Encarta | Investigating The Mormon's $100 Billion Hedge Fund (#424)

00:00

Did you Sam, have you heard the story about how the Mormon Church has a hundred billion dollar hedge fund? Yeah. And that kills it. Yeah.

00:07

That was that that's old. Right? That's from two nineteen or twenty nineteen. Exactly.

00:12

And Ben, you're Ben, you are,

00:14

I don't know how to explain it. You are Mormon. You are a a member of this great business. You are a a patron of the business,

00:21

that that we described.

00:23

First, so far, Ben, have I offended you? Not yet. Okay. Great.

00:27

Let's fix that.

00:30

Keep going. So you're saying this,

00:41

Alright. We're live.

00:43

Dude, you're wearing the brightest sweatshirt. It's like bothering me almost. I'm here, and I'm ready to to shine, bite like a diamond, Rihanna style.

00:50

Oh, Diamond's actually That's alright. It's kinda looks like Rhanna's halftime outfit a little bit. If I just had the belly bump, it would I'd be there.

00:57

Someone say I do.

01:01

I I wouldn't say that. Subway, but I wouldn't. I had to take the shot before you did there. No. I'm not gonna I'm not gonna you're you're not chubby anymore. You're, you're strong. So you got your shit right. Bro, we I've got a couple things to cover that are pretty good. I think you do too.

01:16

Yeah. I'm locked. I'm locked and loaded. Alright. Do it. What do you got? It's amazing what not running another business will do to you. You so much so much time to,

01:25

to work on this podcast. Okay.

01:27

I wanna tell you about

01:30

what I think might be the greatest business of all time. Okay.

01:34

The greatest business ever. I think this is the greatest business ever, and I'm gonna convince you of that.

01:40

Let me let's just walk through the before I even tell you which one it is, let me walk through the criteria

01:45

for a business like this. Okay. So

01:47

if we were gonna describe the greatest business of all time, what would be some of the You gotta have attributes. What would be some of the attributes? So the -- -- lifetime LTV. -- high high LTV. So you want a customer around for a long time that pays you for for a long time. K. Great.

02:02

What about, like, let let's say I told you there's a high LTV business, but it's only been around for eighteen months. Well, you'd be like, I don't know, not not a long operating.

02:10

Track track record or history here. So you want longevity. Right? You want -- Long longevity.

02:15

Yeah. -- years. What if I told you this business maybe been around for a thousand plus years? Would love that? You'd be interested in? Okay. Let's continue on. Are you gonna tell me that there's tax tax advantages too? The the these this business doesn't pay any tax. Okay. I love this. No taxes. How does that sound? I like that. I like it even better if the government would subsidize it. That's a thing. But, yeah, that sounds good to me. I like that, Kanye.

02:39

Kindly's mom had to come back out for this one. Okay.

02:43

Cost structure. What if I told you, you basically don't employ anybody. Volunteers do all the work, and there are franchisees, essentially, that pop up, to sell your product and just pay you a royalty. Wouldn't that be quite nice? I'd say hallelujah.

02:56

I I'd love that.

02:58

What if I told you, you know, you might say, well, what's the balance sheet look like? Okay. You've told me the P and L is fantastic.

03:04

But, what about the balance sheet? Well,

03:06

What if I told you that these types of companies have, or this, this, this product, this business, has

03:12

not just billions of dollars, but but often tens of billions or hundreds of billions of dollars in assets on the balance sheet with no liabilities. Wouldn't that be something you'd be interested in? I would be very interested in this. Yes. I'd

03:23

pray to god and I would thank that god that that they gave me this idea. You're a product guy. You love product. It's all about products.

03:32

Hair products. Any pro any type of product. You love it.

03:36

This is a product beloved by millions.

03:38

Has insane product market that people use a daily, weekly, they don't even need an app. They can just use it in their head. It's not good. Even if there's evidence

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That it it's a bad product. If if the if somebody said, hey, there is no proof that this product works,

03:53

they might they would not care. They would not care. They would they would not hear a word of that. They would like to hear more, baby.

03:59

In fact, in fact, it drives them together.

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What if I told you this product spreads by word-of-mouth

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if I told you that some people would not only teach their kids, but they would leave their house, go to other people's houses knock on their door and tell them about this product. That's how much they believe in this product. What if I told you this is gonna be true? Core issues, their morals, their ethics, their community, their self development. What if I told you that the product is so good and not just guarantees you a good life today if you use the product, but not but in your afterlife, when you die, you might go to a nice special place where you'll be happy after you die. That's how good this product is. Internal LTV. I'm in.

04:34

What if I told you, it touches every part of your life cycle from when you're a baby to when you're old and dead, you how you pay for your funeral and everything in between your marriage,

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you know, give away a part of your salary to this to this company just because you feel like it. And, it's a part of everything in between. What if I told you this this company, not just sold this product, but also had the number one best selling book of all time. This sounds like the crypts and bloods, like a gang, but even better. Your blood in, blood out. I love this. You have real estate. They also own a ship ton of real estate. So tons of real estate. Okay. So let's let's review billions in revenue. Tax free with basically no customer acquisition cost. And super, super high LTV. It's a product that solves the core needs, spreads via word-of-mouth, and the people who use it, believe it, use it daylight day, day to day, week to week, month to month. And they're willing to die for it. They are willing to die for it. People run this business with volunteers and franchisees. It lasts for a thousand years, has network effects. It sells an information product. There's no manufacturing even involved. It's got the number one book of all time and the TAM, the market size is every human from birth to death. How would that sound? Because religion

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is the greatest business of all time. And I'm gonna tell you why I got excited about this, but how was my rant? That was good. I

05:47

I, I knew where you were going because I'm, I'm, you know, like, I'm born and raised Catholic. I I I catch your your stepping in all about this. You smell what I'm farting that, you know, you can go on that one quick.

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So I I wanted to to talk about this because there was this news article that came out,

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or, like, there was, like, a wave of news about this recently, but Actually, there was, like, a whistleblower thing in twenty nineteen. And Ben Wilson, you're gonna have to come on to talk about this. This Sam, have you heard the story about how the Mormon Church has a hundred billion dollar hedge fund? Yeah. And that kills it.

06:19

Yeah. That was that that's old. Right? That's from two thousand nineteen or two thousand twenty nineteen. Exactly.

06:24

And Ben, you're Ben, you are,

06:27

I don't know, how to explain it. You are Mormon. You are a a member of this great business. You are a a patron of the business.

06:33

That that we described.

06:35

First, so far, Ben, have I offended you? Not yet. Okay. Great.

06:40

Let's pick that.

06:42

Keep going. So you're saying this, James.

06:47

Second, Ben, what can you explain this hundred billion dollar mega church fund, or sorry, Mormon Church Fund. And,

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what your reaction to it was when this dude's broke in twenty nineteen. I don't know how deep you want me to get, but the the church of Jesus Christ, latter day saints, popular known as the Mormon Church,

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tithes. It's it's members. So we all pay ten percent of our income to the church.

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And, but

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not only that. The church also has a number of

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businesses associated with it,

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has,

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and a lot of this is comes from, over a hundred years ago when essentially the Mormon Church, Utah. So

07:26

it spun off a lot of those, businesses. It it basically doesn't run businesses anymore. But what it did was create basically a big a big hedge fund. And because of its association with the church, that hedge fund does not pay taxes and has done really well, and now is worth as you pointed out over a hundred billion dollars. Yeah. Could the hedge fund be invested in just public equities as well? Yes. Like, can you just do normal? Wow. So basically, here's here's here's what the here's how the hedge fund works. So,

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so it it owns forty billion worth of US stock So companies like Apple, Microsoft.

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Yeah. Facebook, things like that. They can't own stocks that are like Caesar's entertainment

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or like a Starbucks they don't they don't own that because of the caffeine or whatever. So they they they they select something. But don't they own a Coca Cola?

08:12

I don't think they I don't think that a myth. They own Microsoft Apple, Facebook, they have test out. They made eight million dollars on the GameStop squeeze when that was happening. So that was pretty cool.

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They also own two percent of all the land in Florida, which is kind of amazing.

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They

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They basically grew from forty billion to a hundred billion just from twenty nineteen to to today,

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for or or or sorry.

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From that was from twenty, like, twelve to twenty nineteen. So, like, in a seven year period, it it kinda doubled there. They also invest in hedge funds own a hundred million dollar motel at Maui.

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They outbid Bill Gates for, like, two hundred million dollars of land in Washington.

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So land, stocks,

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hedge funds, this is what they do. And then they've donated,

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sixty four million dollars

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to charity since nineteen eighty five. So that's kinda where the knock on this comes from, which was The the the the complaint was basically,

09:07

wow. That's a lot of money.

09:10

We are It's just, like, why they're homeless when you all got this? That's like the And why are we giving ten percent of our income when maybe I actually need that money if it's going to this massive stockpile and then that's not being redistributed

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to this. And then the the answer was, like, they called it. This is where there's some all time, all timer

09:28

lines. I gotta give I gotta give credit to whoever these are in the in the church that are giving these lines out. I mean,

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to say these are the straight face is amazing. They go it's a rainy day fund. So this hundred billion dollar fund is a is a rainy day fund. And, actually, it did start out like that. That was the initial intent, I believe, like, in the seventies or something like that when it started. It was like, alright. For every six dollars we get, we'll put five towards, you know, operations and furthering the mission, and we'll put one away for, for for the rainy day fund. But then Maybe it's still a rainy day. It's just their household now has a hundred or two hundred or however many hundreds of millions of people it is instead of

10:05

Whatever it was. But there's not that many members. I think there's, Ben, how many members? So there's, like, sixteen million members or something like that. It's not that That ballpark. Yep. Yeah. It's not it's not that many members.

