Side Hustle Friday: Sam Parr on How to Invest? What are the New Side Hustle Trend? What are ways...

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What's going on, dude? Thank you.

I mean, you sold Trends and The Hustle to HubSpot. I know you haven't revealed the price of the deal, but are you feeling good about it? Was it— was there some cash involved? Was it all stock? What can you tell us about the deal itself? And then I want to get into the nuts and bolts of creating a newsletter that can be sold.

It was a lot of cash up front on signing day, and then I got paid what I think is a shit ton of HubSpot stock. HubSpot is publicly traded. They're growing really fast. This isn't like insider trading stuff or anything like that, but like, if the stock grows by a lot, it won't surprise me. And so that's one of the reasons why I was really interested in doing the deal. I think it's a great company. Before they bought us, I, uh, I was like, always thought a HubSpot or a Salesforce or even a WeWork would want to buy us or a LinkedIn, like some type of non-media company. I always thought that would be the right move. And then HubSpot came calling and I was like, oh, I know this stock. This is kind of an interesting company. That's kind of cool.

So the Hustle newsletter, just to describe, and your high-end product Trends.co, the Hustle newsletter, a newsletter that went out to something like 2 million people.

It's a daily business newsletter. And we have, you know, millions of small business people, small business owners, very entrepreneurial, maybe like next to Tim Ferriss, probably one of the largest audiences in the world of entrepreneurial type folks. Yeah.

Like it used to be people would go to a blog, like let's say TechCrunch or something like that. But I sort of feel like blogs died a while ago and now people get newsletters, um, as popularized by platforms like Substack. But in particular, you and Morning Brew were kind of the, one of the first, I, I shouldn't say the first out there cuz there were many, but you kind of went over the top and took it to a new level. A newsletter that I get every morning. That has all— in the case of Morning Brew, has all the latest like business news and some other internet news you need to know. And you guys were kind of like, not just news, but ideas. So like particularly in this pandemic or these lockdowns, people are looking for alternative sources of income. And as the name implies, The Hustle, you gave information not only on like, oh, this guy makes $10 million doing this side hustle, but you really gave the nuts and bolts on how to do something and how to do a side hustle. Like. How would you sell, make a clothing line and sell it on Depop? Or how would you put together, uh, shampoo with, you know, your own ingredients or whatever? This was even deeper on trends.co, which we've talked about before on this podcast, where you go really deep into the nuts and bolts of some side hustle industry. Like, I remember one, it was always— there's always industries and ideas that I'd never heard of. Like, there was the, um, what was it, the something as a service, uh, industry, not software as a service, but negotiation. Oh no, maybe, maybe no, but I want to hear about that one now. But, uh, dropshipping as a service, I think you were talking about, or I don't know. There was a—

yeah, we've done this thing called everything as a service where we've gone through like all the different models. Long story short, HubSpot has like 100,000 customers, right? I don't know what their market cap is today. You could look it up. Probably $20 billion, maybe.

Yeah, it's $20 billion.

and when they bought us, it was $16, I think. Whatever it was, it was a lot lower. They just announced that they crossed $1 billion in revenue, but they only have 100,000 customers.

I mean, what's their main products? Cause I, I feel like I've, I know I've heard of them and I followed the stock a little bit, but I don't really know what they do. Even—

well, that's the cool part is that a lot of people say that. So like, there's a few things that people say about HubSpot. If you read like Motley Fool or some other stock sites, they're like, this is a buy stock, buy, buy it because a lot of people don't talk about it, but they're quietly killing it. And they are, I think. I think they grew last year. Everything I'm saying is, it's so weird being owned by a public company now, but everything I'm saying is public and it's all like approximate. I can't remember all the numbers, so it's all just like ballpark numbers. So there's my, my, uh, disclaimer, but I think they grew by like 30% or 40% in revenue last year. And so to a billion dollars in subscription revenue and they're still growing quickly. And so the idea here, the reason I was interested in as someone who was going to sell to them is a lot of people say the same thing, which is, well, This stock and company is killing it, but what the hell do they do? And the reason why they bought us is they have 100,000 customers. If they can just get 2,000 or 3,000 customers, which is like 0.1% of our audience base, then hypothetically their revenue can go up by, you know, 2%, 3%, or $20, $30 million a year in subscription revenue, which will affect the stock, I imagine, by whatever you can guess.

By the way, that's the sort of way one should value an acquisition. Like you were, you were basically a vertical acquisition for them. So you weren't just adding to their own, like they, one of the things they do among many is email marketing. They weren't just buying an email marketing company, which, you know, I always forget which is vertical and which is horizontal, but if they do email marketing and they buy another email marketing company, they're doing, um, a horizontal acquisition. You're a vertical acquisition in the sense that you add, you, you give them a, a new feature on their stack to offer, but really what they're trying to, to say, they're trying to value either some percentage of your customers will convert to them and like, and that's a good amount. Like then their stock, if it goes up even 5%, that's a billion dollars. They could offer you, let's hypothetically say $50 million and it's a win-win-win all the way around. For their customers, for their stock, for their shareholders, for you. Um, or they could value you as they have 100,000 customers. If they just sell you for like, if they make $5,000 a year on average for each customer because of their acquisition for you, then within a year and one month, the acquisition pays for itself. So, so that, that's true.

And we already make money. So we, we, our business makes money and we're profitable. So the idea is like, oh wow. So it's a marketing machine that makes money by itself. Itself. So we can make our money alone off that, plus the cherry on top. So that's why it's kind of a no-brainer deal, I think, for them.

I think the fact that you make money makes it, uh, like you say, a no-brainer. There's one nuance there, which is my guess is you weren't valued because of the— of your earnings.

No, they don't give a— they— I mean, I, I would imagine they don't care about that, right?

They're valuing this acquisition in terms of either how much more of an increase their stock will have or how much more an increase their earnings will have.

