How to Make Millions by Unbundling Etsy | My First Million #207

That's exactly how it works, is people think, "Oh, if I practice Stoicism, I'll become that person who is calm mind and able to just operate and doesn't have these sort of like massive swings." And it's like, no, it's the other way around. Once you learn to tame the mind, once you learn to master the mind, you'll naturally become a Stoic person. What up?

All right. What's going on? Um, I'm in Nashville. I wait, it's, uh, is it 8 or 7 where you are?

7.

Oh, it's 7. Wow. It's early. So I woke up a little bit late and I texted you and I go, you just wanna record something right now? And you said, yeah, I'm thankful you said yes. Yeah.

Let's give it a shot. You're at a podcasting conference, which sounds like not a ton of fun. Is it a ton of fun though?

So it's educational and I'm happy and I'm learning, but it's just like nerdy stuff. And, uh, you know, there's not like— I don't want to— I can't absorb it for that long, but I'm happy that I, I would love— yeah, it's worth it. It's cool. People, uh, people like know us and that's crazy. Like, it's crazy just to walk around. It's a— it's at a hotel and like, so everyone's staying and it's kind of funny to be walking around and just people come up to you and say that they like listen. So that's kind of neat because it's all podcast nerds.

Yeah. Okay. I like that. You learn anything cool? Any hacks? Any, any growth hacks for us or what?

I think YouTube is just the way to go. So, and that's what we'll be doing with this show. You're like, going hard.

Podcasting is for nerds.

We're going to YouTube. No, I mean, well, that's the way to go. Some of these people spend. So for the listeners, Sean and I spent— well, it's not our money anymore, but when we were doing this, like, we were like so cheap. And I actually think too cheap about starting this podcast. I mean, I think it was right how we did it with like really, uh, bad at first and then it got a little bit better and a little bit better, but people spend so much money on recording their stuff and I actually don't think that's important. But when you have something like we have, which is like you kind of hit this lick, it's important to invest. And I think we've underinvested, which is crazy.

Yeah, maybe. I don't know. I was renting a studio the first 10, 10, 20 episodes, $100 an hour. So that was a, that was like professional setup. I went— I thought I was going— I thought I was over-investing at that time because I had zero listeners when I recorded those.

Yeah, no, but that's my point, is that my perspective has changed when I'm seeing like some of the budgets that people have. Um, but for this episode, I like— I called you because I saw like 3 amazing things that I wanted to bring up to you, and you have 1, 2, 3, 4, 5, uh, interesting things, and I just wanted to talk to you about them.

All right, let's do them. What do you want to start? Give me, give me your first one.

Okay. The first one that I— we didn't get to last time, but I wanted to fill you in about it. And it's about the— oh, I'm just writing notes. It's about the elevator business. So I told you a little bit about this. So I like— there's— this was one of these moments and I've had them with you a ton where you explain something and you're like, I didn't even know that this was a problem. I didn't even know this was an industry, but now I'm totally bought in and I think it's amazing. And this particular company— and what— in this particular company, I'm not sure. I don't— it's not because I think that they're bad. I just don't know them well enough to actually believe that they're going to win. But like, it was pretty amazing. So let me set the stage. So I believe there's something like— I might be off by a little bit, but I believe there's something like 2 million elevators in America. And only 4 companies basically control the whole elevator business. Have you ever been on an elevator and looked at your feet where the doors open and seen the names?

Yeah, you had— there's this little like plaque there, but I don't remember any of their names. I don't, I don't, I can't recall. I once threw my key in the crack and had to call one of the companies to be like, hey, how do, how do I get under your elevator? Wow.

So it's Otis. You probably recognize Otis.

That's the big one.

Yeah. Otis, Schindler, Kone, and, uh, Mitsubishi. Is that, uh, Mitsubishi? Mitsubishi, um, are the big ones. I know of Otis because I've already, uh, I've looked into them a bunch. They're not technically— these 4 aren't technically a monopoly because there's more than one. But basically they control just about everything. And what that means is when you buy an elevator, I'm not actually sure how much an elevator costs, but something like, like Target might have 6,000 or 7,000 elevators. And when you buy an elevator from them, it's a like 10-year or 20-year contract. It's a really long contract and it's almost like buying a car. So when you buy a car, you get a 50,000-mile warranty. And except imagine buying 5,000 cars and it's incredibly challenging to know when each car needs to be serviced, what type of service the, the car company is actually going to pay for and what they're not going to pay for, what falls under it. It's kind of a pain in the butt. And so what happens is oftentimes a company like Target, they employ a whole team to manage their elevators and escalators and they don't know like you know, what they have to do. And instead of fighting with Otis and deciding, they just go, fuck it, we're just going to call service people and we're going to— we're going to figure it out on our own. And there's two new companies. One is called Auditmate. That's who I talked to. But there's one in Britain called We Maintain that's raised $40 million. And basically what they do is they manage your elevator and escalator. Like, it's like fleet management, you know what I mean? They determine what— and I thought that this was so fascinating and very interesting. And when I heard about this company, I was like, well, I don't necessarily want— I'm not sure if I ever want to, like, invest in anything like this, but I would love to own it. And so the way it works is they charge $50 to $60 a month per elevator. And the name of the game is you just go out and find all the elevators and you say, look, we're going to be your, your agent, which means we sign on to speak on your behalf and we're going to negotiate with Otis and we're going to make sure that your shit's maintained. It doesn't break down and we're going to handle all of it. And I thought that was amazing. And it's one of these business models where it's kind of like The way that they charge right now, or a lot of these companies charge, is a subscription fee, which is fine. But this is one of those business models that we've talked about, like TurboTax, where they take a percentage of all savings. So it was like the easiest shit ever to sell, right?

And so anyway, they're basically saying, hey, you have no risk, no loss, because we're gonna save you money. You know, you sign up to pay with— you sign up with us, we're gonna save you money, and we'll take— we'll take out of it in the same way that, you know, like Main Street does this with tax savings basically for you. They'll be like, all right, uh, we'll take a percentage of whatever we save you. It's like, oh, okay, sounds like I have no downside. And even if that percentage is large, it's like found money, so they feel good about it.