10:14

They,

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overall, overall, they,

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this thing is just sort of ballooned up. And so that I think

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They don't know exactly how much members contribute every year. Some one guy said seven billion in the whistleblower report, seven billion. There's like some historians who think

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that's too low. It's probably closer to thirty billion gets contributed in per year. So that there's a there's a bunch of, like, kind of, there's lack of transparencies. That's the second complaint.

10:39

Because not only was this not openly discussed, like, that's why a whistleblower had to come out and say, hey,

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There's this management company called Ensign Peak. And Ensign Peak is take giving the money from the Mormon church and deploying it. And Ensign Peak is now

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has a hundred billion dollars into management, and they're not being open about this. And they said, well, we didn't want people to know how much money is in there because then they might not feel like contributing.

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So that was the first, first line. The second one was like, well, how come you did it through these, like, thirteen

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shell companies so that nobody could track you know, what you were investing in and how, and you bought this mall and you bought the stock. What's going on here? They said, well, we we obscured it because we didn't want our members to try to copy and sign And maybe they would mismanaged their funds not having the same info that we have. And so these are just like, I just love the the, you know, the the sort of the repartee here between between people that of that were running this thing. So I thought this was kind of amazing, and

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it was just staggering that they've accumulated this much wealth from a very small base

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of, of of people. And that's why I kind of had this realization, oh, man. Religion really is the greatest business ever invented.

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And, yeah, there's there's five big ones and then they they they sort of dominate in the same with the same sort of they all share the same benefits and and characteristics.

11:55

You're Hindi or Hindu. Is that what are you at nothing? I don't I'm not, I'm not a believer, but, yeah, like, most people in India are Hindu. And is there no central hub? There's no organization? You know, like the Catholics or the Mormons have like a like a crew? You know, you don't got a h two?

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I don't think there's as I think it's more decentralized,

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than that. So I don't there's no, like,

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there's no, like, the church.

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Like, I there nobody says that. I don't know. I don't know if that means there's not one or what, but there are many, many, like, temples that are sort of like the Vatican.

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That get tons of donations and people make the pilgrimage.

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And, there's tons of, you know, shaviness around that too where, like, you know, we went, and you're in line on this mountain to get to the top to see this, like, statue. And then it's like, hey. A hundred bucks. Cut the line. And it's like, the the guy who's taking the the the bribe, essentially, the cut cut money. He's like a priest. And so they don't even, like, obscure. It's like the guy comes down in his robe and is just like, oh, yeah. Yeah. Your family. Your family. Come here. Come we wanna give you a special,

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special treatment. You know, do you have some something to donate? And then you're like, yes. And then he's like, cool, cool, cool. Come to come to the front of And they found, like, these guys have gotten raided and they're,

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like, these gurus and sort of, like, you know, leaders in the of these temples, and they have, like,

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it's like, oh, open up your master bedroom, man. It's just like piles of gold. Just like Yeah. Yeah. Just like, you know, it's a gold storage facility. Dude, that always. It always so I went to Catholic school my whole life. So k to eight or no, k to twelve, and then I went to a a real another religious college.

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And

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at so we used to go to church three times a week. Catholic mass three times a week. It was like Monday, Friday, Sunday for since I was eight till I was eighteen. And

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every week, your mom and dad write a check, and they, like, someone comes around and, like, collects it. Right. And I remember hearing about this, like, all powerful god and how smart he is.

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And it's like, you know, this guy's the greatest. You know, he's just he's brilliant. You know, like, it created us. It, like, you know, we just came from his hip and all this stuff. And, like, we're just magical. Like, this guy's magical, but He's really bad with money. You know, he he she needs and he needs more of it. He needs more of it. And he's just He can't get enough of this money and he's really bad with it. And if he loves you, but look, if you don't give him money, you're gonna go to hell where you burn free all eternity.

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Forever.

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Buddy loves you.

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And he needs fucking money. I I'm just like that's

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Okay. Got it, man.

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He's like the worst uncle ever. Yeah. He just needs money. He comes scratching his neck. He's like, hey, man. Yeah. Oh, yeah. Like, what do you got? I think anything you got. You know, literally, just give me change. You gotta change. I'll take a change. You gotta check. I'll take a check now you can even Venmo him. And I just remember being at church every Sunday thinking, this guy, man, he ain't so good with money, but he's all knowing. But he but he can't he doesn't know which stocks is short because he could not figure this out. He needs more money.

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There's also another little side thing before we get off this religion tangent, ministry brands. Have you ever heard of this PE firm?

15:06

Yeah. Yeah. Yeah. Yeah. Are they the ones who buy software companies for churches? Yeah. They've I brought them up. Thirty.

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Thirty church related software businesses, and it does a hundred million in EBITDA. So a hundred million essentially in a profit before taxes,

15:23

just on this roll up, which is kind of amazing. I mean, it's it's sort of a billion dollar billion dollar church roll up, which is, church software roll up, which is pretty awesome. Alright. I have a story for you. Well, let's stick with scandal and,

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like, a negative stuff because I gotta go. One disclaimer.

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The product of religion genuinely is great. It genuinely helps people. I'm also just saying that the business of of religion,

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I think, is

15:48

Amazing from a pure business point of view and also

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a little sketchy to me. I do think the product is amazing, and the believers, you guys are awesome. And, Ben, you're awesome. You're you're super awesome. And I hope we didn't offend you. I I have you didn't offend me. Still haven't offended me. But I just, like, final word on this, which is kind of the Mormon perspective on our hundred billion dollar hedge fund, which is,

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the the leaders of the church

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So, like, the broth of the apostles, their salaries got leaked,

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by some people who were disaffected members of the church who wanted to make them look bad. Tell me more. What you got? Guys wanna know what you guys wanna guess what the salaries were?

16:24

Three hundred thousand. That's pretty good. Yeah. I I would have guessed two hundred,

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two hundred. That's close. A hundred seventy I well, I am I believe it was a hundred seventy thousand dollars a year.

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And they get, like, a a car, which is usually, like, Toyota Highlander

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and Why a Highlander? That's the that's like the So specifically.

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Is that like Pias? That's like that, like, they've just decided to I don't know. Just own a bunch of Toyota side. There's no cup holders. Can't put soda can't put soda in it.

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My dad was one of these people who who was getting this he was a a clergy. So he, you know, he's a Stanford NBA. He was making a bunch of money. They asked him, would you come work for the church? So he takes, you know, like, ninety percent pay cut, and he goes and makes this. And he had a he's driving around to this is my point. Toyota Highlander, just like very middle class. And so the point is no one's getting rich off of this. Even the people who manage,

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the hedge fund kinda get paid below market Right? They could get paid fine. They get paid well, but less than they would make at other big hedge funds that are doing equally well. That we'd know of. Because because with the Catholic thing, it's a little bit different. Right? The Catholic on the Catholic side, it was like, oh, this whatever bishop

17:31

took seventeen private jet rides last year and blah blah blah. They It was like a bunch of things like that. So so maybe in this case, it wasn't, or maybe it was more obscured where the benefits come from and not just so obviously on payroll. Like, But but I know where that with other religions that also have a big balance sheet also have huge revenues and and taxes and status,

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the perks were were sort of substantial.

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But this is why it seems like it's a bigger controversy outside of the Mormon church and within it. A lot of people like myself or we hear about it and we're like, well, I wish it was two hundred billion, you know? Like, it doesn't bother that the church has left me.

18:04

Double down on it. Yeah.

18:06

Take twenty percent of my income.

18:09

Dude, well, not everybody. I mean, it's one guy sue, you know, one guy famously was suing them. He for five minutes. He's like, I want all my tithing money back because I was basically under the impression this was going to help people or, like, expand the church. Did he get it? That's an lawsuit for five million dollars. And, I I don't know if that's been resolved yet.

18:27

Let let me Let me tell you another interesting,

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controversial story.

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So we talk about software as a service. We've talked about SAS. We've talked about a few other type of as a service products. I'm gonna talk to you about scyops

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as a service, meaning

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psychological warfare. So this story, I'm

18:45

basically

18:46

my researcher here, he he's around here, on the on the,

18:51

Eugenio, he's here on the river side. So he might have to pop in if I get something wrong. But I found this article that blew my mind and was totally underplayed

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and I thought not talked about enough. So I'm gonna be recanting a bunch of this story. So nothing here is crazy original, but we found a bunch of articles that we kind of tie them together. So basically, this starts in the summer of two thousand twenty two. And a bunch of journalists from all different newspapers kind of teamed up to to to write this story, but it basically is a

19:19

They went undercover and they found this company. It's called team. It's it's pronounced, I actually don't know how it's pronounced, but it's, j o r e. So maybe Jorge, I'm gonna call team George, like George, like George Mossvidal,

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but we're gonna call it team George.