And I think, which is the definition of a strategic deal versus like a purely financial, just off of our own earnings.

Right. And, and, and I think that's really critical to understand, like, like valuation is, is a nuance and is a kind of a sub-skill or a micro-skill of business skill. And when you're doing a negotiation like this, they could start off and say, okay, well, companies like yours go for 8 times earnings. And then you could back off and say, whoa, whoa, whoa, we're going to add, you know, at minimally $200 million in earnings to you guys. You know, one-fourth of that is $50 million. That's how you should minimally, how you should value us. Forget about our earnings. So that's just, just a nuance in the negotiation potentially.

Yeah. And a lot of people say what you said, which is HubSpot, what the heck does HubSpot even do? And, uh, hopefully with the, with them buying The Hustle, The Hustle will kind of change that with people will be like, oh, I know HubSpot. They own The Hustle. This is what they do. And whenever they want to. Buy whatever the products are that HubSpot offers, which is a ton of different stuff, uh, they will. And so that's kind of why it's an interesting deal.

So HubSpot, from what I understand, and I'm just looking at their Yahoo Finance page again, it's like one of those companies that's in the internet space, so it's always kind of written about on all the tech blogs and stuff. They offer email marketing. They help you automate your ads on LinkedIn, Facebook.

Yeah, it, it's a CRM, which is this like big broad term, but basically it's like Mailchimp plus Salesforce plus Squarespace. So you can—

but not as much consumer focus as 2 out of 3 of those.

Correct. Well, you could do the math. If they have 100,000 customers and they do $1 billion in revenue. So like, what does that mean? Their average deal size is like, what's the math on that? Uh, is that $100,000 a year or $10,000 a year?

Yeah, $10,000 a year.

So it's smaller businesses. I think they said in their latest earnings call, they're trying to go upmarket. So like some bigger customers are going to start buying it. I think they said something about their retention. So their net retention is very, very strong. So if someone spends $10,000 with them in year 1, the likelihood that they're going to spend that or more in year 2 is quite high because people don't realize—

and I'm, I'm sorry to interrupt, but it's almost— I'm kind of figuring it out as we go along. People don't realize that these things like email marketing or, hey, we'll automate your ads, there's a heavy moat around them. Like if someone's in charge of all your email marketing, and they have all your emails essentially in their hands, it's kind of hard to switch to another provider. Yeah.

And there's only a, like I keep saying, 100,000. There's only 100,000 customers. How many businesses need this type of product? Like all of them.

Yeah.

And this isn't like an infomercial for HubSpot. I mean, I'll tell you the truth. I'll tell you the pros and cons, but they've been cool about the whole thing. Like they listen to my podcast and sometimes I say some crazy stuff. I mean, I don't think it is, but like an uptight, super conservative company might be like, ooh, you guys are a little bit too risqué for us. But they've been cool about it. And they're like, they get it. I don't think they spent a ton, if any, marketing in order to get to like hundreds of millions of dollars in revenue. They did it all through, through content. So they get it. I think that what's going to happen is in 5 or 10 years, you're going to see way more of these. And we're definitely not, I don't think, but maybe we're not the first ones to have done this, but I definitely think we're one of the first bigger ones to do this.

To do what? To be acquired by a B2B software.

Yeah. So I have a feeling you're going to see a lot more of that.

Is the idea also that they're going to create more consumer-oriented products? Like I saw in the initial press release, maybe more newsletters, podcasts, stuff like that.

Yeah, we're going to, well, like, I don't know what you call our audience. Like, do you call it like a prosumer? Like the type of person who we appeal to or the type of person listening to this podcast, there's not really that much of a separation between their job and their life. Like it's, it's very intertwined. And so if someone listens to us for fun, like it is like, it's like, it's like Tim Ferriss shit or like, I mean, we are that, right? You and me and our audiences. It's like people where the separation between work and life is small. So even if you listen to it for fun, you can still apply the learnings and you're still thinking about money and your company and things like that. And so the idea is we're just going to make more of that content and hopefully a small percentage of that will one day sign up for HubSpot.

Trends is sort of like an amped up Hustle. Your Hustle is your kind of mass broad newsletter. Trends is your high-end product. People have to pay to join the Facebook group and get the letter and, and the digest and so on. But in Trends, like even right now scrolling down it, there's questions like, is affiliate marketing still a good, uh, side hustle business model? What are best practices for affiliate marketing? And someone says yes and gives some links. How do you accept pay if you're an agency, you know, in a one-man agency, how do you accept payments for your services? What are opportunities in financial technology?

We did some interesting ones with trash.

Oh, tell me about it.

Trash and recycling. But basically, like, long story short, recycling's bullshit. Like, nearly all of the plastics that we think that we are recycling, it gets thrown away or burned. Like, it's not being recycled. And we did a whole thing about looking at what are the— what are— where's the opportunities in recycling? Because I think it's really important that the world recycles or reuses. And we covered this one model where like a lot of print, like there's this thing where big companies, if they own printers, if they own computers, cameras, anything that could store data, if you want to get rid of them, you need to send them off to a certain place in order to wipe them clean. And then the place that wipes them clean can actually resell them. And there's a huge opportunity there because there's not that many people doing it, but there's a ton of stuff.

What does it mean wipe them clean?

So if you are HubSpot, for example, you have information that if it goes public, you can break SEC rules, you can get in trouble, you can have security breaches. Like, it's really important. So what do you do with your extra— your old computers, your old cameras, anything that could possibly store data, maybe even a monitor or a printer? What you do with it when it's done, when you're done with that device, you need to get— you need to wipe it clean. You know, there needs to be some—

so legally, like, some— you Your legal department says, listen, you can't just throw this in the garbage. You've got to send it to these 5 things. And then the CEO says, uh, do they make money off of it? And legal says, yeah, but you gotta do this because it's the law. And CEO's like, all right.

I don't know if it's the law, but there's definitely like some— like, there are regulations.

