Sam Parr Reveals How He Grew The Hustle And Why You Shouldn’t Take Outside Funding | #Marketing - Ep. 58

The Toyota Tundra and Tacoma are built to keep going, backed by Toyota's reputation for legendary reliability. Step into a Tundra with the available i-Force MAX hybrid engine, delivering impressive torque and serious towing power. Or take a look at Tacoma with an available power liftgate, so gear goes in fast and the adventure keeps moving. Toyota trucks are built to last, year after year, mile after mile. So drive one home today. Visit toyota.com to find out more. Toyota, let's go places.

Kayak gets my flight, hotel, and rental car right, so I can tune out travel advice that's just plain wrong.

Bro, Skycoin, way better than points.

Never fly during a Scorpio full moon.

Just tell the manager you'll sue.

Instant room upgrade.

Stop taking bad travel advice. Start comparing hundreds of sites with Kayak and get your trip Right. Kayak. Got that right.

Now, obviously, if you want to sell stuff online, you're going to need a good funnel. But if you want a great funnel, then you're going to need to use ClickFunnels. ClickFunnels is the number one funnel builder in the world, helping more first-time entrepreneurs to leave their 9-to-5 and to launch their dream than any other company on earth. ClickFunnels was built for the dreamer and the doer, and you can get a free 14-day trial by going to clickfunnels.com/podcast right now. That's clickfunnels.com/podcast. ClickFunnels, because you're one funnel away from changing the world. This is the Russell Brunson Show. What's up everybody? This is Russell. Welcome back to the show. Uh, excited to have, um, someone who I've been watching for a long time over the last couple of years, do a lot of really cool businesses, a lot of things. Uh, but this is actually the first time I've had a chance to meet him in person and talk to him. Uh, his name is Sam Parr. He's the founder of, um, The Hustle, which a lot of you guys know, but he's got a great podcast called My First Million, another business called The Hampton, excited to talk about all those things with him. But Sam, thanks for jumping on and finally excited to get to know you and, uh, and actually meet you in person for the first time.

Hey, I'm excited to be doing this. I've, uh, you can check my account. I've used ClickFunnels and I've, I've, I don't know, I think I've gotten my 2 comma club record. I think I've made over a million on using ClickFunnels.

So have you submitted for the award yet? We need to get it to you.

No, I did not. I, uh, But I definitely have achieved a few things on ClickFunnels and so I'm happy you made that and I'm happy to be here.

That's awesome. Thank you. I know it's funny on our side, it's like we've, I think we've, we've awarded over 3,000 2 Comma Club Awards now, which is like exciting, but the number of people who never submit is probably double that, which drives me crazy because I like bragging about the numbers. So I'm going to add it to 3,001. I'm counting yours as officially in there now.

So we've done, I've done over a million across a couple of accounts. But I for sure did, like I used to use ClickFunnels, I still do, as like my MVP, and I've done six figures a couple times.

[Speaker] Oh, that's so cool. Well, thank you for being a, for using the platform, man, I appreciate that. So, I first got familiar with you guys, with you specifically, with your newsletter, The Hustle, but I'm curious, like before that, I don't know your history prior to that, like how did you get into entrepreneurship and get into this whole world back at the very beginning? Where'd your path start?

I'm from Missouri, and in Missouri, all of my family were small business owners. They didn't call it entrepreneurs. They just, um, my parents actually started a fruit stand. That was their, uh, kind of their first business and parlayed that into, uh, something a little bit bigger. But I grew up in Missouri. I, um, was a Division I athlete, uh, or I wanted in college or in high school, I wanted to be a Division I athlete and I became one. And so that's why I moved to Tennessee. I went to a small school. I ran the 400-meter dash, so I used to be fairly fast. Not anymore, but I used to be. And I, in college, I was studying accounting and music business, and I knew I was going to start a business. I thought it was going to be like a blue-collar, like, lawn care company. I wasn't sure, but my first business was a hot dog stand. And so I had eventually like a bunch of hot dog stands. I think— did you write a book on how to like I didn't write a book.

Uh, Perry Belcher wrote one, but I— we had a client who's a multiple Two Comma Club winner who teaches people how to start hot dog stands. So it was kind of interesting.

I, I probably bought one of those things, but I— that's what I had. It was called Southern Sam's Wieners as Big as Baby— Wieners as Big as a Baby's Arm. And, uh, I, uh, I would sell hot dogs like crazy. And then I learned about a company called Air Bed and Breakfast in 2012, and I cold emailed the CEO and I was like, You guys can improve your site if you do this, this, and this. And he was like, yeah, whatever. But that's awesome that you had the initiative to like have this list of how I could do better. Do you want to interview for like an entry-level position? And I said, hell yeah, I do. Come. Uh, and he said, come to my office on Monday. And I lived in Tennessee and he was like, I live in the Bay Area. And I was like, I don't even know what the Bay Area is. I've never been— I've never been west of Missouri. I was like, I don't. Silicon Valley, is that like Hollywood? I don't know what that means. And so I basically dropped out of school and I moved out to join Airbnb as one of their early employees. And I—

how early was it in the company? Were they like— how many?

Not that early, like 200 or 150 people.

Okay.

I think they had raised a Series A, maybe this was in '12, 2012. I think they were founded in '10. So they were 2 years in. Not that early, but early enough to be like an early adopter. And I, uh, back then, uh, so I'm completely sober now, but back then I had a drinking issue and I'd been arrested for DUIs and fighting and all this stuff. And I lied on my back— on my resume. Like they said, like, do you have a criminal record? And I said no. And they caught me. And, uh, so I had moved out to San Francisco to do my thing. And the day before I'm supposed to start, they're like, we don't hire liars. You're out. And so I was out in San Francisco with nothing. And I was like, I gotta make this work. I dropped out of college. Like I gotta do something. And so I started a small internet business that was acquired for like $100,000 after a little bit of time. And then I started this thing called HustleCon, which was a conference. And that conference led to me starting The Hustle, which I ended up scaling and selling for many tens of millions of dollars in a fairly short amount of time.

That's so interesting. That was the thing that got you to move and then it fell apart. So the first business that you sold for $100 grand, what was that? What was that business?

