MFM #172 - Advice to Young Entrepreneurs, Indie Businesses Making Millions, & How to Grow a Podcast

I used to chase money a lot. Like, how do I make money? Maybe this will make us money. Maybe this will make some money. And that was good because I, like, learned skills about how to make money. But the things that actually paid off, none of those really paid off with a big dollar amount.

Yeah, I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back. All right, before we actually get to the content, A few things. We've been making a ton of changes to this podcast. The numbers are working. I think the last month was our highest ever, right, Abreu? I believe so.

Yeah. So I think we should start saying the numbers. I think we should start saying the numbers. I think we should say what it is, say what we're going to do, and say what happens, whether it works or it doesn't.

Yeah. So the trailing 30 days was, I think, 350,000 listens, which If it's not the highest ever, it's one of like top 1 or 2, but the trajectory is, is really what matters. And that is great. So we're getting around an average episode, I think is 20,000 downloads an episode, which is, I think, a 60% increase from the year before. Is that right, Abreu? Am I, am I getting all these?

Yes.

22,000 to 23,000, right?

So let's say we're at 22,000. Uh, it used to be 15. Of course, it used to be zero, so whatever. It's growing. And our goal is 100,000 per episode. One Rose Bowl Stadium per episode is what I want to be doing. Something like that. And so we're not far. 4x is, you know, it's not far. I think naturally that would happen in a couple of years. And what we're going to do is just accelerate it so it happens in one.

Yeah, I feel quite confident that if we do the same thing but more, it would happen with time. But I don't want to do that. I'm impatient. I want it to happen immediately. So, uh, the changes we've made is we've prepared more for every podcast, which I think is very clearly working.

Yes.

We now have these videos going, um, which I also think is clearly working in that it makes me feel good. Is it driving downloads? I don't actually, I'm not convinced, but it's worth it.

I think, you know what it does do is there's a whole group of people that like either A, just don't listen to podcasts or don't listen much. So they're like, kind of like, otherwise they would only hop in once in a while. They didn't build a habit with us and they follow just through the clip. So there's actually just like another audience that's like, oh good, I watch those clips every time because they're good. And I always get messages about it.

Yeah. And I'm in that category as well. I've never, I don't think I've ever listened to a Joe Rogan podcast, but I watched a lot of clips. Right. Um, and, uh, we're putting our clips on YouTube, which is not working. That is not working well at all for us. Right. Um, Maybe the, we're putting the full episodes on and a handful have 20,000 to 30,000 views, maybe even more. A couple of them have a few more. That's working, but the clips are not working. And then we're doing email blasts in The Hustle. I think that started 2 weeks ago. That is working.

We should rewind. We should basically say we had a meeting, which was like, uh, I don't know, a week ago, maybe something like that. And it was like, oh, okay, we got all these ideas. Basically, I had thrown in a few ideas. You had a few ideas. Abreu had a few ideas. My buddy Ben had a few ideas. They were like, oh yeah, great, all these sound good. So who's going to do them? And then we kind of had this come to Jesus moment where it was like, look, in Sam we trust. We can't outsource this to somebody else who doesn't really— I don't want to say doesn't care, but it's a different thing when it's your baby, it's your show. You are getting the— the more people who listen to this, the cooler opportunities we get, the better DMs we get every morning. And so clearly it matters more to us than it would be for even if it was somebody's full-time job. And the second thing is your skill level is super high, right? We saw you grow The Hustle. I saw you grow The Hustle. A lot of people who were subscribers saw you grow The Hustle, saw you grow Trends from scratch and saw you sell the thing. And it's like, so I got excited because I was like, I'm going to get to see Sam in action even closer than I did with The Hustle, where you would send a monthly update. Now I'm seeing how you actually operate. And it's pretty dope. And I actually think the listeners will like to see how you operate, how you approach growing a thing. And I think that'll be exciting.

That's a lot of pressure. Thank you for the compliment. That's a lot of pressure. I will say, I think growing the podcast has been— I mean, that's actually one of the harder things I've done.

Yeah.

But HubSpot owns us now. It's not my money. Like, it's their money. And so we're in a totally— I mean, we're— our owner, you know, the company, this company now does a billion a year in revenue. There's like a billion plus in cash in the bank account. Like, so we could actually, so we're going to have a lot more resources. I actually am not convinced that that's actually going to help us grow though.

Yeah, I don't think resources helps you grow, but I think I would say like that wasn't the problem before. Uh, it can be helpful, but that wasn't necessarily the problem.

Uh, and then, so what we're doing now is, uh, we don't have ads in the email anymore. So in The Hustle, we do zero advertisements and the podcast is going in every day now. Um, or not every day, but, uh, a lot. And then also what we are launching at HubSpot and The Hustle is we're creating this thing. Well, I actually don't know if I could say too much about it, but there's gonna be a lot more podcasts and amongst those podcasts we can promote one another and that's what you're gonna hear. So whoever is in our pod— our podcast crew, we're gonna promote them, them us, yada, yada, yada. And I actually think that's gonna help a ton. I think that, um, I actually don't think I could talk any I don't want to say who's in that, but we'll say it later when you can.

So, okay, can I give the audience the 5 ideas that we had brainstormed that were like, oh, okay, thing 1 was like, let's put Sam in charge of it because Sam knows how to grow shit. That was step 1. Step 2. Okay, so what are the, like, how would you grow a podcast if you're going to grow a podcast? So we said, I'm going to rattle off the ideas. Number 1, big name guests that actually have an overlapping audience. So people like Chamath, people like Tim Ferriss. Not just like a famous person who, like, for example, we had Jake Paul on, super famous, but his audience and our audience not going to have a huge amount of overlap where it's not necessarily that his fans would connect with us and become ongoing subscribers. Okay. The other one was paid. Can you advertise to grow a podcast? Right? Like running some experiments on, take a few thousand bucks, run it on a paid campaign and see, can you grow through paid? I think we'll find out if that's interesting.

We're doing so. We bought ads in Player FM, Abreu, is that what we did? Yep, yep. And then, um, we're buying ads and a few more. I have a few more that we're buying ads. Did that work, uh, Abreu?

Player FM, it's hard to tell because they claim a lot of their views come from desktop listeners, um, which doesn't necessarily get measured according to them.

Um, okay, well, oh, that's like saying like, thank you. Yeah, yeah, it's like saying like, no, look, the— it's like, this is like selling like CBD treats for for dogs. Like, does it work? Right.

Can't ask your dog.

Yeah, it's like the greatest business ever. It's like selling vitamin B for your puppy.

Yeah, exactly. So I would say if it's hard to tell, it didn't work is a very obvious way to think about it. Okay, another one. Go on other people's podcasts. So do a tour going on other people's pods. They already have an audience. Those people listen. They say, oh man, what a great guy. I'd love to listen to more of this person. They were interesting.

Boom.

Get some people from there. Clips. People have seen we tripled down on clips. We found awesome clip makers. We're making a fuck ton of clips and we're going to post the shit out of them. So I think that's a good strategy. And then the last one that I thought was kind of an interesting one was like, get sharper on the branding. So if you want to grow a product, the sharper the hook of what is the product, the better chance you have to grow because it'll be more clear. It'll resonate with more people. And so being able to describe it well, as well as just being on brand all the time about what this is and what you get out of it if you listen to it. I think that's an area that honestly we're kind of shitty at, which is ironic because I think we're pretty good at it with our startups, but we're pretty bad at it with the podcast. The name doesn't really make much sense. The description, I don't know. We don't have like, we don't do an intro when you join to be like, oh, this is the podcast where XYZ happens. We don't have like a highlight reel of like, you know, start here if you're new to the pod, like go here.