Like you say, there are SEC regulations at the very least.

Yeah, well, that's the law. Yeah, the law is that you, you can't— like, if someone— you need to be— you need to have certain security. I don't know what the laws are regarding trash. I bet you there is something. But what's interesting is that, like, even if you're just a consumer, I think you'd want— you'd want— you'd want your shit to be cleaned, right? Like, even as a consumer, if I can send my printer off somewhere, or it can just get picked up for free for $40, and I know they're going to clean it and resell it, I'm cool with that. And so we wrote about— there's a ton of opportunity in that space.

Here's the question I always ask, like, oh my gosh, this is already an established industry. Is it too late? Like when, by the time I read about it on trends.co, is it too late?

The answer to that is it's often never too late. Like there's always room for different or better. And so I think that the answer is it's oftentimes, or no, I would actually say the answer is always no, it's not too late. But, uh, like what does too late mean? You could probably build a profitable business that will make you a millionaire in just about any industry at any time.

I agree with that.

Now it's definitely better to catch trends early on. It's far better to be early in a really fast growing market, but even if you're late in a dying market, you could still make yourself a million dollars in an industry. Now that doesn't mean it's going to be easy. It definitely won't be easy, but you could do it. I mean, you could start a paid newspaper right now, and if it's good, people will buy it.

So yeah, even, um, a non-paid one, because you can upsell other stuff or you can have advertising. Or you can point people to a podcast or whatever.

Yeah. So like, is it too late? The answer is probably always no. I mean, you could probably always find an example of someone figuring out how to make it work, but yeah, you do. I think it's far better to be dumb and have a shitty product and a bad team and be in a fast-growing market than it is to have the other things, but a slow-growing market.

Yeah. And so, so like, for instance, the whole e-waste thing, Maybe companies like GE do it or Procter Gamble. But if you go to personal injury law firms, maybe they've never even thought about it. And you can even say, listen, we'll take all your equipment for free. And, but the idea is you clean it and you resell it and you sign up every personal injury law firm. Like you take a small, you take a niche with a lot of, not a small niche, but a niche with a lot of like mom and pop type people who don't really think about this stuff. And They'll be like, all right, you're going to take care of this for us. We never have to worry about it.

Yep.

And they'll just do it.

And so I don't even know how we got on this. What are we talking about? Newsletter?

We talked about sorts of things that Trends.co. Yeah.

That's the stuff that trend. Yeah. Yeah.

But, but, but that's the, but this is all interesting stuff. Like, like we could do podcast after podcast about all the things in Trends.co. And I, and I do want to do that a little bit. Like, so I like this trash to treasure, you know, the opportunity.

I have a few ideas we can go over, but, uh, let's do that.

And then I still want to talk about like the hustle.

Can I ask you a couple questions really quick before we move on?

Yeah.

You're— you— are you happy you sold your company?

Um, well, you know, I've sold my company. I've sold 3 or 4 companies in my time. And the answer is yes in every case, because at some point, first off, not every industry lasts forever. Like, so for instance, when I was in the website development agency business, you had to really pivot a lot to survive in that industry. Once, you know, WordPress was created and stuff like that. I one time started a company called Stock Picker, which was like a social media for finance. And I just had a feeling that other social media like Facebook would become social media for finance. And that turned out to be correct. So I was happy to sell that. Uh, see my newsletter business. I am happy I sold it because, you know, sometimes you just don't want, you know, you don't love something, you don't want to do it forever. And I'm still doing it. I get a nice tail, meaning I get, I get a percentage of the profit still like 4 years later. But this is the real case where I wanted a big, a bigger partner involved so that it would be easier for, I don't have to deal with the marketing, which I'm not, I don't enjoy as much. So I get the best in the world to deal with the marketing.

And I can just focus on the content, which is the same situation that I'm in, by the way. I just do content, right?

So you don't necessarily want to deal with all the sales, all the business decisions, all the management. People don't realize, like, oh my God, if your business is your baby, you should hold on to it. And like, famously, you know, Facebook, uh, Facebook turned down a billion-dollar offer from Yahoo back in 2007. Mark Zuckerberg, who was 24 years old, could have made $250 million. And he decided not to because he figured the only thing he would do with the money is start another social media company.

Yeah.

Yeah. And so, so I think, I think though you did the right thing, which is, and also the, you know, Mark Zuckerberg's example aside, usually the first major business you sell is, you know, you want, that's life-changing and now you, there's many things you can do, uh, and you're still involved in the growth of the company, cuz you're gonna affectly— directly affect the growth of HubSpot. Uh, like you could see yourself moving the needle on HubSpot, which is a company now you won't have stock in, but it's much more liquid than having the illiquid stock of a private company. So long story short, I'm actually almost 99% of the time in favor of selling a company than holding onto it and building it.

You know, like when this all happened, I had a, a crazy year because we, uh, my wife has worked at Facebook for years and I had a few other investments that, uh, really did well.

Like what?

Just like the normal shit. Just like some stocks did really well. Bitcoin. I bought Bitcoin in 2012, 13, something like that. So like, that's been crazy. And then just like the business, my business's income was kicking ass and I was making money. I mean, I just, you know, like it was just a great year. Like it just, it like tons of hard work and luck all kind of paid off at the, like all in a matter of months. And so, which was crazy.

First off, you're a super smart guy. Like every time you're on the podcast, we just brainstorm and, you know, there's always a lot to learn. Like, like just now we talked about the e-waste industry, an industry I've never even thought of, but suddenly now I'm bursting with ideas about how someone can get into the e-waste business. Like you say, make a million dollars without even really being an expert in the space. It's probably, you could do a week's worth of research to know the basic guidelines and then You can make some calls to see if you get some simple customers and then boom, you're in business.