It was some— so when I was interviewing at Airbnb, I stayed on at Airbnb and I met a guy who had an idea for a roommate matching app and I was like, hey, can I join you? And so we created a roommate matching app and it was basically Tinder for roommates, which is obviously stupid. It should have just been Tinder for Tinder because like, like Tinder wasn't that popular yet. We were like, oh, this is like a really interesting way, this swiping thing. That's kind of cool. Let's do that for roommate matching. Which is the worst, like the worst business ever. Like dating would have been way better. And so I started a roommate matching app and I sold it and I think we got like $30 grand upfront and then like a salary and then like some bonuses at the end of one year.

You know what's funny is one of my business partners, his daughter just found her roommate on a roommate app. I wonder if it was your app, if it's still around.

No, I think they shut it down.

Okay.

Or I don't know, this was in 2014.

There's one out there 'cause like he literally, this, he told me this like 2 weeks ago. He's like, yeah, we couldn't find a roommate so there's this app and we download it. Someone's doing it as a, as a thing still, which is kind of interesting.

So there's like 5 or 10 businesses that every entrepreneurial college kid starts. It's like, it's like, yeah, it's like laundry, like on-demand laundry. And then it's like a roommate matching app. And then it's like a college Craigslist. It's like there's like 5 or 10 things that like every like 21-year-old who's entrepreneurial does. And that was, that's usually one of them.

That's awesome. And then you went and started the hustle. So, um, The hustle, the, the event in New York used to be called HustleCon. How many is that? What, like, tell me about that event. Was that event you ran for a while or was it just a one-time thing?

No, I, so my goal was to, uh, like start a big company. I wanted to start, I wanted to like, my goal was to make $20 million by the age of 30. That was my goal. And I was like, how am I gonna get there? I didn't know. I didn't have a plan. And so I created this event called HustleCon and I made about 60 grand in 6 weeks. So it was basically like an entrepreneurial conference. And I was like, that's kind of cool. Let's do it again. And so I did it again and I made like $250,000 in a very short amount of time. And I was like, this is great, but conferences stink as your, like, as your business, it stinks. Like you do it now with Funnel Hacker Live and that's cool, but when it's your main source of income, it's not awesome. And, but I was like, I, but I grew my email list from 0 to 10,000 people in like 2 months.. And I was doing some math and I watched you and I watched Andrew Warner from Mixergy do interviews. And I saw like what you did with email. I saw what my friend Noah Kagan did, did with email. And I was like, I'm pretty sure I can build a media company with email only. And I pitched this idea to a bunch of people and some of them I cold emailed like executives at media companies and they laughed at me. They're like, this is stupid. But I'm like, I don't know, man. I think I can get 5 million people on this email and I think like they'll open every day. And I think that can make like $100 million in revenue. I'm like, I'm pretty sure you could build like a $500 million, billion-dollar company with just email. And the premise was simple and we, and we started it and I sold the company in year 4 or 5 when we were doing about $20 million in revenue. But my best friends had a company called Morning Brew and they are now in the $100 million revenue range. So my premise was right, but the early premise was social media is going away like in terms of reach. So back then, If you posted an article on Facebook, you could get tons and tons of, of views. And I was like, no, that's going away. Everyone knows that email is like a pirate ship. And every email I get is a little bit of wind in my sail. If I just build this email list to be huge, I can own my destiny and I can create an entire news company, media company off the backs of this. I just have to create content that's so good that people wanna read it every single day. And that's news, which I love. And it's business news, which I also love. And I was like, let's do that.

So cool. So walk me through the model of the hustle then, because in my world, everyone understands building an email list to sell their products, but they're not doing it the way you did, right? Building a media company, how you monetize it and all that stuff. I'd love to understand the model better.

Here's the thing. So you— so the way you started is not where you are now. You're a proper product builder. You have an amazing company. But like, I was inspired by you. I was like, all right, this, this internet marketing information product person, could I mix those tactics with like the Silicon Valley ethos? I don't know, like whatever you want to call it. I was like, because all the Silicon Valley guys, they poo-pooed email and they thought that like long-form copy, you know this better than anyone, they laugh at it, right? They think like, oh, this landing page is so ugly, this is nonsense. And I was like, no, like I could— this guy is a bootstrap guy. He's building this big thing, which means every cent he spends has to be ROI-driven. Whereas if you raise $100 million, you can blow a lot of money and not be efficient. And like, the efficient way is definitely the better way. And so I was like, what if I have a 1,500-word text-only email and that's like someone's news? And if I can get a million people a day, if I can get a million subscribers and half of them open. So if I get 500,000 higher net worth, like coastal, higher earning, income young people to read my newsletter, man, I think I can charge like $80, $100 per 1,000 opens. And that was the model. And so when I sold, we were gonna do about $20 in revenue and maybe $14 or $15 million was gonna come via advertising in my newsletter. So the old analogy was basically if you'd go to BuzzFeed, you'd see ads on their website. My ads were just in the newsletter and I didn't even have a website. And so I had a team of 12 people and they were each a salesperson that had like a $1.5 million quota and they would sell ad space to WeWork, Salesforce, HubSpot eventually bought us because we used to sell ad space to them and we would sell so much of their software that they wanted to own the thing. And so that's how the business model worked. It was basically a cost per thousand cents.

That's awesome. So then Uh, so every—

it was every day you were sending out, which is, which is not a fun business model, by the way. Like selling pro— selling products is better.

I think there's a hybrid where both, both sides could be cool, you know, having your own media and also having your own products.

Yeah. Which, which, I mean, but I just did what you did. Like I just— most things that I have done, I have just copied you.

That's amazing. Um, okay. So when you were doing it, you were sending out just one email a day, 1,500 words. Did you have team that were curating content or were you guys doing it through— how did that publishing side look like?

I just wrote an email every day where it was like your smart friend tells you the business news that you need to know. And I would just write them. I would sell ads and I was writing an email and I wrote. I got good. Like people probably admire you and your writing and your content creation, but they don't realize that If you make it your job, you can create 1 or 2 or 3 blog posts a day if you like really like buckle down. For sure. Like you just got to get, you got to get what it takes weeks or months to get in the groove. But once you get in the groove, like I could bang it out. And so basically between like 9:00 AM and like 2:00, I would build the business. So I would grow our subscriber base, I would sell ads. And then from like 3:00 to like midnight, I would write the email. And so, but really quickly, I think in the first year of business, maybe we did half a million. In the second year, we did, let's say, $2.5 million in revenue. So somewhere between $500,000 in revenue and, or somewhere around $500,000 in revenue, I hired a team. And so I didn't have to write the email every day, but we, we had like really great journalists. So a lot of the guys who wrote for me or worked for me, are all like pretty popular now. So if you know Trung, if you know Trung Pham on Twitter, he's got like a million followers on Twitter. We found Trung before he even had Twitter. And some of your listeners maybe know Trung. He's like a comedy guy on Twitter. And then like I had another guy named Zach Crockett who he now is the host of a podcast for Freakonomics, which is a popular podcast. Anyway, we hired really young, like 23, 24-year-old ambitious writers who are really funny and interesting. And we had them go and find the content and write it every day.