I thought— and I thought this was cool— I've never— have you ever even heard of anything like this?

No, dude. So you— so I'm just looking at some of your notes. Otis, $12.5 billion in revenue. Schindler, $11.6 billion. Kone, basically the same, $10 billion in revenue. Uh, it's huge. Those are huge revenues for, for these companies. Now, I don't know how profitable the elevator businesses, but well, they're like family-owned.

Uh, Otis is like a family-owned business. I'm almost positive Otis has been around since the 1800s. I mean, these are like huge, huge family-owned businesses, so they definitely are— I believe they, they have to be profitable. Um, here, Otis. Oh, Otis does $12 billion. Otis is publicly traded. So what do you think their, uh, market cap is, uh, for $12 billion in revenue?

Okay, I'm gonna guess they are a $22 billion company. Might be less. I think it could be less.

You think less?

I think less.

Is it more? Oh, it's about $40.

$40.

Okay.

So I was $22. I was off.

Uh, so, okay. Pretty crazy, right? Like, who would have thought? And so this is just software that lets you help you negotiate.

Twitter is like $50, $55 or something like that.

So is it really?

Otis, the elevator company. Yeah. Twitter had been hovering below that. And then now it's at $55, $60 or something like that because the stock went up recently. But Basically, Otis Elevator Company is worth almost as much as Twitter, which is insane.

And not only that, I believe— let's see, it's been around since 1853.

Yeah. Amazing. So it's— the funny thing is this is named after like a guy's first name. It sounds like it's not even—

yeah, it's just— it was— it was the— the company was, uh, invented in Yonkers, New York in 1853, and they've been around since then. Fucking elevators. And so this fascinates me when I like learned about this because, you know, I like old shit. When I think about you and I and a bunch of friends—

what is Yonkers? Is Yonkers a place?

You never heard of Yonkers?

Is somebody born in Yonkers? Because that's amazing. I want to say I'm from Yonkers from now on.

Yeah, it's in, uh, it's in the— I believe it's in the Bronx in New York. It's like a— it's like, I don't know, it's in New York.

Yeah, I'm from Yonkers in the Bronx. All right, well, uh, so, so this company— but you're— what you're saying is that this company is a SaaS company on top of those, right?

Yeah, it's a SaaS company that lays on top of it. And here's why this fascinates me. I love old shit, things that last a long time. And we were talking about like the creator economy, Substack. I don't remember what we were talking about, something like involving like one of these newsletter, like one-off creators. And it's like, yeah, I think you can make a lot of money, but can you do that for 20 or 30 years? It's really, really challenging, I think.

Right. Basically Sam's type on companies. Did you start in the 1800s? In some way? Did you, um, did you have a physical product that you could, that you could touch and feel? Were you started in the Midwest or some, some part of America? You know, are you named after a family like Rockefeller or Schindler or Otis or, or something like that? Um, let's see, what else, what else is it? You know, are you absurdly profitable? Uh, what, those are your, those are your type essentially.

Yeah, look, I think it's cool. That's something that— to build something that can last a really long time. Yeah, that interests me because that, that, that, like, you, you optimize for excitement, I think, or, uh, interest. I optimize for what's the least amount of work I can do in order to, like, have freedom.

And yours is more like durability. And, and I feel like durability is, like, number one. It's like, yeah, you just If you have this, you win. And I'm like, if you have this, you might win for an hour and then you might lose the next hour. Like, I'm cool with that.

So both work, but they're both work. They're just different. What, what do you, what do you have? What do you, what do you have?

Let me give you one.

All right.

So what I want to do, let's do, let's do this too. Okay, let's do this unbundling Etsy one. So I'm really interested in the second tier or like what I'll call B-class marketplaces. I don't mean that as an insult. I mean it more like if you're in real estate, you're like, oh, do I buy an A, you know, A-class property, which is like it's a modern building, fully leased up, blah blah, or do you go for like an older thing that has upside, right? Do you go for something that has some hair on the deal that you might be able to do? And so you go, you know, this is not New York, right? That like that marketplace might be Amazon. Um, Etsy or Poshmark are these like second-tier marketplaces, but I see a lot of opportunity in them. We talked about, I think we talked about this, about building SaaS tools for sellers on those marketplaces.

So you brought that up and I thought that was a pretty revolutionary thing. That was a big idea.

And so these exist, but they're not great and there's not a lot of competition. And so like, I think we had talked about Jungle Scout, which sold for some large amount of money that you knew. Jungle Scout is a tool for sellers on Amazon. And I was thinking, okay, who's building stuff like this on these second-tier marketplaces like Etsy or Poshmark? So that was the first idea. Then I started thinking, okay—

Wait, are you gonna elaborate on that? 'Cause that's pretty amazing.

Well, I think, didn't we talk about it? Maybe we talked about it. I thought we talked about it. No, if not, then that's an idea.

I don't know if you phrased it that way. I think the storytelling here that you just said is actually wonderful. So I think that's actually brilliant. We had, so at HustleCon, we had Poshmark, ThreadUp and one more of these companies speak, and I think they were some of the biggest.

Mercari is a big one.

Yeah, they're huge.

Secondhand sales. The RealReal. You know, there's all these like other marketplaces basically. There's all these other, other places. So Ben's wife, uh, Tiffany, she is a Poshmark like super seller or something like that. And so she like, she sold so much that like when they IPO'd, they invited her and like whatever the top other 1,000 sellers to be like, do you want to buy the IPO? You can buy the reserve price. Basically, we're reserving some shares for you because you've helped build this thing.

For which company?

For Poshmark. And like Airbnb did the same, I think. I think for— they offered Superhost the ability to buy some shares, some, some small amount of shares. And so, um, and Airbnb, by the way, another, another marketplace where— could you build a Jungle Scout type of tool on top of Airbnb?

There is that. I'm a subscriber. For too. It's called AirDNA. It's amazing.