Yes. So, uh, I do that shit all the time and it just, it just so happens that 2020, everything, even though like the world was doom and gloom for us personally, it was, it, we did, it was really good. Me and my wife and I, oh, I started reading a lot of like finance stuff, like personal finance stuff. And I came across JL Collins, who I'd always heard about, but I started reading his stuff and I started seeing you comment on his blog, but from like 2010 and 2011.

Yeah. You know what? I saw you post about that. I vaguely remember him. He was always linking to my stuff, but I didn't know he was like a major blogger.

I don't know if he's major, but I think he's funny. I think he's cool. I think his writing is really good. He's got, he's a really good writer. So my whole thing, when I sold, I actually had a goal. Have you, do you, have you read this book called, uh, it's so bad. I don't want to even say the title, but it's called How to Get Rich. And it's written by this guy named Felix Dennis.

Yeah. Yeah. Uh, Felix Dennis had a big ad agency in England.

He did everything.

Um, and he wouldn't mind me saying this. He's kind of an obnoxious guy, but on purpose, like that's his persona.

Yeah. He's like a, he's like a crude Richard Branson. He's like if Richard Branson and Mick Jagger had a baby.

Yeah.

He, uh, but he's dead now. And he, uh, he owned Maxim magazine and a bunch of other stuff anyway.

That's right.

In one of his books, he said his goal was to get rich by 35. And then, uh, have that money allow him to have a good lifestyle and then focus on more important things than just business. And I read that and I read about a few other people doing it. And so I was like, that's what I'm going to do. And so I'm, I wanted to do it by 30. I did it at 31, but my whole goal on this, and tell me if you feel the same way, was to just make it so your nut could pay for your lifestyle. And then everything else was just a cherry on top. Is that how you did it?

Yeah. I mean, that's how I still do it, which is, um, my, my, any, any kind of like, um, well, let's just call it the difference between income and capital gains. So any income I get during the year that pays for, you know, all my expenses and so on. And then I try to save the chunks, by the way, as opposed to the first 20 years I was doing this, where I would end up spending all the chunks, assuming that new chunks would be coming. And a chunk means like, uh, uh, an exit of something you invested in or an exit of your business or whatever, or like a book deal or whatever. And the main difference in personal finance for me is I save my long-term capital gains and I tend to spend my income and that helps me avoid going broke.

And what do you think it costs per month to live lavishly?

I think, well, obviously. I, and I've lived in all sorts of places. And by the way, I've been, I've gone from broke to rich, to broke, to rich, to broke, to rich, to broke, to rich several times. So I had to adjust my lifestyle several times by force and other times because I built up to it. But I would say on the lavish end of things is between $50,000 and $80,000 a month. And on the cheap side of things, for someone who is always trying to build a business, and so there's some expenses involved in that. It's probably $10,000 to $15,000 a month.

So I—

and that's living in the New York area.

Yeah. So for the lavish thing, I was thinking about $50,000 to $70,000. So we're in the same range. And so my whole thing was I just want to lock that in, even though I spend like $10,000 a month. I mean, I spend nothing. I don't spend anything near that, but my thing was like, I'm going to lock that in. And then now I can go ahead and make more stuff. So that was my whole point for selling. And I don't know if you agree or not, but That was—

yeah, no, I, I 100% agree. So I remember like one time when I went broke, I had to basically move out of New York City because it was too expensive to live there. I moved to a place where the, where my expenses were a little bit less than $10,000 a month. And I was able to, to build up from just writing gigs and also my initial income from setting up a hedge fund and running a hedge fund. I was able to get my nut. And then ultimately that gave me time to build a new company. And sell it and make more. And then I moved and then went broke again. And then I had to go cheap again. This happened to me like 3 or 4 times where finally I was able to make enough from the income to make the expenses and have enough from capital gains to have a little bit of cash in the bank just in case times were hard. And then build. And then that's an easy way. And that's a good platform to build up from. What we're really aiming at is How much money do you need to live in life? And of course, some people try to have a billion dollars because then they think they'll be happy, which is, which is not really true when you put it just that way. But the reality is too, from a personal finance perspective, nobody actually needs a billion dollars. So unless you're buying like artwork or a sports team, there's nothing that costs a billion dollars. So almost every expense you think is going to be more than 5 million, you can probably get cheaper. Like if you wanna buy a private jet, that costs you 150 million. But anytime I need to fly private, or not me, but anytime anybody needs to fly private, you could usually rent a plane for a day. Wouldn't cost you, you know, depending on where you're going, anywhere from $10,000 to $100,000. So you'll never actually need to spend 150 million to buy a plane and maintain it and so on. So now you don't need a billion anymore. You need 850 million. And every big expense you can tell me, I can knock you down so that probably the real number is about $10 million.

And also, uh, you can get very cheap loans. So, well, I didn't— yeah, which I didn't know about.

Oh yeah. So here's what happens too, which you probably experienced just now, is as soon as your deal is announced, you probably got phone calls out of the blue from every single bank, from Goldman Sachs all the way down. I don't know. I don't want to say what the bottom is, but you probably got calls from the bottom and the top. And they said, why don't you come in? We have a team that's just ready for you. And it's like almost as if you're like, you started your first movie and now all the agencies are courting you. And, uh, like I'm thinking of, there was a chase, a scene in Entourage where Vinny Chase gets wined and dined by all the agencies. So you go into the banks and they're telling you how to collar your stock, which is a whole other topic. They're telling you, listen, we can help you get loans to buy artwork. You need a plane? No problem. We know the best places. We have a concierge service. You could call anytime. Uh, you need to borrow money off your stock? No problem. We'll arrange that. It's, you know, no interest. Just, just, you know, we'll take care of it for you if you're in our private client group. And then we have, there's the private client group, then there's the $100 million private client group, which is extra special care. And, uh, uh, on and on. Sorry. Did you experience that?

