How Roger Federer Became The First Tennis Billionaire (#367)

I saw that Roger Federer was one of— he's, he's part of the, uh, the Billiathlete Club. So there's like— Federer is 5 athletes who have made a billion dollars: Tiger Woods, Floyd Mayweather, LeBron James, Ronaldo, and I think Michael Jordan, maybe Messi. So that might be 6. I think it's 5. Um, and now Federer is in that club.

The whole Adam Levine thing's ridiculous. It's just like, is that in like the Santa's fake section of the newspaper as well? It's just like the most obvious, like people are like acting like it's like a big deal. It's like, dude, what do you expect? Look at the guy. Of course he cheats.

I don't even know the story. Why did he cheat?

I don't know.

Why? Like, what's the controversy? Like, did he do something really crazy?

I only read the headlines. I think he just texted, like texted or Instagrammed like his yoga trainer and said, I want to roll around naked with you all day. And then he texted this other lady that says like, Um, you know, like he like said like, hey, like I want to go out with you. Like, why are you so hot? Or something like that. And then later on, weeks later, he texts and says, hey, my wife's pregnant and we're going to name the baby your name. Is that cool with you? Which is super freaking weird. But, uh, I don't know if he did anything wrong, like legally, but he's just, you know, just doing what like guys with like body tats who live in LA do, you know, you just cheat. Like you could, he's got the face of a cheater, right?

I mean, this is obvious at the bottom of your tattoo sleeve is just a place to put your number. It's like, I wouldn't have got this sleeve as a married man if I wasn't trying to play the game.

Dude, speaking of bros, I think I've just invented something. I've been doing this for the past few weeks. I call it, uh, like fitness dip. So you know how like, you know, people dip like tobacco, they put like, uh, stuff in their lip lately.

Uh, yeah.

You know, like chewing tobacco, you put it in your lip.

I've heard of it, but you're the only guy I know who does it.

Yeah. Just like a fat lip. Lately what I've been doing is just putting in, have you seen PB Fit? It's like powdered peanut butter.

Yeah, that stuff's great. I love it, dude.

I just get a, like a tablespoon of it and I just stick it on the roof of my mouth and I'll just suck on it for like an hour. And I just, it's, it's my fitness dip and it just keeps me like from like a pacifier for you. Yeah. It keeps you, it's like chewing gum almost like, you know, you can't eat anything because you got that in the roof of your mouth and you're just sucking on it real slowly. That's my new fitness dip.

All right. So how do you get an idea like this? Like, I'm not saying it's a, I'm not saying it's probably doesn't taste good or it might be therapeutic or whatever, but Why are you like, you know what, something need to— I need something on the top of my mouth. What can I do? What can I do? What can I do? PB Fit powder. All right. I'm gonna like, I've never even wanted to put anything at the top of my mouth, nor have I just taken foods and be like, what if I stuck this here for an hour? Would that be better than just eating it?

Because I go to the store and I just like look at all the products. I look at new stuff and it says to add water. And I'm like, what if I don't? What if I just eat this as plain powder? And I did.

A rebel without a cause over here.

I don't know. I just tried it. It was interesting to me. It just Dead water.

Don't tell me what to do.

Yeah, it works. It works. You should try it.

I definitely will not. All right, so what do we got today? You got ideas? I've got topics.

I've got a ton of stuff. Let me— we can start off with something. One thing that's like, I don't know if this is actually interesting or not, you tell me, but basically I'm reading this book called More Money Than God and it's about the history of hedge funds. You know anything about hedge funds?

Not, not a lot. Tell me.

Yeah. Well, you know, I'm only in the first half of the book, so I can't tell you much about how they operate now, but cuz you know, we're still in like the 1980s, but basically the guy who invented it was called a hedged fund and his name was Alfred Jones. Alfred Winslow Jones, A.W. Jones is what they call them. And it's kind of interesting. He was a journalist for Fortune. You know, he was just a writer. It's crazy that Fortune even existed back then. This was in like the '30s and '40s.

And for some reason, for some reason, Hedged Fund is so funny to me. That's what it—

that's what it was called.

I know it's— I know it's real, but for some reason it just seems like something we would just say wrong, trying to be smart. But yeah, I'm looking at investing in some hedged funds.

Yeah.

And people would be like, is he putting a D at the end of that?

Like, you know, go out there, have fun, and break an egg. You know, just—

just continue on.

So it's called— it was called a Hedged Fund. And he was researching for an article, Stock Pickers, and he found this like small group of people that were doing like some slightly different stuff with hedge funds or with stock picking. And at the time, like basically rich people viewed Wall Street and a lot of like equity investing as just a way to preserve wealth, not really grow wealth. And this guy, A.W. Jones, he was in his 40s, journalist, and he goes, oh, with these, you know, small group of people that I'm researching, this like mathematical formula stuff that they're doing, it's actually really, really interesting. And so he raises, I think, $100,000 at the time. And what he does is basically, uh, the kind of dumb way of explaining it is, which is the only way I understand it, uh, is that he just like does a combination of longing, going long on things with borrowing leverage. Meaning if he invests $80,000, he would borrow another $50,000. Now he's $130,000 into a stock. Then with the rest of his $100,000, he would buy shorts in such a combination where his upside was much higher and his downside was a little bit protected. And there was like some math behind it. And at the time, this was revolutionary. But here's where things get actually really cool. That itself wasn't the revolutionary part. I mean, that was one part of it, but it wasn't the main thing. The really cool thing that he did, which wasn't done ever before, is he hired these young stock pickers and instead of just giving them a salary, he goes, all right, you work for me. I've raised $1 million. You get $50,000, you get $50,000, you get $50,000, you get $50,000. You can go and hire 2, people to work with you. You're your own group. You're your own group. You're your own group. And, uh, get after it. Let's see what you can do. Uh, the person who does least best or the person who does worst, you guys are out. And he created this like cutthroat culture of these people who were just getting after it. And he was the first person that made it. So you, they were only paid a percentage. So 20% of future upside. And at the time he did it because that was, that just means you're, you're taxed more, uh, uh, it was more beneficial for you. It wasn't income tax, it was a capital gains tax, and your tax benefits were like way greater. But he told his folks, he goes, yes, the reason we're doing this is Phoenician sea captains used to keep a fifth of the profits of successful voyages. And that's like how he like— he didn't say, hey, it's just so we can— for this tax thing, but like, he like justified this weird reason. But anyway, this team structure, that's what like changed everything. Prior to that, Wall Street was just like this stodgy, sleepy place of like, look, we're just doing 80% stocks, 20% bonds, and we just let it sit there. But then he, once he changed that incentive structure, everything changed. And that kind of got me interested. That, that's kind of like been sitting with me because at The Hustle we used to do this too where, uh, for our quotas for our salespeople, we would say, you know, go out and get ad sales and you get a percentage of what you close. But then they would close like dumb shit. They would close like, for example, they're like, who cares if it's a porn company, if it's a weed company, if it's a shitty service, like it doesn't matter. And then we were like, well, Actually, that's a good point. We need like inverse incentives. Like, uh, you know, do the readers like this? Is the click-through rate high? Do they renew? And I couldn't figure out how to do that successfully. I couldn't figure out because both all the—

I thought, I thought for sure the story was ending with, so then I created a better system and it worked beautifully. You're like, I, I couldn't figure that shit out. That's too complicated. Just like, you know, like I thought so I would've bet anything that you were about to say. So then we did this and pat on the back. I did a great job because I'm so used to people doing that. Like, you know, in tech, nobody says, you know, we kind of hit this problem and we didn't solve it. We just didn't solve it. You know, nobody ever tells a story like that. I love that you just told a story like that. That's amazing.

