. He said, dude, hit me up. Would love to meet and chat. I've never met the guy. I he he gives me his cell phone. I text him. Go, yeah, it's Jasoniano. It's what's up, man. I said something about friend tech. Guy ghosted me. Never just left me on red. Really? So this was gonna be my time on air to call out Sean, but alas. Well, you called him out. No. Sean's out. Sean's getting a a nose job. He's out with surgery this week. Really? Yeah. But but he'll he'll hear this.

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Alright. Sean's a ghoster, man. Sean is a ghoster. I give him a hard for I give him a hard time for that.

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But, you know, he brings the heat. So he he gets a pass. What are we talking today? I don't know, man. Tell people, like, you're under the radar, but your business is shockingly big, and I think it's gonna be incredibly successful. What do you what's like the pitch for what blockworks is? Blockworks started six years ago. So my co founder, Mike, and I started it in December of twenty seventeen.

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Basically,

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the thesis back Ben, which remains the same. I think we've got a lot wrong over the years, but one thing we got really right was the thesis,

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which is that crypto as an asset class and as an industry is going to grow exponentially

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over the coming years. And this was back in twenty seventeen when most of the information about the asset class,

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was basically, like, siloed on Reddit and Twitter. And our thesis was that as the industry grew mentally, those investors who and professionals who came into the industry, they weren't gonna,

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you know, listen to

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cryptopanda

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or, like, crypto whale about this new asset class, they wanted this professional source of information,

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kinda like a Bloomberg or Wall Street Journal for crypto.

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So, yeah, we said, hey, let's go build it. And that was six years ago. So what we've built is basically, for the first five years, we've built a media media platform, media company, We own the largest network of podcasts in the industry. We have a couple big newsletters. We have,

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I think the best team of reporters,

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and, you know, journalists in the industry. We own a couple of the conferences in the industry,

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and we built this big media company. And a year ago, we thought the industry was ready for, like, deeper

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I call almost like bottom of the funnel information about crypto, data analytics,

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research, protocol governance, and that is our subscription platform that we launched called Blackworks Research. So that was a year ago. So that's what yeah. We're we're a media information platform just about crypto. Crypto need native media information company. Do you say how big you are? Did you see the research my guy. I so I have Eugenio. He's my Yeah. E

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he, like, had your revenue and EBITDA. Was that all correct?

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Crazy.

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Like, he's doing, like, he's that guy's digging.

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He said in two thousand twenty three, you're gonna do twenty five million in revenue with eight million in EBITDA. He says, two thousand twenty two, you did twenty five and seven million in EBITDA. Is that right? I'm not gonna say specific numbers, but what I will say is, yeah, last year, we had a goal of twenty million in revenue, and we pretty decently exceeded that.

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And we've been profitable since day one. So Yeah. We we bootstrapped the business for the first five and a half years. And then back in April or May, we took a we raised our first outside round of capital from from ten T and framework and and the Angel Santiago. So we raised twelve million bucks at a one thirty five valuation.

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And, yeah, we've been profitable since then I mean, kinda since we started, we did a decent bit of EBITDA last year. This year,

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those numbers are wrong because this year, just to kinda share a little bit of insights into, like, the crypto market. I don't know how I I think you followed pretty closely, Sam. The market's just gotten crushed. Right? So what's actually done really well for us this year is our subscription revenue on the research platform, but the ad market across the board, both in crypto and digital media. If you probably talked to the morning brew guys or probably saw the buzz speed numbers because they're public. Like,

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it's gotten it's it's, it's been a tougher year than last year on the ad market.

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Is it coming back now?

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It's the ad market is just starting to come back. Yeah. But you guys crushed it on conferences. I mean, I went to your conference. What do you have? Five thousand people there? The conference, the final number was a little above four thousand this year. Yeah. I mean, that was amazing. You it seems like you filled it there.

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Yeah, I mean, I think that, like, I'm a media nerd. I I think that everyone who has a media business, ever works in the media business,

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they hate it, and they love it,

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I hate it, but it's like an art that I'm addicted to.

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I hate selling ads, but I love creating media.

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And when I look at, you know, media is an interesting business because the barrier to entry is really low,

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particularly for the written word, well, even for podcasts,

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everyone can write. Therefore, everyone, the the pool of people who think they're good writers is significantly higher than, like, building some other type of business.

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And I think that most people do it really poorly. Myself included. I made a lot of mistakes,

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but whenever I, like, you're telling me about your guys' business, I'm like, oh, I see a well, from an outside, I see a crystal clear path to, like, a hundred million in sales.

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You just do the same shit. But more and more, And you just are thoughtful, man. You do things right. And I I think that you're one of the more under the radar operators in the space. Thanks, man. That's why I think a digital media business is actually one of the best businesses to start. It's not gonna make you a billionaire. There's no, like, go start You had the you had the the the the flying guy on the podcast the other day. Like, that's what you'd go through if you wanna be a billionaire. Like, a digital media brand, I think, is, like, the best venture into entrepreneurship

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for first time founders. And Mike and I, like, Mike and I were just roommates at the time, and we were twenty three when we launched the business. We basically just work. We'd wake up at like four AM. We'd jump on LinkedIn.

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We had no media business. We didn't even know what media was. We just we just wanted to host an event because we went to an event, realized they made, like, five thousand bucks. That was big money to us. And so we just jumped on LinkedIn. Every morning, we would wake up, and just send, like, three hundred messages. Right? Ten percent of those people reply, that's thirty. You get, like, three out of the thirty to actually buy a ticket. Our first event, February twenty eighteen, we had two hundred and twenty people, and we made top line twelve thousand bucks, I think it was. And so we're that's that's off to the races. And then we ended up building the A media company basically asked backwards. Right? Like, how you probably started at the hustle was with content? Yeah. You you you did it horribly horribly horribly horribly.

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I would argue though, like,

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the problem with most media companies, and the reason they don't work is because they're started by folks who can't monetize. So they're usually started by a podcast host or a newsletter writer in twenty twenty three, and they're brilliant at content, and they don't understand how to sell. What happens is they're a year and a half in. They're like, oh, shit. I need to monetize.

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And

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they don't know how to build a business. They know how to create great content. And for us, We did events, then we linked up with pump. Right? And we that we got into the podcast in games. Our first podcast was pumps. Well, it used to be called off the chain. That's called the pump podcast.

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But you were just selling ads for him. Right? We were doing everything. I would go into Palms office seven days a week, Saturdays and Sundays too. I would put the mic in front of his face, I learned how to use garageband.

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I was editing the podcast. I was producing the podcast. We were designing the things on ninety nine designs. I was selling the sponsorships. We were doing all of it.

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And then we built that business out and hosted shows for other people realized that business was great for revenue sucked for IP because we don't actually own the content. Yeah. You're just an agency.

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Yeah. Then COVID hit and eighty percent of our revenue got wiped out overnight

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because

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we were eighty percent of revenue came from events, and then that's when we pivoted into, like, We said, let's let's go do the media thing. How much can you say how many how many, how much in sales your, your, like, one event would do?

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Yeah, our biggest one. I mean, last year, we did, what, like, well over ten million from permissionless.

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Dude, that's insane, man. My whole thing with events was I started with Hussle Con.

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Hussle Con. I so I did it the same thing as you where, like, I threw it together and hosted it in six weeks. I think the first time I did it, I think it did fifty thousand in revenue and like twenty thousand in profit. The second time I did it, I think it did a hundred and sixty thousand in revenue

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and fifty thousand in profit, maybe. And then the third and fourth time, it varied between, like, five hundred thousand and a million. I think in sales.

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And then I don't remember what the profit was, but the margins got smaller.

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And events were hard. I was like, I know these events can get big, but I screwed it up because what I did was I made the event about

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I just, like, looked at I had never been to conferences. I just looked at what a TED Talk was, and I was like, I'm just gonna do that. I'm just gonna get people on a stage,

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and people are gonna sit in the audience and, like, listen to this.