That's so cool. Then how did you, how did you build the list? Like, what was your process? What did that look like?

The first 100,000. So in one year we got between 100,000 and 150,000 subscribers, and that was all organically. And so what I would do is I would go to subreddits that I think my audience would be hanging out in, and I would write articles that would go viral there. For example, I paid my friend to live on Soylent. Do you remember Soylent? Wait, vaguely. Like SlimFast for nerds type of, it was like a, it was like a supplement that had like all of your nutritional, like calories that you need.

Yeah. Yes. I bought it one time. It was okay. Yes. I 100% remember that now.

Yeah. It's like not that very good. It's not great, but it was like popular and I'm like, well, I'm gonna pay someone to live off that for 30 days. And I wrote an article like 30 Days Living on Soylent. And so I would just write timely great articles and I would, but I would write them in such a way that I thought with a good chance that they were gonna go viral in a particular subreddit where my customer was. And then I would get like half a million people to come to my website in like 30 days. And I had a really good popup that said like, oh no, not another popup. Okay, look, while you're here, here's what this is. The Hustle is actually a daily newsletter with news and business stuff. But I wrote this blog post to get your attention. Now that you're here reading it, you might as well gimme your email. Like I, like, I wrote these like really good posts and like we did another one where I had a friend that was plagiarizing people and turning books into Kindle books that he would sell and he was making like $60,000 a month. And I was like, that's horrible. I don't like that, but I'm going to write an article explaining how this is done because Kindle should catch this. And that article got like 2 million views and I got like 20,000 subscribers and that's how I grew the first 100,000.

And so you, you're writing the article on the blog and then promoting it on Reddit and other places like that, or you're posting the articles on Reddit, like the first one.

Okay. And then once I understood what my LTV was or my— so I was earning roughly $10 per subscriber or something like that per year. And once I learned that, then we started advertising. And back then, I don't know what it is now, I could acquire an email newsletter subscriber for $1.50 on Facebook. Oh wow. And so I wish I didn't know, I didn't understand math back then. Like I didn't understand like there's like a rare window when like you can acquire customers for cheaply. I was 25, like I was silly, but I should have emptied the bank account into that. But I spent money on Facebook ads in order to grow from 100,000 to when we sold about 2 million.

Okay. Dang, it's 2 million people. And then HubSpot bought it. At that point, were you out of the business or were you tied into it after the, after the, the purchase?

I had a really good executive team that was doing all the work and when I sold, I basically was told them, I'm like, I'm out. Um, and they were, they were cool with it and I think they preferred it because like back then, I mean, I'm kind of wild and I was really wild then. And so basically, um, the hustle, we owned a bunch of stuff including our daily newsletter, but we also owned a bunch of podcasts. One of those podcasts being My First Million. And they were like, just do the podcast. And I said, yes sir, that sounds good to me. And that unexpectedly blew up.

Yeah.

Interesting.

This episode is brought to you by Indeed. Stop waiting around for the perfect candidate. Instead, use Indeed Sponsored Jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate see. According to Indeed data, sponsored jobs have 4 times more applicants than non-sponsored jobs. So go build your dream team today with Indeed. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. This episode is brought to you by Nespresso. Introducing VertuoUp, the latest in a long line of innovation from Nespresso. It's innovation you can touch, sense, and taste in every single cup. With a 3-second start, easy open lever, and dedicated brew over ice button, it's even easier to enjoy your coffee your way. Sip for yourself. Shop Vertuo Up exclusively at Nespresso.com.

So with, with HubSpot taking over, they just keep running the same way, but now they're just advertising their own stuff. Are they still advertising for other people? How does it— how do they shift when they take it over?

So the year we sold, we went into the year, we were gonna do, let's say, I think $18 million in revenue. And so we went into the year with like $4 million in revenue already booked for advertising. And I sold the company on February 4th. I gave back all of that money because HubSpot was like, look, we're a, at the time, a billion dollar company. Like, I don't want your— Your chump change. Like, yeah. They're like, I don't even wanna report on our P&L what advertising is, cuz I don't want an analyst at Morgan Stanley to think, oh, you got, You guys are in the advertising business? What's this? And so they gave it all back. And the way that they make money is just through leads in the same way that ClickFunnels probably— ClickFunnels makes money from your personal newsletter. Yeah. And so that's what they do. Interesting. And then they also— it turned into this thing called HubSpot Media, which is my— the hustle. But now they have like 30 or 15 podcasts, of which My First Million is one of them. And it's one of the largest business— or it's for sure one of the largest business podcast networks, but it might be one of the larger podcast networks in the country.

Yeah. Interesting. So then you— so that podcast was already part of your business and they acquired that as well. It wasn't something you spun out later?

No, no, no, no, no. I owned it and— or The Hustle owned it. And at the time, I forget how big we were, like 600,000 downloads and views on YouTube a month, or maybe even, maybe even 350,000. And over the last 12 months, including some of our clips, like we've gotten like 90 or 100 million. Uh, so like it grew a lot.

Interesting. So they own, they own that now. Like, are you an employee of that? Are you a partner on that?

Or how does that work? Uh, they, so they own the IP. I sold the IP and then they pay MFM Media, which my partner Sean and I own. And so they pay us a per— like, so based off of how many downloads and views it gets, that's how much I get paid.

Oh, okay.

Gotcha. So I guess I'm a vendor or like a—

you're a hired gun, hired host.

Yeah. The way that I explain it to my family, they're like, wait, do you work there? I'm like, not really. Like, so I, I'm Howard Stern and they're Sirius Radio. Like I have like a contract. I have like a talent contract.

Yeah, that's really cool.

Interesting.

Are you gonna keep doing that for a long time, or what, what does that part of your life look like?