Well, I, I, so with my new business, I am trying to think, I'm like, how do I solve this? You know, like, can I pay like 50% of the, but there's like, but I started researching different ways to solve this. And, uh, I don't know, have you had, I'll tell you a few other examples, but have you had with like the Milk Road or with anything that you've done, have you had where you're like, if I just change the incentives, this other thing changed? So it's like the product isn't the revolutionary or interesting thing. It's like how you operate. That's what's interesting.

Yeah. Um, I don't think I have a great story personally off the top of my head. Uh, like we just did one where we needed to fill all the ads for like October or something like that. Or like whatever, some future month. And we were a little light and it was like, oh, how do we get this up? And Ben was just like, you know, if we just told our salesperson, we'll give them an extra $10K if they can get us to this fill rate, I think they'll do it. And I was like, yeah, but that's the same thing as their quota. If they just filled it, they would get that percentage. He's like, no, I think if we just say, I'll give you $10,000 on top of your quota if you could do this. And I was like, okay, I guess that makes sense. And, uh, instantly they like way overfilled it. So, and I was like, okay, I don't think you could do that all the time. Uh, because like, you know, this got them, you know, to get off their ass and do something. But, uh, but yeah, I thought that was interesting.

So what's funny is you're right, that does work and you can do it all the time. So I was researching like incentives and one of the, there's a handful of ways to make, basically I think Charlie Munger or some, one of the like rich smart guys said like, You show me the incentives, I'm going to show you future results or something like that.

And show me your incentives and I'll show you your outcomes.

And there are a few successful ways to, like, incentivize people. And so one of those ways— I was reading this McKinsey study where they said you actually should give bonuses based on 105% performance, not just 90% performance. And research shows that if you over-attain in order to get a bonus, people tend to do that versus the other way around. Another thing is you do Clawbacks. So you get 50%, uh, of a bonus upfront. And if you don't achieve the goal that you said you were going to get done, then I'm gonna do what's called a clawback and I'm gonna take that money from you. So you could do this with kids where you say, hey, look, your allowance is $100 a week or $100 a month. I'm actually gonna give you $50 now and the other $50 when you do your chores. But if you don't do your chores, you're giving me that $50 back. And that loss aversion is actually performs better than if I just say, I'm going to give you $100 at the end of the month if you do X, Y, and Z. Um, that's, that's 100% right.

Um, yeah, the, I think loss aversion is what they, what they call it, but basically it feels, it feels worse to lose money you have than to not gain the same amount of money. It should be the same thing, but it's, it's definitely not the same thing. And, uh, I had this when we did, I did a deal once where we got a million dollar signing bonus. but it was contingent that if we, if we left before a year, um, then we wouldn't get the million dollars. And, uh, I would, uh, personally, I wouldn't get the million dollars if, uh, if I left before a year. And, um, and I think if you had just told me, hey, do you wanna stay for a year to get this million dollars? I would've been like, well, you know, that sounds good, but there's other opportunities. Maybe I could do it this other way. But once they just put the money in my account, they're like, That's there now. Go look at that. Okay, cool. If you leave early, you have to pay all that back. And I was like, oh man, I got to pay back $1 million. And it just felt— if my brain knew exactly what was going on, I was like, I just don't want to pay back $1 million. That sounds like, uh, that would be horrible. I'm definitely not doing that. I'm not losing $1 million. Whereas if they had just said, hey, if you, if you stay a little longer, you can get this extra bit. I would have been like, ah, maybe I can go get that some other way. And, um, and that's a kind of a crazy, like, psychos— like, you know, psychological trick. I knew what was going on and it still felt real to me.

Well, and another interesting example, then we can move on, but another interesting example that I was thinking about was for, uh, you know what's like a really fucked up industry is private prisons because you're incentivized by like how many beds you fill, you know? And that's like, you know, doesn't align with what we want as a society. And I'm like, well, what it should be is you're paid a little bit of money for how many beds you fill. But then if the inmate, you know, has a recidiv— if they go back to prison inside the next 4 years outside of being released, you gotta gimme that money back. And if they stay out, I'll give you the second half of your payment. And I was just like, I was thinking of all these different ways that, uh, cuz I was thinking about my business. I'm like, how can I change my incentives around in order to get a different outcome? And that was like a really good example. Uh, but it seems the problem with incentives is that A, it's like to change them, you have to be kind of bold and like kind of be the first to like really try something new. And B, oftentimes it's not always straightforward. Like, did you achieve this? Or like tracking the results is actually like a huge task in itself, which is what we had at The Hustle. I'm like, I could do this, but like I gotta build all this stuff to like track all this.

But anyway, I, I, yeah, because it's, uh, they call it second order effects basically. Usually the first thing you're trying to incentivize does happen. It's the second thing that goes wrong. Basically, it's, uh, yeah, you got your ads filled, but they filled it with certain types of content, which led to readers being upset, which led to churn or whatever. Like, you have to predict what would be the, uh, the second-order effect that comes from some of this stuff. There's a, there's like a Farnam Street blog that I've read about this one.

The Cobra thing.

Yeah, like the Cobra thing.

Yeah, go ahead.

Sort of like incentives gone wrong. I don't remember the story at this point.

Basically, it was like in India right now, like there's, you know, the stereotype of like a guy playing like a horn, or I don't know what it's called, and like the cobra coming up and like dancing. And it was like, well, why are there so many cobras in India? And apparently, I don't remember what year it was, but there, there was a little bit of a cobra problem. And they go, hey everyone, we're gonna give you $50 for every dead cobra you bring it, bring to us, thinking great, we're gonna have no more cobras. But in reality, uh, the schemers were like, oh, let's breed cobras and kill them and bring them to you. So like, oh nice, it's free money, this is awesome. And that there was now an overpopulation problem of cobras. I actually have no idea if that's a true story, but that's, uh, that's like one of the urban legends.

Yeah, that's one of those Malcolm Gladwell stories that just like becomes like known by everybody, whether it's real or not.

Um, have you heard the one about, uh, him talking about David and Goliath? Yeah, that one's great. Basically, I'll summarize it in 10 seconds, which is basically like everyone talks about David and Goliath. It's this underdog versus the big shot. And they're like, oh no, it turns out Goliath was like 8 feet tall because he had a pituitary gland problem, which means that he was like had low IQ, meaning he like was like, you know, like an idiot. And he was like big, which means if you have that pituitary gland issue or that issue, you can't see. And at the time, the Davids of the world were like shepherds and they had these slings, which is basically like they had a rifle. So basically this like lead BB that this guy had is already deadly and he hit like a big guy who was stupid and blind. So it's really not that like impressive.