This is the onboarding episode, you know, basically in a sense it kind of succeeds a little bit in spite of itself.

Right.

And a lot of people say the name doesn't really matter or sorry, the name doesn't reflect it. And I'm in my opinion towards just names is it doesn't, your name really like it rarely will it hurt you. In some occasions it actually could help you. I think Coinbase is like the perfect name ever, right? But, uh, even if Coinbase was called like, uh, uh, Blue Sky, uh, Sunglasses— I'm just looking, I'm just making shit up that I'm looking at— um, it would work. Blue Sky, uh, like, it will work. It would have worked.

Uh, okay, so, uh, should we move on to Coinbase?

Actually, let's move on to Coinbase. So Coinbase went public today, and it's— everything about it is astounding. Right. Um, so do you want to start?

I can read off some of the kind of the numbers of like, just how big is that business? And then we can talk about the returns of this, of the, of the investment. So how big is the business? So Coinbase came out, they're public now. So now they released their numbers. Their Q1 numbers came out, 56 million users, um, 6 million monthly active users, which is, I think, more than E-Trade had, uh, you know, like total, I think E-Trade had like 3 million, uh, like trader accounts or whatever. And so this is kind of amazing to me that there was more people on Coinbase. Um, Coinbase makes up 11% of the crypto asset market in terms of how many assets are stored on crypto, uh, on Coinbase. $335 billion in trading volume. Okay, here's the interesting bits. Uh, $1.8 billion in revenue for the quarter. Um, for the quarter, for the quarter.

So round up to 2. So about $8 billion-ish in revenue is annualized.

$800 million in net income off that $1.8 billion in revenue.

So like $2.4 billion annualized in profit. Right.

And, uh, and then, yeah, so basically Coinbase goes, it lists publicly today. It wasn't a, it wasn't an IPO. It was a direct listing where you basically, you know, IPO is you create some shares, uh, you, you issue new shares to, to buyers. A direct listing is you don't issue new shares. It's just people who have shares can get, you know, like basically sell some of their, their shares. So they listed, they had about 114 million shares for sale and it's up about 40% on day one. So the implied market cap as of right now is about $110 billion. So what I wanted to know was, there's this kind of phrase in the startup investing world, which is like, anytime there's a gold rush, like some new frontier, new space, it can be hard to like pick the winner. It can be hard to like, you know, just grab your shovel, dig and find the gold. And there's 1,000 people looking for gold and you don't know where to dig. It might be this one, might be that lot, that land, you, you know, you don't know exactly where the gold is. So the foolproof strategy in any gold rush is what they call the picks and shovel strategy, meaning you, you sell the shovels to people who are going to go mine the gold. And so Coinbase is kind of a classic picks and shovels thing in the crypto market. So you, you could buy Bitcoin, you could buy Ethereum, you could buy one of, you could buy Litecoin or Dogecoin or one of the thousand altcoins that exist and you're betting, okay, maybe one of these will become like the digital currency. Or you could buy Coinbase, an exchange that's going to trade a bulk, you know, a bulk number of these coins. And so I wanted to know, once Coinbase got up to where it was like $100 billion valuation, I had the question of what would have been a better investment, Coinbase at its seed round or Bitcoin that same day? If you could, should you have bought the currency or should you have invested in the company? And the reason I thought this was interesting is I remember 2013, I just kind of heard about crypto from a guy in my office. Like, Pete, our IT guy, was like, dude, Bitcoin is the shit. It's at $7 now. It's at $11. I was like, I don't know what that means. And he was like, yeah, fuck fiat currency. And I was like, fiat? That was a car. I didn't even know that's a currency at the time. I didn't know what that meant. And he was like, mining Bitcoin using our servers at the office. And he's like, oh, we mined 2 Bitcoin today. And I was like, okay, good for you, Pete. Like, what does that do? You know, I was kind of like, you know, mocking it, but I was curious also. So I started going and listening to some talks. And, uh, and so one of the things I was looking at was like, are, are smart VCs, are people smarter than me investing in this space? And what I remember happening was I listened to this talk and it was Andreessen Horowitz, it was Marc Andreessen, uh, who now blocks me on Twitter. Um, he was talking at a thing, he was talking about how crypto is going to be great, how it's, how Bitcoin is going to, you know, is such an interesting technology, how blockchains might change everything. And then the interviewer was like, so how many investments, how much money have you put into this? You're kind of hyping it up. Like, how much money have you invested? And they're like, we haven't invested in any crypto companies yet. This was like, I think 2012, I think it was 2012. And he goes, right now we're just owning the currency. We're just buying Bitcoin. And I was like, what? That's so weird. These guys, like, they're a VC fund. They bet on companies. There's a few companies out there, like I found it to be super strange. He goes, right now, the bet, we don't know which of these companies is going to emerge as the winner. So we're just buying the underlying currency. We actually think that's the right move right now. And later, Andreessen Horowitz actually did invest in Coinbase later and since invested in many projects. And actually, Andreessen Horowitz changed their whole fund structure from a private VC fund to some other kind of financial investment vehicle. They went and got registered with the SEC or whatever. Because they wanted to own crypto assets and you couldn't do that out of a traditional fund. They couldn't, you couldn't buy currencies out of a traditional fund. The paperwork, the docs don't let you. And so, um, so anyways, I went back and looked at the numbers. So Coinbase announced a seed round September 2012. Um, I don't know, they probably raised it a little bit before that and then they announced it. They raised $600,000 from investors, including a crowdfunding campaign, which I, which I found interesting because I, uh, you don't like them. I shit on crowdfunding all the time as like, me too. It's always the bottom of the barrel, but this was through Funders Club. Funders Club had put in like $285,000 through its crowdfunding into that, that round.

And so anyways, what is, is Funders Club is just a startup.

Like Funders Club itself was a, is a YC startup and then Coinbase was a YC startup. And so Funders Club took a, took a share, uh, or like did a, did a crowdfunding campaign for, for that. Uh, if I read this correctly, I, I could be wrong in this part, but anyways, I went and asked one of the seed investors. So somebody who, uh, a friend, uh, who invested in the seed round of Coinbase, I said, what was the valuation back then? He said it was 15 cents a share. So 15 cents a share there. And he said the A round was only 20 cents a share. So it wasn't even that much more. Um, uh, so something like that. So, so 15 cents a share and, um, now it trades, it's trading right now, like right before this podcast at $330 a share or whatever. And so you got this, uh, you know, 2000x markup, I think 2,200x markup. And, um, so you invested $100,000 in the, in the seed round of Coinbase. That's worth $220 million on this day today because it goes, it goes public. Now, if you had invested in Bitcoin same time, Bitcoin at, at, in that same month was trading at $12 a coin. Now it's at $62,000 a coin. So your same $100K instead, you know, would've been worth $500 million. So still Bitcoin was the better investment, even though this was like a, you know, you invest in a startup that became a $110 billion company, still Bitcoin outperformed, but, uh, it's closer than I would have thought because Coinbase has really gone up in value in the last 2 years.

So let's give some more numbers. Um, I think right before we started, the valuation was $80 billion, but a few hours ago it was $100 billion, right? We're going to use $100 billion because that math is a little easier. Brian Armstrong is the CEO. He's 38 years old. He owns, I think, 20% of the company, which means at $100 billion, his net worth is $20 billion, which puts him, I think, like in the top 50 richest people in the world at 38. The company Coinbase, I, let's see, it started when? 2012. So it's 9 years old. So basically became The, from zero to richest, uh, top 50 richest people in the world and only, uh, 10-ish years, 9 years. And also he owns 20% of Coinbase. Who knows how much Bitcoin he owns? I certainly don't know, but you have to ask how much Bitcoin does this, does this person own? If you told me that it was another $20 billion, I don't think I would be surprised at all. Do you, would you be surprised?