And what does that do? It tells you like what to price it at or—

Yeah, so it's called AirDNA. And when I was— so I rent out my house when I'm not there and I buy property to rent out and I use it as a research tool. And I guess it just crawls Airbnb and it determines what the average occupancy rate is, what you should charge, what the earning potential is. It's just, it's tons of signals for buying properties to make into an Airbnb.

And there might be other things like reporting, you know, tax, you know, some tax savings you can get or whatever if you, if you're an Airbnb host, it plugs into your Airbnb and it generates your report. So anyways, I was thinking, okay, you could build a Jungle Scout type of tool. And for those who don't know what Jungle Scout is, basically you go on Amazon. If you have Jungle Scout installed, it's a Chrome extension. And basically when you are looking for products, you can just click Jungle Scout and it'll tell you, hey, here's how much search volume this has, how much monthly revenue this product makes. It's an estimate, but it's pretty good. Here's how fast it's growing and here's how strong the competition is. And so what you want to find is something that there's a lot of search and low competition. And if you find some, if you find a combination like that, you're like, oh, nobody's searching for, you know, wooden spoons that are like wooden oversized spoons. You don't want to build that because nobody's searching for it. But if you have like, you know, wooden oversized baby spoons is high search, low competition, you could go go to China, get that product made, and, and become like the top result on Amazon, which is basically free traffic for you. So that's the idea. So I think you could do that for Poshmark. I think you could do that for Etsy. One thing that I was thinking about for Etsy is I think you could spin off a whole new marketplace just unbundling Etsy. Etsy is now big enough. It's a public company, been around for a decade plus, and, um, has all these different categories, right? So it's like you can go and you can go to home, you can go to, um, you know, custom gifts, you can go to all these different categories on Etsy. And you could ask yourself, huh, could I make a marketplace of, or a service that just does this one thing better than Etsy's doing, market it as that, and actually like unbundle a piece of Etsy in the same way that people have had a lot of success unbundling Reddit, unbundling Craigslist. If you haven't seen this, Google, Google unbundling Craigslist and look at the diagram. It's like, it takes every part of Craigslist And then it just shows how, oh look, this housing part of Craigslist became Airbnb and this became Etsy and this became this other thing. And so the same thing I think can be done here. So here's, that's the, that's the core idea is unbundle one of the verticals of Etsy. What I would do, I was looking at the, the categories, I would do custom gifts. So custom gifts is one of the top categories on Etsy and people go there because they wanna send a thoughtful, kind of like what looks like a homemade handmade gift to somebody or they're getting it made for like their wedding and they want all their, wedding coasters to have their names on them, or their bachelor party, and they want everybody to have matching shirts that say the, the bachelorette's name on it or whatever. Um, and so I think custom gifts could be spun out into a marketplace that's like Fiverr, where it's basically just, um, here's a bunch of custom gifts, push a button and you get these for, you know, $10 or some, some flat rate basically. So I think you could do a Fiverr or, or even like a Cameo style thing for custom gifts. And that's the, that's the category I would go after. But I think generally I think you could study their marketplace and find a— find a— we'll find one that works because you can also see the shop sales. You can go into any shop on Etsy and you can see how many sales it's had, which is like—

you can do that, you can do that now, right?

Yeah, this is part of Etsy. It's like, you know, here, this shop has had 6,000 orders and you can look at the price, price of the store, be like, oh, you know, average thing's $35. It'd be like 6,000 times $35, that's how much revenue this shop, the shop has made in 2 years.

Those are both two big ideas. So you're talking about building like the, the, the software that analyzes the sales and then the, the marketplace that sells the stuff. Both actually pretty amazing. I go to Etsy sometimes and I do. So if you scroll all the way to the bottom, you'll see how many sales they have. eBay does it too, but not as good. But that's actually a great idea. And, and by the way, I looked up AirDNA. So the thing about these software companies, you're talking about two different things. We'll call it one software, one marketplace, the software companies. So if I told you or if you told me about Jungle Scout a few years ago, I would say like, oh, that's a nice little—

that's a nice little indie hacker business. Yeah.

Yeah. Well, it probably does like 80 or— I mean, if it's worth a billion, I wouldn't be surprised, but it's definitely worth nine figures. I know that for a fact because it sold part of their company. So I told you just about AirDNA. I thought that was just a small thing. How big do you think AirDNA is?

By the way, Jungle Scout raised over $110 million, which is— that gives you a sense of how big it is if it was able to raise that.

I think it was some of it was private equity, so I don't know how big the valuation was, but it's definitely huge, right?

Okay, AirDNA, I don't even know what it does. I've never been to the website, so I'm just gonna take— I'm just gonna say a random number out of the air. I'm gonna say $35 million. What is AirDNA worth?

Well, so they— AirDNA, so they charge, I I think I pay $100 a month for it. In 2018, they did $4.9 million in revenue. In 2019, they did $8.4 million in revenue. They said they were growing 100%. So you could probably assume that I would, I would actually bet that in 2020 they probably did $16 million and then '21, I wouldn't be surprised because there's a lot going on with investing in Airbnbs. I wouldn't be surprised if they're in the $30 million recurring revenue, annual recurring revenue range. And they raised $8 million in order to build up. They bootstrapped to $9 million in revenue and then raised $8 million. So these are like these things that you would think are small, insignificant stuff that could actually be quite big.

So that's a, that's a $50 to $100 million a year valued business at that roughly those numbers you just told me.

Yeah, it's a huge thing. And who would have thought? I never would have thought that if you told me you're going to build this thing.

That analyzes Airbnb, I'd be like, no, I would have been like, side hustles are cool. Yeah, yeah, you should be able to bring in the $4,000 or $5,000 a month, uh, you know, with your little Airbnb DNA tracker, whatever the hell you're talking about.

And, and I would say, I, I would have— if you had to guess what's bigger, Etsy sellers or Airbnb, I would think there'd be more Etsy sellers than Airbnb hosts.

Well, the thing with Etsy sellers is that, um, so Airbnb is very much— it's a lot more set it and forget it, and there's less levers to pull, and there's less like, um there's less like categories and things like that, whereas like Etsy has like multiple different categories. Each one has its own little nuances, uh, and then there's like such a wide variety of sellers where, yes, there's many people have houses, but it's all— they're all doing the same, they're offering the same service. Etsy's offering like a million different services to people, um, and so I think that's why it has probably a little more opportunity.