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But it's team George and it's this Israeli company that does Syops

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as a service. And so what that means is you can give them one to ten million dollars

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and they'll basically hack stuff for you. And this company, it's based in Israel. They have employees. This isn't like, like the guy who runs it has a LinkedIn. This isn't like a a criminal enterprise necessarily. This is like a legitimate company. And I wanna tell you this crazy story. So it starts off. There are they call themselves a private intelligence agencies. They charge anywhere from fifty thousand to hack someone's phone, four hundred thousand dollars to have their versus on retainer, six million dollars to get involved with a,

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an election to the sand. Six million to meddle in an election.

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This is hilarious that that's on the menu. Dude. And the guy gives, like, these crazy stories. So the guy's name, his name is Tal Hannon. So he's the guy. He's, like, the CEO, the founder. And he does this, like, crazy stuff. And so, basically, there there are three part process is to gather intelligence,

20:31

construct a narrative, and then deploy maximum impact. All wonderful phrases.

20:36

And so I'm gonna give you an example. So this guy, Tal, He's the head of team George. He's in Kenya with these journalists who he thinks,

20:43

work for an African government who wants to hire them to do some work. And at the

20:48

seminar or at the meeting where he's pitching his services, he shows his phone, Tal shows his phone, and he's talking to a person who's supposed to be an an African

20:57

government

20:58

consultant or something like that. And he goes, here look, check us out. I just sent your mom a few messages

21:03

from your telegram account. And the guy's like, why? He goes, yeah, here's my phone. Look, I'm logged in to your Telegram account. I hacked you already. And and so they do these crazy things where they offer these ridiculous services. So they do they have tool called a profiler, which is can, it can create all these different

21:19

fake social media accounts. And so what they'll do is they'll figure out what what story they wanna con like who they wanna hurt, what story they wanna construct, and then they use these fake social media profiles to make it really popular. And they have something like think it was like fifty or six or no, sorry. Thirty nine thousand of these profiles out there. And so here's like a handful of crazy stories. So here's a couple examples. So

21:41

The claim that, the team claimed to have a sex toy delivered via Amazon to the home of a politician with the aim of giving his wife a false impression that he was having an affair. Thank you, my love. It was a wonderful night waiting for you whenever you come back, read a note inside the box. The wife received the package And then,

22:00

the team George, they sent a film crew to film this, and they found the politician sleeping in his office for the next two days.

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And they found out who the sender was. It was this woman named Shannon, and I think she's one of their fake avatars, and they found out who she was, and active on Twitter and on Facebook and has a Gmail account and WhatsApp account, but I don't believe this woman's real. And her Amazon card was connected to a digital wallet so they could, like, track all of this. And so that's like an example of the things that they do.

22:28

Another

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thing that they do is,

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to prove

22:33

the journalist to prove how powerful these guys are. Do you know who Emmanuel,

22:37

the emu is? Do you know who that is? Have you heard of that person? No. Who's right? So there's this TikToker, this lady who's got a TikTok, and she's wonderful. I I followed her forever, and she has,

22:47

an emu. You know what an emu? It's like an ostrich looking thing. Yeah. Like a pet emu that went viral on TikTok and she talks to the emu and his name's a manual.

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Well, the journalist asks team George to make it go viral that Emmanuel was dead.

23:01

And so overnight, they did that.

23:04

Really weird request by the journalist.

23:07

What the hell were they? I don't know. It's just weird. They're weird. First strange

23:11

choice makes zero sense.

23:13

And it got to the point was where this woman who owns Emmanuel, the emu, to who I follow. I love her. That's why I found this article I saw the story where they're talking about Emmanuel, the emu. I love the manual. I know all about them. I I own a a manual, the emu t shirt. And

23:28

they I'm for real. And they

23:31

like, she tweeted today, I saw online that RIP Emmanuel,

23:36

the emu, was trending on Twitter. So I just wanna you don't know. I had I ran outside to check what was going on. He's totally fine. I have no idea why this happened.

23:44

Right. But this company,

23:45

they, like, create all these crazy stories, well, they'll be like,

23:50

hey, you know, one one company will be like, hey, the CEO of this billion dollar company,

23:54

we need a front we need something bad to happen to them. Find some dirt in their past. And what they'll do is they'll hack into a person's Gmail or Google Drive. Using that, they'll find passwords to all these other things, and they'll create these crazy stories, then they'll use their network of twenty or thirty or fifty thousand fake social media profiles to share,

24:13

all this stuff. And then they'll also bribe

24:15

some,

24:16

journalists or create fake blogs where they'll write these stories and then the avatars or social media profiles share that stuff. Crazy, fascinating and I read this article and it blew my mind. It absolutely blew my mind. Yeah. This is really, really wild. And the, you know, CIOops, I thought was, like,

24:34

when you

24:35

use, like, the social media thing or articles to influence

24:39

somebody's,

24:40

beliefs.

24:41

Not just like, but like hacking their phone is sort of different. So so it's interesting that they do both.

24:47

I have a couple quick reactions. Number one, prices seem really low.

24:52

I feel like we can seem low. Yeah. Team George, triple your prices. This is this is a small boy still for what you're what you're the value you're providing. I mean, it's it's only six million dollars to meddle in an election. That's it. Like,

25:05

you know,

25:06

I'm taking a shit's bigger than that. Come on. Look, what's going on here. So so I don't really understand their fifty thousand to hack it to a phone. You know how much chaos you can call us by hacking to someone's phone? That that seems wild. So

25:18

I think that's crazy.

25:20

Good find, that this business exists. That's my second reaction. And my third is

25:25

this kind of lines up. I think I've I feel like this is a thing on social media that p that you sound like a conspiracy theorist

25:33

if you bring it up,

25:35

but it's clearly gonna have it clearly happens, and it makes total sense that this would happen. I also know that this happens in the, like,

25:42

non

25:43

election,

25:44

you know, this is basically also done for influencer marketing. Right? Like, we Like, what?

25:48

Like, we've talked about,

25:51

my buddy Steve Bartlett and how he used to own a huge number of Twitter pages. And he would own pages that had nothing to do with anything. It'd be like, you know,

26:01

Hermione's favorite books. It's like some Harry Potter fan page. And they would have, like, freshman problems. They would own that page. And, like, things I overheard in Manchester. They would they would own So they own a bunch of things that if you were like a

26:13

fourteen to twenty one year old in the United Kingdom,

26:17

you followed probably, you know, four to eight of their accounts. And so what they would do was when we wanted our app to go to to grow and to go our goal was to

26:29

to go get a bunch of downloads for cheap. We worked with him, and I was like, alright, Steve. What can we do to grow this thing? He's like, well, we can use my network. And I was like, great. So just say,

26:38

You know, hey. This is a great app.

26:41

Download it. You know, blah blah blah. Here's the link. And he's like, just looked at me, like, okay. You know, get out of here. Get out of the room, dad. Like, you don't you don't understand.

26:50

And he was like, yeah. We're not gonna say this is a great app because nobody cares, and that looks like an ad. We're gonna say, like,

26:58

my mom's reaction when she sees me checking Bebo for the forty third time that day. And then as a mom slapping a kid, I was like, oh, well, I don't think that a good image for a new app. And he's like, no. He's like, do that and then be like,

27:13

you know, when I, you know, when I,

27:16

you know, my notifications

27:18

blown up because of this annoying effing Bebo app. As shows forty seven notifications. I'm like, but you're calling it annoying. That seems bad. Right, Steve? He's like, no. When somebody sees that, There's an app that has forty seven notifications. They wanna know what it is, and that you're complaining about it makes it look like not an ad. And I was like, but then where are you gonna find the link? He's like, I put the name Bibo in the thing. They'll go Yeah. They're gonna look search for it. And he's like, then they'll search for it, and then they'll find it, and then they'll share it because they saw seven. He's like, when you hear five people talking about something on social media, same thing in a day that you hadn't heard about. It feels like everybody's talking about it. And that was his core insight. We called this the thunder clap and we did it, and we ranked number one In the end story. Wait. Wait.

27:58

Thunder clap is like the name of go getting popular.

28:01

Yeah. That's what we call it. When every when all the start talking about it at the same time. That's a great name. On same day. Yeah. Thunder clap? Who made that up? You make that up? Well, I used to say that when, like, you know, it's Yeah. If if your thighs get together or something like that, you know. It's thunder clap. I just decided to reuse it for a better purpose now. So from when your thighs get together? It's just messing around. No. We made that up, but I think it is actually a social media term. I remember looking it up because I was like, oh, this is genius. What do you call it when all the accounts on the same day just flip on and start organically talking about something.

28:32

Like, what is that? And I it's some other person had made that up. So I I stole that name off them.

28:38

But basically, that's what that's what these guys were able to do. And he used to and we've talked about this before. So I'm repeating a story here, but, like, he gave a talk once on stage and goes, watch this.

28:48

This is, you know, whatever, I've made up a name, like Freddie DB. Yeah. Freddie DB,

28:53

yeah, he puts him on he puts a slide on the screen of him wearing a, you know, a Manchester United uniform. He goes, Freddie DB just signed with Manchester United for seventy two million dollars.