I feel like $20 billion is a lot. That is a very, very large amount. So I don't think it would be quite so high, but I wouldn't be surprised if it was over a billion dollars. I think $20 billion would be like, he'd be one of the top 3, I think, Bitcoin whales, I think at $20 billion or something like that.

Okay. Okay.

So I think that'd be way too much.

Would you think, I don't, I didn't do the math ahead of time, but would you think he would be a top 50 Bitcoin holder? That seems reasonable, right?

It's plausible.

Yeah.

So, so I don't know, we, you know, he, I don't think he's ever said or disclosed, you know, if he, if he was buying the underlying coins though. So the biggest thing is, did you hold, right? Because Bitcoin on this run-up, right? So from when, you know, if, if he's doing Coinbase, Bitcoin's at $10 a coin, right? That becomes your kind of like frame of reference. Bitcoin today is trading at $63,000. $63,000 from $12,000 is such a mind-boggling change. And so when I was talking to my friend who was an investor in Coinbase, I said, I was like, wow, did that mean— does that mean that Coinbase outperformed Bitcoin? He goes, no, I think Bitcoin still wins. He goes, but name one person who held all their Bitcoin from 2012 to 2021. He's like, me. Sam's right. Well, I guess, like, of people who owned a lot of it at that time.

No, I didn't own a lot. I bought hundreds of dollars worth. but no, not a lot.

So let's say you owned a lot, you know, as that nest egg becomes $10 million, $20 million, $100 million, you're going to like, a lot of people would, would liquidate some of it. And so he was saying, you know, all of us at Coinbase, we really couldn't sell this whole way. And he goes, the illiquidity was a feature, not a bug. Like the fact that we couldn't sell this whole time for Coinbase, it was the best money-making strategy for us to like not be able to be liquid until now.

I didn't sell, but my numbers were like tens of thousands or maybe hundreds of thousands of dollars. It certainly was not a million or tens of millions, but I didn't sell because I actually forgot my password and I was like, oh, I just don't want to log in. It's too hard. And so I didn't log in.

Have you still— you have it now or no?

Yeah, I have it now. I just never did like a forgot your password thing in my email because I was like, too much work. Maybe it's a sign I'm just not going to sell.

Right.

And so I didn't sell. But can— what do you have in front of you? Are you looking at something?

I'm looking at this tweet you put in of Daniel Gross.

I want to bring— I want to bring this up.

Yeah.

So the numbers here is fascinating, but I actually don't think that's the really fascinating part. What's the fascinating part is the psychology behind this, because today it's Coinbase. In 20 years, it's going to be something else. 50 years ago, it was real estate or something. 100 years ago, it was oil. There's always something.

Yeah.

And the psychology behind the human being, I think, is far more interesting.

And by the way, he was an engineer at Airbnb before he left to go start Coinbase. His Airbnb shares from, you know, would have done amazingly as well, right?

Like, well, he only worked at Airbnb, I think, for a year. And before that, he worked at Deloitte. So I'm almost positive, granted, he was probably a genius, probably like, you know, crazy high IQ, but like normal guy, uh, normal, like a normal 9 to 5. Um, and also, uh, so let's talk about the, let's talk about the personality part here that I love. Um, I like knowing what drives people, what makes them tick. We talk about Billionaire of the Week and it's not actually about necessarily the money, but what, what, what, what do people think who achieve greatness, right? In this case it's money, but reality greatness can be a variety of things. Um, so Daniel Gross is the guy we had in this podcast. He went, uh, so Hacker News, if you guys don't know what Hacker News is, you should read it every single day. It's basically, uh, Reddit, but only for nerds. I love it. I read it every day. It's tech folks. And anyway, Brian Armstrong has a handle on tech news or on Hacker News, and you could read his old posts. And he has this old— and Daniel Gross tweeted out some of this guy's old posts. His handle is— I actually don't know what his handle is, but well, it's— sorry, it's B Armstrong. And so B Armstrong actually had a blog. Listen to his blog. This is actually kind of funny. It's called startbreakingfree.com, which is, which is kind of on brand consistently. And actually, if you go to startbreakingfree.com, it's controlled by a virus. So it like, they, it automatically wants you to install a plugin.

It's controlled by a virus.

Are you know what I mean?

Like, go, are you like, it's like, uh, if I go to it right now, it's gonna try to install like, you know, security software that actually is gonna steal all my money.

Yeah.

Just steal all my Bitcoin.

Yeah. It's gonna, well, it's gonna say like, you won, you know, you're the lucky winner. Uh, like somehow he let the domain expire or something like that. And, uh, someone got ahold of it. So now it's just a scam, which is kind of funny that the guy who's supposed to be like Mr. Security, his web, his domain expired and whatever. But anyway, you can see his post history and he was launching a lot of stuff. He launched this one thing and it says, hey, Hacker News, I just built a new forum software. Hey, Hacker News, I just built a new photo sharing website. So the guy was really prolific and it's really interesting to see his posts.

Yeah, he was definitely like trying like what Daniel tweeted out was, I, you know, I look back at Brian's Hacker News submissions before he started Coinbase. You could see what you see is a story of a hacker working on different projects, slowly zeroing in on his launch coordinates, uh, right? Because he's consistently shipping stuff. They're not all like, you know, some of them have like 1 upvote, 7 upvotes, 32 comments, right? Like they're not like taking off. So you see a guy taking a bunch of swings. and as it swings, you can see it was something about maps, something about how would you start your own country, something about could you build an entire web app in one language? And then it's like Bitcoin Android release, how Airbnb does X. And then it's about how to build your own forum, Bitcoin iPhone app, and just sort of finding the thing that is his thing. And this is true for everybody, right? You know, people joke about Sam's, uh, you know, Sam's Footlong Wieners or whatever, your hot dog stand.

Yeah.

Uh, you know, my sushi restaurant. It's like, if you dig back into people's first projects, um, you're always going to find interesting things. Like Mark Zuckerberg, first project that, uh, I've heard him talk about. Have you heard this? The dentist office thing?

No.

He set up an internal, like, just net— internet network for his dad's dental office. So it was like a messaging, like the secretary of the front desk could message him and his office in the back. So he just kind of set up the internet inside their office and let them message each other. Then he built Wirehog.

Wirehog, I think, was really successful, by the way, for like a 17-year-old kid.

Yeah, exactly. For a 17-year-old kid, it was more successful. And there's chat transcripts of after he leaves to go work on Facebook, he moves in the Social Network. They move to Palo Alto. It's like, this is it. Facebook's going to be the thing. There's chat transcripts of him talking at that time.

Like, he's like, we should bail and do Wirehog.

Yeah, like, I think Wirehog's the thing. So even then, it's not obvious at that time. And whereas people try to project that these guys are visionaries, they are visionary geniuses who never had a doubt in their mind, and then they saw the future and then they built it.

And it's like, well, I actually think that a couple of those things are true. They could be visionary geniuses, or rather, they could be geniuses. but that's actually not a prerequisite, but it does help. But they definitely had doubt regardless of how confident someone is. It doesn't matter if you're Conor McGregor and you're going in a fight, you always have doubt no matter what. Um, and second, um, they probably didn't have a vision until it started getting a little bit of traction.