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That was really dumb. For from a money making point of view, that was a really stupid thing to do. And I knew that some of these events were doing, like, tens of millions in sales, And I totally screwed it up. The the way that you really make revenue and income through these events is the speakers are simply

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a way to get the similar, like minded people in the in the audience, and you make money through more expensive ticket sales because you're doing networking, and you make money not to sponsorships. People call them sponsorships, but, like, through,

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like, a booth so they could actually it like, it's basically just a marketplace that day where, like, you have to make people are making deals. Conferences are basically just, three day marketplaces

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where you build the marketplace. You shut it down three days later, and that's what the show floor is. Sheldon Adelson. So there's this guy named Sheldon, I think his name is Sheldon Adelson. He might have just died. He started this thing called,

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ComDex, I think it was.

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And it was eventually turned into CES. I think it, like, rebranded. But, anyway, he created this conference called ComDex, and it was like the computer show or something, a computer. It was right when computers were getting popular in the seventies eighties and nineties. He built it up. He actually sold it for a billion dollars, but Sheldon Adelson's the guy who basically made the Vegas strip, like, it made it happening. Because what he noticed was he goes, oh, wow, this conference, I'm basically just creating, like, a it's basically a real estate business. Because I'm creating a marketplace and I'm like a merchant in the sense of, like, I'm selling, like, corner space because that's the best space that I'm selling this space and, like, marketplace, it's a marketplace for those few days. And then he was like, well, shit. I'm just gonna get into real estate industry because he saw, like, loads of different parallels.

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And, anyway, when I, like, read that, I was already, like, pretty deep into, like,

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one big event, and I was like, shit.

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I did this all wrong. You know what I mean? I don't even think you did it wrong. You just needed to go bigger. So the secret with events, so we started with small events. The thing that a lot of entrepreneurs get wrong with events is the business model of small events is a is a really good experience for

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attendees really fun. You bring people together. Good community building. It is a shit business model. So the kind of secret to events is you need to figure out how to go really big go bigger and bigger and bigger. And what we found out some early insights was, let's say you have a company,

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like, like, like, Coinbase, right, and Coinbase might pass a million dollars to sponsor a conference.

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If we launched another conference, they're not gonna go past two million. They're gonna take that million that they allocate to their blockworks conference budget, and they're gonna cut it in half. So then they're spending five hundred with us here and five hundred with us here. So But we're doing twice the work, right, to go run two conferences. So we basically consolidated all of our things. We now just have two conferences, digital asset summit, and permissionless,

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And the reason for that is, like, that is the best

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business model for conferences, is bigger, is better. What's really tough is

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big conferences you have to plan out years in advance. So our events team would like us to book venues, like four or five years out.

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We can't do that because crypto is too cyclical. So we but we still have to, like I think we just booked our twenty twenty six venue, or or or we're, like, about we have with with the contract for them. So and why that's really tough for our business is because

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crypto is so cyclical.

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And if you think you're planning a big event,

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but you don't end up having you're not able to host the big event, you can crush your business. Right? Coinbase desk almost died in twenty nineteen because of that reason.

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They had, like, I don't know, ten thousand plus people in twenty eighteen.

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And then in twenty nineteen, they fell to, like, two thousand people. Right? They fell eighty percent. And that almost wiped out their whole business. And their takeaway from that was,

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hey, maybe events, big events aren't gonna come back. Big events aren't gonna be big. Like crypto events just aren't gonna be big again. And what happened is you end up losing money on the upside. When the when the market comes back, you lose money on the upside. So for us, like,

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it's just a big challenge to running a a conference business in such a cyclical industry is you have to plan these things years in advance But then you're basically act asking yourself to, like, predict market cycles. Very tough thing to do. But you're big enough now that, like, you said that, like, cities are, like, courting you. Right? Yeah. So these the bigger your conference gets, the more GDP you bring into a city. So I forget the I forget the specific number, but I think for Palm Beach, last year we brought in, like,

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I don't know, three or four or five or six million dollars of GDP to Palm Beach just in those three days. So they so they're the mayor of Palm Beach came to our conference. He really wanted us to come back.

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And the bigger your conference gets, the more cities, and then even countries will court, like, countries will court, like, web summit and money twenty twenty and folks like that, and they'll give them big upfronts.

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How much do you think that upfront was for a web summit? Web summit has, what, fifty thousand people? Yeah. A couple couple million probably, I don't know, five five million

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Maybe ta maybe some money in tax credits.

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That's the same, man. I, Yeah.

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Yeah. I mean, like, I've I I haven't cracked the code for an event but you have. That's why, that's why I like hanging out with you, but, like, it's freaking stressful. It is stressful. That's one of the reasons why hate events Fifty percent of tickets get sold in the four in the four weeks leading up to a conference. So imagine the fifth week out from a conference, you're basically thinking that fifty percent of your attendees aren't coming. And you know it because there's six years of data that they're gonna come, but it's stressful.

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But ultimately, the conference serves as, like,

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It's the reason we were able to bootstrap the business. Right? It serves as, like, the cash flow into the

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podcast.

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And into the research business and into the digital and news and all that stuff. And, another thing that I like about hanging out with you. So, like, basically, for the listener,

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I, I spent my summers in Brooklyn. One year, Jason was like, hey, there's this, apartment in my building that's available. You wanna rent it out. And I was like, hell yeah. So I lived three floors below you for about four months, hung out with you a bunch. And an interesting thing about you is you are one of the better storytellers I've ever hung out with. Sean, Sean Perry, partner Sean, awesome at awesome at telling stories. You've you've told some of the craziest stories I've ever heard of. Particularly one about when you, like, won a did you win a corvette?

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Oh, man. So I was super

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I was nervous for this podcast, not because I'm nervous to go on podcasts, but, I was telling Dana last night. I was, like, I'm actually pretty nervous for this podcast Sam knows too much about me to to make this this communication. I'll give you I'll give you I'll give you a pass on anything. Anything you don't talk about. You don't and I asked you. I I had a time. I I said, what don't you wanna talk about? I'll share anyone.

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I think Sean and I joke were, like,

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if you were, like, really good at gaming, if you were, like, good at poker, if you, like, were a hacker, if you did like most people, not most, but a lot of people who end up with, like, huge amounts of financial success, they were doing something like gray

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early in their career before they realize, like,

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oh, I should, like, follow the book and, like, do things by the rules because that is way better for long term success. But they had that, like, gene in them. A hundred percent.

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You told this story. And when I heard that story, I was like, oh, yeah. Like, it would have been obvious at the age of sixteen or eighteen that you were gonna be like a massive success. So when when you told me this story, it was one of the crazier things I've ever heard I'll tell I'll tell the abbreviated version because I don't I don't think it's as interesting as you do, but I've always had this come from this scenario. Don't don't give me the abbreviated version.

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I've always had this entrepreneurial tick. Like, I, my parents shared this story with me the other day. I guess when I was in, like, fourth or fifth or sixth grade or something, I would buy is not the story. I'll get to the story, but I would buy,

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MLB showdown cards on the eBay that I thought they were marketing it poorly. And, like, maybe the picture was bad or the subscription was bad. I'd buy the MLB showdown cards. I'd take a nicer picture with a nice camera, re upload the the exact same card to to eBay, with just a better picture and better marketing copy and sell it for, like, two x, what we bought it what I bought it for. So I've always had that kind of bent This,

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has pulled me down good rabbit holes like that or, like, lockworts, and then some less good rabbit holes, which I think is the story you're getting to.

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Summer after

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senior year of high school,

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summer after senior year of high school, I wanted

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some money, some summer money. So I went to my parents, was like,

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hey, can I get some money? I'm a high school. I don't have a job. Let me get some money. They're like, you're not you're not getting money. We're not giving you money.

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Go my remember, my mom said, I think your friend Jake is getting a job at Taco Bell. Go work with Jake at Taco Bell. I'm not going to Taco Bell, and we we would go to Taco Bell every day. I love Taco Bell. And,

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sounds like I'm not going to I'm not working at Taco Bell. So my buddy was a year above me in school, and he would he were he went to school at the University of Hawaii, and he was back from his freshman year of college. He's like, hey. I heard about this thing where it was actually

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the soylent podcast guy,

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or the soylent guy brought it up on his on your podcast with him It's

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he's, like, most companies spend, like, forty percent of their budget on marketing.