Yeah, it was pretty funny. And I remember, and what were some of the things they offered you? Well, I had already had someone who I was working with, someone who I trusted. This person came to my office 3 years ago. Like they put in time and I, so I had a relationship with them, but it's all the same stuff. Like we have a concierge, but the interesting thing is that you can get loans for like 1.5%, which is crazy if you think about it, because if the stock market grows at 7% a year or 8% of the year, why wouldn't you just withdraw all this money and put it in the stock market? And the guys were like, well, there's risk. Yeah. Yeah, yeah. So there is risk, but it's a, it's like a really interesting arbitrage. And they're like, well, some people do do that. And I was like, so this is how, like, this is why this game's unfair and why the rich get richer. And they're like, yeah, yeah.

No, I mean, it's unbelievable what you get when you're in a certain category. For one thing, um, uh, you know, you get, you get these, these loans. You also get in to get, you know, if you're at Goldman Sachs, you get in all the hot IPOs, and then, and then when they bounce, you could sell them that day. So that becomes a huge source of income for a lot of people. You get lots of opportunities and you get to hedge your stock. So you don't have to worry about that going down. My problem was, is that I would just, I was always trying to get rich again after getting rich. And that's kind of the wrong way to think. Like you want to, you know, one thing, one, you got, you get all the advice in the world. So I'm not going to give you advice except to say one thing I wish I did was let the money marinate in me a little bit. When I, the very first time I sold the company, meaning don't do anything different in lifestyle for a year.

I did one thing. I bought a car, kind of a fancy car, not crazy, crazy, but kind of crazy. And, uh, besides that, there's been no purchases.

I think that's smart. The only other thing I would do on the personal finance side that's related to making money is when you make an investment, don't use more than 1% of your net worth, 1 to 2% max of your net worth, unless you're buying like a big ETF or something like that.

I'm buying— well, I am investing in startups. I think this year I'll invest $150,000 into startups.

For me, I do 1% of my net worth in each startup I invest in. And just, just assuming— so not 1% in an asset class. I think that's why I say an ETF, you could do a little bit more.

That's so stupid. I can't believe you do that. You put 1% of your net worth into an angel investment or your own company?

Into an angel investor, my own company. I'll do a little bit more.

Yeah, because it's easy, dude.

But, but I have a bunch of rules. So 1% of my net worth in investment, but here's what I will never do. I will never invest by myself in a company. So I'll never say, oh my God, this is a great opportunity. I can't believe no one else sees this except me. I'm going to be the main investor and take 30% of this company. I will never do that again. Oh yeah.

Then I think that's silly. But so, but like what I like to do when angel investors, is I'll find out if a top-tier firm is involved and I'll be like, yeah, I'm in.

Absolutely. I don't even—

I just copy other people. So like, I invested in this one company the other day. I put a small sum, $15,000, and it was because Andreessen Horowitz was involved in it. And I was like, okay, fine. And I don't even know, like, I didn't even really, to be honest, see what it does, but I'm like, I just— some people might think that that's stupid, but I'm like, well, you guys have a whole team that does this. You're like a very reputable firm. Uh, if you're not the best, you're one of the best.

So yeah, in the analogy I usually give people is let's, uh, and this is more of a public company analogy, but let's say Warren Buffett invests in IBM at 100 and now it's at 80. It went down. It's not like I'm going to run into Warren Buffett at a party and say, Warren, I can't believe how stupid you are. Like you put in IBM at 100. Uh, I waited for 80 because Warren Buffett, we know is not stupid. He does his work. He does his homework. So if I can get into a stock he happens to own and I can get in at a discount, um, it's like he's working for me and it's the same thing. So like all— there's one investment I did where Benchmark, who was the first investor in eBay, and Venrock, which is the venture arm of the Rockefeller family, they were in it at the same time I was at the same terms. Like they first entered into it in the same round I did. So what am I going to do? Say no. Like, then I figure it's okay, 1% of my net worth. Worst case is it goes bankrupt, it goes to zero, and I go— and I, I don't lose any sleep because it's only 1% of my net worth.

That's not the likely that it goes bankrupt, right?

Like, so one time I invested in, in Bitly, you know, which is the, the link shortener. They were at the time, they were hand—

I think they did go to zero, didn't they?

No, no. What happened was, and again, I invested alongside like mega, mega investors, like the best investors in Silicon Valley. And the worst case scenario did happen, which is they never really found a business plan. They never really kind of kicked in. So, so it kind of was arranged that they got bought and it was roughly like a 2, 2.5x. That's kind of a worst case scenario in those situations. And then a best case scenario is like, you know, 200x. I have some things which are still illiquid, but at last rounds I'm like 200x up on. And so again, 1% of your net worth makes a So like Filecoin, for instance, I'm in that at like $0.50, $0.52. And I think right now, last I looked at it, the price was over $120.

Wow.

So, so yeah, I mean, that's why 1% of your network's not so bad if you, if you pick it up. Oh, it's at $144 now. This thing is fucking ridiculous. Sorry for my language.

And I'm used to starting companies where like the tolerance is either it's going to be huge or it's going to go to zero. Um, or like, I mean, I guess the, when, when you start companies, the downside is that it goes to zero. And that's what I'm used to. And I was, when I, when our deal happened, I was like, I don't want to put this in the stock market, not a chance. And then I went and looked at like 120 years of returns or something like that, or since 1920, so 100 years of returns. And I'm like, oh, the worst year was only 40% down. And 5 years later, it was back up to where it was. I'm like, oh, this is easy. Like stock, stock investing, or at least investing in, uh, you know, S&P 500 or, uh, like Vanguard, uh, the total stock market compared to starting companies. It's so safe and stress-free, which is, uh, like I told my bankers that and they're like, what are you talking about? And I'm like, dude, compared to what I'm used to, this is easy.