Right. And I, I go back through, there's these, there's this, uh, interview on YouTube of Mark, uh, doing, he, there's like some college news station that's interviewing him. Some guy, some go, some guy has like a college podcast. And he invites Mark Zuckerberg on because he's got the college social network that's kind of like taking off on a handful of colleges. I think they were on like, I don't know, 5 or 10 campuses at the time. And he's like, so what is this going to be? You're going to go out to more colleges and then what, like high schools and then non-college students? And Mark Zuckerberg is sitting there in his basketball shorts with a red Solo cup in his hand, and he's like, I don't know. I don't know if it has to do that. Why can't this just be like the cool thing for colleges? Like once you take it out of the college thing, then you let everybody in. It's like less cool. Like maybe this is just cool. And like now he's literally putting fucking satellites into the sky to give people in India the internet so that they can use Facebook. Like, you know, his aspirations changed.

The takeaway here, and I actually just went back to my high school the other day to like give like a talk.

And I was like, dude, doesn't everything look small when you walk into high school?

Yeah. And you meet a 16-year-old and you're like, oh my gosh, like I felt I was mature. I felt I knew what I was doing. You're a child.

Yeah, I could beat you up.

Yeah, I'm like, I was like, dude, I'm 30 and I thought that we were more similar, but we're not.

We're not at all.

Yeah, we're not.

Like, why are these chairs so low to the ground?

Yeah, everything is so small and like water fountains are disgusting. I can't believe I used to drink from them. Anyway, I was like, you guys just do shit. Take swings, tinker on stuff. First of all, a lot of stuff that starts out cool, it actually looked really dumb early on. But even if it stays dumb, just get into the habit of taking swings and making stuff. Because, like, I'm not, like, uber successful, but my first shit was, like, a poison ivy business. It was a business.

What is that?

My first stuff was, like, stupid. And, like, it led to this thing and this thing. And, like, hopefully the thing that I'm doing now is actually going to lead to something even bigger. And I also did a ton of research and I found out that there is this poison ivy treatment called Zanful, Z-A-N-F-U-L, I think. Zanful. And basically I did a ton of research and I found the guy who started it used to work at a cleaning supplies company. And I was like, oh, that's interesting. What is going on here? Like, that's kind of weird that I just saw that connection. And I did research and I found out that basically what he did was he took this thing called, I think it was called Mean Green, and it was really good at washing oil off mechanics' hands and it costs like $5 for a gallon. It was dirt cheap. But he found out that the way poison ivy works is if the leaf gets on you or if it leaves on you, it gets this oil on you and you have to use this oil stuff, this oil remover.

I've done it. Yeah, yeah, yeah. Same thing with poison oak or whatever.

Yeah, yeah, same thing. And I was like, oh, so I'm just going to bulk buy this Mean Green crap and repackage it and sell it for $40 as opposed to I sold it for like $40 for like some, like a, like a Carmex size or like a, you know, like a, like a ChapStick size thing when it costs like $40 for like literally an industrial size barrel. And I just repackage it and I was making thousands of dollars a month and then I quit doing it because I was like, I don't want to do this anyway. It was kind of a cool thing, but I shut it down because I was like, all right, this is making money, but like, I don't want to do this. I'm not proud of this. This isn't like anything I like to talk to. Tell people I'm doing. It's kind of lame, even though it was making like $5,000 a month. Shut it down. And, um, the point is, the thing that we're doing now, I have a feeling it's going to lead to something even bigger. And, uh, in, in Coinbase's regard, everything was much bigger in a much shorter time frame. But, uh, it doesn't matter. It's the exercise I think is still true.

That's great. Uh, you know, those guys who came and set up, uh, my studio here, they just released a vlog on his channel. This guy Henry, I forgot his last name. Henry Bladcaster or something like that. I don't know what it is, but basically, I don't know how you'll find him. Henry on YouTube, he did this thing. He put out a video yesterday being like, oh, the advice that I got from Sean Puri. And I was like, okay, well, I'm one of his, like, I don't know, 100 subscribers. Like, I'll click this. This is about me. So I will go ahead and watch this video. And his videos are actually super well made. He's like, very Casey Neistat-ish.

Mini Casey Neistat.

Yeah. Which just shows how hard it is to win on YouTube. Like, his quality is really high, but like, no one gives a shit because it's just YouTube. There's a billion things on there.

Hey, as we said, just give it some time and just keep trying. It might hit.

So the advice, and I was like, I'm curious what the advice was because they came over and they were like doing all the work and I'm just sort of standing in the garage with like a cup of coffee, just like, you know, just sort of like trying to be nice. I'm not helpful, but I was like trying to talk to them and I was like, and they're like, you know, hammering things and I'm just like asking them questions and giving them some kind of like, well, here's how I would do it if I was you guys. Because I really resonate with anybody who's like, if you're like 22, 23, and then you're smart, but you chose not to go the traditional path and that feels right, but then you also just get these hunger pangs of doubt when it's like, shit, my friends actually have a salary. Wait, I'm sleeping in a— 4 of us are sleeping in this 1-bedroom apartment. And so I started— I really empathize with that because that's where I was. And I just want to tell them what I what I would tell myself, which is like, dude, you're doing the right thing. Here's how you need to think about this, though. Don't worry. Here's how this is going to play out. And what I told them was like, look, honestly, the best times of my life were 3 of us living in a 1-bedroom apartment. My co-founder and my roommate lived in my closet because he couldn't even afford our dirt cheap rent. So Trevor lived in my closet and turned my living closet into a room for himself with a lava lamp and shit. And then his girlfriend moved in with him in the closet too. Oh my God. And so then I was like, he had a grocery cart because he didn't have a closet because he was living in a closet. So he stole a shopping cart, rolled it into his closet, and used that as his hamper, his closet for himself. And I just remember at the time, everything seemed so shitty. It was like, oh, this is the shitty version of life. And now I'm like, no, that was the most fun time. Because all we were doing every day was just trying to figure shit out, trying new different schemes and projects. We had no responsibilities, no burn, and then we would just like party for fun, like on the side. And so I just remember thinking, like, now that I look back, I'm like, that was the shit. And that's what I was trying to tell them. I was like, first of all, guys, this is the best. So like, like, embrace this part. You're never going to get to have this again with your friends like you have right now. It's, it's so fun. Embrace these 5 years. I said, the second thing is like, I used to chase money a lot. Like, how do I make money? Maybe this will make us money. Maybe this will make some money. And that was good because I like learned skills about how to make money. But the things that actually paid off, none of those really paid off with a big dollar amount. The things that paid off were like the people I was meeting and like doing projects with or learning from, like those relationships pay off big in the end. You know, the learning of like building skills around like I did my first e-com project like you are selling these wristbands called fatbands.com and it was just a fat, fat wristband that I like noticed that a bunch of kids were wearing on campus. I thought, oh wait, maybe that's a trend. Let me try to sell those online. You can customize them. And so those skills translated, but the business did not. And so what I told him, the advice that he put in the video that I didn't even realize I said was like, you're 23 years old now. Like, here's the trick to this whole thing. You're doing the right thing every day. You're just making stuff, you're trying stuff, you're making content, you're having a blast with your buddies. We're going to measure the scoreboard when you're 30. Not when you're 24. And it's like, that was the game changer, like kind of like advice I wish I had and that I gave them.

And maybe 35 or 40, right?

But basically it's like, don't— like you're planting seeds. Don't go dig up that seed the next day and be like, shit, this didn't grow into a plant. Like, no, plant that seed, water it, enjoy it. And just say, look, I'm not trying to win the whole game in one year, uh, in a year and a half. And like, if my, my, if my friends who went and took this banking job or consulting job or are doing better than me in 18 months, like, I don't need to feel like I made a bad choice. Like, I'm making the right choice for me and it's going to pay. Like, let's look at this as a 10-year game and we can only measure the score that, like, the fourth quarter is 10 years from now. So that's the only time you can look at the scoreboard really.