You know, I've done it— how long have I been doing it? Uh, it was, uh, in— we've— I started doing it in '19. Uh, I never— I didn't want to— I don't— I didn't want to be a podcaster. The podcast was Sean's idea, and I started doing it because one day, uh, one of his guests didn't show up, and I was like, I'll just like step in and riff on with you, and, and We did good, but I'm sort of his— I'm like the straight man and he's like the— he does most of the talking. And I never wanted to be a podcaster, but I don't know if I'm going to keep doing it for, you know, I always say like, I'll reevaluate at the end of the year. But I don't particularly like— like, it's really— it's a lot of work. How many episodes do you do?

We do 2 a week.

It's— how long have you been doing that?

A long time, but 90% of mine are just me talking. So I don't, I don't do many interviews. So it's, it's easier cause I can just set up a mic and just go, you know?

But do you, do you write in advance what you're gonna talk about? No. I hate doing that. Aren't you nervous?

You guys pre-write all this stuff in advance?

No, no, no, no, no, no. So half the time we have a guest, half the time we don't. But if we don't have a guest, I'll spend an hour in advance just like taking no— I just right here, I just take notes. I'm like, here's like a bullet. And then like half the time I don't even bring any of this up. I just, we, I follow, you know, we follow the energy, but I find it very stressful. The bigger the audience. So like some of our episodes will get 2 million downloads and I find it incredibly stressful. Uh, like I just don't want to say the wrong thing. Do you not get nervous about it?

No, I don't. But what's okay, this is interesting. So I don't know if you follow personal development world, do you know what Earl Nightingale is? Of course. Okay. So I just bought, um, his entire estate from his widow. And so I had a chance to fly down.

You did it with Napoleon Hill. You talked about this on Instagram. I saw this, right? When you did it with Napoleon Hill and this, right?

Yeah. Like we bought Napoleon Hill's estate. Now we're buying this. Anyway, see, I'm collecting. Anyway, yes, I'm collecting all these old books and people. But Earl's was fascinating because he was the radio personality voice for a generation, right? Like my dad listened to Earl Langille when he was growing up every night on the radio teaching personal development. But what's crazy is the radio back then, the laws were like you had to get things approved before you could say them because there was no you know, if someone's got a mic and they're hot and half of America is listening to it, you can't just say stuff. So what I acquired, these boxes and boxes of every one of his shows. So he would sit down and he'd pre-write the entire show, type out the entire show. Then he'd sit there and he'd read it over the air. So think about that. Like, I like, we're so lazy nowadays. Like I'm saying, I have an outline or I have a couple of thoughts and I just go. But for them, he had word for word so that the radio, so that the radio commission could approve it. And if he deviated from it, he could get in trouble for like saying things that weren't— anyway, I was like, it was so much harder back then.

I think like I always, I always get like a little sense of being a fraud where it's like I need to like, I want to be someone who's making cool companies and occasionally talks about like the stuff I'm doing, not the other way around. Like I talk and whatever. Do you Do you ever feel that way? Because I mean, ClickFunnels is bigger than any company that I've built so far. So you kind of have some, some great street cred. But do you feel like, I want to talk less and build more?

Yeah. I mean, I, I, yes, I'd rather be building all the time. I'm very introverted too. So like, I don't— my natural default's not that, but like, the podcast is nice because it inspires people, gives them tools and motivates and like, I use it as a tool to train people for free on how to use, just understand marketing, understand business and understand, you know, like just from this alone, people are gonna understand like, oh my gosh, I can start an email newsletter. I didn't even think about that. You know, so it's, it's just, it's a good tool to keep getting our members just different ways to use it. 'Cause you know, you could use the platform to do a million different things and everyone's got different models on how they use it. So it's just inspiring people to like, okay, I could, I could use it for this or for this. And anyway.

That's cool. How big is this pod?

I actually have no idea. I should probably find that out. We've been doing it for a long time. So I first started, it was called Marketing Your Car, and I would drive my work, my office back. It was like a 5-minute podcast. I did like 350 episodes that way. Then we transitioned it and we transitioned. We finally hooked up analytics, but I'm not 100% positive.

What's crazy. So our podcast. Okay, so I think we have someone in the audience to look this up, but I think we have 800,000 subscribers on YouTube. And including audio, every podcast that we do for sure gets 150,000 people watching it. And then upwards of like, let's say 2 million if it goes viral. And when we started, it was so janky that Sean would take one earbud and I would take one earbud. If someone like, we would wanna like talk to someone who called in and we would record sitting around a table on an iPhone. And now I'm recording just in my office. I think I have $2,000 worth of equipment. Nothing like crazy, maybe less honestly, maybe $1,000 worth. And it's just insane. It looks like you have a fancier one, but it's just insane that a podcast could start so janky and, and continue to be janky to be honest. And it still reaches like so many people. And that kind of boggles my mind because I used to think that email is the strongest marketing channel. I've changed. I think podcast is because when you listen to someone in your ears for 40 minutes, you are very intimate with them. And there's been times where I've said stuff that I don't even remember and someone off the street will like tell me all about it and I'm like, I said that? And so it's just crazy how much people listen.

I completely agree. It's like my philosophy is the same thing. It's like if I move people from short form to long form, like long form is when you get their mindshare, you know, versus the other things you're getting a glimpse of attention. But yeah, when someone spends 45 minutes with you twice a week, it's— it changed. And I think about the podcast I go deep with, like, I feel like I have such close relationships with those people who I've never met, you know? And that's the power. In fact, it was interesting when we, we have our high-end masterminds, like we have a $50,000 and a $250,000 mastermind groups. And what's interesting is like the majority of those people were podcast listeners for a long time first. It's not people who got me off email or saw an ad. It's like they went through some process, got on the podcast, listened to me for a year, and then they invested and came in. You know, like that's the, the highest-end clients I found come off of the back of that.

Yeah, it's like I think I've always been surprised at how much influence a podcast can have. To this day, it still shocks me.

Yeah. Okay. I want to ask you a little about your— I don't know how much this is newer business or whatever, but it's interesting. So you have a company called Hampton and I run Masterminds Inner Circle and this is like a different variation, I think. And so I don't understand it completely, but I'd love to explain what it is and, and I probably a lot of follow-ups afterwards.