29:02

One of the craziest contracts for a prospect who's only seventeen years old.

29:07

But the thing is Freddie DB doesn't exist, and he never signed a contract, but watch this. We're gonna make this go viral. Just by the end of my talk, this will be trending on Twitter. And -- Oh my god. -- he, like, nodded to, like, you know, one of the, like, nineteen year olds that worked for him off stage goes, you know, like, like, launch the missile. And that's exactly what they did by the end of the thing. It was trending real, like, you know, sort of like ESPN type news sites started picking it up. They're like Freddie DB sides for seventy two million because, like, They're all trying to find information on it, but they just publish first because they don't wanna be late to the news. And it just showed how much influence you could have. And so this happens, I think, from a commercial

29:41

for, like, you know, just in the business world plus, in this case, for, like, you know, political

29:46

power shit.

29:48

That's wild. What a bad ass presentation?

29:50

I know you're right. That's, like, That's a really good presentation. I mean, that's why you're, like, the swagger knob is broken. It's just stuck on twelve. There's nothing you could do. We've tried to take them into the shop.

30:00

The hustle, we now are read by about three million people a day. So we're not a big deal.

30:05

And we're definitely not like influential enough that one of these companies would be like, let's that company to influence the masses. But and, like, same with this podcast. Like, we're not we're not a big enough deal or we're a where someone's gonna, or at least I don't think so. Where someone's gonna trick them into saying this because then they're gonna, like, actually have, influence over the outcome of whatever we want. We'll we'll make your analytics guy say, what happened today? But that's it. You know, that's that's going crazy.

30:31

Yeah. Like, it might be a little bit of note on, like, your spread your spread for that day, but that's the at best. That's it. And,

30:38

but, like, I would see a little bit of this, like, fake new stuff because I would do little tests where I would create, like, you know, so my parents do this all the time. They'll look up a celebrity and they'll say, Oh, Nick Cannon, only worth eight million dollars. That's not it's not even a big deal. And I'm like, you guys, like, and like they wouldn't even, like, click the article sometimes. They just see, like, paragraph text and and I'm like, or there'll be like, their day today or this past weekend, I was with my father-in-law. And he's like, oh, look, if you Google it, it says the worst way to sleep is on your belly, and it's like because we're talking about the one in the back. Yeah. I'm like, you guys realize, like,

31:14

Like, anyone can write these articles, and I can make them show up. And so I used to write these articles about net worth. So like Ross O'bright, the Silk Road guy, I would write an article about his net worth, just fucking make it up. I'd have no idea what it is. I would just make it up, and I would track my analytics and people would start linking to it, and I would start getting traffic. And that happened a lot of times or there'd be times where I made errors in articles and I noticed I would see that same error in on a few other people's websites and you start seeing this is how it starts. Like, these little things -- Right. -- this is how it starts. And so

31:44

this whole fake news conspiracy,

31:46

it's one of the few things where I'm like, No. There's actually truth to that. Like, and I have very small examples of that, but if you're like a much bigger deal, you can find lots of bigger examples of that. It's actually this whole fake thing is it is one hundred percent real. And so this story is definitely proof of that.

32:02

Dude, as soon as you see how the sausage is made in any industry, it just really ruins it for you.

32:08

I remember when we were doing our restaurant startup. We were like, dude, we don't know anything about restaurant How does a restaurant even work? Like,

32:17

what are we doing? And we had learned a little bit about sushi because we did sushi restaurant, but I was like, Dan, who's my our our business partner was like Raw Fish seems like the best the best platform to learn, by the way.

32:32

Of my favorite sport Russian roulette. Yeah.

32:35

So we were like, Dan, go work at noodles and company and go learn their, like, process stuff. And he's like, alright. So he didn't graduate. He is his Duke graduate. He goes, applies for a job at noodles and company. They're like, wow, son, you you interned at Goldman accident. Now you're here. He's like, yep. It's always been a dream to become the back of mine. And they these they've whatever. And so he used to bring home noodles and company every night. And we were like, dude, what's,

32:58

so he's, like, he's, like, bro, the the way they make this, the way that he's, like, the amount of salt in this. And you know, this, like, this guy that worked this guy who barely spoke English that worked back in, you know, like a line cook with him. And Dan was, like, eating the tomato soup

33:13

because he's like, I'm gonna eat. He's like, I don't wanna get, like, super foul. I mean, I guess I'll just have the soup. So he's like, put the soup in a bowl and the guy just, like, knocked it out of his hand. He goes,

33:22

No. Don't eat the soup. It's, like, too much. Oh, too. He's, like, he showed him, like, when they make it, they just, like, take a salt thing and just, It's like, is it measured in grams? No. It's measured in seconds. What do you mean? Second? It's like, how long do you hold the the the lid with no?

33:39

I can't. I'm sorry to pouring salt. There's like seventeen seconds worth of salt. And so he used to tell us, like, dude, don't eat the shit. And that's how I feel about everything. Like, when we sold the milk road,

33:51

to Mike and Kendall, these guys are they come from an affiliate marketing background. And so what they do is they make websites that are like news or blog sites

33:59

that rank at the top of Google,

34:01

and they're the authority of the site.

34:03

Like, they were doing it for,

34:06

gold. Buying gold online. And so they were like, you know, should I buy gold or the price of gold over time or should I buy gold coins or bars? And so whatever question you would They wanted to be the number one result. The the other guy did it in for for sports betting. So it would be like,

34:19

you know, is it legal to gamble in the state or, like, you know, what's the best place what's the best place or what's the safest place to do x?

34:26

And so they're you go ahead at doing this thing. Good one. So as I met them,

34:31

and I was like, okay.

34:33

Who else does things like that? And it's like, dude, have you ever googled anything? Like, every top result in Google is the same model. Like, Oh, you you're worried about that, whatever. Like, that that thing on your elbow. Yeah. Google that. Oh, you found health fine. Cool. Yeah. Healthvine seems like a great website. Right? Super helpful for you. No. You're making a medical kinda decision on whether to worry about this or not off of healthline. It's all by an SEO company. Red ventures. Red Van. Yeah. It's like, oh, this rolls back up to Red Ventures. And so does this credit card website? And so does this other thing. You wanna know what's the best credit card? Don't Google it. You wanna know what what's going on with your health? Don't Google it because

35:09

not only is there model that

35:11

they're just gonna write whatever's gonna rank. And then when they rank, they're gonna promote

35:15

whatever they get paid on as an affiliate. And they'll try to say,

35:20

No. No. No. We just say that what's the best. And if they happen to be an affiliate, they happen to be an affiliate, but we don't let that affect our editorial rank. Yeah. Right. Bullshit. That's how you make your money. You're going to promote the things that'll pay you a bunch of money.

35:34

And so Do we used to have, like, a TV in our office, which the person who had the most page use that say, like, things like that. So it's like, what does that make the writers room do? Oh, you better get more page views. Yeah. Yeah. Get more page views. Like, I don't think there's a dirty thing. Like, I don't think there's a malicious intent. It's just a natural incentive is all I'm saying, which is that if your natural incentive is that one company does not offer you an affiliate deal, and the other one does probably not gonna put the one that doesn't give you the affiliate deal as the number one best choice. You might put it as number four. Right? And so the editorial thing has been slightly smudged with that

36:06

and so you see this with with everything. And then you're like, okay. Cool. So who's writing these articles? Must be like, you guys have all these doctors on staff? Or, not and there's an SEO specialist in upwork.

36:15

Yeah. Exactly.

36:17

You know, this is Jorge. And, you know, he is the guy writing our best articles, and, you know, we pay him nineteen dollars per day

36:28

I'm just making all these numbers up, but, like, you get the idea. This is, like, it's basically

36:33

what ranks in Google is somebody who understands how to rank in Google, which is not the same thing. Person has the right answer. And once you see how the how the content gets made, once you see how the tomato soup gets made at noodles and company, you become very, you know, suspicious or skeptical of of things, which has, you know, pros and cons, I would say.

36:50

Alright. Well,

36:51

Sorry, everyone. So,

36:54

what do you got?

36:55

Next topic? What else do you wanna shit on?

36:58

Okay. Let's do a quick one, and then I have a I have another one. Put this thing in here. The work smarter not harder hack. I sent that to you. You said this. Okay. This is amazing. Explain what this is.

37:08

So,

37:09

no, you explain. You explain. Well, we just need a light from the group. Just do something funny or something. I said this to the group chat because I thought it was hilarious. This was this was really funny. A guy at Barstool, basically, is a guy who works at Barstool,

37:22

or, sorry, Barstool retweeted this, but This is kind of an ad. So there's a a tweet we will will play it in the in the YouTube video if you see it. But, like, basically, there's a guy who goes out to, like, a party.

37:35

And he's just looks like he he he's wearing no shirt. He's just, like, in Miami, somewhere it looks like. And it looks like he's live streaming. So he goes up to this girl. She's like, no way. Fifty thousand people are watching this. Oh my god.

37:47

And then he's like, yeah. What's up, guys? Of all they wanna know what, you know, what's the craziest place you ever been? She's like, she's like, panic. It gives fifty thousand people are watching. And then she's like, how are you so famous? Yeah. And he just, like, doesn't answer or something like that. And then he just does it's a montage of a bunch of people reacting. He's like going into the club, He's like, yo, what's up y'all? We're at this place, and the guy's like, hey, yeah, go ahead VIP.