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These there are another comp type of company that spends zero on marketing, forty percent on affiliates who market their products for them. And that was kind of the pitch that my buddy gave me. He's like, if you are able to sell this energy drink, to other people, you can make money. You get, like, a percentage of what they make. And, again, I'm eighteen. I didn't know anything. I just wanted money and I didn't wanna work at Taco Bell. So I

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signed up. I bought, like, thirty energy drinks and started telling people that, like, hey, you drink Red Bull and Monster. You

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should You shouldn't do that. You should buy these healthy energy drinks from me. Go you go to, like, yannoets dot, you know, the web the website dot com. And,

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Anyways, I I I did it for a couple months, didn't make any money. I get to college, I went to Emery down in Atlanta, and, I really didn't wanna be, like,

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the

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energy drink guy. You know, I'm trying to be, like, cool on campus freshman. Didn't want didn't wanna be, like, the energy drink guy. And, I talked to some friends. They didn't wanna do it. But then I discovered, like, digital marketing and actually, like, Noah Cagan

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and, like, all those people, like, that whole crowd, they were kinda booming

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back in the day. Like, they were just kinda finding some success and found that whole crowd of, like, that guy, Branson, something or whatever. Russell Brunson. Yeah. Figured out how to create landing pages.

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Went super deep down that rabbit hole, and the business got crazy.

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So you got paid, like, a percentage.

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This is where I didn't realize what I was doing. Looking back, there's a lot of, like, I'm not sure if I would do this. Why probably wouldn't do this again. I actually think about, like, what I let my kid do this, in the future. But, yeah, ended up having four thousand six hundred people in my down line had, like, a thousand people in France,

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you know Because it was a it wasn't that you were making money just from selling this

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drink you're making money from enlisting people to sell it for you. So, basically, it was a pyramid scheme. Multi level marketing. Yeah. You told the story. You're like, you I told my parents what I was doing, and they're like, Jason, you know, this is a a multi level marketing. You're like, what do you mean? I I'm just selling a drink. Like, you didn't even know what that meant. Right? I so this company was the, like, official sponsor of the Phoenix Suns. Doctor Oz was on my if any of my friends from college or listening to us, they're gonna laugh at this because they have heard this pitch probably a thousand times. I used to, like, get on Skype. It wasn't Zoom back then. It was Skype, and I'd give this pitch to, like, a room of five hundred people. Like doctor Oz has, you know, a can of can of this and a handful of almonds is the healthiest thing that you can put in your body, blah, blah. So they had all these big names. I had no idea. I really fell for the pitch that it was like, look, a lot of companies like a Nike spends billions on marketing. Why don't they just spend billions giving it to when Sam tells me about Nike, they should give Sam, like, ten percent of that, ten percent of that. What I didn't realize was there's all these companies There's this multilevel market. I didn't realize that there's this whole industry, and it wasn't until

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well, to to bring this story home in the in the car. It wasn't a corvette as a BMW. I got so high up in this company or had so many people below me. The company gave me a BMW,

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my software of college, I I tried dropping out my sophomore year, got, like, a two point two or two point four GPA. My obviously, my parents wouldn't let me. They knew they they were, like,

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I later learned that it was a big debate my parents had about whether or not to let me keep doing this. My mom wanted to shut it down from day one, and my dad was, like, it'll teach him a good lesson. I don't think they really I don't think they thought it was gonna be successful. But it wasn't until,

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Bill Ackman and Carl icon got into that really crazy battle over herbalife.

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And I watched the full thing. I watched the whole presentation by Bill Ackman

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that I realized

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I was like, oh my god. He is explaining

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this company

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that I work that I'm working with. And,

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And then my and then my roommate junior year, like, one of my best friends, like, basically slap me in the face junior year. He's like, alright, man. We're gonna get internships.

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You should join us.

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Stop doing this stop doing this thing, and and we and it shut down. So

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What is it? How much money do you make if you have four thousand people on your, like, down line or whatever it's called? I be I was making probably a thousand

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fifteen hundred bucks a week as a sophomore.

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But don't but that's four thousand people is a shitload of people. I would have thought you'd make way more. There were people making millions a year, who had, like, if there I probably had four thousand on one side, like, six hundred on the other. If my sides were, like, even,

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then,

23:02

then it would I guess they probably did some model internally that has, like, made the company more sustainable if it was, like, even. So

23:09

Yeah. That's so that's what it was. But I was I mean, for I was nineteen. Right? I was a year and a half after wanting to work at Taco Bell or not wanting to work at Taco Bell. So, like, That was crazy, crazy, crazy money for me.

23:21

And you're just, like, giving speeches in front of hundreds of people on Skype about why this drink is is awesome or why the business is awesome?

23:28

Basically, the pit yeah. What kind of both? Like, the so the difference between so you brought up pyramid scheme, the, like, technical difference as the regulator see it between a multilevel marketing company,

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which is I would call very shady, but technically legal. Versus a pyramid scheme, which is illegal,

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is the percentage of people who buy the product

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for the product ex itself

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versus the number of people the percentage of people who buy the product just to get access to be able to sell it and make more money. So that's the, like, The reason something like Amway

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or like herbalife can be still exist is because there's actually a pretty high percentage of people who just buy the products because they like the products.

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Like cut code knives and all those. So Yeah. Cut code knives is a is a multi level mark. I mean, I've got a ton of friends that sold cut code knives. And, you know, what's crazy? They all say awesome stuff about the product. So, like, an MLM isn't inherently unethical. I think, like, wasn't, like, Tupperware?

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Like, I don't know. I think this company had been around for ten years. That was the other thing. It'd been around for, like, ten or eleven or twelve years. And they sold to, like, fifty and sixty year olds who wanted to get, like, protein shakes and all that stuff, and it was a really good product. And nobody did the money part of it. They just got it and they might tell some friends. But, like, most people who use Amway products, they don't tell their friends about it. They just actually like the product So that was this company. And then they realized,

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hey, who wants money more than anyone? Like nineteen year old kids. So they launched and what do nineteen year old kids drink? They drink energy drinks. So that's when they launched that. They did flashy marketing. They sponsored the sons. They got doctor Oz as a spokesperson, all this stuff. And that's when it really that's when the percentage

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of people buying the product

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for the

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to make money, start to outweigh the number of people buying the product for the for the drink.

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How big was that company? I don't know. Don't I don't have metrics. The CEO, I think, went to jail for a year or two, though. Oh my god. That's

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Well, I have a lot of my I this one of the things, like, I I wasn't even sure I wanted to talk about it on the podcast today because I have a lot of

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not regret, but, like,

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It is inherently kind of a shady thing to talk about. Right? It's like multilevel marketing is a shady thing. And

25:45

I didn't realize it at the time. I truly I truly had no idea. I'd like to drink the kool aid so hard. I really had no idea.

25:52

And the debate I have I don't have any kids, but if I had kid, would I let my kid do this? And the immediate answer is no. Like that. It is super shady. No.

26:01

But

26:04

It did teach. I'd I'd I'd know for a fact I would not be here today if I hadn't done that.

26:10

Why is that?

26:11

Lockwork started by just me posting on LinkedIn a lot about crypto.

26:15

And nobody was posting on social. Nobody was posting on LinkedIn back then. Like, it gave me the confidence to post on social a lot. It gave me the,

26:24

like, understanding

26:25

that mo does, like, most

26:28

of growing a business at the beginning is just like grit and hustle and really marketing and sales.

26:34

It's less product. Eventually, that changes over time as you find product market fit and all that kind of stuff. And it just taught me this, like, it

26:41

26:43

made me realize that I there was nothing in the world I wanted to do outside of building a company. And it gave me the I like, I didn't I didn't know how to build software company. Like, you have some, like, geniuses come on the show, like, their coders. Like, I wasn't like that.

26:56

And it just gave me the confidence to go do it. So Were you were you thinking about any other different ideas before you started blockworks?

27:04

Yeah, I was desperate for something. I was really desperate for do something, but I had a bunch of shit ideas.