Yeah. David's a bully. Yeah. All right, so let me give you, let me give you an idea. Okay, so I need a name for this. Don't have a name. Uh, it's a working title here, but I think that— isn't it crazy that basically— so we're, we both invest in startups now, and, um, and I had this real— one of, one of the startups that I invested in is just doing absolutely amazing. And I'm like, wow, that thing is going to make like our little investment. We put $75K in. I was like, I think it's currently probably at like $4 or $5 million of value, that $75K check. And we're not like, like it can still run. Like that thing can still double twice.

And you're not doing anything.

I'm not doing anything. And I was like, and also, so that's kind of A, just amazing. And I'm like, oh, I'm excited. Like the fund is going to have like, like the first really, really big winner because we're only 2 years in. And so it's hard to know what's your, what are going to be your big winners. But I think that one's going to be one of the really big winners now. It's, it's, looking like very, very promising. But the second part is I would have never guessed that that would be the one.

Um, what can you say? What it is?

Um, no, I don't want to say which one it is yet. Um, because I don't know if they want me to say or whatever. But basically I looked back at literally that, that the batch of that quarter, I did 10 deals. And of those 10, I would have said like, oh, this is probably like, you know, somewhere in the middle. Uh, I would not have guessed it's like the one that's the big winner. And I thought, wow, that's crazy. And I was like, you know, it's pretty unfair that employees at tech companies don't have this sort of portfolio approach. And it got me thinking, well, you talked about, or the founders, Sarah's List, or the founders. So you talked about Sarah's List and how, you know, if you could pick one of these companies that's gonna 4 or 5x over your 4-year period there, Um, you know, you can become a, you know, a self-made millionaire without taking huge entrepreneurial risks, but you gotta pick right. And so that got me thinking like, why do you have to pick right? And so I got two startup-related, uh, community ideas for you.

The first is, by the way, the way that you're setting this up, it's like, you know, doesn't it suck that when you eat 4,000 calories a day, you get fat? Why does it have to be that way? It doesn't.

Like, what if ice cream had just had a bad rap?

Yeah.

And what if I told you If you exhale while eating, it has no effect at all.

Yeah. It's like, duh. Yeah. Okay.

In the, um, all right. So my idea is basically this. You take a job at a tech company, you get your portfolio of stock options, or sorry, you get your stock options. You can then click a button and you can, what you can pool it and you could pool it with other companies that are like, like equally risk weighted. So we basically create like a, um, like a, like a credit rating agency where we kind of rate stock options and we're like, all right, cool. Like you're getting it at this price, at this valuation. Good. We know that that's, that's set. And secondly, like there's a community, like desirability to these options. Like maybe everybody in the community really wants Stripe options because they're like, wow, Stripe is great, but I'm not working at Stripe right now. I'm working at this smaller startup that I think has high upside. But like I consider Stripe options to be AAA stock options. So you kind of get a valuation and then a trust of that valuation. But you basically put your, you put your stock in and you end up with, let's call it 40% your stock and 60% becomes a blend of other stocks that you get to either pick or index into out of the startup community. And so as a, as an engineer or as a designer or whoever you are, you're getting to be a part of, you get de-risked a little bit out of just your one thing. Cuz maybe you got a crazy CEO. You got Adam Neumann. You thought WeWork was a good idea. Now, 3 years later, your stock options are worthless. They're underwater. And like, you know that, okay, cool. That's just how the game works. But does it have to be that way is my question. And so, um, Sam, I have 2 questions for you. How good of an idea on this on a scale of 1 to incredible? And secondly, we need a name for this idea.

Uh, we already know I'm not funny on the spot. So the name thing, I'm going to, I'm already going to say, yeah, it's already a swing and a miss. I mean, I called my company The Hustle. Like I'm not even good at naming maybe not on the spot. Uh, so, so I mean, this podcast is called My First Million. Like, we're not, we're not exactly good at this. Uh, I told Sarah I want to name my, our kid Buck, and, uh, she, she wasn't feeling it.

Dude, that's so funny. I had told my wife, I'd been saying this since college, I wanted to name my kid Jumper. And then even I was like, that's a horrible name. But at some point I was committed because I had told like 12 people that I was doing this, and those are like my 12 friends. And it made no sense, but I had to stick with it till my wife was like, what are you saying? This is not even close to what's going to happen.

Yeah. I've suggested Biff and Buff, and she's not into it.

I think these are like, you know, in Batman comics where they punch and it's like pow. It's like Biff, Buck. It's like the sound effect of a cartoon punch.

I have a feeling that first name Chuck, middle name Steak is not going to pass either, but TBD. So I'm not good at naming anything. But yeah, I mean, if you could pull this off, dude, one thing that I learned when I was running my company was I thought like, oh, it's a privately held business. I can do whatever I want with the shares. Like, I can just— you get a share, you get a share. I can give this to you. I didn't realize that. It's like, it's not— I guess it's— I don't know if it would technically be considered regulated, but there's like rules, right? Like, you can't— for example, if I give— if I sell you a share for a dollar, I can't then 6 months later— and I'm like summarizing this, which means I'm probably a little bit off— I can't then go and give like another employee that same share for $0.50. You know, that's— I guess I don't know if that'd be considered illegal or just against like certain rules that where you can get in trouble, but it's like you can't do whatever you want. So yeah, if you could— but if you could figure out how to like operationally pull this off, I think it's badass.

Well, there are like secondary markets where you actually sell them, but I think this would have to be some— you'd have to create some some, you know, financial contract, some, some, some derivative product that basically says I pledge or assign my shares to this portfolio basically. And then in exchange, in exchange, I receive shares of the portfolio. And there has to be some sort of like consequence for trying to like, you know, renege or whatever. Let's say your startup hits it huge. You're like, oh, uh, don't wanna do that. So I don't know the, you know, I'm gonna wave my hands in the air right now that what I'm doing right now is legal financial magic. Like, all right, it's done. That's done now, and now we just need to like, you know, start the company and have it take off.

Yeah, I mean, it's—

by the way, that's how I actually run my businesses. I'll go talk to the lawyer or the accountant. I'll be like, I don't know, we don't have the— we don't know what the contract says. Like, you know, you got it, you got this. Giving them good vibes. I'm like, hey, I already agreed to this deal. You got to figure out how that works. Like, they're like, what? Why didn't you just Talk to me first.

There's like this leadership principle that you're supposed to like give people autonomy and like let them figure out and empower them. And I always just see— I'd be like, that's what I'm doing. You're empowered, dude. I'm empowering you to figure this out.

You're welcome. Yeah, autonomy I've given you.

Your ass just got empowered, my friend.

Congratulations. Yeah, you're welcome. Thank me later. Studies show this makes you happier. Yeah, study shop. Yeah, I mean, if you could figure that out, I think I'm down. I just empowered your ass. Yeah, I just empowered your ass.