What would you do? Why would you call it Cameo?

Well, I was just thinking custom gifts. If custom gifts is this big of a market, I would just start with that. I'd say custom gifts. I wouldn't— maybe the end product wouldn't be a physical gift like Etsy. Maybe it would be something like a Cameo where it's a video, or just making a jingle for somebody. Or it could be with celebrities or non-celebrities, but basically some way to send a custom gift to somebody. If that's such a big, uh, such a big part of Etsy, maybe you could rank for it in search or run Google Ads and hijack some of that traffic of people looking for custom, you know, handmade whatever, custom name blah blah blah. And be like, yeah, we do that. We'll put your name on a shirt. Yeah, it's not as nice as Etsy. It's, you know, we just took the generic Etsy look and we just mass produce it basically. Um, that, that'd be one way.

I'm on board with that. Um, you want to move on to another one?

Yeah, yeah.

All right, so I'm gonna weave two— one, one of mine and one of yours. I, I'm a big UFC fan, so are you. So DC, Daniel Cormier, he is, uh, he's retired now, but he's a, he's a big fighter. And he, he posted this thing, and I'd seen ads for it, but he posted that he's now going to endorse this thing called Fit2Warrior. And I went and looked at it. So Fit2Warrior, it's incredibly interesting. And so what they do is you spend $2,200 and in 6 months they take you— is it 6 months? Maybe 3 months. I think 6 months. They take you from being a complete noob. So you're just a guy off the street.

Is it Wimp2Warrior?

Oh, sorry. I spelled it. Yeah, it's Wimp. My bad. That Fit2Warrior wouldn't make sense. It's called Wimp2Warrior. Wimp to Warrior. They take just you off the street, you give them $2,200, and I think you get like 100 classes or 50 classes. What did I write? So, so it's a 20-week program. How many months is 20 weeks? 5.

So 5 months. Yeah.

Okay. So you have 5 months and what they do is you sign up and you have a fight. You have a fight scheduled 5 months from the day you sign up and it's like, and it's like cohort-based. You pay like $2,500 or something like that. Of course.

Yeah.

Yeah, it's a cohort-based thing. And they say in the next 5 months, we're going to take a guy off the street and you're going to have an MMA fight. Now, it doesn't take a rocket scientist to understand that the goal of this is not necessarily to get you fit or to like get in a fight. The goal of this is to have like a pivotal change in your life, to be more confident, to say like, look, I've said I'm going to lose weight forever. Now I'm like, I have a fight in 5 months. If I don't get my act together, like I'm really— it's not a good— it's not going to be good. So this is like a pivotal, life-changing thing. And I love this business. They just raised $8 million from a bunch of people. It was launched in Australia. And basically what they're doing is they came up with this name, Wimp 2 Warrior. They come up with this program and they work with loads of different MMA and I guess boxing gyms and they license out their program. And now they are paying Conor McGregor's coach, John Kavanaugh's on board, DC, all these coaches to like promote it and they give them some type of fee. I thought this was amazing and I think this is amazing for a couple of reasons. One, it's a business that I actually think this would change your life. If I told you you had to— if I told you you had to fight in 5 months, would that be the one thing that finally, like I said, I got to take this?

Am I wrong that you think basically this should be mandatory part of the education system?

Well, so look, here's the thing.

Everybody to do this.

Here's what— here's, here's why this has always fascinated me. So women have this because they have like a biological, like, you are now officially a woman. But men, we've lost like a rite of passage. We've never had this like, all right, now I'm officially a man. Like, I guess if you're Jewish, you have a bar mitzvah. Maybe that's like the, like the crossing of the chasm. Like, all right, you are no longer a boy. Now you are a man. And like, we had this, like, I love the Spartans, the Spartans, because they do this thing where they like, you'd go, they'd say, all right, you're 14 or whatever. Now you got to go out in the wild for 5 days and you got to survive and just come back when you're done. Right. Meant American— we don't really have this like this, this modern day. Yeah, yeah. And so I love these type of transformational, like, all right, it is official. You have it. There's a start, beginning, and then like an end type of thing. So I love that. And you up here, you want to talk about mental fitness. I've also done like yoga or not yoga, meditation. I love Headspace. I love Calm. I try to— I do buy into mental fitness stuff, but it's a little bit tough because it's not like intense. And so I love these intense programs and I think that they can be great businesses and incredibly fun and fulfilling to run.

Yeah. So I think there's a couple of things. First, I had seen this. I thought McGregor's coach, John Kavanaugh, I thought he invented this because he was the first one always talking about, oh, we're doing Wimp to Warrior. It's so good. We have 200 people doing it this season and he just kept doing it. And it was like they take average Joes. You come in and you basically say, cool, I'm going to turn into a fighter. I'm going to train like a fighter. For X amount of weeks, and then it ends— the kind of the graduation, the culmination, the rite of passage at the end is you do the, like, the, the amateur exhibition fight or whatever with somebody else from the program, I think. So it's not like you're not in a ton of danger. Um, I think it's really cool. I didn't realize that there was like a business underneath this. And so just to do the math, so basically what they're doing is they're licensing this out to gyms, and they're saying, hey, this is a great Um, customer recruitment like mechanism, right? So you, you run a Wimp to Warrior program, we'll give you the branding, we'll give you the business in a box kit, and what you gotta do is—

and we'll send you the customers.