27:12

I the way Blockworks originally started, who's the consultant that you had on the show? Ovens. Sam ovens? Yeah. So the way block work started,

27:20

Sam ovens plays a role.

27:22

27:24

wanted to

27:25

start a consulting practice

27:27

because I saw I read Sam Evans's stuff. And I, like, I didn't buy his course, but I saw all of his ads. And I was, like, this dudes making it. It was funny hearing that, like, New York photoshoot that he did. You know what I'm talking about? I, like, remember seeing that ad. It was, like, obviously, now I know how the game works. That wasn't a real thing. But

27:43

27:44

I I wanted to, like, do a Sam Evans did start a consulting firm. By the way, Sam Evans is this guy who came on our pod nowadays, he's like a really nerdy,

27:53

like, almost like an intellectual. He started a software company and he's doing everything right. But previously, he started this thing called consulting dot com. He rented out this slick apartment, slick back his hair, wore a bright blue

28:07

blazer,

28:08

And I don't think he did anything unethical,

28:11

but he was, like, selling the dream. He was, like, I started a consulting business that makes money I'm gonna teach you how to do that too for this amount of money. And he came on our pod and he was like, I don't remember exactly what he said, but I think the energy that I got from him was He's like, I don't regret doing that because I helped a lot of people, but I was playing a part that wasn't authentic to me.

28:31

And I got bummed out

28:33

may maybe there was a little, like, regret. He's like, I've fucking played a part. Like, I was an actor. And I don't think he regrets it because Right. I don't think he did anything wrong but he just pushed it to the to the limit.

28:45

Yeah. So I saw those ads. I that's what I wanted to do. I was, like, really sick of my job. I wanted to do that.

28:50

And so I'd so the I used to go to this thing called brunch work or something in New York. I don't think they exist anymore, but I'd go to all these events they had a thing on how to build a consulting firm at

29:03

two PM on a Sunday. I think it was like two PM on a Sunday. They had a thing how to build a consulting firm. I thought as these ones get sucked into these, like, scabs.

29:11

Alright.

29:12

Let me one day, if you ever talk to Mike, he'll tell you about the,

29:16

the Jerry Steinfield ticket ticket flipping scheme did not make money.

29:20

Anyways, we, I get there an hour early because I thought it was at one PM. And they were doing a talk on Ethereum.

29:27

And I already knew about Bitcoin from since twenty fifteen, I was living in Buddha. I heard about Bitcoin. Twenty seven this is twenty seventeen now.

29:35

Got really into Ethereum from this talk. And so I decide I went I came home that day, And the real story of Blockwards, I went home that afternoon. I was like, I'm launching a consulting firm to help companies

29:46

figure out Ethereum.

29:48

Hours after learning about Ethereum.

29:51

Hours after. I was like, sold the dream. Yeah.

29:55

I was like, this is what I've been looking for. I I, you know, I've known about Bitcoin for two years. I was I was already, like, listening to Bitcoin Podcast and stuff. And, like, Hannah had heard about it here, but, like, didn't under didn't click didn't get it. And,

30:07

came home, and I was living with four guys at the time. And one of them was Mike, who's my co founder. And I

30:14

We remember it slightly differently. What I remember is him saying, let's do it, and then waking up in the morning and saying, hey, this is a horrible idea. I currently work in consulting.

30:23

Nobody's gonna buy consulting from us because they don't trust us. We're twenty three years old. We need to build trust with community. How do we do that? I said, great. How do we do that? He said, what if we hosted events? We went to that event last month. That made some money. So we started hosting events to then try to sell consulting and

30:40

six years later, we have no consulting. But

30:43

Hey, guys. Really quick. So you may know this, but my beginning in business was being a copywriter. I'm a self copywriter. And what that means is I figured out what motivated people, and then I figured out how to use the written word to get them to do what I want them to do. So that could mean selling them a product, that could mean writing a speech or even giving a speech and giving someone to buy into a particular movement. It could be recruiting.

31:04

Hell, you could do it for dating. It just basically means figuring out what motivates someone and how to use the written word to take an action, get them to take an action, or to think a certain way. Way that I learned how to copyright was I did this thing called copy work, and copy work is this famous technique that's not really popular anymore, but it used to be really, really popular, and you basically take writing that is great, writing that you love, and you write it out by hand and you copy it and you make notes of what particular thing that that writer is doing that makes it special. This is the exact same way that you learn how to play the piano. When you wanna learn how to play the piano, play happy birthday, and then you learn how to play like jingle bells, and then maybe like, a rock and roll song, and then maybe like a hip hop song, and eventually you can combine that all together after a few years and you learn how to make music that's your own. Thing with writing. That's how I learned how to write. I locked myself in a room for six months, and I just did this for many hours a day.

31:49

I created a program to make it easy, so you could do that. It's called copy that. Copy that dot com. You can go there and you could check it out to ten day exercise to make it really easy to learn how to write. If you want, you can just go do this on your own. You could find great just literally copy it by hand. I know it sounds crazy, but it works really effectively. But I made something that makes it a little bit easier. So check it out. Copy that dot com. And we will talk soon and back to the pod.

32:14

Our software is the worst. Have you heard of HubSpot?

32:17

CMO's 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,

32:27

grow better.

32:29

Dude, it's so funny. I think that, like, alright. So Black Works is gonna be a huge success. I don't know how big I believe you're gonna have a multi hundred million dollar exit before the age of, like, thirty three, very likely. What are you twenty eight now? Twenty nine. You're gonna be you're gonna be worth at least a hundred million dollars in the next five years. I I would imagine liquid. That that's my prediction.

32:50

But

32:51

in order to get there, I think what people, like, that we Sean and I talk about some time, they're like, there's this always, like, revisionist history of, like, oh, I had this great idea.

32:59

When in reality,

33:02

like, you just do dumbass, like, kinda meat head stuff, and you just kinda can iterate your way. And then after, like, you get to, like, some type of sustainability and some type of mastery, you're like, okay. I actually clearly see the path now. And, like, maybe I'll go back in time and say, I I had this, like, revelation that we have to build this big thing. You said your story earlier. You're like, I thought this I thought crypto was gonna be a big thing, but no one was covering it. But in reality, it was like, Ethereum sounds sick.

33:29

I I I need a job.

33:31

I'm just gonna host this event and see what happens. Like, you know what I mean? You just kinda like do shit, and it works out sometimes.

33:37

There's always basically a so, like, that is true what I said about. Like, we had this vision that crypto would be this institutional asset class because once we said, Hey. How do you host an event? What what what should we talk about? I think our first, like, one of our first events was like crypto and the institutional age of blockchain or something. Like, we had that vision. Right? Yeah, I think you are dead right. And I think that is a

33:58

almost a problem that gets pushed is that everybody thinks that founders had this vision from day one. But if you talk to founders who have built big companies,

34:08

ninety nine percent of them do not. They do they never did at the beginning.

34:13

Second time founders actually do, I've noticed. Like, second time founders will, but,

34:18

honestly, like, a hundred percent of first time founders, there's no grand vision. It's this kind of

34:24

it's this, like, how did block risk get built? I don't know. We took one foot in front of the other day after day and, like, slogged it out. And that's how you build your first company. Second company, I think, is different. Second company can be, like,

34:37

you know, robotics and, like, all this other

34:40

shit, but that's

34:42

you can have a grand vision, but not the first company. Yeah. I don't think it is. I think that, I remember when I started my first the very first thing I started,

34:51

I was like,

34:52

I wanna start a newsletter, and then I had this horrible idea I just read the biography of Ted Turner,

34:58

and he, like, employed all these people. And I was like, that sounds amazing. I wanna employ ten thousand people.

35:03

And then I had, like, a team of ten. And I'm, like,

35:06

no. I I definitely don't want ten thousand of these assholes hanging around. Like, this is just too hard. Like, two other people.