Classic.

Yeah, you like that?

Leadership move on my part.

You like that? Suck on that, Harvard.

So, speaking of like investing, I was, uh, reading about the Figma thing. So Figma is like the design thing that just sold for $20 billion. So have you heard of O'Reilly Media?

Yeah, they, um, they publish like books and the conference, right?

Like, yeah, basically what's the guy's name who started it? I had dinner with him one time. What's his first name?

Uh, O'Reilly.

Tim O'Reilly. So he's like, they call him like, he had this title like the Oracle of Silicon Valley cuz he's been in the game since like the '70s and '80s and, uh, originally started writing books on programming. And his mission statement for his company was actually really cool. It was like, uh, work on interesting stuff with interesting people. And he's like, we'll try books for a little while. And then he's like, oh, we'll just, let's just stick with books. That's fine. But like, he didn't actually necessarily care about books. He just wanted to like fund his ability to work on cool stuff. So he, anyway, they're famous for writing these books. Now they make like $200 or $300 million a year, uh, with a combination of books, conferences, and, uh, like you can pay like $50 a month and like get access to like a bunch of their like technical content. So it's content. For engineers and shit like that. Anyway, they started a little fund using the profits of their business, and the profits of their business were— was big, but their fund wasn't necessarily big compared to like a, a full-time, you know, proper fund fund. And I was looking at some of the stuff that they did and they were in Figma's seed round and I was doing some math and this doesn't account for dilution and if they sold early. So these numbers actually could potentially be off by, by a lot. But assuming that isn't the case. Uh, if they— if I don't know what Figma's seed round was, but I think they raised $3 million. So if you assume that it was around a $15 million cap, uh, it sold for $20 billion. That means it went up by around 1,300 times. So a $250,000 check is something like $300 million. And it's crazy that this is one of those examples where the main thing didn't even make the main money. You know what I mean? Like the— or sorry, the main— the not main thing made more than the main thing. Our software is the worst.

Have you heard of HubSpot?

See, most CRMs are a cobbled-together mess, but HubSpot is easy to adopt and actually looks gorgeous.

I think I love our new CRM.

Our software is the best.

HubSpot. Grow better. Dude, I mean, there's so many examples of that. That actually leads me to another topic I had, but like, The, remember that when we did Camp MFM, we stayed in a house and I don't know if you saw it, but did you see on the stairway up to the guest bedroom, those plaques on the wall? Did you walk to that staircase? Like the back staircase by any chance?

Yeah. I thought they were just like kids' trophies, like basketball trophies. I didn't even look at them.

No, they were adult trophies. Basically what those were. Uh, so the guy whose house we were staying in, he's a venture capitalist. Oh, and he's a venture capitalist who lives in North Carolina. And that on that stairway up, I was walking up there and I was like, wait, Beyond Meat? And it's basically what he was framing was a share certificate. It's like, this guy, you know, whatever his name was, owns, you know, 45,000 shares priced at $0.01, you know, dollar, like basically 1 cent a share. And then it's like Beyond Meat going public at $11 a share. And I was like, wait, I was just like, Literally took out the calculator app, you know, it doesn't go up to a billion or whatever. I was like, unless you turn it, this is—

you got to turn the phone. Oh really? If you turn the phone, yeah, that's a fun little fact.

Wow, game changer. I've been, uh, just like the same. I'm like giving up. Exactly, that's my, that's my goal, not to be a billionaire, to get an E in my network. Yeah, the, um The, the, but the guy basically had like 20 of these on his wall and they were just like, yep, issued shares at 22 cents a share, now going public at $22 a share. I'm like, wow, that's like, you know, these are crazy run-ups. And it's like, okay, you own 10,000 shares, 20,000 shares, 5,000 shares, 50,000 shares, and you just do the math. You're like, this is a staggering amount of money that's being generated by this. It is really mind-boggling when you get these investments right. And it is also really funny how some of the really successful people made their wealth not out of the main thing that they did, but in a way out of the main thing that they did. Tim Ferriss is another example. Somebody was asking me the other day, they go, how much do you think Tim Ferriss makes a year? And I said, I, you know, I don't know. I don't think he maximizes like, no, what he can do. Like, he doesn't sell out, you know, fully.

Probably just $5 to $10 million.

Yeah, I said that's exactly— I said $5 to $8 million a year, probably, of just like cash flow. At this point from podcasts, sponsorships, newsletter, whatever, but book royalties, something like that? I said, "Maybe $5 million a year." They're like, "Oh, okay. That's really good, but I guess that's not that big." And I go, "Yeah, but he also, because he was Tim Ferriss, got to invest in Shopify and Uber and probably made hundreds of millions of dollars off of his Uber investment." Over $100 million, my guess.

I would bet that he's net worth is north of $150, maybe north of $200 liquid.

Yeah, which is, I mean, insane. And obviously, like, what that means is that 90+% of it probably has come from not his— if he described himself, he might say, I'm an author, I'm a self-experimenter, I'm a podcaster. But then all the money came from, like, you know, 4 angel investments or whatever. And, um, and I think that's really, really, uh, that's like really, really impressive, but also more common than you'd think. Do you know other people who had this? Otherwise I have an example that I want to go into anyway.

Yeah. Uh, just like a few famous people, just like you see, like, uh, like Nas the rapper, like on all these cap tables, like, yeah, you, you know, the guy who started Figma in one of the articles, it said that he had made $10 million because he owned the most expensive crypto, one of those like big ones. Uh, and he bought it for nothing and he sold it and he had $10 million before he even sold Figma. But, uh, what are the other ones?

Uh, well, I wanted to do, I was thinking about, okay, who do I do as Billy of the Week? And so my Billy of the Week that I came up with was Roger Federer, the tennis player. A million dollars isn't cool.

You know what's cool? A billion dollars.

So the US Open was on, got me thinking about tennis, and, um, and I saw that Roger Federer was one of— he's, he's part of the, uh, the Billiathlete Club. So there's like— Federer is 5 athletes who have made a billion dollars. Tiger Woods, Floyd Mayweather, LeBron James, Ronaldo, and I think Michael Jordan, maybe Messi. So that might be 6. I think it's 5. And now Federer is in that club.

So did you give him like a $300 million bump though? Because he married Brooklyn Decker.

No, that's not even included. That's, that's just bonus points. So how does this work? So he has the same thing where, okay, he's had a great career, right? Considered, I think, the GOAT in terms of tennis, tennis players. So he's the greatest tennis player of all time, but less than basically 90% of his money came not from winning tennis tournaments. So he's made $130-ish million from official prize money from tournaments. He's got 20 Grand Slam wins, but most of the money he makes is off the court. So just for example, like, is he retired? Yeah, so Roger Federer, who just announced literally yesterday that he's retiring, you know, in his last year he made like $300,000 of prize money, but $90 million from sponsorships off the court, off the court, which is kind of insane. But his story is kind of cool, like And when I was studying these different athletes, I'm actually going to do a whole episode that's just a deep dive on each of these athletes, the moves that they made that made this happen. So one of Federer's big moves was that early on, he was not getting paid jack shit, even when he was the best player. They would pay, like, Andy Roddick more because they're like, oh, Andy Roddick, he's American. America is a bigger market. Federer, Swiss, the Swiss market, that's a tiny population. He's kind of this like clean-cut, sort of boring guy. He doesn't have this big personality. And even though he's really good, he's not as marketable. He's not as sellable. And this is what they used to tell him. So he was getting like very small— like Nike was paying Andy Roddick more than they were paying Roger Federer, even though, by the way, that was not ranked number one.