And we'll send you customers because we have star athletes and coaches promoting this because it's a feel-good thing for them too. Um, and, and so we'll send you a bunch of interest people, they'll find a Wimp to Warrior program near them, and you be my operator. So it's asset light. You do all the work, we will just do the marketing and create the brand on top of this. I think this is actually really, really smart. I would invest in this company even though it seems like so crazy fringe. I think that actually there's a very nice model. It's better than Tough Mudder, better than Spartan Race, better than all those because they take on a ton of operational overhead. They're a traveling circus. And so I like this model a lot better. So, okay, I think Wimp to Warrior is cool. I think that your rite of passage thing is interesting, and especially we talked early on about Boy Scouts and like the downfall of the Boy Scouts program and what you would do if you were gonna buy it or reinvent it or make a new Boy Scouts. And I think we were onto something with this, and we should keep looking for the opportunities that are here. I'll tie this into the mental fitness thing. We did a segment on Simone Biles in a podcast 2 episodes ago, 1 episode ago. Yeah, and we ended up cutting it. So it's only— it's in the lost archive, lost files, along with me and Sam Parr footage from when I went to his house in Austin.

And the reason we cut it is because I had a strong take. I was pretty like— so, but we didn't— we had— I didn't have— I didn't have all the details of the story. I didn't realize that there— I thought this was— when she said I had like a mental breakdown, I was like, oh, that's like crazy. Like, that's nuts.

We—

but then yeah, yeah, and then there's like these like the twisties things. I'm like, all right, well, that's like that, that's like an injury. That's a like your leg is broken type of thing. So my opinion changed and I was like, ah, I didn't actually have all the facts when I was, when I was kind of explaining my opinion.

Yeah, uh, yeah, that's, that's true. And so we, we basically were like, we sent it to Sam's wife and we were like, hey, what do you think, too much? And she was like, yeah, a little too much. And so we kind of— but I, I thought there was one part of it that was interesting, right? Like, so yeah, nobody really cares about Sean and Sam's opinion on Simone Biles, even though kind of that's whatever, it can be interesting. The more crazy your reaction, the more interesting it gets. I thought the more interesting, I thought the real part in it was there's gonna be a trend, I'm calling it now, over the next 5 to 7 years, people are gonna start to really give a shit about mental fitness. And it's a very different thing than mental health. Just like for your physical body, you have health, like do you have a disease? Are you ill? Like, no, I'm not sick. You can be not sick, but you can be not fit at the same time. And right, so you could be healthy but not fit. And in the same way, you could have mental health, meaning you're not suffering from depression, severe anxiety, bipolar, anything like that. But you can also not be mentally fit. And so what's a fit person, right? Sam's a really fit person, really physically fit. If you work out with Sam, you go for a run with Sam, you'll be like, goddamn, this guy can run. He can go long distances. He's fit. And so similarly, there's mental fitness, which is basically just like in physical fitness, it's about overcoming some adversity. So a mentally fit person is somebody who can overcome a high degree of and variety of adversity and intensity of adversity. And so, you know, shit not going your way, getting in sticky situations, being out of your comfort zone, these are all areas where mental fitness matters. Relationships, different challenges that come your way is where mental fitness matters. And I think right now this is something that is very poorly understood. It's rarely talked about. It's almost never taught. But I would say mental fitness is, in my opinion, the most important skill one can have, right? The most important thing is the little voice in your head that's talking all day nonstop, this chatterbox we have in our head. And what is it telling yourself? Is it telling yourself that you suck, that you can't do it? Is it telling yourself that you should give up, this is too hard? Is it telling yourself that, uh, you know, don't do it, things might go wrong, or is it saying the opposite? Is it saying, you know what, you could figure this out, hey, even if it doesn't work out, no problem, you know, everything will still be okay, hey, even though this person just cut you off on the road, look around, the sky is blue, the air is crisp, your family is happy and healthy, you have a lot to be grateful for, right? Like, the voice in your head dictates the quality of your life, and the voice in your head is your mental fitness. It is, it is the, the manifestation of your mental fitness. And so I think we're going to be seeing a lot around this. I think we're going to be seeing growth in services, content, thought leaders, whatever, around mental fitness. What do you think? Am I overblowing this, or is that, uh, are you a believer?

I'm a believer. I think that what you're doing with this title of mental fitness is I think you're just rebranding something that's been around for a long time. You know, this is like a Tony Robbins book. So I totally buy into what you're saying and I 100% agree with it. I think there's a few opportunities here. The first is— so I'm reading this amazing book called Human Nature. I've been reading it for a long time, for like 6 months, and it's, it's very dense, but I'll read it and read it over and over and over again. And I take notes and I'm trying to like master it because to me it's like a handbook on how to like handle my emotions and how to handle other people. Now, what I would do with this is what I would want to do is almost have like a Wimp to Warrior type of program where I can spend a fair bit of money and have a very intense program. And I think that a mental fitness type thing, I think that's a lifetime of learning and that's like a lifetime journey. But I do think that there is like transformational moments and series of your life that could actually level you up significantly. And I think that there's an opportunity to build something like that in this weird kind of fucked up way. I've always been a little bit jealous of people who went to the military, or at least people who went to military school, because like there's this like classic, like I was undisciplined, I was fat, I was unhealthy, I wouldn't wake up early. Now I make my bed. I know how to like show respect to each other, to people. I have self-confidence. I know I have a new level of discipline and I'm like, oh my God, I know what I'm made of.

I went through Hell Week. And I made it. So I, I have been to my breaking point, beyond my breaking point, where there was just no way, and, and I did it. And, you know, they don't brag about it, but you could tell there's a certain level of confidence that people have by discovering your bottom, right? What is your actual rock bottom? Not, not, not in terms of your money, but in terms of like your mental, your mental game, where you break, you break physically, yeah, sure. But when you break mentally, it's over. And, uh, and so they've been there because, you know, that's what the military does to challenge you in that way.

And I've always been jealous of that. I'm like, man, I wish that— like, I make it— I, I, like, I say it in a joking way, but I'm not actually joking. When I'm with my wife, I'm like, I, I wish I would have went to military school because, like, there's some, like, discipline stuff that I don't have that I wish I would have had. And it's almost like I've searched for, like, what type of program is going to go to where it's like, uh, It's like basically like the, like the, the, the soft version of that. It's like a, like a fat camp version of that where I can just like spend money and they just like insult me for a week. But, uh, anyway, I think that's like, I think there's something there with that. And I also think that there's something there with mastering some of these books and some of these things, um, and doing this mental fitness type of, type of stuff. And so I'm on board with this. I actually think this is quite amazing. Yeah. And I think the, the word is amazing in this concept, this concept of Look, you're healthy, you're not like ruined, but you're not fit. I think that's amazing. I love— you know who could like crush us if they wanted to, but I don't think they do. Have you paid attention to what Ryan Holiday has done with his Stoic brand?