35:12

Yeah. And, like, he he inspired me, but I'm like, oh my god. I don't want all these people. And and I just made so many mistakes. But then the second or third time around, you definitely have a more clear vision. You also have more,

35:24

you have more,

35:26

you have more wisdom and and that shows up in the sense of like look, like,

35:32

after we do this for, like, two or three years, I have a feeling we're gonna be able to do this in, like, five years. Like you have a little bit more vision, but you know it's still pretty murky, but you also have a lot more patience and trust in the in the cycle or in the evolution because things evolve. But when you're first starting stuff, you're like you're like, this isn't even gonna work to get to point b. Let alone, like, thinking about point c and d. You know what I mean?

35:55

A hundred percent. I think that's a big fallacy, and I think the other one is,

36:01

this idea that it gets easier as you grow.

36:04

Right?

36:05

That's,

36:06

I think anyone

36:08

startups are, like, this weird or being a founder is this weird thing where, like,

36:14

I think what they

36:16

you kind of hold constant the rate at which you can tolerate

36:20

problems,

36:21

and

36:23

everything else kind of becomes this variable that moves. And you're always as a founder in this zone of max pain.

36:30

And whenever you are able to if you're ever below that threshold of max pay, you take on more stuff. And I think that is That's something I thought at the beginning, which was, like, when blockworks hits ten people, man, it'll be a lot easier. Alright. When blockworks hits, like, thirty people, a lot easier. And that's,

36:48

I don't know. Just listening to Patrick Colison, the founder of Stripe on a podcast.

36:53

That dude's in Max Pain right now. You think so?

36:57

Oh, yeah. Oh, yeah. He is

36:59

reading between the lines of that company.

37:01

If he is in max payne. And,

37:05

Doesn't get uneasier. So Do you have you read the have you read the Elon Musk biography? I'm reading right now. I'm like two hundred pages in. I have started it yet, but I've all my friends keep talking about it, and his life sounds miserable.

37:16

He does it does not I wouldn't trade I wouldn't trade what he has for in a million years. I would I it sounds miserable.

37:23

Like, his personal life sounds awful. His professional life sounds awful. Everything about it sounds bad. It does not sound enjoyable in the slightest. Can I flip the script? Am I allowed to ask you a question here, Sam? This is the conversation.

37:35

You guys were talking with the soylent guy about, like, what you're optimizing for, basically?

37:40

And you guys will likely like you. Some people optimize for money. Right? Some people are optimizing for happiness. Some people are, like, he said the things. Like, you, you know, every person has a duty to make a big impact on the world. Some people are updating that. I did not agree with him. I did not agree. I know. I know. You called him out on that, but what are what are you because you're doing Hampton again. You pro I don't you probably have enough money where you could just sit on it and put it in some, like, treasuries for the rest of your life, but you're doing Hampton again. What are you optimizing for? I'm optimizing for fulfillment. So I'm so when I took time off after selling my first company, I was incredibly lonely.

38:12

I was I I think I think there Scott Galloway talks about like a loneliness,

38:16

epidemic, particularly amongst young men, and I I experienced that I was like, I'm just so alone. I I feel alone. I I feel like,

38:23

quite unhappy.

38:25

I felt proud of my previous experience, but I I felt lonely.

38:29

And so I started the business because

38:32

I wanted,

38:34

a new challenge where, like, I just wanted to achieve something and I wanted to succeed at something. But more so, I wanted to be less lonely and I wanted to be in the trenches with the troops and, like, create something together.

38:46

I think that,

38:48

young men, I'm I imagine young women, but I'm a young man, so I only know that perspective, is that, like, I need something to chase after with a team of of people who I enjoy being near.

38:58

And that's really what I was optimizing for. I'm also,

39:01

optimizing for,

39:06

living life on my own terms.

39:08

So the reason why I'm not willing to do, like, this what John said he what did he say? He was like, you gotta build something big. I'm like, dude, I I don't want that because I feel like you're signing up. You're signing up

39:19

to to live a life where you where you have so, like, there's like three things. There's, like, What do you want to do?

39:25

What should you do?

39:27

And what do you have to do?

39:29

And I only wanna spend my time doing, like, the things I have to do and the things I want to do.

39:35

I don't wanna do things that I should do. So Let's just say that you have a huge company with ten thousand employees. You have to do you should be doing lots of meetings with them. You should be talking to your investors. I don't wanna do any of that. There's shit in my life that I have to do, like, no matter what. I'm okay with some of those, but I wanna maximize my time

39:54

for things that I want to do. And so that's kind of what I'm maximizing my life for. Is is spending my time how I want to spend it, not things that I should be doing. Does that make sense? Yeah. It does make sense. And and I think that when you sign up for those, I think that, like, Brett Aftock was on the pod yesterday or Monday, and he's this guy who goes big. The thing about him is I believe he's happy. Like, he's doing what he wants to be doing. I listen. He sounds like it. And I'm happy that freaks like him exist.

40:23

But I am not that person. I, like, I don't wanna go into

40:27

the warehouse that are his factory on a Sunday and, like, mess with robots that's just not how I find fulfillment. I would rather read a book and be by myself

40:36

on a Sunday.

40:37

So, like, I I I just don't I don't wanna, like, sign up to those big,

40:43

world changing ideas, because I feel like you're obligating yourself to live a life for other people. Do you know what I mean? I do not mean. Was that how you feel?

40:52

Kind of. I think fulfillment's a good way to put it. But if I had to, like, distill that into a couple different things, like,

40:57

Well, first off, there's safety and security in starting your own business.

41:04

I think it is a

41:06

one one idea that is in, like, people's heads in the US, especially people who, like, graduate from good schools and they go into, like, the workforce that has been broken in the last year, which is gonna be really interesting to see how this plays out, is that working at, like, a big tech company is a safe thing to do. Like, the number of people have been laid off from, like, big tech and from banks and stuff like that recently is, is incredibly high. Right? And so I actually think there's more

41:32

safety and security and doing something that you own and where you can, like, manage a hundred percent of the risk. Like, you can be the best employee somewhere And if all hell breaks loose and, like, the companies doesn't have a good business model, you can get let go. So I think there's safety and security in doing your own thing. I think there's autonomy, like, just the type of personality that I am. I've never done one of those, like, Myers Briggs things, but I'm sure it would say I need my own autonomy. Like, I could I'd I would not work well in other companies, I would say.

42:00

And then I think there's this, like,

42:03

need

42:04

42:05

I think building a company is also, like, a very personal growth type of thing.

42:10

And I think you, like, you there's no way blockworks can grow if Mike and I don't become better as humans.

42:16

And I like that. It's this forcing function to become a better person. Yeah. And I think in some, in a weird sense, and I don't wanna, like, grand, like, act, like, this is some, like, big world changing idea or that, like, what I'm doing isn't selfish. But,

42:31

There there it's almost like being an artist. You know, I joke about it. I'm like, dude, just, like, give Pablo Picasso, like, a freaking tuba, and he'll make art out of it. Like, and and that's sometimes how I feel about when I'm playing on the internet. Yeah.

42:43

We were talking about, like, different ideas that you're you're take everything with or that you're, like, different opportunities that you're spotting. What, what interests you at the moment? You you're not gonna go and start anything because you have a full time gig, but is what interests you? I mean, the like, just crypto right now. I'm, like, head like, just super deep into crypto. I think there are other startup ideas. Like, if if someone waved a wand today and said you couldn't go work in You couldn't go work in crypto.

43:08

What would I do? I would probably there's probably two, maybe three things.

43:12

There's only two things I would look at that I think are huge opportunities.

43:16

First off, remember when everyone started creating, like, the Uber for

43:19

x like, the Uber for whatever. I think we're about to see that with,

43:24

with Behigh, actually.

43:26

What is that? What does that mean?

43:28

Because this newsletter platform, that's just like a ten times better newsletter platform than anything on the market. I know you'd our friends with the ConvertKit kit guys, so sorry to sorry to him. I like Tyler. I like co ConvertKit too. Or I like, Behigh too. I'm also supervised because I'm an investor in Behigh, but, like, we don't use it yet because it it'll be enterprise scale soon, but It's more for, like, the individual creating their their newsletter. All they did is they just had a

43:51

super deep understanding of newsletters. Right? Tyler was, I think, CTO of Morning grew before this. They just had a super deep understanding, right, deep domain expertise, and then they just built a really slick UI UX

44:02

and a really deeply technological,

44:05

like, technologically

44:06

more powerful platform than anything that exists on the market. And

44:10

I think you're gonna start to see people basically say, hey, Behi was able to do this in newsletters. Where there's all these platforms, right, campaign monitor,

44:18

send grid, sale through, ConvertKit,

44:20

Substack,

44:21

and they just did a ten built a ten times better product. Think you're gonna see people try to do this for other industries. If I were doing it, I would do it for conferences.