And the seeds that you're planting, at least in my experience, and I think in a lot of my friends' experience, and it also seems like you for sure, uh, is it's shit, it's shit, it's shit, it's shit. And then suddenly it's like, Oh my God, it works.

Yeah.

Like, so it's shit for the most of the time. And then finally it's like, oh, okay, now it's all happening.

Your learning goes in this like gradual curve. Like your learning does go up every year where you're like, oh man, last year I was such a dummy. I didn't know shit about shit. And now I know better how I would do this. And then the same thing happens the next year and the next year and the next year. But your results can kind of stay flatlined for like a decade, almost for like 7 years before it actually, you know, stops being a flat line and it just like curves up rapidly.

So I wanted to continue talking about this, but I'm actually going to save my stuff that I have these notes here. I'm going to save that for the next time because I don't want this episode to be entirely this stuff. Although frankly, I love this stuff. Abreu, do you like this or not?

Yeah, man, I'm just soaking it all in.

Okay. Um, I like this stuff, but Sean, do you want to move on or you want to do the other thing? Do you want to do microacquire or do you want to keep talking about this?

Uh, I don't want to keep talking about this. I want to do either some microacquire or some ideas.

I want to do microacquire and this is an idea actually. But, uh, we at The Hustle, we've worked with this guy and I never talked to him because, um, I wasn't the one working on the project. But anyway, I just started hanging out with him recently. This guy named Andrew, uh, people call him Gaz, but his last name is like Gaznady or something. Do you know Andrew?

Gazdecky or something. Yeah.

Gazdecky. Uh, I think they just call him Gaz. Uh, do you know Andrew or do you know who he is?

I did the, like, the mini SPAC with him, so that's the only way I know him, just through DMs. I've never talked to him.

Uh, never met him. Andrew is 32, I think. Um, he previously had a company that I think was an agency, and he told me that he sold it for like tens of millions of dollars. So it is very, very successful. But his new thing is incredibly interesting. It's called MicroAcquire. I think it's just microacquire.com.

That's right.

And the premise is very simple. Uh, he finds people that want to, that wants to sell their, their company and he just talks about it in the newsletter. It's basically like AppSumo or like The Hustle, but, uh, a newsletter that just sends out cool companies, except what he does is he makes you pay money to be access to, to get access to it. You only have to pay $200, $300 though, and you get a year's access. And his numbers are pretty interesting. And keep in mind, Andrew's actually the only employee, so no one works there. Um, and so as of today, he's got 1,500 subscribers paying $299 a year, and that brings his revenue to about $400,000 a year. And I posted a chart of this. Do you see the chart I posted?

Uh, no, I'm on his Twitter because I was looking for that because I know he posts. Oh, here it is.

Yeah, no, I have the chart, so I posted it. Um, and I'll— he just sent this to me, so I guess— I mean, I said, can I share it?

He builds it in public, so he, he announces the revenue publicly as part of his like way of getting more traffic. So he's at $425 ARR.

And look at the chart. Yeah, that's a pretty amazing chart.

Um, really see what the growth happened like in November, December, January, February, like it just lasts like 4 or 5 months.

Yeah. And it's pretty interesting. And I actually shared with you, just scroll down a little bit more. I shared with you his, his vision, but what this guy is building, uh, I mean, this is his vision. We'll see if he can pull it off. Um, is a different type of angel list. So basically he wants to disrupt investment banking and he wants to make it easier to buy and sell companies. And it's incredibly fascinating. So he wants to, or sorry, not disrupt AngelList, but kind of be like AngelList.

I feel like we didn't describe what it is. So what it is, MicroCorner, you go on there if you want to buy a small SaaS business. So a small business that makes recurring revenue through subscription. And, um, and so that's the, that's the, that's the thing I browse and the size are, it ranges. So it could, you could buy one for $5,000 that's making $100 a month of revenue or something like that, or $0 revenue, but it has users. So you could buy it for as low as like $1,000 or $5,000. You could buy a business. And as high as, there's a couple for like single digit millions of dollars on there. Maybe there's a few that are outliers, but that's like, I would say the sweet spot, the range for these things are kind of like hundreds of thousands of dollars is like where the decent businesses are on this platform. And this is the thing where I talked about this once on the pod, but he had DM'd us and he was like, hey, like, love My First Million. You guys are great. Would you guys want to do something with me where I like, give away a $5,000 micro SaaS business. And I was like, dude, that's a great idea. I'll go in with you and I'll pump this to the audience. And so basically I tweeted out, I didn't even talk to him. I didn't actually even respond to his DM. I just tweeted out, hey, me and Andrew are giving away a SaaS business for $5,000. Like, who wants it? The business is there. We'll buy it and give it to you. It's like, these are businesses that are already working to some extent. It's like, we just need to add some hustle. Who's a hustler who wants this business? And what ended up happening was a bunch of other people started chiming in, being like, I'm in for $5K, I'll put $5K in. And so we ended up raising $100,000 as a micro SPAC, meaning a blank check company. So we raised $100,000 into an entity to go and use that entity to go buy a business off of Microquire. And then as of last week, it closed. So we found an entrepreneur, found a business, and we closed that deal, um, to buy a Shopify app.

That's amazing. And that's pretty wild. I'll be eager to see what happens, and I'm sure you'll reveal in like 6 or 12 months. My opinion around MicroAcquire is at worst it's going to be okay, right? At best it could be amazing. I don't know what it's going to— what's going to happen to it. What do you think? It's a really fascinating business. And I— the thing is, now I'm actually shocked he's letting me talk about it because I feel like I can clone this so Uh, yeah, it's a lot of work.

Like, I saw this guy doing the one deal we did, and it was just like a fuck ton of work to just like, you know, shepherd everything to make it happen, do the paperwork, get a deal.

Yes, but that's not the work for MicroAcquire.

Well, they have to help you do the transaction. So, so that's their, that's their function. Um, it's what's good is that they don't make money on the like transaction closing. They make money on you paying a premium subscription. Like I pay a monthly fee to be able to browse businesses, which is a much better model because you're not just reliant on taking a brokerage fee of closed M&A because there's just not a lot of closed M&A that happens. But there are a lot of people who are curious and will pay the, you know, $100 or whatever it is, $200 to be able to like browse the premium listings and get the, get the details, get the info.

And so what I would do if I was Andrew is I would decrease the price to $99 a year. Because that— or even $39 a year, because that would make it an impulse buy and I would get loads of people. Then I would do this company selling. Then I would have a course that costs $2,000 to $5,000 and it would include a community and was all focused on buying and selling companies, growing businesses. And I'm pretty, I'm pretty confident that you could get that to around $30, $40, $50 million a year in business. I don't know if that would be a valuable company to sell, But I'm pretty sure that you could make $10 to $20 million a year in profit for at least a handful of years.

I think it's—

that's what I mean.

I think it's needed. So I think it's smart that he specializes in SaaS. I think that it's smart that he's a curated marketplace versus, um, like Flippa or these different places where you're just like so much fucking junk. You don't know what to— there's no trust. So I think he's doing it right that he's bringing trust to these kind of like lower trust like marketplaces. So I'm with you. I really like the project and I'm with you that the minimum is a good outcome. The maximum is like, oh wow, this was a big idea hidden in plain sight. And I think it's interesting. I think it's more likely going to just be the good outcome, but I like that it has the, you know, the option to do both. And it seems like a fun, a fun kind of business to build if you're this guy.

I think he wants it to be the okay outcome, which is he owns it and he lives a really good lifestyle.

Right.

And which, by the way, I think I would probably do the same as well. So anyway, that's a cool company I wanted to bring up. What do you got?