38:08

And so

38:09

basically, it's all fake. It's just a fake live stream see

38:13

a screen. And so it just looks like you're live. It looks like you're on IG live. It'll say live. It'll show fifty thousand people are watching this. The comments are flooding.

38:22

And you look like you're some sort of celebrity, but it's that's all the app does. It's called parallel live. I think it's a real app. The way. It's real. I'm on it right now. Yeah. It it by big brains, LLC.

38:33

Work harder or sorry. Work smarter, not harder. Yeah. That's like the whole thing.

38:38

I try not to get jealous anymore, but I'm jealous. I didn't think of this app, to be honest with you. Because, by the way, I did this when I was younger. We did a a a version of this that made sense back in the day where we paid a guy to walk around with a camera behind us, like, we were on a reality show, like an on the shoulder camera. And we were like, dude, I bet you Like,

38:58

you know, we won't need to

39:00

do anything tonight. You know, we don't need to pay for stuff. We don't need to approach people. We don't need to wait in line, watch. And, it is sure sure enough. It played out completely that way. And so I I I was sort of on to the you know, more than a fifteen years ago now. And, I think this is so smart. What a great idea. Dude, my best friend, Neville, So you can Google it. So Nevble med medora, so n e d h o r a. So Nevble Medora, one year south by southwest. So Nevil's Indian, but he's from whatever part of India he's from, he looks Persian.

39:33

So, one year he

39:35

He,

39:36

more like, like, these stereotypical things that you see in the Middle East of where it's like a white, you know, like, what do they call that? A white gown with, like, a head. Yeah. With, like, a head cap thing. And he basically looked he's like, I'm gonna look like a middle eastern prince. Like, that's my goal tonight. And his other friend. I think it was Noah and a few of the guys wore black suits.

39:56

And he

39:58

he said they walked around south they walked around in the evening on South by Southwest, and he goes, we got in everywhere.

40:04

They thought I was from the Middle East, and I had, like, I was this king or friends, and I had people coming up for me up to me constantly.

40:12

And, like,

40:13

his friend Noah would, like, whisper, no girl's ear, like, hey, this man wants to speak to you. And they, like, kept up this shtick going for a while. And if you Google it, you'll be able to find it. But,

40:23

dude, this type of these types of pranks are my are my favorite.

40:26

What's the what's the play the clip? Sometimes you just wanna do hood rat shit with your friends. But I wanted to do hood rat stuff with my

40:33

That's what that's what this is. This is a app that lets you do hood rat shit with your friends. Parallel, live, genius, big brains LLC. I went and looked at what other they've made. There's one thing called Like a relationship one. Right? A relationship tracker.

40:44

And it's got seventeen ratings and two stars.

40:49

You know, this is you can almost see the the, the development of an entrepreneur. Go to their app store, and it's, like, starts with, like, productivity app to do list,

40:58

you know, bus tracker

41:00

to be more efficient.

41:02

Oh, something that helps you save your, you know, your favorite memories with your family, and then it's to become, like,

41:07

hot or not,

41:08

fake livestream simulator.

41:10

Get late tonight.

41:16

So, you know, that's like, it's like eventually you stop selling what you want people to do and you start selling what people wanna do.

41:24

I can't find this client info. Have you heard of HubSpot?

41:27

HubSpot is a CRM platform, so it shares its data. Ask every application. Every team can stay aligned. No out of sync spreadsheets or dueling databases.

41:36

HubSpot,

41:37

grow better.

41:40

Let's do one more thing. What do you got? Do you have one more? I had a fun meeting. I wanna tell you a little bit about. So

41:46

I went and met up with,

41:47

James Currier, who is An internet o g. I know this guy. I like him. He runs something called NFXNow, which is a big fund. Like, they have, like, a billion. He's at one point two billion under management or something like that. I didn't know that day. Wow. So it's grown grown a lot.

42:02

Back in the day, he started a company called Tikkel.

42:05

Here's another example of you start doing what you think you should do. And then you at the end, you give people what they actually want. So tickle started off doing,

42:14

cycle like site quizzes. So it'd be like, you know,

42:17

I forgot. What's that thing called Briggs Myers and

42:20

Myers Briggs or whatever that I think it were originally for, like, which jobs are you built for? Things like that. It was, like, trying to, like, help you figure out what you should quit career you should do. Blah blah blah. And then the thing that went viral was what

42:33

dog breed are you?

42:35

When you take a quiz, it's like, you're a husky. And they're like, oh, that's so cute. I'm gonna tell all my friends about this. It went super viral, and then they started making more and more silly quizzes. Eventually, They sell a thing for for about a hundred million dollars to mon to monster.

42:47

But or kinda like a good a great win, in the early internet days. And then did a bunch of other things. So they've And they kind of, like, it it it it invented a little bit of the of the,

42:57

internet morality. If I remember correctly,

42:59

your old boss, Michael, worked with them. And I think, like, Rick Marina was there too, who Rick Marine now owns. What's the gay dating app? That went public.

43:09

A grinder Rick Marini. Rick Marini owns that? Yeah. Well, he owns He didn't start it.

43:14

No. He didn't start it, but Rick Marini

43:17

owns or founded the PE firm that eventually bought Grindr, and I think they either took it public or they sold it to someone who and it went public. Something like that. But it was like a pretty big deal.

43:27

Yeah. Yeah. Yeah. So these guys are all about they've been doing this from the beginning. And if I remember correctly, like, they invented little things that we, like, take for granted today or things that don't even work anymore. Like, for example,

43:39

enter in your Gmail here, and we'll email all your friends to ask if they also wanna join along this thing and they grew that way.

43:46

Yeah. They they basically were, like, kind of,

43:50

They were early to the viral game, and so they bought my so Michael Birch was my former boss and an investor

43:58

they bought his first social network ringo.

44:00

And what Michael the way Michael described it to me was, he's like, I built this social networking thing

44:06

it grew to, like, three hundred thousand users, which was, like, really big at that time. And the internet's, like, that was, like, a big internet thing. It's, like, it was costing me so much money to run it.

44:14

Pre Facebook, didn't know what to do with it, didn't know nobody thought social networking was gonna be a, like, a money making thing. It just seemed like a kind of time waste. He's like, so they offered me a couple of million bucks. I I sold it. I worked at Tickle for, like, nine months or something like that. And then I

44:28

I was like, you know, I learned a bunch of things through sitting in an office with these really smart people. And when my earn out was done or my my my non compete was done. I went and I was like, now I know how to do this right. And he built Bebo, which got a million members in nine days using everything he had learned during that period. And ended up selling for eight hundred fifty million dollars. And so,

44:49

yeah, they kind of were were all this cluster of people that were doing the early address book imports and to measure virality with a k factor, that sort of thing.

44:58

So I go meet with James. And,

45:01

what was the premise of the meeting

45:03

So the premise of the meeting was just ketchup. So he knew that I sold the milk road. He was like, you know, what do you think about doing next? And I was like, I'm not sure. Let's, let's chat. So he invites me down to Palo Alto. And so it could've been a Zoom, but

45:17

I was like, no. No. No. Sean's leaving the house today.

45:20

Let's go meet belly to belly here, and and and I I think it's it's gonna be worth it. Totally was totally was worth it. So

45:27

I go down there.

45:28

First thing I noticed was, like,

45:30

his office is right on, like, whatever, like, university Ave or whatever that is in in Palo Alto where it's, like, everything is there. It's, like, right in the middle. So

45:40

I I just kinda noted that observation. I was, like, oh, that's interesting that he, like, made that choice. Could've been somewhere else. BDE.

45:46

That's that's big dick energy.

45:48

Second thing was,

45:50

there wasn't really anybody else in the office, but, like, he was there. And, I think other people may be working remote. So we sit down. We we start chatting.

45:57

And,

45:58

I wanted to give you some of my notes from from this thing. So the first thing is,

46:05

He's

46:06

have you ever met him before?

46:07

Yeah. He's like a he's he's really nice and can have a conversation, but he's like a quirky,

46:12

not quite. I wouldn't use the word centric, but he's just like,

46:16

he loves this network density stuff. It's like sharing stuff. I don't know. I mean, he's very academic almost about it. He he yeah. Personally wise, he's got a great vibe. Like, he's very lighthearted,

46:28

and and he does himself too seriously. Like, you know, I I even wrote this. I I emailed him afterwards, which is a little life hack by the way. I emailed them afterwards. I was like, here's my notes from the meeting. People don't usually do that. They don't, a, they don't even take notes, but, like, if they do, they keep it to themselves. But if you actually send the person the notes, they really appreciate it. And it it's almost like it's a double meeting. You don't edit. And I don't edit. And so he sent me, like, a revision of one thing. So here's my, can I read you my my takeaways from from the meeting I go? Here's here's my my notes. Five big takeaways. I like your lifestyle.

46:58

46:59

47:00

learned something about a great compliment too, by the way. Yeah. I go. I like the way you I like your lifestyle. I like how you've used your financial freedom. So he said he spent four months a year with his kids.