44:30

We have used six different ticketing platforms and six different ears of blockwork.

44:34

And it's always been we like our current one actually kinda a little bit right now.

44:39

But in the past, it's just been a nightmare. To find a ticketing platform. And there's this company called Hopin

44:45

that,

44:47

was, like, one of the hottest startups of the year couple years ago, during during COVID. I heard the founder took a hundred million dollars in secondary. Yeah. He did. He did. I actually heard it was even more than that, but He That's insane.

44:58

Yeah. That's insane. They raised a seven billion dollar valuation. They just sold for fifteen million. So down from seven billion to fifteen million,

45:05

Wait. Hoping just sold. Hoping sold

45:08

for you should you should fact check me on this, but I think for fifteen million.

45:13

No way. No way. Yeah. RingCentral, acquires

45:16

Hopin,

45:21

events and session products for fifteen million. Holy shit. And the founder took over a hundred million dollars in secondary,

45:28

funding. Yeah. That's his day, dude. He's he he won that one. Yeah. He did win that one. Oh my god.

45:35

Anyways, that's

45:36

That's what I would do. So I think Hopin kind of Hopin could have dominated

45:41

this market, but they had the stupid thesis that virtual events were gonna take over physical events, which was, like, the dumbest thing I've ever heard. And,

45:49

and and so they failed. But if they had just built a better product for event hosts and conferences, that was just a ten times better product. That's a that's a the lost in business. That's a shit business. That's a good business. No. I don't think it is. I think that, like, if you look at Eventbrite, look at their their market cap. I I I haven't looked at it in forever. I I'm pretty sure it's been, like,

46:08

slow growth. I also think, are you looking it up let me know what it says. I also think that, there's this company called splash. Do you remember splash? Splash that dot com?

46:19

Oh, yeah. You're right. You're right. I remember, I think they rebranded the splash. So it was it was great. It was like eventbrite, but they just made a slicker landing page for cheap or free events. And it was great. It was really fun. I I created so many events with splash. I think it was splash dot com. I have no idea if they still exist.

46:38

And the problem with them is that

46:41

most of or I I think the problem was is that most events are like ten dollars or forty dollars or something like that. And they could only earn like three percent or two percent or some number like that of the ticket sales. And it seemed like a really small business that raised tens of millions in funding that never came to fruition.

47:00

So that's a good that's a good pushback. I would go enterprise. So the reason I think probably event Bright.

47:05

So the reason Flashlight didn't work is because they were trying to sell to, like, random people just setting up events. It was kind of like a partyful, if you know, partyful now. And then, like, they were kinda flirting with with Yeah. So many people are using that. I I don't think that will work. They were kinda flirting with enterprise, but, like, weren't really doing it eventbrite. Like, their probably cost of support alone is, like, a total nightmare,

47:27

just because they have, like, anyone can go create an event on on on,

47:32

You know what, you know, what's a better comparison, Sam, Bizzabo?

47:35

I would just go make, like, a ten times better Bizzabo.

47:38

What's Bizzabo?

47:39

It's an enterprise events platform. It's like it's they sell it like SAS. It's like twenty k year, thirty k year subscription.

47:46

You host all your platform, your events on them. They don't take a cut of the fee of the of the ticket sales, I don't think. It's just a but the platform sucks. It's a shit product.

47:56

But they just dominate the enterprise event space right now. Why are you interested in hair transplants?

48:02

The rate of balding in men right now,

48:05

the hair transplant

48:06

hair transplant

48:07

space is the

48:09

one of the fastest growing markets,

48:13

in in all of medicine right now. Hold on.

48:16

I was actually researching this before this.

48:19

Dude, did you ever get lasik eye surgery?

48:21

No. I'm afraid to do it. I should do it, but I'm afraid. So

48:25

lasik twenty years ago, was this, like, kinda sketchy thing to do? Or maybe twenty five years ago. And now it is so the success rate is ninety nine point nine percent. The cost of come down ninety five percent for a surgery, and everybody gets late sick. It's like a thousand bucks or something like that. But before, it was way more expensive and way riskier. And I think you're about to see the same thing happen with hair transplants.

48:48

And the reason I think it's so, first off, the market Market size five billion dollars last year. It's projected to reach thirty billion by twenty thirty one. So eight years, it's gonna go from a five billion dollar market to a thirty billion dollar market. That's a compound annual growth rate of twenty percent year year over year.

49:04

The

49:05

people that you are selling to are the most desperate

49:08

cohort of individuals.

49:10

Right? Like, start losing a little hair on the back of my head? That sucks. Like, that is a thing that you don't want. Right? So

49:18

I think and I think you see this already with hymns and

49:22

the other one. I forget Roman or something, whatever the name is. Like,

49:26

they're selling, like, fear of balding, basically,

49:30

and they've been able to create these huge businesses. And I think if you're able to

49:35

do this. Like, if you look at the hair transplant market today, it's a bunch of just, like,

49:40

kinda like semi shady plastic surgeons,

49:43

Like, billboard, like, like, billboard having, like, billboard. Yeah. Exactly. Those kind of people. And, like, you have to sign, like, these waivers where it's, like,

49:53

you know, like, fifty pages of, like, I will not sue you is what it sounds like. And

49:58

I just think there's a an opportunity to build a better to build to build something like that. Can you,

50:04

tell me how so, a thing that before I started Hampton, I was really interested in the research business. Particularly data.

50:12

I screwed this up with trends, man. At the hustle, we had this business called trends.

50:16

I charged three hundred dollars a year. It's really dumb. And I went like fairly broad. We should have just done that before a more narrow niche.

50:23

And you're one of the few companies, I think, that's gonna a few media company few media first companies that's gonna pull off having

50:31

a totally nonrelated

50:33

income stream to ads.

50:35

How does their your research business work? It because I'm I'm I'm what I've noticed is that there's very little innovation, not innovation, but there's very There's very few younger people talking about it because it's not very sexy. But if you look at a lot of really large companies, for some reason, a lot of them are in England, but there's like a lot of research businesses that are making hundreds of millions of dollars a year and they've been doing that for fifty years, but they're so big and the founders are dead so I, like, I'll go and, like, read the biographies, but I'm, like, I don't know even know how you started this damn thing because, like, it's been lost in fifty years of history. How is how does your what's your research business providing the user? And how how do you operate it? How does it work? Basically in crypto, there are these things called protocols, like Uniswap and Avay and compound. And then there's, like, these layer ones, like, Ethereum, you've probably heard of, Salana, all these other things. The industry is moving from treating these protocols.

51:25

Like, they're these, like, weird esoteric things

51:28

to treating them, what, like, what they are, which is just businesses.

51:31

So make or dial, for example,

51:34

they'll do a hundred million of revenue this year. That is a business. They have, like, people they pay, like employees and contractors,

51:40

profits,

51:41

costs, that is.

51:43

Nobody talks about them like that. So what Blockworks research does is

51:47

it's a platform for investors who allocate to crypto assets, to basically look at,

51:52

these crypto protocols

51:54

and look at their user metrics, financials,

51:56

get research on them. We're very early to trends. With what's happening with the protocols, you can look at the governance.

52:03

So, like, if you wanna look at,

52:04

who's voting on different proposals,

52:07

if you wanna look at, like, how people are how people, like, who are the big stakeholders inside the protocol, you can look at all of that inside the platform. So It's probably not useful to you. It's incredibly useful if you're a Crypto Fund

52:21

who Alec who has, like, two percent of their portfolio in in crypto. So And and you're getting and so the way that you built, like, the v one was did you just go and find, like,

52:32

a dozen or something

52:33

public or private databases

52:36

and aggregated all of the information into an easier to use way. And then do you, like, write articles on your findings?