That's the guy who married Brooklyn Decker.

Oh yeah, Andy Roddick. That's right.

Damn.

So, so anyway, so Federer goes and he's like, he's making— so he's making like very little money from Nike. Then he, you know, he carries on and he goes and he gets to a $10 million a year deal with Nike. And it's sort of like, well, you made it, you know, you should be happy. You got this $10 million a year deal. You know, you're set, your, your family's set, whatever. But he made two decisions, which really one decision led to two things that made him an extra $600 million. And here's what those two were. So the first is his contract with Nike is coming up. And the expectation is that he's going to just renew with Nike. And he goes to Nike, he says, hey, this is now or then? This is back then. He's like, I'm one of the, you know, I'm one of the best tennis players in the world. Like, you know, what can you do for me? And they're like, Raj, we put so much marketing behind you. You know, the reality is you can't compare yourself to basketball players or to, or to soccer players. Like, you know, tennis is just a different thing. Here's the best we could do. And they gave him a deal, and the deal was basically like, every year that you're playing, you get X amount of money. And he's— and, you know, something similar to what he was making right then. But he started— he decides, you know what, I'm gonna pause here. I'm not just gonna take this deal. I'm gonna go shop around a little bit more and see what I can do. And then Uniqlo comes at him with this crazy offer. And so Uniqlo, who's not even in the, like, sports apparel game really, but they kind of had this, like, tennis vibe, they're trying to come They're trying to come to the West. And so Uniqlo comes at him and they offer him a 10-year deal worth $300 million that pays him even when he retires. So this is 2018. He's retired now. I think he's retired now. Check that. He is retired now, right, guys? But basically he signs this deal knowing that he will retire during this deal and he's going to get paid $30 million a year doing this. He goes back to Nike. He tells Nike, hey guys, I got this offer. 'Can you also give me an offer like this? It doesn't even have to be as much.' And they're like, 'No, we'll throw in this, here's that extra free t-shirt, but no, you're not getting a new deal.' Give you a parking spot. So he's like, 'All right.' He leaves. But there's one key thing that he kind of knew here, which was that Uniqlo doesn't make shoes. And so he signs the Uniqlo deal, he starts wearing Uniqlo, but he's still wearing Nike shoes. And they ask him at the press conference, they're like, 'Roger, I noticed you're still wearing your Nikes.' Are you allowed to do this? Like, oh yeah, I don't have a deal with them. You know, I'm shopping around. Let's see what's out there for me. You know, it's exciting. I want to see what's out there. And so for 3 years, he keeps wearing Nikes essentially for free because he's just playing in them. He doesn't have a shoe deal. And then finally he gets— he does a shoe deal with a brand called On Running, which I'm guessing you know about. Yeah, the running brand.

They're also another Swiss company. Yeah, they're kind of taking the world by storm. And you know what's funny is they were one of our advertisers when we first started. And they started spending a little bit of money and their spend kept going up each year. And I was like, you guys are killing it, aren't you? And they are. I think they make like over a billion in revenue now. Or maybe they even sold. Did they sell?

No, they went public. So, so they went public. At its peak, it was like $11 billion valuation. Now with, with the market correction, it's back closer to $6 billion. Uh, but at the, you know, at its peak, so Roger owned 3% of the brand in exchange for, he did an equity deal. So he said, all right, I get it. You guys don't have the same cash these guys can offer. How about a piece of the company? And so he owns 3% of the company at its peak. His stake is worth $300 million now. So that's sort of like bet on yourself and then do an equity deal. Don't, don't trade dollars for time, you know, trade your brand for shares, trade it for equity, and that becomes worth $300 million. And then he says, all right, what else can I do? So he then takes matters into his own hands. He cuts ties with his current representation company, starts his own player management firm to represent him and other players. Then he starts creating his own tournament. So he is got his own, like, you know, cup that's basically like, you know, the equivalent of the Ryder Cup in golf where it's like Europe versus America. Uh, so he wants to do the same thing. And so now he's got his own competition thing. And so he is built this whole empire, made over a billion dollars total, most of it, 90% of it off the court. And I think this is kind of amazing. And if you look at it, um, there's a couple like, like interesting things here. So he, um, he goes upmarket. So he goes basically like, how do I go premium? So his sponsors are Mercedes-Benz, Rolex, Lindt chocolate. He didn't do what Jordan did, which was Coca-Cola and McDonald's, right? Because he's like, all right, where's my niche? Where's my market? How do I get paid? Let me go to these, like, you know, go to Rolex basically. The second thing that he did was he, he He basically, not only did he bet on himself, not only did he take matters into his own hands, he played a very patient game. And so I think most people would've been, during those 3 years where they don't have a shoe deal, they'd just be counting the dollars that they're missing out on. I, I make $5 million or $10 million a year if I just sign this contract. And this is a common trait. There's this great LeBron James story where LeBron is 18 years old. He graduates from high school that same day, you know, the day, the first day he's legally allowed to. Nike shows up at Nike or Reebok. I think Reebok shows up at his, at his school or whatever. They take him to a meeting. He's like, and I remember, dude, this is like the longest table I've ever sat at, like the longest boardroom table. He's sitting at one end, I'm sitting at the other end, and he's like, he slides a check over to me and I look at it, it's more money than I've ever seen in my life. And LeBron comes from like single mom, right? She had him at 16. Couldn't pay electricity bills type of thing. He was dirt poor. And they basically offered him a $10 million a year contract as an 18-year-old kid. He hasn't played a single game in the NBA yet. And he looks at it and they're like, you sign this now and you can become our signature athlete. We will put this money behind you. It's the biggest deal we've ever offered to a kid out of high school. Congratulations, son. And he doesn't have an agent. He doesn't have anything at this point. And he basically just says, You know, appreciate the offer, man. Like, I appreciate it. Thank you. Um, let me get back to you. Did I get back to you? This is $10 million a year. What are you thinking? And he's like, and he's like, he tells a story later. He's like, in my head I'm thinking, man, this is more money than I've ever seen. But if Reebok's offering me this much, I wonder what Nike will offer me. I wonder what these other, like, he's like, I must be worth something to these guys. Like, I don't have to take this deal yet. And just by being patient, he ended up with a much larger deal. Out of that just for not like immediately grabbing.

So you know what trait that's called? It's called— there's this awesome book by this woman named Angela Duckworth called Grit. Have you ever heard that book, Grit?

I've seen like Silicon Valley people talk about it.