I got a couple. Okay, so I'll go for— we talked about this before, but I'm curious what you think. So Photopea, we talked about this many, many months ago, but we were much smaller than people. Those people are probably not even listening anymore. So we'll just pretend it's the first time. So there's this thing called Photopea, and all it is is it's Photoshop, but it's free and it's in the browser. You don't have to download anything. And the guy who makes it, I don't know much about him. He posts on Reddit or he has posts on Reddit. It's a pretty big thread. I think you know a little more about him than I do, kind of like the backstory. But it's a free version of Photoshop that has cloned every feature of Photoshop pretty much. It's like it's the exact UI of Photoshop, which is crazy because Photoshop is such a complicated piece of software to build. And this guy just chipped away, just chipped away, just kept chipping away and basically built Photopea. And pea as in like the vegetable, like pea. And so Photopea.com, you go there and it's just like one banner ad. That's like how he makes his money.

I think.

I think it does $1 million a year now because so many people use this goddamn thing, like students and like people who don't want to spend— Photoshop's really expensive. People who don't want to buy Photoshop can use Photopea and get like 80 to 90% of the same power without any of the cost and without any of the headache of downloading a big-ass 1GB application.

What, uh, oh my God, I'm on it. So we do— I know this person, is that what you're saying?

I remember the first time we brought it up, you had already heard about it because I was like, dude, this— I have a really obscure thing. And then you're like Mr. Obscure. So you're like, oh yeah, I've seen this on Reddit. at the time. So I remember being like shocked that you knew about this thing because I thought I had just discovered like an uncovered gem, you know?

Yes, I see it. It's from November 2018. Uh, a guy, yes, because it got 50,000 upvotes and he started it by saying, I made a free alternative to Photoshop.

Yes.

Ask me anything. And that's how he got promotion for it. Yeah, I like this. Um, so you think he's making a million dollars a year doing this?

Yeah. So I don't, I don't know why Ben told me this. Ben gave me this topic and he was like, Photopea, you know, he's like, you know, Photopea? I was like, yeah. He's like, you know, it's been a million dollars $1,000 a year. So if I'm wrong, Ben's wrong. I didn't look it up myself.

But, um, by the way, I got access to SimilarWeb. I've got a premium account now.

So I can actually— oh, you got the goods.

Yeah, I, uh, someone who works at HubSpot, uh, I'll— I don't know if I can blow up their— anyway, I got SimilarWeb.

Dude, I'm the same way where at Twitch I was like, oh dude, you got a premium App Annie account? That's like a couple thousand bucks a year to see app download stuff. Like, share the login. And they're like, you know, we're like a company. You just buy a seat and it's just the company pays for the seat. If you think you would use this, just buy it. I'm like, oh, but they're like, I felt like such a pirate. Like I had to like hide. I was like, oh yeah, yeah, of course. Of course. I wouldn't bootleg that. Like, well, yeah, that's not what I meant.

That I'd still try to like be a little bit less hoodrat Sam and more like, oh yeah, it's like, this is ROI positive. Just buy it.

Right. Right. Uh, it's actually like very much looked down upon to be that way. Like I was negotiating with somebody and they're like, wait, Why are you trying to like, why are you trying to like save us all this money negotiating with this vendor? Like just pay the thing and do it up front.

And you're like, but this goes against like everything in my genes. I can't not do it.

I was like, yeah, booked him a hotel, but it's in the Motel 6. Like I saved us $200.

I always used to tell people, yeah, like we'll take care of your accommodation. And it was, they would actually be sleeping in my house.

Stay at my aunt's house.

And I would actually go, I would stay at my girlfriend's house and they would get my bedroom. I did that all the time. I'd be like, yeah, we'll take care of your accommodation. Uh, come speak at HustleCon. They just slept at my house. Uh, so according to SimilarWeb, Photopea gets 8.5 million, uh, monthly uniques. They spend a ton of time on the website and most all the traffic is direct. So I, if you told me that this made a million dollars, I would think, are you sure it's not a million dollars a month?

Uh, I don't know. I gotta, I gotta check. I don't think it's a month. I think that would be pretty, pretty crazy. I think, I think a year because, you know, he's only, he's not monetizing well, right? He's just got display ads. So he's, you know, he's got the bottom of the barrel monetization, I think, on the, on the site.

Yeah, you could probably crush this though. Um, speaking of just, oh, go ahead.

Well, I was just gonna say like, you know, okay, so what? So I think there's the, so what here is a photo piece, cool and interesting and like A, just a cool thing to know about, but B, couldn't you do this for more things? First of all, take the whole Adobe suite and do the Photopea for After Effects. Do the Photopea for Illustrator, Photopea for the whole suite, right? Anything that has over X million users you could do this for. What else? Maybe it's AutoCAD. I don't know if that's free or if you pay for it or whatever. What's that thing called? MATLAB, MATLAB or something like that. It's the thing that all the engineers have to use. Like, is MATLAB paid? Is, you know, great. Can you, can you do this? And I think a version of this is called OBS. So have you ever used OBS? No.

What's that?

OBS is an open source piece of software that's basically the most popular thing for every Twitch streamer or YouTuber. So it's the easiest way to like stream from a PC, high quality video and audio to Twitch to whatever. So for years, Twitch actually, just up till recently, Twitch didn't have any way. If you went to Twitch, you're like, great, I want to be a streamer. They're like, cool, go, go use OBS. Like, what the hell is OBS? Twitch doesn't have a button just saying go live. And same thing with YouTube. You go live on YouTube. Nope. Can't just go live on YouTube without, like, using more sophisticated software. And so OBS is actually an open source project maintained by a small community of developers, but really it's just one guy, Jim. And I met this guy and Jim's like, you know, I don't know, 5'7" and long hair down to his waist. And he looked like an open source app developer. And he has extremely high ethics and morals where he's just like, the app is 100% free. He's been working on it for a decade and it's supported by donations of people who are like, dude, I run my whole business off OBS. Sure, here's $10. And Twitch actually was paying him every month just to keep maintaining OBS because it was like cheaper to just pay Jim, I don't know, X thousands of dollars a month than to like have 20 engineers trying to recreate this thing.

I think that that is cool. I think that like when I hear that, I'm like, that's badass. I love that. I love that that exists. But what was my, what was my thing earlier? I'm like cornrows and sleeve tattoos. I respect it and I think it's badass. I just don't want it. It ain't for me. I'm not wearing it. Uh, and that's the, that's my case. With this, which is I'm so happy that that exists. I ain't doing it because there's a bunch of examples of this. So another example is Spiceworks, spiceworks.com. They were doing like $50, $60, $70 million a year in revenue and they ended up selling because they raised too much money. It didn't work out, but they had traction. And basically what, what Spiceworks did was they created software. So if you're like, if you have like had 1,000 employees and you wanted to figure out which computers you needed to buy, they created software to help you figure that out, which normally costs money, and they actually made money through advertising on the website. In my opinion, that's like neat, but just charge people money for your thing because I'd like— would you rather be Photopea or Adobe? Yeah, I know. Of course.

Of course.

I know which one I'd rather be. So I think it's cool to actually do that free stuff just to get a ton of users. But after a while, like if I was Photopea, I would be like, well, if I just, I should just hire more engineers and we should just make some premium features and upcharge. And that is what I would do. I would not do this.