Yeah. So I was trying to think of like what business to launch after I sold The Hustle and I settled on this one because it kind of fits my preferences and my skill set. But basically Hampton is if you're an entrepreneur of a company that does somewhere between $20 and $50 million a year in revenue, A lot of times you're lonely where you live and you want to be less lonely and you want to have a peer group of people who you can talk to about the company, the company. And if it's, you got to lay people off or if you're succeeding and you don't know what to do with your money, if your wife and you are having issues, like these are issues that if you live in, let's say Boise or Nashville, maybe you're a little bit of a freak, like amongst your friend group. Like, you know, some of your friends might work a little bit more normal jobs than you. And so you're like, I don't really have anyone to talk to. And we wanted to help solve that. And so what Hampton is, is we're in, we're live in 12 different cities. And the first thing that you get is a group of 8 people who you meet with every single month, uh, with a facilitator who guides the conversation. And then you have your local chapter, which is one above that. So let's say in New York, I think we have 170 members and we'll host 400 events throughout the year. So you can meet other people in New York or Atlanta or LA or SF, wherever we're in. And then we have the network, which is our online community. So you could post like who's got a good lawyer that they love and trust. And so that's sort of like the pyramid of value and of what the products are. But the main thing is your core group that meets once a month. And my goal, I think I can get, you know, like one of my competitors is this company called Vistage. They have roughly 50,000 members. And it's, I think that a company, a company like Hampton, my goal was to find a company that can last for 100 years. Vistage was launched in 1963. YPO, which is a competitor, was launched in 1958. My goal is to like, how can I create something that can last that long and also be a multi-billion dollar company? And so it's not gonna scale quickly like a ClickFunnels, But I think we can grow it like 30% a year for like, you know, 30 years.

And I was in EO for a little while, so that's my only version I've been in. This kind of sounds similar. Yeah. What's the, what's the pricing strategy? How do you guys charge for it?

So at first I did what a lot of silly entrepreneurs do. I just made it up on what people are willing to spend. But now it's roughly $12,000 a year.

Okay. And then the growth, like, because if they're— if it's similar to EO, like when I joined EO, there's like a bunch of Boise, I think, forums or groups or whatever they were, right?

Forums is your monthly group.

Yeah. So for you, do you have to go city by— because you can't just launch it nationally now. You get one dude in Nashville, one guy in Boise, doesn't work, right? Like, so you go city by city, or how do you roll out the chapters?

It's been a huge pain in the butt because when I launched the company, we we were still kind of in the COVID world and my customers were like, I would love to meet virtually, like online for my monthly meetings. And we said, that's awesome. That makes it so much easier for me. And I launched it that way. And we had like 15,000 people apply to join the waitlist really quickly. And so we created core groups. That's what we call it. Instead of forum, we say core, virtually. And then obviously the macro environment has changed. And over the, over the last 2 years of us being in business, people have wanted in real life way more. And so we basically have been like crushing it virtually, but now we're changing the whole business. So we're basically going to destroy our company and build it all in real life. And so we had to, uh, we've made a big pivot about 4 months ago to in real life. And so we're, we found the 12 cities that we have that have the most density, and we've created core groups and chapters in those 12 cities.

Are there people that fly into the cities to do that or no?

No, no, no, no, no. They live there. They live there. So, and that makes it really hard. It's a huge moat if I can pull it off, but like it's really hard. Knowing what I know now, I would have launched city by city, like no doubt. And I think had I done that, I think I would be at like $30 million in revenue in 2 years. But I, you know, I made a big mistake. And so, we're fixing that mistake now and giving our customers what they want.

Interesting. How do you facilitate the monthly meetings with each group? Or who, like, is there a facilitator or do you facilitate, or what does it look like?

No, so we train moderators to like, so we have like, for example, in the first meeting everyone does a life walk where they tell you the top 10% and the top, the top 10% and the bottom 10% of their life so you can get to know them. And then in meeting 2, you're gonna do this other thing. And then in meeting 3, you're gonna do this other thing. And then in meeting 4, 5, 6, 7, 8, 9, 10, whatever., it gets into a flow where we go through MITs. It's called the most important thing. So you come, here's the most important thing I have on my plate right now. The group can criticize me and I can ask questions and I can get feedback. Um, that's what the typical meeting looks like. And it's all moderated by someone, but in the future, we're actually gonna test having, um, member-led, uh, groups. So there will be no moderator. So it's a group of 8 people with similar sizes and types of businesses who lead their own meeting.

Yeah. How long, how long do the meetings go? About 3 hours.

Okay.

Interesting.

What do you think? What, um, what can you, uh, what am I missing? Because you're, you've been doing this forever.

Well, my model is different, but yours is really interesting because ours are, um, we do, you know, the groups will come like 3 times out to Boise and we, and I'm facilitating groups which I really enjoy because I get a lot of value from the members. But we don't have like the monthly in-between stuff, which I think is really powerful.

Yeah, the difference is, is that, you know, I'm going to judge. I don't know if this is the truth. I have a feeling they're coming to learn from you.

Is that right? I would say initially, yes. After they are in the group, no. The group self-facilitate, like the way that facilitate means, like we're in this room actually and and each person has a chance to get on stage and share the number one thing that's working for them and then get their feedback on questions. And most of it's actually facilitated by everybody else. I just kind of hang out and take notes for myself.

Well, then it sounds like actually our models are, are a bit similar. Yeah. Uh, and I would love to like share notes on like the best way to lead a meeting because it's an art and it's really hard. Um, and so our thing was my— I just like in the back of my head, I was kind of like, wouldn't it be funny if in the next 10 years I can get 15,000 members to join? And if 15,000, like our average company does around $25 million in revenue. So let's say each company has 100 employees and I'm able to get 15,000 people. That's 1.5 million employees of the companies who are members. And I'm like, that's kind of interesting. Like, could I help these CEOs get just a little bit better and impact those 1.5 million people. Uh, and that was kind of the math. And I was like, it's kind of funny. I would be like, it's like the Illuminati a little bit. Like you're like helping, you're like helping these people make—

yeah.

And I was like, I wouldn't be manipulating them, but like I have insights into how they're all making decisions. And I'm like, that's kind of powerful. And that's really fascinating. It seems really fun. And so, uh, that was the idea.

Yeah. How did you launch it? Is it mostly from the podcast, the media companies you launch these, or you Do you have a different strategy how you're selling access to it all?