Yeah, well, it's like centered around this story. It's like a study where they give a whole bunch of kids, they sit them down at a table and they go, hey, look, you can have one marshmallow now or in a couple hours I'll give you two, but, uh, I'm gonna set this here. I'm gonna go outta the room for a little while and handle some stuff. When I come back, I'll see if you decided to eat it or leave it there. And, uh, that will kind of tell me what decision you made. Sound good? And they leave and, you know, they just see who does what. And they measure these kids for like 30 and 50 years, like for years and years. And what they found is there's a correlation between traditional financial success, you know, like our traditional word of success. There was a correlation between how successful they were and the children that chose to not eat that one in exchange for getting two in the future. And the ones who put it off, you know, an 8:02, they were more successful. And what you've explained to me is like the perfect, like real world but rare example of, uh, grit where it's like, no, I'm willing to like not do this thing now in exchange for a better alternative in potentially in the future.

And that, that's delayed gratification.

Yes. Delayed gratification. And that's like the best way to describe that.

I'm a marshmallow eater, dude. Like, I, I, I would've been that first You know, I would have had it in my mouth while they're explaining the instructions. Like, what? There's another one coming.

Well, I always got like frustrated when I talked about like, you know, I told you this when they talked about Warren Buffett and Jeff Bezos talking about patience and having fun. I'm like, dog, you're way too old. Go have fun now. Like there is no, there is no long, there is no long-term man.

Your long-term, Jeff Bezos now, he's like, you know, he's rushing, you know, You know, Sig Ep over there, he's turning into a frat boy. He's like, he's like, he wants to be single, do roids, you know, drink beers on a boat. It's like, all right, that's cool, but like, not as cool when you're— how old is Jeff Bezos? Not as cool when you're 57 as it was when you were young.

Oh no, man, it looks like it works. It looks like it, it looks like it's working for him. Let me tell you about this thing I read right before we started. So basically Today, I think today they're going to announce with the Fed what their rate raise is going to be.

Yeah, we're going to, we're going to learn how much money we've lost today.

Yes. And I don't know anything about that type of stuff, so I'm not going to pretend I do. But I read this interesting article and it was about JPMorgan. You know, JPMorgan is like, you know, amazing bank that's supposed to know what they're talking about. And I was reading about what their predictions were and they had this like day-of scenario where they're like, here's like the 3 options. Here's the 3 possible outcomes. And, you know, they raise the rate by this much, this much, and this much. And here's our prediction on what's going to happen. And they weren't like being funny. They weren't— obviously they weren't being funny. They weren't trying to be like silly or anything. But I'm going to tell you the range of the 3 options. So option 1 was— well, I'll just say like, so what's going to happen is if they raise it by 0.75, we are potentially going to have a 5% drop. Uh, sorry, if it's a full percent, full percentage point raise, we're going to have a 5% drop in the market. Or if it's a 0.75% raise, we're going to have one of the best days on record for the S&P 500. So that's basically this, like the, the most, like one of the most prestigious banks on earth with thousands of people studying this. They say it's either going to be the best day ever, or a 5% drop, which is not quite the worst day ever, but it's a really bad day. And it just goes to prove that even the quote experts, they don't know shit. We're all just floating on this rock trying to figure it out. But I saw this and I was like, wait, are you kidding me? Is this a serious, is this a serious prediction? It's going to be one of the best days ever or one of the worst days ever or something in between. That's basically what their prediction is.

It reminds me of those people where you're like, all right, so, you know, what do you think of the chances that it happens? Like it's a 50/50, man. It's either going to happen or it's not going to happen. No, like, just because there's only two options doesn't make it a 50/50. It's either going to be or it's not going to be. It's not 50/50.

Tomorrow the statement analyst is going to be like, well, you know, I saw that going one of two ways, but I did not expect it going that other way.

And the funny thing is, it's like they released like an 82-page report and it just like, I don't know, man, at the end. Yeah, yeah. It just trails off.

Yeah.

Well, who the hell knows?

It's just like, mm. 'NM, not much, you.' That's just what the whole report should be, because that's basically what they just said. Like, 'What's your opinion?' 'Not much.' Yeah, I thought that was ridiculous. That's, that's— so I was reading about all these hedge funds and I'm like, 'Oh, these guys are smart.' But turns out, like, when I was reading about these hedge funds, these guys are smart, but they're like kind of lucky. Like, they like just make a bunch of guesses.

They're hedged funds. Yeah. Did this guy, um, This is a hedged opinion, by the way.

This is the most hedged opinion I've ever seen in my life. The—

it's like one time I was playing roulette and I was so down on my luck at the casino. By the time I get to the roulette table, that means I have like— I got bored of poker, then I lost money in 5 minutes playing blackjack, and then I had like an absolute roller coaster at the craps table. And now roulette is my like come down. Like my gambling addicts out there will know what I'm talking about. And then at some point I'm like just betting wrong every time. Like, what are the odds of me being wrong on red or black 12 times in a row? And then I'm just betting both red and black just to feel a little bit of a win. And it's like, you know, just hoping a green doesn't show up. But basically, like, there's a tweet that I saw that goes, yeah, I never realized my whole net worth was dependent on an interest rate. Like, yeah, it's like, dude, until this year, did you know what the FOMC committee was? Did you? Did you know that like your entire net worth was dependent on 0.75 or 1% interest rate hikes? Like, who the fuck did this come from? And why did it turn out that they could— no, I remember I could just ragdoll my net worth.

I remember, uh, people talking about the Fed and I was like, I don't know what the Fed is.

It's like, it's like when people say like, talk about the FBI, to be honest.

Yeah, that's the Fed.

A lot of like Breaking Bad and Narcos. I had no idea.

Like, you know how like people people say like, well, you know, scientists say, or, you know, they say this. That's who I thought the feds was. It was just they, you know, there's he, him, her. Now there's they, you know. I just thought it was the pro— the official pronoun.

My pronouns are they and fed.

Yeah, dude, I saw a guy on Twitter and he put for his pronouns, he put we-damn-boys.

Dude, that's— it's the best one. It's the best one. It's that guy Jack, um, Jack R. Read them, boys.

That was his pronoun.

It's too fucking good.

Yeah, that one will always make me laugh. Um, all right, I have something interesting. Uh, so in— I found this video on, on YouTube. If you Google on YouTube like Figma seed pitch.

So I watched that this morning, dude.