47:09

So it's like just four months out of the year. He's with his kids. They travel. They do stuff. He's like, dude, that's the max your kids will wanna be around you. It's like, I have I have teenage kids, like, That is I'm pushing the boundary of, like, how much I can max out. Four months and one turns, like, summertime. Per year. Yeah. No. No. No. Like, except spread spread out. Okay. Probably a couple in the summer and then whatever, the rest.

47:28

He's writing a TV show for fun right now, and I was like, like that. Wanna do things like that. I think that's dope that you have a life that lets you do that noted.

47:37

Because I'm, he's fifty five, I think, and I'm thirty five. And so, you know, I'm basically looking at, like, I'm always hunting for blueprints. Like, who's got a gold lifestyle? And not their whole blueprint, but, like, part of their where I'm I like I want a cherry pick. It's like Costco. I wanna go around and sample different people and then be like, oh, I like that. I like the way that Sam has his ranch and how he does things. And his, like, your home gym, for example, I went to your your place in Austin. Your home gym was awesome. And then I came home and I was like, Sam, what did you use for the floor? What'd you buy for this? How do you get the leaves out? What do you do this? And you gave me the thing, and I recreated that in, you know, with a ten percent change in my office. How's it going? Is it awesome? Oh, dude. It's amazing. Yeah. And so, like, that was what I stole from you. And then I Did you get the cordless leaf blower? The leaf blower's dope. It's also a great party trick, by the way. People are just like, if people people love it, it's super effective. It's way bit way easier than sweeping. So,

48:27

so anyways, I was like, I like your lifestyle for these reasons. I I told him a bunch of stuff.

48:31

Then I go then I go the second good thing he told me, he goes,

48:34

I think I can say this. Let me say let me try to say this without causing any,

48:38

a ruffalo nanny feathers here. So he's like, Where do you he's like, where do you wanna land in the,

48:44

the status game? So he's like, okay. So he draws this, like, line on the board. He goes,

48:50

On one side of the spectrum, you have, like, let's say Gary V

48:54

or, like, five hundred startups or, like, he's, like, you know, think about, like, people who go for a, like, a mass market, like Tony Robbins. They try to reach, like, a mass market

49:04

type of individual with their content.

49:07

And,

49:08

and then that becomes their audience. That becomes their deal flow. They so, you know, if if a really popular person sends me, like, Oh, here's a startup I got pitched. I'm like, he's like, I kinda know where that's gonna be in the quality filter versus if Sequoia or Benchmark sends me a deal. Like, I know where that is in the quality filter. That's on the other end of the spectrum. They have a much more niche audience. They're only creating, like, NFX. He creates really niche content that's for, like, an a plus founder who's trying to build a billion dollar company

49:36

using network effects. And the So this is the NSX. You're referring to NFX, the blog or NFX their customer base or Both. Like, the blog is to attract a certain type of founder. He doesn't need a million hits on a video. He needs, like, the right hundred people to read the thing. Right. So that they think about NFX and they they've learned from NFX. And so

49:56

He's like, where on this? You're you're making content, but who's your customer? Are you more like McDonald's

50:01

or, you know, we're like, say, a Michelin Star restaurant. They're like McDonald's, know, we're not gonna get the volume that they get, but they're not gonna get the the quality of clientele we get. You know, so we're he's like today, MFM, he's like, is in he's a is in the middle here. He's like, and my advice to you is

50:16

don't slide down that way. He's like, because today,

50:19

I like you guys, and I tell people to listen to you guys because

50:23

You're like,

50:24

you keep it real when it comes to entrepreneurship. Like, a, you guys are real entrepreneurs. You've done it before. B, you just tell it like it is. C, you don't talk about the most, like, complex objects. You like simple businesses and and and, you know, more achievable business models for most people.

50:39

But you're not yelling at them to hustle harder. You're not just hustle porn. That's just saying, like, yo, bro, you need to grind and, like, you need to do whatever. And then We're an observational

50:48

because we try to be motivational.

50:50

And we're not promoting

50:52

paths that are like,

50:55

you know, drop shipping

50:56

And, like, you know, flipping things on eBay or whatever, like, you know, there's a a a business class there. We're neither nor are we saying, like, enterprise SAS isn't like the main thing we talk about either. So it's like, you know, we're somewhere in the middle. He's like, I think you should stay in the middle because

51:10

it'll be tempting to slide there to get more views.

51:13

But I don't think that's what you're gonna want in the end because that will be the network you create. Those will be the deals you get. Those will be the people who like you. Those will be the people you meet. And so you will your your content will define which network you're a part of. Today, you're here. You can kinda go either way.

51:28

You should either stay there move up market, but, like, he's like, my my my advice to you is don't don't slide down market there. So I thought that was interesting. Nobody really talked about that. And there's also like,

51:39

you know, I had been gone through this exercise recently where it was like defining kinda like your your brand. Like, who do you talk to? Who who who's your customer and who do you who do you like to create content for?

51:48

And initially, the thing I thought about was like,

51:51

usually it's like, oh, you know, I'm all about entrepreneurship. I'm all about starting a business, and that's what I did, and that's what I like. But there's many different flavors of that. There's, like, tech startups, like, more like YC,

52:03

There's

52:04

stuff like starting an agency. There's different stuff in between. And then there's some people who are like, they cater to a market of people that are, like, kind of like entrepreneurs only. So it's like

52:14

quit your nine to five job. Don't be a slave to the cubicle.

52:17

Get out there and be your own boss type of messaging. And I'm like, I don't feel like the people who listen to us are

52:24

mostly in that category. Like, I think the people who talk to us often are second time founders. They're people who are they own small businesses or they they're actually planning to take shots and they're not, like, They already made the decision of, like, I'm not gonna, like, struggle in this nine to five. I don't, you know, I don't think it's Dairy Queen worker. That's our main like, kind of person to listen. So it was just, like, interesting to hear that.

52:47

Okay. Here's the last thing that I think is two two last things.

52:50

One, partnership advice. So him and his buddy Stan have been partners for, I think, like, twenty years now. Yeah. Forever.

52:57

And

52:58

I had talked to Stan before I met James, and I asked him, I go, Hey,

53:02

I wanna have a business partnership that's like yours, like a business marriage, not just a partnership. Like, your thing is like multi decades. There's no end in sight, and it's been great. And you guys have had multiple successes with the same people.

53:14

What's the secret?

53:15

And normally when you ask somebody this, like, the odds of them actually saying something insightful are very, very low.

53:22

But you could tell, like, how good they are that off the cuff, he's like, there's four things you need to know. Oh my god. He tells you the he tells you the four things. And I'm like, What what are these four things? And so here's what he told me. He goes.

53:34

He goes, most relationships

53:36

are,

53:38

Both sides are focused on what they're getting out of it. He goes, you're he goes, the first thing if you want this to work is you make it a giving contest.

53:45

I go giving contest. He goes, yeah. He goes when we sold our first company, James owned ninety percent of it or something like that, eighty, ninety percent. And he owned stand on, like, ten percent or twenty percent.

53:56

And right before the deal closed,

53:59

James, like, evened up the the thing.

54:02

And he was like, what?

54:04

He's like, no, no, no, you don't need to do that. Because James had had, I think, some financial success right before that or something. And so he's like, no, that's not right. And James was like, no, this is this is right.

54:14

And he's like, in a moment where everybody would have been selfish. He had every right to just keep the deal exactly as is. I'm I'm more of a gift basket type of guy.

54:24

You know what I mean?

54:26

And I've I've I've kind of done it both ways. It's not about, like, you don't have to just make everything fifty fifty. I don't think that's the right answer, but I think Making sure everybody's taken care of is an important thing. When we sold Bebo the first time,

54:39

or when I sold Bebo to Twitch,

54:41

I own double the equity

54:43

that my co founder, furcon owned. And so on paper, I should have got double what he got.

54:49

And as we're getting close to the deal, I told him I said, hey,

54:52

we're gonna get the same. Like, whatever that total pool is, we're just gonna split that fifty fifty of what we get out of between me and you because

55:00

you know, that's what felt right to me. And, you know, I was like, this is I think this is the right group. Was this before Fircan had was this before app applovin sold?

55:10

No. They had sold, but then, actually. So Wow. And so for those who don't know, Sean's partner helped found applovin, which

55:17

varies in market cap between twenty forty and fifty billion dollars. It's like a huge thing. And so you still I mean, he had a that was that's probably a home run for him eventually,

55:27

the the app loving. Yeah. Yeah. I mean, the app loving thing is way bigger for him than than our deal was. And we knew, like, he was gonna be wealthy from that. So, you know, it wasn't I I don't know. Like, I just felt felt he was the right thing to do. And what I the it was actually it wasn't like, dude, I'm gonna make it so that we're even. That's that's not really the mentality. It was

55:46

the original deal was not fair. And so I just wanted to correct it. Like, when he joined the company, he had, like, point five percent of equity or something like so I had already upped him once, upped him twice up to I've been upping him without him asking anyways just because I was like, this first deal was wrong. Now I just try to cut the right deal up front so you don't have to do that anymore.

56:05

But, like, the point is, like, you try to do what I what is actually right. So anyways, so that was the first lesson from Stan was like, He's like, I never feel

56:13

like, he's like, I basically feel like we are both trying to give more. And it's not about equity only. Like, it's like effort. Like, He's gonna do something. I wanna do more.