So originally I worked on it for about 10 months without telling anyone. I would just DM my friends and see if they wanted to join. And then I launched it on the podcast and on the first day we got like 100,000 people coming to the website. It was a lot and it was all through the podcast and Just like last month was the first time we started spending on marketing. So we, but we still spend, I think our budget's $15,000 a month. Like we're not spending anything. And so it was all organic.

I've seen, there's a group called Speakeasy that's, they just launched a chapter here in Boise. This may be helpful for you, but they actually borrowed our office for it. And so they did a free event. They brought everyone in Boise in They facilitate, they do the whole event, and at the end of it they're like, hey, if you want to be part of this, then there's a monthly thing. And they signed up, like half the room signed up from that one kickoff event here in our office. And they're doing that city by city kind of doing— feels like you could do a similar model. I don't know how big the business is, but they said they have a Boise chapter now, which is— which there's not anything that happens in our neck of the world. So it's kind of fun to see. Something happening. I think they're in, I don't know, 10, 15, 20 cities right now, but that's how they're, they're filling initially, just doing like one big free event. Everyone's inviting all their entrepreneur friends to come in the thing and they have a bunch of stuff happening and they make a pitch at the end and sign them all up but one. I feel like you could do something really similar to that. Just hit, you know, these local events in each city.

Growing isn't the hard part. You know, the hard part is keeping the integrity of the community and of the core group. And so because what we're asking for is like pretty big. So the way that I want to grow is through retention. And so like a good retention rate is like 90%. And, you know, I'm getting— it's predominantly men and I'm getting like grown men in a room and they're like crying in the first like meeting. Like that's like a— it's like a life-changing thing and it's like a pretty serious thing. Like this is like— it could be heavy shit. Like I'm in a core group and like there's people that have like gotten divorces and like we know about it before their spouse knows about it and we're like, Talking through the pros and cons, like it's like a big deal. And what we need to do is make sure that people come with a sense of seriousness. Like you are explicitly saying that you are going to support your group and be there and be there emotionally, be there to make introductions. Like it's like a big commitment. And so that's hard. And selling that idea to someone is easy. Getting you to buy into this for a decade, that it's like hard. You actually, you have a great book, one of your Dotcom Secrets on like cult building or something like that. It's like, it was like, it speaks to this. But one, and another premise that we have, and this is important for anyone listening, which is like my opinion, if you're a tech guy, obviously go get, go do AI. But I'm not that. And so I was like, what do I think is gonna like grow along with AI? I'm pretty sure it's gonna be loneliness and people craving in real life experiences. I think they're gonna like kind of go in tandem. And so I think that a company like Hampton, which is, it's just like the newsletter, my newsletter, people, I said people laughed at it in real life communities or whatever I'm building. People laugh at this too. They're like, this sounds like a cute project. I'm like, No, man, I think this can be a multi-billion dollar thing if you do it right. And that's kind of what I'm hoping and what I'm working towards.

That's really cool.

So good, so good, so good.

Spring styles are at Nordstrom Rack stores now and they're up to 60% off. Stock up and save on Rag Bone, Madewell, Vince, AllSaints, and more of your favorites.

How did I not know Rack has Adidas?

Why do we rack? For the hottest deals.

Just so many good brands. Join the Nordy Club to unlock exclusive discounts, shop new arrivals first, and more. Plus, buy online and pick up at your favorite Rack store for free. Great brands, great prices.

That's why you Rack. Score more with the college-branded Venmo debit card and earn up to 5% cash back with Venmo Stash. Got paid back? With the Venmo debit card, you can instantly access your balance and spend on what you want, like game day snacks, gear, tickets, and more. The more you do, the more cash back you can earn. Plus, there's no monthly fee or minimum balance. Sign up now at venmo.com/collegecard. The Venmo Mastercard is issued by the Bancorp Bank N.A. Select schools available. Venmo Stash terms and exclusions apply at venmo.me/stashterms.

Max $100 cashback per month. I remember when I did EO, I did it, man, I did it right after the 2018 market crash. The group I got into, everyone is like on the brink of bankruptcy. And so I ended up not staying because like it's just a bunch of people who are like, they get together and drink and talk about how their wives left them and their businesses failed. And I was like, on the upward. I had a bad group, but I do remember the process was fasting because they brought me in and it was like we did similar, like a timeline exercise. There's like 3 or 4 meetings I had to go to be trained before they let me actually into the group, which was a really fascinating thing that, that by the time you show up, like, you know the rules and the standards. And, um, I don't know if, if you do similar stuff like that, but I thought that was kind of an interesting way to get you prepped.

It's, you know, I think that like there's like businesses tend to have like one or, or there's like 3 categories of problems I think that a business has, like On one hand, it's like a technological, a tech problem, which is like, can you actually physically like build this technology? So it could be like a cancer curing drug. Like if you can physically build that, then that's gonna be the greatest thing ever. Or the second problem is like a demand problem, which is like, you've invented this interesting widget, but like, does anyone even want it? You gotta go and prove that out. I don't know. And the third one is like operational. Which is like, for example, yeah, if you can get this cab or this guy to my doorstep in 5 minutes after I click, like I'm ready to go. Yeah, I would love that. But it's really hard to pull off. My business is in an operational— we have an operational— we have operational issues, which is I can convince someone to sign up for this. I just gotta make sure that I make this a seamless, smooth experience for all types of people. And like having in real life meetings, like you're describing, like pre-training, Having it across the country, that's really hard. And so I'm still, we're building, we're building that. And, um, once we build it, I think it's gonna be awesome.

Are a bunch of your people still running the virtual versions then if they're not in one of the main cities or?

Yeah. But my goal is to like slowly pull 'em apart. Like I'm like, they're like, if they love their group, I'm like, all right, have fun. But when you're ready, like let's get you into an in, in an in real life group.

Interesting. And people pay the same for the virtual as they were, as they are for the in real life?

No, in real life retains way better.

But their, their cost is the same though, right?

Yeah, yeah, yeah. Um, I, you know, it, we'll see. Like, do you know, um, have you heard of Vistage? Yeah, yep, for sure. So they do like $200 million a year in EBITDA. Really? Yeah. Uh, and then have you heard of World 50? No. World 50 is this— World 50 is actually similar to your mastermind, but it's for Fortune 500 executives. They do about $180 million a year in EBITDA. Like communities like this, like the ones you have, like the ones I have. I think people— I don't know if you felt this way with some of your stuff where people were like dismissive or they didn't understand the math behind it. I don't think people understand that these things can be bigger than they appear.