No. Like, I'm from afar, but I don't know anything specific. I've seen his books, but tell me what's interesting.

So Ryan Holiday is an author. His first book was called How to get famous or what was it called? How to—

it's like newsjacking or whatever.

Yeah. I forget what it was called.

Then he's got like the obstacle is the way, ego is the enemy or something like that. He's got a bunch.

Yeah. So he is got obstacles way ego. And this whole idea is based on stoicism, which is this, uh, what are they Greek? I don't know. Marcus Aurelius, the, these philosophies of basically like you're gonna face hardship in your life and it's not about avoiding them, but it's about embracing them and finding meaning in, in them. And it's great. And he's, and, and it's probably predominantly male, young males who listen to his stuff. I, I'm one of them. And he's built this brand called The Daily Stoic. So I believe it's called dailystoic.com and he sells $25 stoicism coins, which I own one. He sells, um, like a $19 email course where every 14 days he teaches you like a new stoicism, like thing on how to read more. Like, and it's, it's pretty amazing. And like, if I don't think he would ever want to do this because he seems like he's got a good life and he doesn't want to work much harder. But I would imagine that if Ryan Holiday had like a Stoic, Stoicism boot camp for like a month and he charged like $10,000 and like it was around this mental fitness idea, I think loads and loads of people, including me, would, would pay to go.

Yeah. By the way, I heard something that I thought was great. They go, a lot of people get it backwards. I forgot who said this. They were talking about Stoicism. And I was like, "Yeah, you know, Stoicism, I get it. You're supposed to be stoic and then that brings you sort of this calm and this peace and this sort of like really stable mental game." And he goes, "No, it's the other way around. When you calm the mind, you become stoic. You don't become stoic to calm the mind." And I thought, "Oh, that's so true," which is that you— that's exactly how it works is people think, "Oh, if I practice Stoicism, I'll become that person who is—" calm mind and able to just operate and doesn't have these sort of like massive swings. And it's like, no, it's the other way around. When once you learn to tame the mind, once you learn to master the mind, you'll naturally become a Stoic person. Um, you have to get the, get the order back, get the order right. And, uh, so that was like a big breakthrough for me because I've known— I know a lot of people that have tried to get into Stoicism, they have this anxiety, they have this like sort of mental like lack of clarity and calmness. They get into Stoicism thinking it's the answer and they get sort of disillusioned very quickly. They're like, "Ah, yeah, it wasn't for me." And it's like, well, that's true because Stoicism is almost a state you get to after you learn how to calm the mind. It's not the method you use.

You know, so I've read a lot of Stoicism books and I like it from just a history perspective and I like it from a practical life philosophies perspective. I think it's one of the very few like philosophical things that you could apply to your daily life. You know whose book changed my— it kind of changed my life on it. And it was shocking. Was Naval, that Naval Almanac.

What's it called? Right. The Naval Almanac.

It's so good. It's so good. So the first half is all about making money and the second half is all about being happy. And the first half is like, that's just normal, whatever, who cares? The second half I felt was, was pretty game-changing. And he talks a lot about stoicism and a lot about mental fitness. And I— and he was basically like, The summary is basically happiness is a choice that I made. And here's some of the strategies that I use. And it's very sto— it is stoicism. And I thought it was very useful. All right.

Let's, let's jump to a different topic real quick.

So can I— wait, let me quick tell you really quick about one of the greatest hacks that I've seen. So a financial hack. So when starting a company. So the first one that I always tell people, and this is something that's new to me that a lot of people— or it was new to me. A lot of people don't know about. It's called QSBS. So it's probably the greatest American tax— basically when you sell your company, if you have QSBS, which basically is like the— it basically means Qualified Small Business Tax. So if you sell a business and you've owned the business stock for 5 years and it's a C corp, if you sell your company, the first $10 million in sales or in profit that you make on your company, you don't pay taxes on it. So it's amazing. But I think I found something that's even better. Moving to Canada. So I talked to this company the other day and they, they were building this like amazing thing. And I was like, how many people work there? You're like a really new company. And they're like, well, we have about 18 people who work here and we only spend about $1 million a year in total costs. And that's kind of— so basically when you're starting a company, I started my company in San Francisco. If you're starting your company I would imagine that you would— when I started it, it was $10,000 a head, but I was hiring like young people who didn't pay much. But I imagine you'd want to, you'd want to bake in $15,000 a head, right? Easily. Especially if it's engineers. Yeah. So maybe more. So, but let's just say $15,000. So $15,000 times 12 is, let's see, $15,000 times 12 is, so that's $180 grand ahead. Oh, I think it's even more than that. It's probably—

it's— so that number you're talking about is basically 7 years ago and non-engineers. And now you fast forward 7 years, double it, and then engineers basically double it again. And so, you know, what, what was maybe, let's say, $10 grand is actually— you should be— you should be budgeting almost $30 grand. $30 grand per, per head is probably closer to reality now. $30 grand, you think? Okay, so $30 grand engineers.

Yeah. So $30,000 times 12 is $360,000. So $360,000 an employee. So $360,000 times 15, if you have 15 employees, that's going to be around $5 million a year.

And by the way, so that's not, that's not just their salary. So let's say their salary is $200,000 to something K, then you have to pay all the, like, you know, kind of additional overhead on salaries, which is about 20%. That's your FICA, that's your Social Security, all that good stuff. You have your rent, you have your free catered lunches, you have your snacks in the office, you have all the other bullshit that you gotta do if you're gonna hire in this extremely competitive hiring environment. Signing bonuses, recruiter fees, it all rolls up. So if that number sounds high, you'd be surprised. If that number sounds low, you're probably right.