52:44

We started with we started with with research. So what we started with was we just hired analysts and had them write, like, what feels like almost sell side research on these protocols? We put it behind the paywall. It's super easy. We started with twenty five hundred bucks a month. I don't know I don't know what sell side research means.

53:00

You're using these words. I don't know what they mean. So I'm gonna interpret it as disrespect.

53:04

It is disrespect. It's,

53:08

it's, like, these ten page research report.

53:11

You got a lot to learn, my friend.

53:14

I don't know if I can anything, dude.

53:17

Is these, like, ten page reports on, like, How is something doing? So there'll be what's, like,

53:23

the cell set, you know, so in in in finance, there's no No. I don't owe anything, man. You had a family in finance. You know this shit, man. My dad sold onions for a living. I love onions. So anyways, we have there's there's like deep research basically on these call. So instead of a news story, which might be a couple hundred words, there's like a ten page report. Like, here's how we think the asset's gonna do. Here's how that we think the protocol is gonna do. Here's how the last quarter, the user metrics looked compared to this quarter, that all went behind the payroll. That's how we launched. Then we did what you're talking about, which is we basically just started There's all these

53:56

inside these protocols. They vote publicly

53:59

on what to do with the protocol, and it's called, like, forums and proposals.

54:03

And that's a total pain in the ass to track that. It all happens in, like, discord and all the and on these disparate sites. We just super manually

54:11

scraped all that information,

54:13

put it into a database, then built a front end for that, and put it behind the paywall. And now

54:18

we've automated most of these processes. But back then, it was just a lot of, like, very manual up uploading. And then,

54:25

two weeks ago, we launched our analytics product, which is, like, the data product, where you can see the user metrics and the financials for any of these protocols. So if you wanna look at, hey, what was Ethereum's revenue yesterday? I can tell you that. What was the Ethereum revenue compared to Salana's revenue yesterday? I can tell you that user metrics of, like, this exchange versus this exchange. I can tell you all that.

54:45

How much did the first product cost to build?

54:50

Like,

54:51

like, a million bucks probably. So we have we have a team of eight analysts

54:55

and a couple of engineers.

54:58

And how big do you think this business could get? Just the research side? I think political pro what were they doing? They were doing, like, a hundred million in revenue, weren't they?

55:07

Yeah. Politico sold for a billion.

55:10

So the reason Yeah. So the reason Palitico's business was nice was they had

55:14

a huge media business and then about, you know, point o one percent of their audience converted into the research platform. That was called POLITico Pro. So, yeah, we think I mean, we think it can get much bigger than that.

55:26

We think that there's a lot more add dollars and a lot more research, like, subscription money in finance than in politics.

55:32

So, like, low end of the spectrum, we've got political. They sold for a billion, Bloomberg terminal,

55:37

is, like, the super high end almost like it's like saying you wanna build a Google or an Apple. It's, like, Bloomberg is one of the best businesses in the history of the world. They'll do, like, nine billion in subscription revenue.

55:48

So that's a crazy business. But somewhere in between, there's, like, refinitiv. Right? Nobody knows Finitiv Third Capital Markets Information Platform. They sold for, I think, twenty seven billion,

55:57

CAPIQ,

55:58

right, FACT

56:00

a lot of, like, multi billion dollar companies just built on the back of, basically, one asset class, like, Bloomberg was just bonds, and then you expand out from there.

56:09

Are you taking all your personal money, Jason's money from the company and buying crypto right now? So Mike and I don't pay ourselves that much, so we don't I mean, most of my money is just in blockworks. Like, if block like, it's just

56:21

yeah. I don't I don't, like I don't have too much money yet.

56:25

But you're heavy on crypto. Right? Pers I mean, of what your of a of your liquid portfolio?

56:30

Of my liquid portfolio, I'm

56:33

Until very recently, I was a hundred percent in crypto. Yeah. But you're insane, man. I think that's so stupid. That is insane. You and my wife are you and my wife agree. So that's not the case anymore. But, if it if it was up to me, I'd be a hundred percent in crypto.

56:47

Really?

56:48

Still?

56:50

That's crazy, man. What why? I have deep deep deep conviction on this industry. Yeah. More conviction than the energy drink.

56:59

Slightly. Yeah. I have deep yeah. Deep deep deep conviction. And, like,

57:04

I think it's one of the best things to work on for the world,

57:09

and I think it's

57:11

from an allocation perspective, like

57:13

risk reward perspective, there's no better industry in the world to work in than crypto right now. I was talking to Sean the other day, like, through text. I was like, I my my preferred route for personal finance is just, like,

57:26

his argument is I was like, well, do you think that I think the trailing one hundred years is going to repeat itself? And he and he kinda is like, well, I I actually don't believe that. Okay. So

57:37

because I believe it, I think, like, an eighty twenty of stocks and bonds is the way to go.

57:43

But what I think is if you have a private company like Blackworks,

57:48

like I used to, I think it's reasonable

57:50

to keep most of your liquid money in a in almost mostly bonds or t bills or some type of, like, liquid, but low rate of return, but safe bet. And then you have, what's it called, the barbell strategy, and then you have the rest of your money in a high risk thing, being your private company. Your private company, I would say, is not a crazy high risk because it's a profitable business with years of operating history.

58:15

But if I'm in your position,

58:17

or my my my criticism of of that of that portfolio is

58:22

you have your liquid money and a high risk bet at the moment.

58:27

And you also have

58:28

and you also have your private money or your your your your Yeah. The majority of your net worth, and also a a somewhat high high risk,

58:38

thing. Doesn't that freak you out? I know I know you're neurotic like I am. How do you go to bed at night? Like, thinking like that.

58:45

Don't no. It doesn't freak me out. I don't I I

58:48

it doesn't freak me out at all. And here's one difference. You you have money.

58:52

Right?

58:53

Nobody ever got wealthy

58:55

through diversification.

58:56

No single person ever got wealthy through diversified. You are wealthy. It's just not in cash. Your black works is wealth. It may not be cash money, but it is as wild as it is something. I get that. And then you could make the argument that, look, if crypto works, block versus a you know, billion, multi billion, whatever you wanna call hundreds, whatever you wanna say, whatever number you wanna assign to it. So I'm basically already betting big on crypto. So, yeah, put it in, put in equities.

59:21

That's the reasonable thing to do. I'm I'm not

59:25

I I think you're probably right. I just am, it's You know what it is? It's, it's this cheesy Jeff Bezos's regret minimis minimalization

59:33

thing. It's like, you know what would kill me, Sam?

59:38

If I didn't have any of my personal money in crypto

59:41

and crypto went the way I think it's gonna go, that would

59:45

That would, like, kill me to my bones. You know what, wouldn't really?

59:49

Like, it would suck, but I would be, like, at least I took a bet.

59:53

59:54

if crypto went down another, like, ninety percent,

59:57

wouldn't faze me at all. I'd be like, you know what? I took a I took a bet. And and even though even though I make fun of you, I respect that. I I think that I I do respect it. I think you're in a really good I I think you you're you're no different than the Brad Adcock who we just had on of, like, who's just, like, you have an idea, you have a vision, you have a you think the world's gonna go one way. And you're talking you're talking the talk and you're walking the walk. And so I I deeply respect that. I think the good news is is that you're such a wonderful entrepreneur that it's gonna everything's gonna be great,

01:00:27

in the grand scheme.

01:00:28

But I always like to push back on people who,

01:00:32

are are pretty also just,

01:00:34

like,

01:00:35

the way the world is go so I probably agree with you about the S and P. Like, the S and P will most likely just keep doing what it's doing and, like, a say it's a safe place to go. But, like, does any part of you look at what's happening

01:00:48

with the world and say, like, things might be a little different in the future. You ever do you know who Peter Turchin is? No. Is it wait. Is he, does he does he spell his name funny? Does it actually start with a t?

01:00:59

It does. It does. So, alright. So Peter Churchchens is this historian and mathematician. He developed this field called, Cleodynamics,

01:01:05

and he kind of studies the you would like him. He's a history guy. Studies like the cycles of cooperation and conflict amongst elites in societies throughout history.