Yeah. Like here, here's the thing about the stock market is that, I mean, then you saw this in real life. Play out in real life in the pandemic. Look at the local cafes in, in— if you're— if you live in a city, look at your local mom-and-pop cafes and look at Starbucks. So every block in a major city has a Starbucks and, and, uh, 2 or 3 mom-and-pop cafes. During the pandemic, the mom-and-pop cafes went out of business, and Starbucks, because it's well capitalized and it's, it's public company and so on, survived and soaked up— not only did they survive, but they soaked up all the business of the mom-and-pop cafes. So the economic lockdowns actually made Starbucks a better company. And so that's why in bad times, even the stock market could be good. Uh, but again, the way I do it is I find a, the only, like in terms of just buy and hold investing, I only put a certain percentage of my net, let's say 10% of my net worth in any one asset class. So, uh, the stock market is an asset class and I'll only put in I don't really like the ETFs that much, but I'll, I'll create my own version of an ETF by investing in, let's say, all the companies that Warren Buffett has invested in or all the top investors. Yeah. So you, you kind of, the key for hedge fund investing really is to do the work to find what you think are the companies in the market index that will outperform the market. And then you can even hedge yourself by shorting the broader market. So that's like a safe way to generate returns.

I'm not bold enough to do that. I just want boring.

Yeah, boring is fine. Cause here's the problem too with the stock market is that by the time, in most cases, by the time, you know, the company, everyone else knows the company. So you're not really getting any advantage, like, and you, but you also have to be willing to handle the 40% downturn and, and it not kill you.

Can we talk about some ideas real quick?

Yeah.

I have a feeling that you're gonna know these people and I bet you'll even know like the founders and stuff like that. 'Cause these companies are, have been around for 20 years.

Okay. Tell me, maybe I won't know them. Maybe I will.

Maybe you will.

I, I go in and out of different worlds, so let's see.

Okay. So you were just playing chess before this, weren't you? Or Jay said you were playing chess or were you writing?

Jay, why are you exposing all my, my, uh, no, I was playing chess. Yes.

So, you know, Chess.com? Oh yeah, yeah.

I played on Chess.com. I play on Lichess.org and Chess.com every day.

How many users?

And by the way, the very first chess server, the Internet Chess Club, I created.

Really?

I helped create. Yeah. So all of these are kind of just descendants of the one that I created before the web was around even. So, so Danny Slater started the Internet Chess Club.

See, I knew you would know this.

Okay, go ahead.

I knew you would know some of these people. That's why I wanted to bring this up. So I'm going to talk about Chess.com and then Dictionary.com. But did you, do you know the dictionary.com folks?

No.

Okay. I, I, I thought maybe you would have, but chess.com. How many people do you think have registered for chess.com?

60 million people.

Okay. Well, you ruined it, but that's crazy, right?

That is so insane as to actually make me insane. And you know, again, from the point of view of an entrepreneur in this space, like the Internet Chess Club should have decades ago. Made many of the features of Chess.com. I think Chess.com and its cousin, Lichess.org, are so much more sophisticated than what I created. And it wouldn't have been— it's not rocket science to create what they created. It's just that they're, they're brilliant. And I really, I really love— I've switched from the Internet Chess Club to Chess.com because it's just better. And Garry Kasparov also told me to switch, which was a high— again, I follow what the experts say, and he's the former world champion.

So Chess.com, according to SimilarWeb— so SimilarWeb is a site that I use to look at traffic sources. Um, it's not typically correct. It's like, you could— it's as wrong as divide by 2 or multiply by 2 if you look at the traffic, but it's a really good indicator to compare websites to each other, new websites, to look at where web traffic is coming from, which is a really important thing, and then also to look at trends. Um, so according to SimilarWeb, Chess.com is the 150th most popular website in the world, which is nuts. And, uh, they get around 200 million uniques a month, which is nuts. They— people spend 18 minutes per session on there. Nuts. And 80% of their web traffic comes through typing chess.com into the browser, which is crazy. So this is like, this is like Reddit level almost. I mean, this is—

well, 60 million people, that's like an enormous social network. And you know, that more hours now on Twitch are spent watching chess than on watching Fortnite.

Are you— is this real?

Yeah.

What's your source? Um, I mean, are you— are you right? Is this like I heard, or is this right? Because I'm gonna—

no, no, in fact, in fact, by the way, Jay, who's listening to this— Jay, I believe you were the one who sent me that, the source. Let me just say, I'm gonna— no, no, you sent me an article.

Because I, my prediction is that Chess.com is going to get acquired this year for at least $250 million.

At least, I think, you know, it is such a profitable company.

How profitable do you think it is? If you, if you, they have 200 employees. If you told me that with 200 employees, they make $80 million a year, I wouldn't be surprised.

Well, let me just see what's my subscription.

Um, oh, you have a subscription? How many people are subscribers?

Because I think a lot of people are subscribers. And then, and then people donate as well. Uh, let me see. I totally forget what I paid because that's how nobody's even going to question, oh, I have to pay to play chess with the best players in the world all day long. And I get to study and there's so many resources and there's games and da da da da da. Uh, I don't even look at the subscription price because, uh, let's see.

So that's like an interesting business. I don't know what the opportunities are around this.

Because it's like, it's like $10 a month.

I wonder how many registered users they have. Um, I, I don't know if where the opportunities are because honestly I think that like they probably have such a moat here. They've been around since 2005. It's so fascinating to me, this industry. I, I just learned about Chess.com recently. I just, so I don't know anything about it, but I, I could look at the numbers and be like, oh, everyone who's a chess fan knows Chess.com.

And, and not only that, Twitch is smart. Twitch is now teaming up all their top streamers from other games with chess grandmasters to get lessons. And they're having chess tournaments on Chess.com made up of all these, um, streamers from— coached streamers from other games. So they're really making an attempt to bring chess into the fold because they recognize the rising popularity. But just yesterday, as an example, something like 75,000 people joined Chess.com just in the past 24 hours. And the business models are, is if you're not, you don't even have to be a top 10 player. You don't even have to be a top 10,000 player. If you're a good streamer, meaning you have the personality and you have enough of the chess skills to be able to stream well and play at the same time, you're going to make a great living as a chess streamer. I know many people who are not top chess players who are making a living as a chess streamer.