And so let's just say $3 to $5 million is a huge range to have a team of 15 engineer-heavy highly competitive startup to get going. It's a lot of money. I talked to this guy the other day and he had 15 people and I was— and he told me he was spending $1 million a year and I was like, wait, what? He goes, yeah. So here's how it works. In Canada, we have these things called the research and development credits.

And basically what that means is if you are an engineer, they call them shred credits, even though it's SRED. But I think they just— when people talk about it, they call them shred.

Yeah, I heard people mention it, but I didn't actually look at the mechanics of it and I'm not an expert on it, but he was reading it to me and I was amazed. And basically what happens is he pays their full salary, so he pays some engineer $150,000 a year and at the end of the year I think he literally gets like deposited money back, 50% of the cost that he's allocated or he's paid them. He gets that money back at the end of the year. So $160,000 salary is actually only $80,000 to him. And also in order to manage cash flow, there's these loans, there's loans that you can— so he has to pay the $160,000, so $160,000 biweekly. So he pays that out. So you have to have cash up front. But he was able to get a loan against that. And so he gets a loan up front. And then at the end of the year, after paying taxes and things like that, he gets the salary money back. This was amazing. And he was telling me all about it. And this guy was based in Toronto, and I've never been to Toronto, but it's— it sounds like an amazing place.

There's a company that you should check out for this that's kind of cool. So, so most companies aren't going to make the drastic move to go move to Canada. So there's a company, it's, it's, it's part of Atomic, uh, if you've ever seen it.

And while you're talking, pulling that up, I think, um, I think the best arbitrage to do this in, or one of the easiest, is service-based businesses.

Uh, okay. So, but I think you can't do it unless they're engineering. I feel like it's only engineering roles.

It, it, it's, I believe, uh, it's for anything that's, uh, research and development. Right.

Which usually I think is, uh, no, no, because the—

at The Hustle, we got a, uh, we got a tax credit for some type of research and development stuff, and I had to go through each employee and like kind of guesstimate what percentage of the time is on like research and development. And, and you can do this for agencies, um, you can get a fair bit of money back, uh, so agencies that do a certain type of thing. And I was at my friend's office who has a New York agency, and their office was like lavish because— and they spent— they— I think they spent half a million dollars decorating it. And I was— I was like, well, why do you guys do it? He's like, well, this is just what you got to do to like keep up with everyone. And I was like, well, fuck, I don't want to play this game. I'd rather keep up with other people in other places. And I think that we have a friend who has an agency and he sells to Silicon Valley and New York companies, but he does this arbitrage thing and he makes way more profit than most huge agencies.

The, um, the company I was talking about is Terminal, terminal.io. I think they basically— what, their, their startup is a smart idea. They basically were like, hey, we will spin up a Canadian engineering office for you. So you want these credits, you want these cheaper engineers, but you don't want to relocate yourself and your whole business and figure out Shred Credits and figure out where to go find engineers and figure out, you know, the best coffee shop in Toronto. Cool, we will do the engineering office for you and you just pay our bill. And like Basically, they're kind of like a recruiting/spin-up agency for talent in this region, which I think is pretty smart, a smart arbitrage. Now they're doing it in kind of a fancy way. I think anybody could really do this. I think it's a smart idea. Yeah.

And so anyway, this guy like made this— it like I had this whole conversation and then he like kind of, he like made this offhanded comment and I'm like, wait, wait, wait, wait, wait, what? And that like, it totally was like, there was a big shift there. And I was like, I'm sorry, I know we're not supposed to— like, this isn't like the main point of this conversation, but can you tell me everything about this? Right. And that was pretty, that was pretty amazing.

Uh, you want to do one more? Yeah, let's do one quick one. Um, all right, what's fun? Did you see that Reese Witherspoon sold her production company for $900 million?

Yeah, and a lot of people caused a fuss about that, and I don't entirely understand the business, but I don't think— I think people cause a fuss because they don't understand what the buyers were getting. But I don't understand what they're getting.

Why is this worth $900 million? They get 3 TV shows and her, her team.

Well, so this is like kind of bro science. So I want to preface, like, I haven't done like entirely a bunch of research on this, but Reese Witherspoon has had this production company, I think, since like the early 2000s. So for a long time, what that means is I believe that she owns the rights. You know, do you realize that Reese Witherspoon is like, like she's grossed like over $1 billion? I mean, she's like one of those people that she's like the killers. Like The Killers is a band that like maybe not everyone says that it's their favorite band, but like everyone knows like Mr. Brightside and they like, you know, they're quietly in the background, just always the best and the most popular, even though they're no one's favorite. That's kind of what Reese Witherspoon is, is like everyone that at least kind of likes her and will go to her movies. And so with, with the deal, I believe what they're buying is like a lot of IP from years and years of production work.

So, uh, okay, so, so I'm looking up, I'm looking up right now. So it says that she started Hello Sunshine, the company that got bought, in 2016. Before that, she had another one called Pacific Standard in 2012, and that's a subsidiary of it, so she kind of rolled that in. So 2012, so that's only a decade. Uh, I guess in 2000 she had another production company called Type A Films, and they made I don't know, some Oscar— Gone Girl they made, uh, you know, not nothing too big. Big Little Lies was their hit recently, and then they had The Morning Show, uh, which is on Apple TV. But, uh, this is wild. This is like— so she has a book club, and the book club has over 500,000 followers on Instagram. Well, that's pretty amazing.

Um, she also owns a— dude, good for her—

she's a filmmaking lab that teaches 20-year-old— 20 girls that are 13 to 18 the art of filmmaking. Like, this is Great. Dude, be like—

she also has a— she also has a clothing brand. I think it's called Draper James, and they have brick-and-mortar stores all over the country. What about— what a powerhouse. Reese is kind of like an Oprah thing where she's just kind of got a web of like a variety of different things. She's— she's a baller. She's also kind of a baller because a few years ago, her husband— her and her husband were at a party and they drove home and her husband was— got pulled over and I think he got DUI. And she got out of the car and like confronted the cop and she's like, well, I'm going with him. So she got arrested with her husband. So she's kind of a— she's kind of a boss. No, it's amazing. I think if I remember correctly, I believe her company was bought by Kevin Mayer, who recently was the CEO of TikTok America but got fired because of all the stuff. And before that, was he the CEO? Was he CEO of Disney? He wasn't the CEO of Disney, but he was president.