56:23

He's gonna, you know, try to, like, you know, sec make some sacrifice. I wanna sacrifice the same amount or more. Turn it into a giving contest. That was lesson one. He goes, lesson two.

56:32

When you disagree or you fight,

56:34

which is gonna happen a lot, and you have to decide which way to go? Do we go my way or do we go your way? Don't use logic. Use the sleep test. So he's like, I ask,

56:43

who cares? Who is more emotionally invested in this in this decision?

56:48

Because

56:49

if I may if we go with my way, but you are more emotionally invested, you're not gonna be able to sleep at night. And if I turn out to be wrong, it's gonna really hurt you. If I'm a little less emotionally invested in this, let's go your way and we agree that we'll just, you know, we'll we'll pivot if we need to, you know, later. And he's like, When it's really, like, just a deadlock, that's how we resolve the deadlock. Is who's not gonna be able to sleep at night? Yeah, about this thing. And when you have that attitude,

57:13

you know, both sides end up trying to compromise versus trying to get their way.

57:18

Three, he goes, I think in twenty year increments. So

57:22

If I'm gonna work with this person for twenty years,

57:24

what decision would I make today?

57:27

That's gonna be the best in a twenty year time spirit versus how most people operate is. They just make a decision today about what's good today. And then the future consequences may not be that good, but they're thinking short term. Whereas if we're if we plan for this to be long term, we're gonna make different decisions today to set ourselves up for long term success.

57:45

So that's number three. He goes number four.

57:50

The last thing I go I go I asked him. I go, I go, okay. That's the partnership.

57:54

Stan, why why are you great? Why is Zach recruiting it? Cause he ended up getting recruited by Mark Zuckerberg to go wrong. Oh, I know this guy. Facebook Messenger. And did he go and actually do that? He went and did it. And and he and he they've been trying to get recruit him for, like, years. Like, you know, seven to ten years. He finally said, yes. And I go,

58:12

I I asked him two questions. I go, what, what makes you great, and what makes that great? He goes.

58:17

He goes, I'm not that talented, but here's my thing. I'm not he goes, I don't have the same bias as most people. I don't have to be right. I go, what do you mean? He goes,

58:25

when I look at data,

58:27

Everybody else, I find they look at data and they just they have a story in their head. They want to be true. Then they look at data and try to find well, they keep searching through data until they find something that supports their story. He goes, I look at data and I ask a simple question. What story is this telling me?

58:43

And he goes, he goes, I just keep doing that, and I just make better decisions because I do that. Because that's my approach to to how I actually read data. That's why I can have more business success than And what about SOC? On the Zucks side, he I go, I go, what makes that great? He he said, you know, he didn't wanna say the obvious things. You know, he's brilliant, hardworking. Like, that would be a pretty blah answer.

59:01

Again, that's how you know the quality of the person. They just skip over the blind answer. They give you what you want. They give you a little candy. So here's the candy. He goes,

59:09

I was sitting with Zuck when he decided to buy WhatsApp.

59:12

And everybody said it was way too expensive. They bought it for nineteen billion dollars. WhatsApp wasn't producing any or what what what's that worth now you think? I don't even know. Hard to say. I don't know. A lot more, though. I think more. Yeah.

59:25

Like, the Instagram one definitely. They bought it from one billion. It's probably worth a hundred now.

59:30

59:31

probably double that. I'm sorry, but what's that's probably? I'm also a hundred billion dollar franchise. So

59:36

he was trying to decide to do it. And he goes, you know what's great about you, Mark?

59:42

You're lucky. You're smart enough to know that you got lucky once. Have you found lightning in a bottle with this when social networking was gonna be a thing? But you're smart enough to know when somebody else got lucky too. And he goes,

59:54

he goes, you are smart enough to know that this this messaging thing was, like, This was the big winner of this era, and these guys got it, and you need to pay whatever effing price you have to pay to get it. Because there's only gonna be one the way that there was Facebook. Like, there was only gonna be one big winner. Right. And you you know that you don't think you're so genius that you're just gonna compete everybody and beat everybody at everything.

01:00:16

Like, you're you can recognize when somebody else got lucky too. And, and I thought that was just like a fun answer. For her for for the answer. Did he say that he liked work? Did he like working with Zuck?

01:00:27

You know, he's not gonna tell me if he hated it. And he but the, you know, the actions speak louder he's been there for for quite a while. I think he's I think he just left this year. And so he's I think he was there for, like, seven years or something. So How did this guy run NFX Labs while working at Facebook?

01:00:39

He didn't. He just worked at Facebook. And he's, like, came as an advisor and then James was, like, again, no problem. Go do that. Take the big fat check. I'll run on FX. You keep your partnership.

01:00:50

Dude, how much does a person like that make at, like, if you're the head of a Facebook person,

01:00:56

a a Facebook business. Are you making over ten million a year? I have no idea. Yeah. Yeah. For sure. You you think so? For sure.

01:01:02

Wow.

01:01:03

I have no idea. I see for sure, like, I know. I don't actually know what he was making, but I would be stunned if it was less than ten million I think it's probably closer to twenty million a year.

01:01:14

That's so much money. That is so much money. There are people at these companies that make forty, fifty million dollars per year.

01:01:20

Like Because they had stock grants early on, and they just stayed there. No. No. Not not the early on type person. Like, they'll get a package

01:01:27

in twenty nineteen that at the twenty nineteen prices

01:01:30

is gonna pay them twenty to forty million dollars a year. They're usually, like, the top AI

01:01:35

guy because they're like, look, this if this top AI guy leaves and goes to another company, not only do we lose this talent that's kind of irreplaceable, but then Google gets them. And then, you know, now they have a problem. So, like, Google has published some of these numbers about guys we're making, like, you know, thirty, forty million dollars a year. I wanna have a I don't know if this has to be anonymous or what, but I wanna have a station with one of these kind of Oji guys who saw the Twitter Facebook's,

01:02:00

like some of these companies

01:02:02

get created Google, like, get created because, you know, they're around. They're and they're probably only fifty or sixty years old, you know, the people who saw Google, like, who are a little bit older when Google was getting started. I wanna ask them all stories about that and just what's it like being around some of these people and what are some of the stories around when it was getting going? Like, you hear these crazy stories about, like, I think we had I think we had someone here. Talk about eBay. And they're like, I joined eBay when we are fifty people, and they were just explaining what, like, the day to day office life was when you're adding fifty employees a month or fifty employees a week when you're only at fifty people. And, I, anyway, I because this type of stuff doesn't it truly exist anymore because the map

01:02:39

The playbook for a for a fast growth company is kind of it's not entirely made, and there's still companies like Uber that are recreating it as they go. But, like, there's a story there, and you have a history. But if you're Google, you're a little bit of a pioneer, and you're like, I don't know, man. How do we how do we add bodies to the problem. I'd I don't know. But anyway, I wanna hear I wanna get some OGs on to tell those stories.

01:02:59

Yeah.

01:03:01

That yeah. The that would be awesome.

01:03:03

I've heard I've I've been lucky to hear a couple, like, the guy who was the, my boss at Twitch essentially was,

01:03:10

semi early at Google. So he would be like,

01:03:13

You know, Larry says this. He's talking about Larry Paige, like, from Google.

01:03:16

And so, like, he he didn't do it often, but, like, he would say these little things that I would, like, ask him a million questions about it.

01:03:23

Dude, so when my wife, my wife Sarah worked at Facebook

01:03:26

from two thousand and

01:03:28

I forget exactly. Maybe thirteen to sixteen.

01:03:31

And during that time, Facebook, I think she was she joined at, like, five thousand. And then when she left there at, fifty thousand, something crazy. And during that time, Zuck would do these meetings every Friday

01:03:43

in, like, an auditorium or in a cafeteria on Facebook's campus and any employee can could show up and just ask them a question, and they would also stream them. And every once in a while, I would like look over her computer and watch her streaming these

01:03:56

conferences.

01:03:57

And there'd be like fifty or a hundred people in the cafeteria asking questions to Zuck. And I'm like, Sarah, you are crazy. You should be in that cafeteria

01:04:06

every single Friday. Like, this is like being around like John Rockefeller or like Teddy Roosevelt or JFK and like This is like a pretty big deal. And if you just ask an interesting question every Friday, maybe eventually he'll say something like Sarah, Nice to see you again. You know, like, why don't you just come talk to me afterwards and we could help. We maybe you could work on that front. Like, I'm like Sam's like fan fiction.

01:04:27

Yeah. I'm like, creating this story with you. And then I'm like, creating

01:04:34

this story in my head. I'm like, what could potentially happen? And,

01:04:38

it never happened to each other in the elevator, and he says Yeah. Like, you know, right?

01:04:43

You have, like, a meet cute in the cafeteria. And he, like, says, like, nice shoes. They're like, you already know what you're like? What's your friend I wanna hang out with?

01:04:52

Maybe he'll follow you on Instagram. Who knows? And maybe you're posting a bunch of pictures of me, and I just don't happen to like, say bobby since him. I don't know. I haven't thought this was you already. But, like,

01:05:04

like, I had this old playbook.