Awesome. Let's talk about it because basically the story is, I believe it was in— this video was filmed, I think, in 2013. So the video, the video was posted in 2020, but the way— looking at it, he looks pretty young. Maybe not 2013 young, but he looks young. But regardless, he's going through his pitch and basically— so Figma, recap, sold this week on Monday or Friday or something like that for $20 billion, one of the biggest exits ever for a venture-backed startup. And the guy who ran it started the business when he was 19. And there's this video on YouTube of him pitching this guy named Daniel Gross, who was actually on our pod early on. Who had a fund, and I had a few takeaways from this pitch. And so it's like a 20 or 18 minute or 10 minute video of him pitching. My 5 takeaways were, A, he's a kid. He, even if it, even the video is like new, he looks like, he looks like he's 18, but, and he looks so young and he talks kind of young, but he's really wise. Like you could, you, you hear him speaking and you're like, it's very impressive hearing him talk. The second is that the pitch was basically videos of the product. It was a prototype, like a demo of the prototype, not as much of a deck. And oftentimes throughout the pitch it was pretty fun and he like used the product to Photoshop the guy he was pitching, Daniel. He Photoshopped his face and made it— he made him look like another person. And Daniel, the guy being pitched, was like, oh my God, this is hilarious. This is awesome. And Dylan, the guy pitching, was just like having fun and showing him the product. And that was so much better than just showing a deck. And the last two things were, uh, tech skills. So the guy is like clearly technical, and we often talk about how like it does— you don't need this stuff, and technically you don't need it, but goddamn, it helps. This guy, he's clearly like— they built something that like was actually working, and that's such an advantage. I do think you need to learn that. And the last thing is that it's an MVP. It does not look good at all. It's pretty ugly, and it's, and it's mildly effective, but it's effective enough that you can see the future.

Yeah, exactly. I watched this thing. Um, so you can find it if you go to YouTube, it says it's his name, Dylan Field pitches seed stage Figma to Daniel Gross. That's the name of the YouTube video. It's got, uh, what, 30,000 views now, I think. But I bet you've probably all of it's in the last 2 days.

Yeah. Yeah.

Yeah. So he's pitching and my observation was very much like yours. First of all, it doesn't, doesn't feel like a pitch. Because most pitches are like, hey, here's our company. We're going after this really big market. Did you know we have a TAM of, you know, $3 trillion a year are spent on healthcare? And you're like, oh, wow, okay, $3 trillion. That's cool. What are you doing? And they're like, you know, we like—

we sell weed.

Yeah. Like, we help you. We help you do squats with using your phone camera, like, with better form. It's like, I don't think that's The $3 trillion of healthcare spend. But okay. Yeah. Like I'm not sure what the—

and they always have like a stupid quadrant thing with them in the top right. Right.

Everybody else, you know, the Y-axis is if you're, you know, stupid or smart. And then this one is if you're hardworking or lazy.

It's like, I don't know.

Everybody else is lazy and dumb and we're hardworking and smart.

It's like this $20 billion company. Are you sure you're better than them?

I think they're like, you know, poor product. It's like, uh, I don't know about that.

You're a poor product.

It makes me mad. You're like very irritated.

What they should do is put themselves in the bottom left and be like, but one day this, we could, we can move.

We were here 6 weeks ago when we met and then now we've moved up and like, just imagine the trajectory. And like, that's actually the reality. That's actually what's happening.

We've already moved an inch. Pitch on this screen. Imagine if you give us 5 years.

It's not to scale, but so, so he's doing this pitch. It's basically literally the first slide, it's a picture of him on a boat. He's like, here's me on the boat, and I used to work at Flipboard. He goes, I worked at Flipboard twice. And then he goes, uh, this is my co-founder. He was my friend at school. We dropped out. Okay. He goes, then he shows this video of this talk. He goes, I was really inspired by this talk by Brett Victor, Inventing on Principle. By the way, this same talk I think is the one that the Webflow guy said was like his inspiration for building Webflow was the same grainy-ass video of this guy explaining, you know, like how to build like a, like a real product.

Well, I think the, I think the takeaway from the talk is, or, or, or he says something in the talk about how, uh, it's morally right to help people to create or something like that where he is like, your goal as a business builder is just help people create. Or something like that.

Yeah. And so the Webflow guy, like the, the demo he's doing in this is like the difference between, uh, like imagine you have to, you have to choose a bunch of options from a menu or write a bunch of code and then push run and see how it happens versus just you see the thing and you could just edit it live, like drag and drop. Like it is a what you see is what you get editor and how much more creative you can be when you're doing it. The what you see is what you get version, because you're just shuffling things around in real time. I think everybody's kind of experienced this. In general. Um, so anyways, he gives this talk and then he gives a bunch of demos and all the demos are like kind of, uh, it's like, oh look, I, you know, I made this like airplane look at blends with the background. And then like, oh, I did this thing. Like I merged these two people's faces together. It's like, you don't look at this and you don't think, ah, $20 billion company someday. Like it's not like you'd have to have a lot of foresight. Really what you see when you see this is like the only two indicators that this would be successful is this guy seems really smart and really, he's a creative builder, so I'd bet on him to be successful in life for sure. And then the second thing was, and this is I think the underrated part of what people talk about for Figma, which is that there was a technology change. There was an inflection in technology, which was WebGL had come out. And I remember when WebGL first came out, I don't even know what that is.

You gotta tell me.

I mean, I'm not technical enough to explain it, but basically what it did was it lets you do cool graphics stuff in the browser that you weren't going to be able to do unless you otherwise normally— like, normally a browser was weak. And if you wanted to like play a game with cool graphics, you needed to like download the game. You need to have the application of the game to run on your computer's hardware because doing it in the browser was going to be too laggy, too slow, too whatever. And WebGL was this like web framework that let people build things that were like— they were like cool graphic-y stuff, 3D stuff, like real-time stuff in the browser. So that's why when Figma, you would see people, if I'm working on the document with you, I'd see your mouse moving around in real time. And that was like a magic trick. You had never seen that before. And at the time, I remember with like, we were building stuff and when WebGL came out, all, all of our developers really intrigued by it. And there was like cool stuff you could do in WebGL that you weren't other, like wasn't possible before. And then the, the question was, now what's the application? And then he, where he landed was like, I think we can recreate the whole creative Adobe Creative Suite in the browser and here's how we're gonna do it. And like that actually made a lot of sense. He didn't actually pitch it that well. He like mentioned those things during the thing, but like you'd have to like ignore 80% of what he said and just be like, oh, that's just fun experimentation. This guy's smart. WebGL is a game-changing technology. And this idea of recreating the Adobe Suite in a browser, making it free for everybody, that's a great idea. And so like you had to sort of see the, the great pitch through the forest here, dude.

So remember how I told you about this guy named Brett Adcock, who's like this billionaire guy who created a bunch of different companies, including basically a flying car business? Remember that guy?

Yeah.

So he tweeted out the other day, like, here's what I've learned about entrepreneurship. And one of the 5 things that he said was pick really, really big ideas because then you could attract more investors and it's easier to like Uh, um, get employees and all that and all that type of thing. It's like that make no small plans thing. And that thing has always made me self-conscious because like every plan I make is like pretty small. Like, like, you know, I want one marshmallow right now, not two later. You know what I mean? Like, I only make small plans compared to like that plan. And it's kind of cool that like this Figma thing, it doesn't seem that grand. It was, but it doesn't seem that way early on. And that like makes me feel better about my deficiencies. So thank you, Dylan. You know what I mean? When people say grand ideas and I'm like, "Yeah, but writing a newsletter is kind of fun." Right. You know what I'm saying? Yeah, totally. I don't know how to make robots.