And he, he like was the president, I think, of Disney Plus before. When they launched or whatever.

Yeah, so he's a big swinging dick and he— yeah, and he basically— they bought this company to build a conglomerate of like some type of media company. I don't entirely understand the structure. These deals to me always seem very complicated and they seem very like deal-making-y.

I don't understand the numbers, right? Because like I'm looking at the— so I'm looking at the assets. So they have Gone Girl, which, which made $360 million, uh, gross in the box office. And then the next highest one was $50 million. So they 4 films, uh, of which, you know, nothing, nothing huge. Um, and then they have on TV, they got Big Little Lies, The Morning Show, Little Fires Everywhere. Those are the 3 shows, you know, and then there's 6 that have been bought or sold to either Apple TV+, Amazon, ABC, Netflix, whoever. I just don't get how you get to that number because I feel like to do that, you, you basically need to, uh, like, like The Office was getting $100 million a year of like streaming royalties. That's like, you know, the top, or Friends, you know, those were getting $100 million a year. I feel like there's a pretty deep drop-off after that. So I think this is like, this is like a Beats by Dre acquisition is kind of what I see it as, which is basically somebody being like, cool, we get Reese, we get Reese and then some stuff, great. I think that's basically like when Apple bought Beats and they're like, great, we get, you know, we get Dr. Dre and we get whatever his name is, Jimmy Iovine or whatever, um, plus we get some headphones. All right, $3 billion. Yeah, we'll pay $3 billion for, for that.

But I think It's like the most expensive acquihire. The company that bought it was Blackstone. They're the funding. And though they— I would imagine they don't— they're pretty savvy. I don't know if they overpay for a lot of stuff.

Blackstone is funding that guy Kevin Mayer. Kevin Mayer's company is the one who bought this. So I think it's more like Kevin— I think it's more like a Quibi thing where Kevin Mayer, in this case, Quibi was started by what's his name, Jeffrey Katz— Katzenberg. Katzenberg. Yeah, the DreamWorks— the guy who started DreamWorks. So he was able to go raise $2 billion because he's like, I'm Jeffrey Katzenberg, I started DreamWorks. And then he used it to go buy a bunch of content and it all evaporated into $0. I think that's, that's, you know, more like what this is like versus something, some like real asset that you can analyze and say, yeah, it's worth that. Dude, congratulations.

Congratulations to Reese for getting that bag. We— I would— that— she is actually amazing. Reese Witherspoon's pretty amazing. Have you seen— have you seen what she— you know, she's like, I think she's in her mid-50s, isn't she? I don't know, but she's killing it.

And she looks exactly the same.

Well, that's how she looks exactly the same.

They get like, you know, shot up all over their face and, you know, they look the same. Or, or, or it goes the other way and they just look super weird and they're like, yeah, it's just gone wrong. Um, you know what, we'll end on this one. One last thing. You know the new COVID strain, uh, it's called like whatever, Delta, the Delta variant. Delta Plus is the new one. Um, I was thinking about this this morning. First, Delta— how shitty for Delta Airlines just for, for the new COVID strain to get named after you. God, that's a, that's a tough, that's a tough loss to just wake up to. It's like, yo, which scientist just decided to name this Delta? Like, that's not cool. And then it's a scary name.

It's a scary name.

I was thinking, what would that be worth to them if you were Delta? Delta's— if you were Delta, what would you pay some lobbyist some, some bribery to some scientists. How much money would you shove in the briefcase for this to not be called the Delta variant? It's like, yo, call this the United variant. Call this the, uh, the, the Southwest variant. Don't call this the Delta variant.

So I'm staying at this hotel, it's called the— I don't know what it's called— Gaylord Opryland, or I don't know what it's called, but I, I think it's called Gaylord. I mean, Gaylord Opryland. That wasn't like a joke, that's what it's called. And I'm in this like wing of the hotel called the Delta Wing. And it, it, it has like a bright red sign that says Delta Wing. And I'm just like, what I've seen is I'm like, oh man, this is just like not good. Like a hospital wing. But yeah, I don't— did you associate Delta Airlines with the variant? I didn't. I didn't. I didn't.

It's going to happen. I mean, Corona, like Corona beer with the coronavirus, like, you know, that can't have been good for them.

Um, I didn't associate Corona beer too much with that.

Did you? I mean, yeah, people did. It's like that— it became the word of the year, and it's associated with like the deadliest virus in 100 years is the coronavirus.

And who owns Corona?

You know, their own thing, you know, nothing good comes from that except for, you know, the like college bro who's like, bro, I've had— I've had the coronavirus for, you know, 5 years, been loving Corona, you know, ever since. It's like that joke. That's the only other upside you get, uh, everything else is downside. And so I don't know, I feel like Delta should pay— you know, they're worth, I think, like $25-30 billion, something like that. How do you pay? I know you can't. You can't pay anyone. But I'm saying, what would they pay if they could push a button and make this go away? I feel like this is worth a billion dollars to Delta. Like, easily, this is worth 1/25th of their, of their market cap. This is worth a 4% swing in, like, brand value perception. You know, who's going to want to fly on Delta with the Delta variant going around? Uh, I just feel like that's a— there's some weird association here on Delta.

That's my airline.

You're staying in the Delta wing, so I think you're—

and I'm selling them the Delta wing.

You're just helping, helping Delta. All right, uh, yeah, anyways, I, I feel like if I could, if I could secretly present the CEO with a button that said pay a billion dollars and this goes away, this doesn't— this isn't called Delta. I think he pushes that button.

Yeah, I would agree. Um, all right. I think that, I think we had an action-packed episode. We'll see what people think. Um, I think we gave like 8 good things.

Good. All right. And, uh, all right. Early morning episode in the books. Enjoy the podcast conference. Uh, all right. I'll see you. See ya.

I put my all in it like no days off. On the road, let's travel, never looking back. Life.