01:01:14

And his argument is that periods of internal peace and cooperation

01:01:19

are disrupted

01:01:20

when the population of elites grows too large, and then competition emerges among

01:01:25

them, for what is actually these limited elite positions,

01:01:29

which then,

01:01:30

because there's too many elites and two little positions, that leads to infighting, in the elites as they try to maintain their wealth and status. And it causes social instability

01:01:40

and a breakdown in cooperation,

01:01:42

and it doesn't

01:01:43

Historically,

01:01:44

that

01:01:45

breakdown cooperation social instability does not stop until there's a crisis like

01:01:52

Something big. Right? See collapse, revolution, whatever it may be. And then a new new cycle of cooperation resumes. So

01:02:02

I don't know if you tend like, if you look at history, you can cut you can see history through the lens of whatever lens you wanna see if there's like the

01:02:08

the fourth turning, which is, like, these four big periods, and you can explain it like that. There's, like, this Peter Turchin, Clio Dynamics View, but

01:02:17

One thing I

01:02:18

believe is like crypto is a

01:02:21

better way

01:02:22

out of this whole system.

01:02:24

So let me give you my argument against that. Cool. I think it could be true, and and I don't know anything about this guy, but I wanna re I wanna learn about what he is what he thinks.

01:02:33

I know I read a lot of history books,

01:02:36

and

01:02:37

that's I do it for fun,

01:02:39

not for, like, trying to find the answer to this question. But what I've noticed

01:02:43

is that when empires

01:02:46

cease to be number one,

01:02:48

they don't go to

01:02:50

not existing

01:02:51

oftentimes, they just go to being like number five or number seven. For example,

01:02:56

in England.

01:02:57

So or or let's just like look at I just pulled it up. I just look at what the eye shares emerging markets ETF is for the trailing

01:03:05

thirty years.

01:03:06

It's compounded annual return

01:03:08

is something like five or six percent a year. So the reason why I'm I'm willing to bet over the next hundred years that the trailing hundred years will repeat itself is because if it doesn't repeat itself, it's not it's still not gonna be that bad. It will go from so actually in the last fifteen years, I think it's been,

01:03:27

you know, crazy. I think it's been, like, thirteen percent a year. I think that if it's not seven or eight percent, it might be five or six. Do you know what I mean? Yeah. I can go agree with that. It's not gonna go away. It will maybe not be as good. It's not gonna go away. That's kind of my point. That that's what I believe in.

01:03:43

I I agree with that. I I agree with that. I think I think we're on the same page.

01:03:48

I think that you just I think I think it's just far more exciting to read about America ending than it is about the same shit happening over and over again. I don't think America I don't think America's gonna end. And I don't think that,

01:04:00

this is my problem with kind of, like, the Bitcoiners, which you're not in, like, you don't spend time on crypto Twitter. So you're in your lucky man for but, like,

01:04:08

the way the best way for Bitcoin to really work is for the US to collapse. And that is a really shitty vision for the future.

01:04:16

And,

01:04:17

that's why I, like, don't align with a lot of, like, the the Bitcoiners, I would say. Bitcoin's a good hedge, but, like, I don't want Bitcoin to go to a million. Because the world in which Bitcoin goes to a million is the world in which, like, civil war is back in the US. So but but a theory but a theorem and, like, What is happening in in DFI is a very different vision. And that is a vision that, like, says, look, these

01:04:39

companies that were built in the in the in

01:04:42

Amazon, Facebook, Google, and Apple, they have become far too powerful.

01:04:46

The traditional way to,

01:04:48

or, like, what the US thinks is the way to, like, decrease their powers through regulation. I don't personally believe that that's the way to do that, and I don't think that will work. And I think that

01:04:58

the best way to

01:05:01

To, like, build a better future there is through is through crypto. So

01:05:05

As we wrap up, tell me the the book and articles that you've read on this topic. Who is that guy? What was his name? Peter Turction. Okay. And what are the other it sounds like you've read about this. What else is good? Fourth turning is good.

01:05:20

How long is that book? Dude, I I can't do read a thousand pages on this topic. What is your current thought on crypto Sam? Just out of pure curiosity here.

01:05:29

And, like, seeing something like permissionless with, like, thousands of people walking around. Like, do you think that is a scam? Do you think that it's just not gonna work? Do you think excited about it, but you don't understand it. Like, I'd just be very curious to get your take there. I'm not incredibly well versed.

01:05:42

So I will preface anything by saying that, like, I'm not I'm not that well versed in it. But I would say that the major things in the space

01:05:51

like, Bitcoin and Ethereum.

01:05:53

I I do I I I enjoy the,

01:05:56

I'd, like, the ideology of it. Like, I I respect that. And so I support it. I think that ninety percent of the rest of the stuff is a complete scam. I think NFTs

01:06:08

are for the mo most part total bullshit. I think web three for the most part is total bullshit, and I think that the people

01:06:16

who entered into that space oftentimes

01:06:19

are

01:06:20

horrible entrepreneurs

01:06:22

who are looking for get rich quick schemes And by slapping,

01:06:25

web three or an n f t onto it, rather than building a widget that truly solves a problem that people love, that isn't just

01:06:33

built to sell to other people in that space.

01:06:37

So,

01:06:39

that's what I believe. So I own Ethereum and I own Bitcoin,

01:06:43

and I like to sit on it, and I enjoy the idea that it could exist because I I I am in favor of, like, the government not controlling certain things. I think it will exist for a very long period of time and will potentially become more useful, but most everything else in the space I think is nonsense.

01:07:00

Cool. Interesting.

01:07:02

What do you think? What do you think about that? I think you're,

01:07:06

I think your general right that there are a lot of, like, hucksters who come into crypto, and that was probably true two years ago. Anyone who's still in crypto's, I would is is not a scam artist. It's too that No one no one operating in a market that's ninety percent down trying to scam people.

01:07:21

But two years ago, generally the same. And I think, like, you love history. You read all same history books that I do. Like, you there are a lot of parallels to new industries, right, whether it's, like, all the scammers coming into the oil industry, Right? In, like, the eighteen seventies, like, very similar because there's get rich quick money trying in into the railroad industry. Same thing. Get rich quick money into the car, into the electricity.

01:07:42

Industry into the car industry. Like, basically ninety percent of people who came into those industries, they were scammers.

01:07:48

And I think that

01:07:50

America, because we're talking super macro is, like, America is probably the most optimistic

01:07:55

country in the world, and that

01:07:58

leads to frauds,

01:07:59

and you can't have one without the other. So, like, in places where they're not optimistic,

01:08:04

they don't have frauds.

01:08:06

They also don't have companies that get built. So I think those are,

01:08:09

like, you can't have best part about someone's also the worst part about someone, say, one and the same. I think the worst part about crypto

01:08:17

is that

01:08:18

the people who were selling bullshit social media consultancies or agencies

01:08:23

then they got into, like crypto. I agree.

01:08:27

I agree. And now they're in AI. Now they're in AI. And now they're in and now they're in AI. And I think it's that's bad for that street. It's like being a presidential candidate and, like, the KK Casey mean, like, being like, oh, we love you. You'd be like, no. No. No.

01:08:41

Get the hell out of here. You know what I mean? That's like what it's like. Yeah. It is like We're like, I don't Oh, get out of here. Yeah. So I think that's been quite bad.

01:08:49

For the crypto industry. In this in the same way, yeah, it is AI now, but that that that's kind of my opinion.

01:08:55

I agree. What's your plug? Blackworks Research,

01:08:59

Jano on Twitter? What are you what are you doing? Yeah. Jan on Twitter.

01:09:03

We got Blockworks research dot com. I have a pod we have eight eight crypto podcasts at blockworks. So if you like crypto podcasts, go to, you know, we got a bunch. I host one called Empire.

01:09:13

That's the plug. Come to our conferences. Dash London coming up March twenty twenty four going across the pond.

01:09:19

Well, I appreciate you coming on. That's the pod.

01:09:22

That's the pod.