Yeah, but I do dream about that sometimes. I'm like, "Okay." Me too. In an alternate life, what am I doing right now? And I'm like, "Why am I not changing whatever, building the next big thing, the next Pixar, or making a flying car or whatever. And it's like, I could do it. I could. I know that I could do it. And, and I do think about doing it. Maybe I will end up doing it. But, but it is for some reason for me, I sort of am like, I don't know, there's a how hard do I want to work? Yeah. Question, right? Like, you know, if I made my quadrants, I'm putting myself in the lazy quadrant where I'm like, I don't need to do the hardest thing to impress myself. So I'm trying to figure out the things that I can do that impress myself, um, that are also like not going to ruin my life and my lifestyle, dude. Well, but what I mean by that is just like, I like being home with my kids. I like that I don't have to like freak out. I don't like— they don't have like an office of 100 employees that are like, we're hard charging and we're about to die at all times. Like, I kind of like that I don't do that. Um, so I just need to find a way to impress myself that fits in my framework. And I think that—

what about Roger Federer?

How to do that?

Like, who's doing his shit? You know, Roger Federer. I was going to ask you that. Like, who's doing his stuff? We had Marc Laurie on the podcast and I talked to a bunch of people who worked with him and they're like, yeah, he's really good at raising money and then he hires people and then he just kind of like— they didn't— it's exaggerated to say he chills. That's not true. But like, they kind of like said like, well, he wasn't doing the hard work. He did a lot of the work early on, but he kind of like got all the leverage by getting the money and having the idea and starting it. And then like everyone else, he did a really good job of hiring them, letting do their thing. But same with Roger Federer. He ain't the one running that, running out a lot of that stuff. I wonder how he partners with people.

Yeah, well, the other one that I was looking at was Floyd Mayweather, and Floyd Mayweather has kind of an amazing, uh, bet on himself story like this too. Like, you probably know it, but I don't know if most people know. Boxers in general, UFC fighters make basically nothing, and, uh, with like, you know, one or two exceptions. And then boxers kind of make more. Boxers can make, you know, $10 million, $20 million in a fight, and they can do that once or twice a year. That's great. That seemed like the top. And what Floyd Mayweather did was he was like, who the hell is making all this money? Because I see that crowd is full of people and the pay-per-view number is huge, but like, where does the money go? And the reality was that the money would go to the promoters and it would go to the cable companies, it would go to all these other people. And so he decided to bet on himself. So he buys out his contract. He takes $750,000 out of pocket and buys himself out of Top Rank, which was the promoter that promoted Oscar De La Hoya and Manny Pacquiao, all these guys. And he starts Mayweather Promotions. And now his business model is basically it's vertical integration, right? To use the business school term, he's like, okay, I'm not just going to be the talent. I'm also going to be the production for the show. Which means that I also collect the live gate revenue, which means that I also have to pay the other fighter. Like, I have to, I have to write the check. Um, I'm also going to own a piece of the pay-per-view. I'm going to make it— he's like, I'm going to make money on every hot dog sold in this venue. I'm going to make money on the merch. I'm going to make money everywhere. And so because of that, now when he does a fight, like his, um, Manny Pacquiao fight, his Conor McGregor fights, he's pulling in somewhere between $250 and $400 million. That's crazy. Himself on those fights, per fight. So he, you know, more than 10x, more like 20x what he could make by betting on himself and building that brand. And then, then he created all the associated brands. So then he's basically created, he's like, why am I, these sponsors are paying me to wear their shit. You know, why don't I just create, you know, the Money Team clothing line and I'm going to like own my own clothing line rather than promoting these other clothing lines. LeBron did the same thing. He's like, why am I promoting McDonald's? He bought equity in Blaze Pizza and is like, cool, I'll just own a piece of this chain rather than just be a sponsored athlete. And so there's, there's basically a bunch of, a bunch of people who do this model. And then Floyd, you know, he did, he did a couple things. One was he went nuts on the self-branding. So he changed his brand from Pretty Boy Floyd to Floyd Money Mayweather.

And he knew that people were going to hate that.

He knew that people were going to hate it. And he started doing hateable things. Like he would just post a photo of himself like at a dinner table, but there's no food on the table. It's just stacks of cash everywhere. He's like, this is how I eat or whatever. Or he would just go throw a wad of cash at somebody and just make fun of them because they're poor and they would pick up the dollars because they're like, well, this is like $10 grand. And so he would do things that would get attention. He would do things that would build his brand. But in reality, he would look like this party guy. He owned strip clubs, never smoked, never drank. The guy trains at 3 in the morning. So he kind of built this brand like he's this kind of like badass or whatever. But in reality, he's like a, he's like an extremely well-conditioned athlete that was like extremely disciplined and never like ran into any of those problems.

But he hired Al Haymon, who Al had run, you know, he's like, he's like, we have to do a whole episode on, on this because Al Haymon is really intriguing. Al Haymon, if you Google his face, there's like 4 pictures of him on the internet. And he's one of these guys, I think he's like famous for like, you never meet him in person, but he does everything on the phone. And he's always in the background of the most powerful boxers and fighters in the world.

And before that, you know what he was doing? No. He was doing the same thing in the music industry. So he represented Janet Jackson, Whitney Houston, helped build their brands and their, their whole business empires. Then he taught Floyd how the music, how musicians make their money. And he's like, oh, I need to do that. Basically, my fight is me on tour. I need to own the tour. And so I need to own the shows. I need to make the money from the tickets, not just be the fighter who goes on the stage. And so Al became his business guy on that side. And then he has Leonard Ellerbee. Who does it on the, on the Mayweather Promotion side. And like the joke, of course, about Floyd is that he can't read. And it's like, he's like, I can't read, but I know numbers. And like, you know, so he's like, you know, he, he know, he's found a way to make a ton of money. He understood like the core fundamentals of business, um, and knew how to put people in place. So he generates a lot of money. Now some people think he's going broke because he spends so much.

I think he might be. I totally believe that.

That's hard to say.

Dude, I totally believe that. This podcast, we, we are the internet dork renaissance. We started with Adam Levine cheating on his wife, and then I think we went to like, uh, the history of hedge funds, option shares. Yeah, and then our huge option shares. Then we talked about the Fed and JP Morgan, and then back to Mayweather and Al Haymon. You can't get this anywhere else. You just can't.

Where are you gonna get all this?

Yeah. Yeah.

You know, we, we are the Chinese buffet of podcasts. Yeah.

They say that like true wealth is created by being like a narrow, uh, an inch, uh, uh, uh, an inch wide, but like a mile deep. Not here. We are, we are, we are a rain puddle. We are just going to cover everything just a little bit.

Well, you built your whole life off being 4 inches long, so it all worked out for you at the end. Yeah. And look at me, comedy at the end of the show. And you get the Comedy. Yeah.

Average at best in, in lots of different— if you're average at best at just about everything, you're kind of above average. So it works out well.

All right. That's, uh, that's the show.

I'm exhausted. I gotta take a nap after that.