Well, there's another way of looking at it, which is sometimes like free doesn't mean no ambition. So for example, Skype was like, hey, free international, you know, like calling and WhatsApp, same thing. Why did WhatsApp take off? Because SMS was actually really expensive. You had to pay for every text, especially international texting. Was super expensive. So WhatsApp free was the growth hack. And for these guys, I would say free is also the growth hack. But if you want to just be one person maintaining this thing and whatever, where you do it matters. So Photoshop is still at least big, but nowhere near as big as texting and calling was, right? That was such a huge market. And then the second thing is if you're going to do free, find some other way to capture a ton of value. So Skype and WhatsApp were able to capture a bunch of value using a totally different method. Whereas Photopea is just like, cool, here's a, here's one banner ad. Um, you know, and that's enough for me. Or OBS is like, hey, donate to me and that's it. Whereas OBS could have like created, you know, either premium features or sold to Twitch or, you know, could have done many things to try to capture more value out of the free thing that they made.

Do you know the website Unsplash? So Unsplash is an alternative to Getty's images. So Getty's images, Uh, everyone has probably heard that word. Not a lot of people probably use it. We used it. We paid them $50 grand a year and we were a small client. Getty Images, they pay photographers, they buy rights.

Why were you paying so much? Because there's cheaper or freer options for photo libraries.

Getty's is the best. Um, so a lot of free or cheap ones, they don't actually have images of, of the people. So for example, if you want to write about Elon Musk, a lot of the free ones don't have good pictures of Elon Musk. Second, once you get to the size that we were, like, we, like, which is not that big, once you get past like 500,000 monthly uniques, you probably want to stop doing things illegally when it comes to photos because there's all these people that, yeah, and which is like, A, it's the right thing to do, right? You, you are using other people's stuff, so you shouldn't do it. It's, it's okay to kind of bootleg it early on, but after a while you should pay for it. Uh, and we were a small person. We were, and we paid, I think, 50, I forget. Tens of thousands of dollars. And anyway, there was this competitor called Unsplash. I think Unsplash is dope. I think they're badass. They were just acquired, acquired recently. I got a little information where I like, I found, I heard a little bit about what they were doing. They were only doing around $4-ish million, $4-5 million a year in revenue, even though like hundreds of millions of their images were being downloaded. Right. And I was actually shocked at how small they were. If I had that much traction, A, I would've been far more aggressive about selling ads on the site and B, far more aggressive about getting subscriptions and charging a lot of money for them because this website Unsplash, which from the outside appeared to be doing wildly well, and I imagine they actually were acquired for a lot of money because if a proper person could get their hands on that, they could crush it, I would think. But if you have that much usage like Unsplash did, Unsplash wasn't ubiquitous, but it was quite popular. You can make way more money by charging money upfront for all that stuff when Unsplash giving away their stuff for free, I think they were only doing like $400,000, $500,000 a month in revenue.

Right, right, right. Okay. Yeah, that's a good, that's a good example of one. I had one other topic I wanted to do. Okay. Which one's more interesting to you? Is it the Affirm for X or is it Game Film for salespeople? I'll let you pick from those two categories.

Affirm. And I have a, I have a take on there that you're not going to like.

Oh, okay. Good. Good. All right. So, uh, if you don't know what Affirm is, Affirm was a company started by, um, Max Levchin, I think. Uh, am I mixing this up? No, no, no. All right. So Max Levchin, the co-founder of PayPal, uh, Affirm went public, I think this year or last year. It's about $17, $18 billion company right now. And what Affirm does is when you're on an e-commerce site, you're going and you're buying a mattress online, you go to Casper's website. and it'll be like, oh wow, this mattress is $1,200. And it'll say, or, or for 96 easy payments of $8, you can own this mattress, right? So it's basically a pay-as-you-go software that lets ecommerce stores sell more stuff because if people don't have the full amount or they're hesitant to spend a large amount of money right now, you can offer them pay-as-you-go plans with with zero effort, and then they take a cut. So, you know, on our e-commerce store, we offer— we use one called Sezzle. And Sezzle will basically say, great, you could buy this thing for, you know, 4 payments or 8 payments of $10 instead of paying the full amount right now. And then they take 7%, and then they send us the rest of the money. And so it is kind of a no-brainer as a retailer because it just— it really does improve conversion. And for us, customers were asking for it because they were used to buying it.

And it's a, it's, it's publicly traded company now. It does really well.

And so, and there's several of these. So there's Afterpay in Australia, which is even bigger. Afterpay is a $34 billion company, which is kind of interesting because normally Australian companies are much, much smaller. Uh, Klarna is like big in Europe, I think, for this.

I think Klarna is even bigger than all of them.

Exactly. So Klarna is probably the biggest one. And, um, And so there's kind of this war going on. They're all trying to like, I think Affirm partnered with Shopify, so it's like built into Shopify now. That's a big move. But basically, okay, pay as you go. Interesting space. Kind of was one of the big ideas that just came out in the last 10 years and is a good example of once it started working in the US, it was not hard for people to just be like, cool, we're going to do Affirm for Australia. We're going to do Affirm for the UK. We're going to do Affirm for India, whatever. Right. So I think generically that was a good business idea. What I thought was interesting is what else could you use it for? So I heard of one company in this, uh, this year's YC batch that was doing pay-as-you-go.

How did you get access to that?

Bro, big-time investors like us, that's what we get access to. Uh, actually YC still has not accepted me into the investor pool, even though I've invested in probably like 10 YC companies at this point. Um, yes, but, but, uh, but I have a friend who gave access. So, so that's no problem. So anyways, one of the companies, what they do is they're a firm for general contractors. So another high-ticket item, you're getting, you know, your garage redone or whatever, bathroom remodeled, or you're building out, you know, a multifamily apartment complex or whatever. They're giving the general— what they did is they went to the general contractor, just like that's their version of the e-commerce store. And they say, hey, instead of charging your client $12,000 for this, you can just offer them pay as you go and it helps your clients pay you money. and, um, you get a higher collection rate, you have less, less kind of late payments and defaults, um, and higher conversion rate because people can afford you this way. It makes you more affordable. And, uh, they were doing all right. They had, you know, decent revenue and, uh, you know, it was early still, but I thought, oh, this is interesting. Are people going to do pay as you go in more, more industries, more, more sectors? And what else might they do?

Okay. But here's my tip. Here's my take. Klarna, Afterpay, Affirm. I like the people who start them. I think they're horrible companies for the world. I think that they, they should burn down completely and not exist. I think that—

Why? Because it's getting people in debt?

It's getting people in debt. It's making you buy stupid shit that you can't afford. So where, like, where's Affirm? Like, if you go to like Fashion Nova, like people who can't afford— people who want to do Affirm for a $29 pair of pants. I'm like, don't buy those fucking pants. Don't use Affirm. Don't buy any of this. You don't need this bullshit. Don't buy it. Do not buy it. Run. And also, if you're going to buy it, don't go in debt to buy it. I think this is horrible. And I'm actually shocked that a guy like Max Levchin, who I think is a cool dude— he started PayPal, he started all this stuff, it's badass. The guy seems like a nerd. I love nerds. What are you doing? This is useless. You're just—

you know, you know how he got the idea?

Tell me.