Yeah. So, uh, chess.com, super interesting business to me. Um, I don't know where the opportunity is. I just wanted to bring it up because I think it was, uh, I think listeners would be shocked by this. And I think that it's always good to feel shocked.

Uh, well, I, I think any, uh, any, any subscription service where someone's getting a ranking based on ability that triggers dopamine. And if you make the skill that you're, you're serving up kind of fun and, and competitive and classic like chess or some other classic game, you're going to make a lot of money.

And then, um, another one. So I told you about— let me pull up my notes here— but dictionary.com. So you don't know anything about dictionary.com?

Nothing.

Kind of interesting. Way smaller, but still interesting. And I think that if I owned it, I would do a lot of cool stuff with it. Um, so do you know this guy named Dan Gilbert? Yeah, he's, um, billionaire Dan Gilbert, owns the Cleveland Cavs, I think.

Yeah, I think he also was from the advertising space. Um, Let me see.

I believe kind of— he started, uh, Quicken Loans.

Okay, no, yeah, so he's not from the advertising space.

No, but he probably bought a lot of ads, which is— maybe you worked with Quicken.

Maybe. Yeah, I've definitely worked with Quicken.

Or is it Quicken? Yeah, or Rocket Mortgage.

No, Rocket Mortgage was his first.

Okay, sorry. Yeah, one of those. Anyway, uh, Dan Gilbert bought it recently from IAC for $100 million. But listen to these stats. Dictionary.com gets 7 billion searches annually. They get 15 million visits a month. Although I think it actually is a bit higher in like the 20 or 30 million range, but they also own thesaurus.com. The two sites last year took in $20 million in sales. The guy who started dictionary.com, he recently bought a house in LA on the beach for $20 million. And I think that one of the best ways to find opportunity is to read real estate blogs. And see who's buying expensive real estate and then go and Google the people and figure out what they did. Um, cause it's one of the best ways to find out people who you never would have heard of. Uh, and real estate, if someone's buying real estate for $20 million, you know that their liquid net worth has to be at least, or it probably should be at least $100 million. So it's a great way to find interesting stuff.

You know, that's, that, that's fascinating. Uh, I never thought about that, but let me ask you this. By the time they're buying their expensive house, And this is, this is the main issue with entrepreneurship and what prevents people from being an entrepreneur is that everyone asks the question, is it too late? Like take dictionary.com. Is it too late to start a competitor or do I have to think of an idea that's similar, but what's similar to the dictionary, which is so fundamental?

Uh, urbandictionary.com.

Yeah. Which, which by the way, that's also been done.

Yes, it has been, but I'm just showing you, that's an example of someone like, don't gimme this bullshit. There is interesting ways. And also I'm not saying go and launch a dictionary.com. That's a direct competitor. I'm saying learn about what they've done and be inspired by that and find opportunity and steal a lot of their strategy or tactics.

Right? Like for instance, I, it used to be a very common technique was take this exact idea and do it in Russia or do it in China or do it in Spain, you know, do the Spanish version. The other thing is I, in my last book, Skip the Line, I have a chapter called the Spoke and Wheel technique. So let's say you love words and vocabulary and you wish you had done dictionary.com. Well, you can either enhance what they did, like have kind of commentary about the etymology of every word and the meanings of every word and whatever, um, or, you know, some make— turn into some sort of social media. Or you could do a podcast about words, you could do a newsletter, you could do, you know, anything. So you come up with the— you could do books, you come up with spokes about If words is the wheel, spoke— the spokes are all the businesses that could spin off the wheel.

Yes. I think that there's just so much opportunity and I just think this one's interesting. And, and, uh, dictionary.com has done $20 million in revenue probably every year for the past 6 years, probably mostly profit. They, you, cause you really don't need a big team, although if it was owned by IAC, so I imagine there's a chance that they were overstaffed. Because it's like a big company. But, um, what's interesting to me is that they, like, I, I, I think they've done an okay job at doing this. They've done a really good job of being snarky. So when Kylie Jenner, or the, the self-made billionaire Kylie Jenner person, the Kardashian lady, when she became like a billionaire, the youngest billionaire, they tweeted out, they go, actually, the definition of self-made means unaided, or like something like they, they made like this to her. And it was like it was retweeted like 100,000 times, you know, really like an interesting way to stay relevant. So I think that's been fabulous. Also, word of the day they've done, which is kind of funny, but also— but the word of the year or sorry, the word of the year is actually kind of funny because like when Donald Trump was president, the word of the year was xenophobic because people were searching what xenophobia— what that means. Or like when Obama maybe was president, I actually don't know what the word was, but it was some— it was— it's almost like a Time Person of the Year, but word. Where like the word of the year is like a representation of our culture and society and things like that. And I would actually go in on that way, like way deeper and make myself relevant because dictionary.com, who the hell thinks dictionary.com is interesting? But it's always intriguing, like when Merriam-Webster or Webster's Dictionary went like, oh wow, mosh pit is officially a word or cryptocurrency is officially a word in Webster's. We've officially made it. Like, I think it's cool that when boring things insert themselves into culture and society, that always interests me. And so, uh, I don't know, there's just some weird stuff here that I like. I always like when people make lists, like, you know, JD Power Award. Yeah, like the fact that JD Power— JD Power is a multi-billion dollar company. Do you know JD Power? Yeah, yeah, it's fucking crazy. It's crazy because a lot of these, I don't know anything about them other than what's on Wikipedia, but a lot of these, uh, power, uh, JD Power, Gartner, they're kind of like a circle jerk. Like I have a little bit of evidence of this, but not enough to make such a crazy claim, but they are kind of like whoever pays them the most money gets the award. There's a little bit of that in there. I'm not saying it's all that, but there's a little bit of that in there. And I just think that these businesses that where you create something out of nothing that becomes part of like culture and you create this brand that people start trusting, like What the fuck is JD Power and why should I care what they say? But for some reason, I, they say it in the commercials. I always think that those companies are kind of interesting.