01:05:07

And she didn't do any of it. And instead, we just had a traditional

01:05:10

fall in love marriage and

01:05:13

all that boring stuff. She's like, I'm gonna go to a yoga class during the all hands. Yeah. We could've had a throuple with zuck, but no.

01:05:22

Well, dude, this is this is one of the other things that James was talking about actually, like, to to kind of actually relate to that. He goes,

01:05:29

I asked him. I was like, so,

01:05:32

I asked him about his office member. I told you. I was like, I noted that he was here. I was like, why do you have the why'd you get an office right here?

01:05:38

He's like,

01:05:40

I mean, it's a no brainer. If you he goes, he goes, I made one mistake when we sold tickle. He drew a diagram. He goes, he drew a circle.

01:05:48

He goes on the diagram guy. I like this. Oh, dude. If you if I'm gonna meet you in person, we're gonna be on the whiteboard. Like, you know -- Yeah. -- that's what's gonna happen. Yeah. It's going down. Yeah. It's going down, you know.

01:06:00

I'm a lady in the streets and I freak on the whiteboard. So, you know, like, I'm going to the whiteboard.

01:06:05

And,

01:06:06

And so he's he draws a circle and he's like, yeah. Let's say that the he's like, the white hot center of Silicon Valley was like, let's say, Sequoia benchmark you know, these people, these founders at that time, Facebook was just getting started. Facebook was like the hot center of, like, where all the action was happening. Google,

01:06:22

Aigos. And then, like, you know, one ring out from that, you know, we were kind of, like, adjacent. Like, we knew a lot of those people. Like,

01:06:29

I helped, you know,

01:06:31

You know, I I advise some people to take jobs there. You know, I had a job offer there. He's like, I didn't take it because I maybe had looked too much ego. I thought I was an entrepreneur. Probably should have just joined Facebook. It would have been great.

01:06:40

He's like, yeah, but we were, like, one one hop away. We were, like, one one one ring away in this, like, circle.

01:06:46

It goes,

01:06:48

what we should have done is realized that silicon valley is a network.

01:06:52

And in a network, like, all the value,

01:06:55

like, a lot of the value concentrates at the core. Like, the closer you are to the center of the network, the more value you get. Physically, in many cases as well. Literally, physically, which is like what he's like. He's like,

01:07:07

He's like,

01:07:09

he's like, the further you go out, the the more you're on your own island. He goes, we decided to go start our own thing, our own lab,

01:07:16

self funded,

01:07:17

doing our own startups with new people,

01:07:20

and, like, you know, doing our own thing. And it felt so entrepreneurial to go out on our own terms and build our own island. He goes, I He goes, I could see you making this mistake too, because I wish somebody had explained this to me at the time. He goes, and you see this all the time, you know. He goes, I can't believe people are moving out of the tech people are moving out of the Bay Area to go live in Austin or, you know, Florida or these places.

01:07:42

You're gonna save thirteen percent on your taxes, but make ten times less money. Like, you know, that's the trade that they're making. They just don't realize. Yeah. Totally buy that. And he goes,

01:07:51

when we did this, he's when we moved out here, you know, when we decided to go off and kind of do our own thing, not physical, not geog geographically, but just like in a philosophically,

01:07:58

All of a sudden, he goes, I had a meeting with, a meeting scheduled with the Uber founders because, you know, they were in our network. And our friend was like, you should meet with the Uber guys. Travis is doing something cool. And, had the meeting scheduled, but I was so focused. Oh, I'm doing my thing here, and I got busy, and I had to I just canceled the meeting. Didn't take the meeting.

01:08:16

Miss Uber would have would have definitely invested in it at that time just because it was in the network as our friends, put a small check-in, you know, no big deal. But I was so focused on building my own little island. I I stopped paying into the network. It goes, you know, similarly, I couldn't have took a job at Facebook at that time and, like, you know, one of the earliest people at Facebook. I kinda knew it's gonna be a big deal.

01:08:36

But again, had my own thoughts about what I wanted to do. So I went the other way and made things harder for myself rather than easier. He goes, you could see Why, like, the value of the network. He goes, when Facebook started getting popular, Facebook started in in Boston.

01:08:49

And he goes,

01:08:51

Zack was smart. And Peter Till told him the right thing, which is get your ass to, you know, get your ass to Silicon Valley as fast as possible. Is the startup that builds this in Silicon Valley is gonna have a better shot, a better high expected value than one that tries to do this on their own in a new talent network, you know, in a new funding network outside of Silicon Valley. And,

01:09:08

and I was asking about YC. I go, well, didn't kinda YC do their own thing? He goes, no. I have the opposite view of YC. YC is is fully a network. And

01:09:17

he goes, Paul Graham did the first one in Boston.

01:09:19

And immediately moved to Silicon Valley because he had figured out, oh, shit. This is the blueprint for for investing in early stage startups. That's gonna work.

01:09:27

Whoever does this in Silicon Valley is gonna be the winner. And he goes, guess what? They moved to Silicon Valley right away. As soon as the first batch was done, Paul, his two little kids, they just forget every drop everything, pick up and move. Like, he's like, you know, it wasn't convenient for them. He's like, I know the architect that was building their house.

01:09:41

And you know, they they had to get there quickly and that they just rushed it moved in to start their second batch in Silicon Valley. Because they look at all the other accelerators that copied their exact

01:09:51

blueprint.

01:09:52

The all the, you know, techstars is the one in Boulder bolder. Every other city. And, you know, they've had, like, a couple unicorns, Paul, you know, has had hundred.

01:10:01

And it's like, you know, the the difference is like a, you know, more than a ten x difference in outcome just by being in the center of the network. And he goes,

01:10:09

and I saw it. So I was thinking about that. I was like, you know, there's a physical location part of that.

01:10:14

Then there's, like, staying in touch with people. So, like,

01:10:17

me doing that meeting with James was great because, like, yeah, this guy's in my network, but I was just sitting in the burbs over here you know, do my own thing. Here create my own content. I wasn't Do you not feel like a Silicon Valley guy? Because you're Dude,

01:10:29

I haven't been going to anything. Like, like, I don't meet with anybody. I don't go to anything. It's like dumb. And then this brought my awareness to, like, wow. I'm silly for not taking advantage of the network that I the hard network that I've built over, you know, ten, twelve years,

01:10:43

that's crazy that I'm not taking advantage of that.

01:10:46

And then I asked him, I was like, you know, what do you think?

01:10:51

I was like, how do you actually take advantage of the network? Besides physically being there, I okay. I I believe the physical thing. And I've always said this, like, proximity is power. The closer you can be to the people you like and the people you wanna be like and the people you wanna be around, like literally physically, the closer you could be, the better. And I go, why does that work? And he goes,

01:11:09

he goes, what you should do is that

01:11:12

you wanna build something that brings brings value not only to you, but also to those people around you. Also, you wanna be like an API. So, like, you know, when a when a

01:11:21

when Twitter is a product, they create an API that lets other people,

01:11:25

like, read the Twitter stream, right, create apps that help Twitter. Like, they Which makes Twitter stronger. Makes Twitter stronger. He's like, you wanna be like an API. You wanna tell you wanna tell people how they can plug into you. Where can they get help from you? How can they give help to you? Like,

01:11:40

if we know that Andrew Wilkinson buys internet companies, then when we see an internet company, we talk to some guy who's like, yeah, I'm thinking about selling. We'll make that introduction because Andrew has an open API. He he has made it clear how somebody can interface with him, how somebody can help him, and how he can help other people. You know, he he's made it clear for those founders. Hey, if you wanna exit, I'll I'll buy you out. And so

01:11:59

he's like, that's why Silicon Valley's great because

01:12:02

You can invest in other people's stuff. You can join them. You can partner with them. You can work for them. You can send them talent. You can do a podcast exchange. You can share ideas about growth with each other. You can share knowledge about a term sheet with you. It's like, that's why Silicon Valley works is because

01:12:17

the network is super dense and people share a ton within that. And so you get all these extra benefits that you don't really plan for that are sort of serendipitous when you're in there. And I I thought, like,

01:12:27

this is all obvious. Like, I kinda nodded my head, but it brought my awareness too. It's not that obvious. A lot of people don't take advantage of this stuff. And even me who still who knows the stuff and still lives at Silicon Valley. I wasn't maxing that out, and I'm gonna make a, you know, a, a sort of, like, turn that knob a little bit and do that better.

01:12:43

If I could

01:12:45

I only live where I live now for family reasons,

01:12:47

but if my family were willing to live in California, I would be in Palo Alto, not San Francisco, actually pal, I would be down the peninsula in a heartbeat. Totally. One hundred percent. I would be there in a heartbeat. I think it's the greatest. And people say, like, well, it doesn't matter anymore. I'm like, well, maybe, like, currently, it doesn't matter that much, but things that maybe in the six or twelve months is gonna be happening, but I actually think it is kinda happening still a little bit. But, I think New York and and and Silicon Valley are a little bit on, even actually now whereas for years, they weren't. But still Silicon Valley, I think has a much better,

01:13:22

ex you have a much better existence living there, but I would be there in a heartbeat if I could. If it were if I was a single guy, I would be there tomorrow.

01:13:29

Right.

01:13:30

Cool. Alright. I think we went a little over, but That's it. That's it. That's the pod.

00:00 01:13:57