Yeah, it's interesting. I've never looked at it from like a way to— because for the most part, my higher-end ones are tough because I'm, I'm facilitating the majority of it.

Makes me think about it. Yeah, but you, you kind of have the best of both worlds, right? Like, you own ClickFunnels, which is highly scalable. Yeah. And you have your masterminds, which are scalable but very cash-rich. Yeah. And like Frankly, if I had to guess, uh, your masterminds make way more cash than a scaled startup, so it doesn't really matter. Yeah. Huh. Interesting. But yeah, they could be— these things could be big. It's just, it's a grind. Yeah.

Is it, um, so with you promoting on the podcast, like, do you— does HubSpot get a percentage of that since they're on the podcast, or is it just that you do whatever you want, or like, is there any You're getting, you can roll out all the businesses you want without having to worry about.

Yeah. Yeah. Yeah. Yeah. Because like, it's not like an ad, like on the podcast, I'm talking about my life. Like I'm saying, I launched this thing, here's what it is. And yeah, I have a big audience, but I can't launch all the businesses I want because I'm always nervous and maybe I'm wrong, but I'm A, nervous, very much so of like, wearing out my audience. Like they'd get confused. Like, wait, does Sam do this thing or does he do this other thing? And he does it like, you know what I mean? But also I just think that in order to build like a kind of a legacy creating product or a company, you need to focus for like decades. You know, I think I sold my last, I'm very happy I sold The Hustle because I was poor and suddenly I wasn't poor. Like that was great, but like I truly, I messed up the compounding part. Like having like a business that truly compounds is like the greatest thing ever. And like one decade in, two decades in, like you really can start seeing some of the benefits. And so I hope that will be the case with this. Is ClickFunnels something that you'll own forever?

I think, I mean, ClickFunnels. So we had an offer 4 years ago that we turned down. And at the time it was tough because there was ClickFunnels and there was Russell and everything was like all together. Over the last 4 years we split it separately. So Russell and the coaching business is separate from the software. So in theory, I could sell one without the other. So there may be a potential that we could do that when we get bored. But right now we still really have fun. But I do, you know, I think I'm going to be in the Russell business forever, but the ClickFunnels business, you know, who knows what, you know, what could happen there.

So, and you guys kind of did it the right way, which is like, if I had to guess, ClickFunnels has allowed you to profit along the way. Whereas a lot of people, myself included, I was a little bit of a martyr. Like I didn't pay myself a lot of money because I was like, oh, the CEO should eat last. And like, which is, which is so, which is kind of true. But like I paid myself like nothing. Right. And so I was like, I have to sell in order to get paid. And obviously that, that was foolish.

That, yeah, we built, we built ours where we had to have X amount of money in the bank based on our hard cost. You know what I mean? Like that was the number, then everything above that we distribute out.

So yeah, it's been, it's been nice. Yeah. That, and it's that, that I think allows you to do something for a much longer period of time than, um, and it was nice cause we never took on outside funding.

So we didn't— we could do dumb decisions or smart, you know, whatever it was, but we didn't have anyone we ever had to report back to, which has been, which has been really nice. A lot of friends I know have taken on equity or whatever throughout the process, and it shifts everything. They can't distribute all the profits. They can't do, you know, like, then it's like as soon as you take that first round, then you have to work towards some liquidation of it or else you kind of get stuck.

Yeah, you're— you have a duty. And I think that, um, that makes it way more hard, like way more challenging. And I always tell people, I'm like, most things in business are reversible. Most mistakes— taking capital might be the one where it's like you kind of can't undo that. Maybe you could, but it's so hard that you'd probably just start from scratch.

Yeah, it's funny. Like when we got started, I didn't know what— you know, it's my first time being a startup founder and we're like a year in and everyone was telling us, like, take money and all the, you know, we get hit up by everybody. And then, you know, Rand Fishkin, SEOmoz, Yeah. So he came to Boise and spoke at an event about them raising cash and capital and told them— he got screwed.

Yeah.

But it was funny because he was— I guess his best friend lives here in Boise and they were doing this little event. So he was telling everyone the story about it, like, as if it was this great thing because he was still actively running at Moz at the time. And then afterwards I had a chance to, you know, wait in line, ask him a question. I was like, kind of told him what we were doing, and he pulled me aside and was like, dude, do not take on— and like gave me this warning. I was like, oh. And then fast forward 5 years later, he was out of the business. He wrote the book Lost and Founder and like I read the whole story and I was like, but it was because he told me not to, it was literally why we never did. And I told him later, I was like, you have no idea, like this one conversation shifted, I think the degree of happiness in my life.

So anyway, it's kind of interesting. Yeah, I think I'm not like dogmatic against venture capital. I think that some companies need it. I think the best analogy I heard was VC is rocket fuel And if you own a car, it doesn't matter how fast it is or how cool that car is or how much you love that car, cars should not run on rocket fuel. And cars are, or rocket fuel is for rockets. And just know that if you're taking this fuel, you better make a rocket, not a fast car. And what I realized was I think I like fast cars a lot more than a rocket. And there's a world where you could have a ClickFunnels company and maybe have both. But I think that I also sold my company for a lot less money than what you see big tech companies say in the headlines. And I made way more than most of my friends who raised the money and sold for a lot more than me.

And so like, because you didn't have any anything before the sale, right? The acquisition was the first cash event.

So the last year, so the first 2 years I basically paid myself $2,000 a month, like nothing. And my business had millions in the bank. And so I was foolish not to do that. But the last year I started paying myself a lot. And then my wife, very coincidentally, I told you the Airbnb story. She worked at Airbnb as well. And it went public like the year before, a few months before I sold. And she killed it. And so we did well there. And then the sale put us in like a new, a new stratosphere. And so it was like overnight. Well, like her thing happened in like December and then I got the money in February. So it was like a 3-month thing where like life changed. And frankly, it took about 4 years to get used to it. And so I think there's like a big difference between people like you who make it along the way Or have you ever had a big liquidity event or it's always been— No, yeah, just along the way. Yeah, so people like you who make it along the way versus people like me who it was like a lumpy, it was like nothing and then boom. I think that the people like me are like broken more than the people like you 'cause you're used to it.