He was, um, so this is the version of the story I know. I'm going to be, you know, somebody who was there probably knows a lot more details, but what I'd heard was there was an engineer who had, uh, so he had this lab, like I had Monkey Inferno. He had a lab called HVF, Hard Valuable Fun. And basically it was an incubator where he said, I'm going to do any project that satisfies those 3 criteria. It's got to be hard. It's got to be valuable. It's got to be fun. And so, uh, and then they kind of like didn't have, um, I think they've had a few nice companies. Glow came out of it, fertility tracker, and then Affirm was the big one. And Max went all in and he became the CEO of Affirm and all that stuff to take it forward. But the origin story, from what I heard, was there's an engineer who had come up with a new database technology or database technique. He's like, oh, look at this. He's basically nerding out. He's like, look at this. We could do so much computation in so little time and with this new technique. And I was like, okay, but what are you going to use that for? It's kind of like blockchain. It's like, great, you have blockchain, but Why do we need a blockchain? What are we going to use it for? Does it really make this better? And like, there's, you needed to find an application. So the way that blockchain found money, currency as the core killer app, uh, what he, what Max realized was he came into the, this guy was an EIR for him. So for months he was just like working on this like databasing technology and how he was going to use it. Couldn't, couldn't really figure out an application. And then one day Max walks in, he goes, dude, like credit scoring and credit reporting is so, like, ancient. We should be able to, like, if you're a person today, I should be able to take signals from the internet, social, social networking data, uh, publicly available data on the internet to do instant credit worthiness versus, like, the way that this works today with this kind of, like, you go get a credit score and it's based off of, like, you know, stuff in the past. So his insight was there has to be a better way to determine the credit worthiness of a person. And he's like, your databasing technology is actually perfect for doing that on the fly and doing that at scale. And so they came together and he's like, great, I'm going to basically create this application to do this. And I think at first they didn't want to do, I don't think the initial, very initial idea was what they ended up doing, which was like pay as you go on e-commerce websites. But pretty quickly they realized that's the use case. That's the market that needs this the most is basically instead of Um, like, I guess my question to you would be, do you also feel the— do you also use a Visa and MasterCard? Like, because it's just credit cards, that's all this is, it's just credit. Um, so do you also hate credit cards the same way you hate pay-as-you-go?

You want to know what's funny is, uh, my credit, my personal credit card limit is $4,000. Um, so I've got a— I've, I've never had any debt other— I just got a mortgage.

Are you one of those people that uses debit cards instead of credit? Credit.

I do it because lately someone has advised me to do it, but for a long time, no. But I'm not against credit, uh, and I realize that what I'm saying is not entirely logical. It's definitely emotionally driven. And you're saying— and I'm not like going this hardcore libertarian route, which is like, well, I'm like against the government, therefore all government is bad. I'm like, no, no, no, no, no. Like, I'm gonna draw— so what I'm doing right now is basically I'm drawing the line, right? Which I get, uh, It's just, that's not always the best, but I think that credit cards in some cases are good and affirm in most cases are bad. That's what I think.

Okay. I think that's, you know, that's what I'm thinking.

Because the people, like, do you know, do you have any, uh, do you know, like in Europe, like our friend Ramon and a lot of my other, uh, friends from Europe, they were like, you know, credit cards, we don't use credit cards. Like in Germany. Yeah. Like in a lot of places in Europe, if you want to use a credit card.

Also, we use bidets, proper cleaning.

Yeah. By the way, whenever people were flipping out over COVID and toilet paper, I'm like, dude, take a shower. Like, why the fuck are you flipping out over this? Why are you fighting over this?

Anyway, you're going to shower every time you shit? How inconvenient. Just go twice a day.

But like, it's— the inconvenience is not bad enough that I'm going to fight over that.

That's fine. That's fair. That's what I'm saying. You're not going to like stab someone and like choke them out.

No, I'm not going to go to jail over this. Like, I'll just like take a shower, uh, or I'll just be uncomfortable anyway. Um, I just think like credit cards aren't that common in Europe. Uh, they're— it's definitely an American thing. But long story short, I am not in favor of Affirm. Uh, I think that that is a stupid thing to spend his life working on. That's my opinion. I would love for him if I— we could goad him or bait him into coming on here and convincing me of otherwise, because I'm open-minded. But I think it's dumb. I think it's stupid. For general contractors, that's a little bit different.

But for buying like a $29 pair of pants, like, don't fucking buy the Well, my family member trains his daughter in jiu-jitsu, and so maybe we could use the daughter jiu-jitsu connection to get Max on the pod very soon.

Am I wrong though? Do you agree or disagree?

I disagree. I disagree completely. I think credit is a great thing. It helps the economy move. I'm always a kind of don't hate the player, hate the game type of situation where I put the burden on the individual in the same way that I wasn't like, oh my God, Juul, or like, you know, like, is, you know, is, is Grey Goose evil because it's alcohol and alcohol causes problems? No, like, I don't think so. I think it— I basically, for myself, I live my life where I never blame a company for tricking me into like doing something. I blame myself if I don't have the self-control and the like thought process to do it. And so that's how I look at others too. I will never blame a credit card company for, for somebody getting in debt. Now, what I do say is if you're not transparent about what the fees are, what the charges are, what the rates are, then that's shady, right? You're withholding information. You're not disclosing. You're hiding the fees. But, but in this case, they don't charge people more for, you know, for buying. A lot of the times it's 0% interest, actually, because they, they can offer the customer 0% interest because they take 7% from the merchant for helping them close the sale. And so it's actually an interesting model compared to—

That's interesting. I didn't know, I didn't know the full story.

It depends on the creditworthiness. If the, like when I bought an Eight Sleep mattress using Affirm and I was like, cause I was like, ah, do I want to spend like 2 grand right now? Oh, I'll try this Affirm thing. And I was like, oh, this is cool. I can just pay in payments and it's 0% interest. Cause I had a credit card.

Well, I tried doing it. I also have an Eight Sleep. I tried doing it with there and I actually was going to have to pay like a pretty hefty fee. I was like, oh no, that's not— Because you don't use credit cards. You don't High credit, something like, for some reason I don't have a good credit. My credit score is not bad anymore, but it was bad, uh, because I didn't have history anyway.

Well, I have one last idea on this, which is, um, I think this is the same thing as like, you probably know what layaway is. I don't even really fully understand what layaway is. Layaway sounded like a total scam to me.

It's silly. It's silly. Basically, like what it is, is if you want to buy a $500 thing, you would go each week and you would give them a little bit of money and would start paying down your balance. And then eventually you'd get the item.

Right. But it's crazy because you don't— it like with Affirm, you get the item first and then you pay later. Buy now, pay later. Right. That's the, that's the—

well, you have to remember there's a one big thing, which is like, is that if, if it's going to take you 3 months to purchase and you can't, if you don't have the internet to buy stuff, like you want to guarantee that they're going to like, that's yours.

Right. I guess for me, it's like, are items really out of stock? But apparently there's a huge thing like Walmart, like in most parts of the country. Layaway is like a huge part of their business. Um, and it's a, it's a, it seems like a pretty predatory thing in a way, but I don't know too much about it, so I shouldn't really speak on it. But, um, anyways, I guess my point is, why aren't people doing Affirm for retail stores? So why isn't this the same option every time I check out? Uh, you know, my wife goes and shops at, I don't know, wherever, you know, Nordstrom. Like when she checks out, they're like, oh, you know, do you want to open a Nordstrom card or whatever? Why isn't it, hey, you want to pay the full amount today or would you like to pay in installments? And you can pay in installments. Now, maybe this is already the case, I don't know, but like it seems like something that should be built into the point of sale at retail stores. I don't do a ton of retail shopping, so this might be me being dumb and it actually is totally a thing.

Does Affirm plug into Shopify?

Yes.

And do a lot of people use Shopify too? But like Nordstrom doesn't use it, but like a coffee shop might.

Yeah, not really. They're trying to do more of that. Square is definitely trying to do a lot of like retail plus online, blah, blah, like, you know, brick and mortar and online. Um, so maybe Square does it, but, uh, but I think a lot of retailers that just have their old school POS still.

This is like one of those rare topics that you're bringing up and I'm like, oh, I don't know, like how do people buy stuff at stores? I haven't done it.

Yeah. So we should just smoothly exit this topic before we, uh, yeah, before we try too hard.

We gotta find the emergency exit on this one.

Okay, I think we should wrap it up. That's a good, good episode.