'Cause you're waiting for the— That's interesting. When the deal with HubSpot happened, was it pretty quick or was it like a longer-term thing and negotiate, all that kind of stuff, you know what I mean?

Like a traditional sell. It was pretty great. Um, I, I'm very proud of myself for how I handled this and I would encourage everyone to do this, but, um, basically they emailed me in like October, I think it was October. And they were like, hey, uh, what's going on? Like, we would love to talk about a partnership. And I replied back, are you emailing me because you want to buy me? Just say yes. And we'll cut to the chase. And they replied, yes. And I replied that night, I said, I said, great, thank you so much for your honesty. Let's, um, let's get to it. Here's a list of all the reasons why you should not buy us. And I made a, and I made a Google Doc and I made a list of all the things that I think could have came out in due diligence, nothing major, but like in this month we made a mistake and churn was higher. I don't know. Or like whatever. And I said, here's a list. Is any of this a red flag? And he said, nope, all looks good to me. And I said, all right, let's do this., and we signed an LOI like 3 weeks later, and then I closed. So they, they initially contacted me in October. I signed a 90-day, uh, what's that window called? Like a— oh, yeah. And then we closed on the 90th day. That's awesome. It was very fast because selling to HubSpot, like, they care. They're a huge company. A, like, they have resources to like A, they have a team of people just for buying companies. B, they're worth so much money, they care way more about their reputation. They're not going to like nickel and dime me over stuff. And so it was like they were like, look, your company is small for us. Like, we— you could tweet about us and hurt our reputation a lot more than this company's even worth. So we're not going to mess with you. And they didn't mess with me. They were wonderful to work with. And so the whole thing was like maybe 4 months from cold email to deal closing. Oh, that's awesome. And it was miserable, by the way.

It was so hard. Were you trying to sell at that point or do you have any like that you're working towards or you were just kind of just doing the business?

Yeah, I was building a company to sell. I was building it to sell like, and I, I did not go to market. But they, people were always messaging me because we were one of the like hot companies because no one thought email was interesting. And then all of a sudden they did think it was interesting. And it was basically me and Morning Brew were the only two companies that were at scale. So there was only two options if you wanted to buy a newsletter company. And they sold to, uh, Business Insider in December and I sold in February. Interesting.

Have you seen a lot of people since they've been hearing your story popping up newsletter companies?

Is it— Everyone, everyone, everyone, everyone. And it's so much harder now, man. So we started, you, I don't know if, if you like pay attention, but I don't tell, you could tell me what ClickFunnels' open rates are. Like we started in 14, I started HustleCon at 14 and I started The Hustle in 2016 and open rates were way higher. And the cost to acquire a customer on Facebook was way lower. And then word got out, like you've been talking about this for 10 years. I'd been talking about it for 5 years. People finally started listening and the competition was, is way harder now. It's, it's way harder. I don't know what it costs to acquire a customer anymore, but I know it's a lot more expensive than I would bet. And I bet open rates are way, way down.

Yeah. Well, I've been, it's funny cause I've been doing this for 20, almost 25 years now. And back in the day, Email was insane because you get like 95% open rate and like 80% click-through rate. Anyway, so I got spoiled for the first 4 or 5 years of my existence. And back then no one was running email newsletter, you know? And, you know, so for me now, every time I see the numbers, I'm always like depressed based on my vision of what we did 25 years ago.

But it still works. It still works. And I think email ebbs and flows like When I started it, it was not popular, but 5 years before I started it, it was very popular. Now it's, right when I sold, it was very popular. It's since gone down a little bit, but there's like all these platforms, Y'all, Beehive, ConvertKit, whatever. So they've made it way easier, but most newsletters are really bad or like they don't innovate. Like it's kind of like, it's a lot of people, like there's a lot of people that just copy what we did or maybe they copy what you did. I think when we came out, we are kind of, I mean, it's email. It's not like we're flying to Mars. It's not like the most like innovative thing, but like within our world it was very innovative. And I think that there's still, people still need to come up with some more interesting angles than what a lot of people are doing right now.

Yeah, for sure.

Interesting.

Well, dude, this has been really fun. Uh, I feel like I want to hang out with you more often.

So, and hopefully I would, I would love to hang out with you. Like, by the way, this is like an honor for you to ask me questions. I'm telling you, I've read DotCom Secrets. I've, like, I was— I've been following you since I was probably 19. I'm 36 now. How old was I? Like, I remember you winning a Ferrari. Yeah, that's crazy. So, like, I— and then I followed you way before— way before you launched ClickFunnels. And then I signed up for ClickFunnels right when you launched it, and it looked like you made it with Play-Doh. It was like all these bright colors, and it was Crazy. And so I've been a fan and customer of yours for so long.

Oh, that's so cool. Well, dude, I'm glad we finally got to meet up and hopefully we'll do more stuff in the future and open a Hampton group here in Boise. I'll join it.

It'll be fun. Yeah, man. Thank you for everything you do. And total honor. And I think I said this when we were offline, you were doing this because you like hurt your leg or arm or something. So I hope you're feeling better.

Oh yeah. I was at a wrestling tournament. I tore both my biceps off of the bones. So I had to get— probably can't see, but I had double arm surgery, got them reattached. It's been 4 months post-surgery now, and I'm doing all the rehab and stuff. But yeah, I'm feeling a lot better now. Well, God, I'm actually next week gonna start drilling, start wrestling again.

So it's good. Um, I'm— and I actually got into wrestling a little bit because of you. I, I follow, you know, I, I became acquaintances with Ben Askren, seen him do his thing, and, um, big— he got in the UFC. But I remember like seeing like Wait, Russell Brunson wrestles? What's this about? And I, uh, started following like Bo Nickal and all those guys. So you've been a very inspirational to me.

Oh, that's crazy. Well, very cool, man. Well, if I can ever do anything for you, let me know. And, um, yeah, hopefully if you come back out to Boise for one of Nathan's events, let me know too. I'll be there.

Thank you. Awesome. Thanks. Rinse knows that greatness takes time, but so does laundry. So Rinse will take your laundry and hand-deliver it to your door expertly cleaned, and you can take the time pursuing your passions. Time once spent sorting and waiting, folding and queuing, now spent challenging and innovating and pushing your way to greatness. So pick up the Irish flute or those calligraphy pens or that daunting Beef Wellington recipe card and leave the laundry to us.

Rinse.

It's time to be great.