Yeah, no, like you say, people love lists. So, and that's a kind of a way to get known, uh, you know, on trends.co there's right now, there's also, you cover review sites, you say review sites is a great business to get into. And that's another category where I would say, well, there's a billion review sites, you know, with let's say Yelp and Google, it's number one and number two. How can you get traffic now if you're a review site? Let's say you come up even with a new area to review.

Well, search is the easy— I mean, that's— it's the hardest, but it's the most profitable. I would do search.

Um, what do you mean you would do search?

Well, this is very hard, but it pays dividends. Uh, it's the type of thing that if you do it right and do it early on, it's going to take you 2 years to see results, but the results are exponential. Uh, make it so I get a shit ton of backlinks. So all I would care about, my main metric would be backlinks. So the way that I would do it is let's say that I'm reviewing, name a product, home Zoom equipment. So like, you know, you see how I've got a fancy camera?

Yeah.

I would call it like zoomlikeapro.com or something like that. The whole website would be on the premise of like your home video setup is like 21st century's business suit. You spend a lot of money on it to look really cool. And to impress your clients, we're gonna help you select the right gear. I'm just making this up, but that's actually really good.

Um, yeah, I, I would use, like, it was 2 million podcasters. I would use, you know, anything that reviewed any, um, podcast tools. We, we, there's no good, really good pod— podcast review site for, for real pro podcasters.

Right. So you call it podcastreviews.com or something, and then you, you pick a term. So I wanna rank number 1 for best podcasting microphone. So it's going to take me 2 or 3 years to do that. And all I'm going to try and do is to write enough blog posts. So a ton of people, hopefully thousands of people link back to my blog called the best podcast microphone. And this is what NerdWallet did. So NerdWallet is a credit card review company. They now review tons of stuff. They review best auto insurance, best this, best that, all financial products, but their number one URL is nerdwallet.com/bestcreditcard, and that blog post probably makes them $100 million a year if I had to guess. And I know that that company— I think that company, I think they last published it, they make like $300 million a year in sales. And so all you do is you spend 2 or 3 years getting as many backlinks as possible to that thing, and then after a while it starts paying dividends. This is what Wirecutter did. So Wirecutter, people came to them through search, Now Wirecutter, what the problem with a lot of these review sites is a lot of them are content farms and they just post shit. Wirecutter is a brand and it's awesome. So they originally got traffic just from search, but then Brian Lamb, the editor, was like, no, we're going to make this high quality and the best. So now people like me go to wirecutter.com every day just to see the new products that they're reviewing. Same thing with consumerreviews.com or Consumer Reviews.

Um, anyway, how do they go about getting um, all the backlinks?

Um, there's a bunch of different ways. NerdWallet has an entire team on this. So anytime they, uh, so they like create journalism that's purely data-driven. Same with like apartmentlist.com, Zillow, Redfin. They all have data people on staff and they find interesting data points and then they feed it to journalists. So for example, apartmentlist.com, where I used to work, I see that they're doing this now. So they'll probably find some crazy stat, like for example, during the pandemic The most moved-to city is not Austin, it's not Denver, it's not this, it's not that. It's actually Boise, Idaho. Here's a top 10 list of the most growing cities as proven by our apartment searches or something like that. I, by the way, I'm making all of this up. I have no idea if any of this is true.

No, no, but that, that's great because that is something that would go, not necessarily viral in the news, but it would at least be, you know, reported on and tweeted a bunch of places. Cuz everyone wants to know, is my city coming back?

Yes. And so you make that article and you do one a month or one a week if you can, and you have a list of journalists on your email list and you email like this person at New York Times, be like, hey, we just did this study. It's, it's all data. That's like, we, you know, we have millions of people coming to our website. So it's a pretty good signal. If you want to run with this, here's the story. And then New York Times or someone else will cover it and then it'll go viral and then they'll link back to your website and that's how you get links. And then that's how you rank for your review.

Yeah, love it. Love it. So on trends.co also, you have this latest signals. So for instance, um, you, you have this thing, global search interest for low alcohol beer has shot up in the past decade. So it's like gone up huge.

We've been talking about that for a long time and everyone has laughed at us and just dismissed me when I said this is gonna be a big thing, but it is crushing it. So what is it? No low alcohol beer is the topic.

Yeah. Low dash alcohol beer.

Oh my God, dude. Heineken. We wrote about this a year and a half ago. Heineken, when we interviewed them, they said that Heineken has this product called 0.0. It's a Heineken beer. So I don't drink any alcohol. I'm sober, but I love non-alcoholic beer. And I started drinking. I'm like, this is so good. So we started researching it. Heineken has said that their 0.0 product is the fastest growing category. Um, there's been a few folks in the space. One's called Haas, or I don't know how you pronounce it, but it's H-A-U-S. It's a low alcohol wine, which is kind of weird. You would think, who wants that? But there's a few things going on. The first is that Americans are, are more health conscious and a lot of them aren't drinking as much as before. And so they want low alcohol or no alcohol alternatives. So there's a company called Haas, there's this company called Athletic Brewery. It's called Athletic Brewery. It's a startup that has funding and it's going after like cyclist type folks, health and fitness folks who still want to have like an IPA, which I have some in my refrigerator right now. It's awesome. And then there's this new thing happening. Um, how old are your children? Do you have a— do you have any children that are like 18, 19, 20, 21?

All of them are between 18 and 22.

Okay, great. Gen Z, the young folks, your kids, your kids category, they're not drinking any alcohol. It's crazy. These kids are not drinking alcohol one bit. It is not part— it was when I was growing up, the second you go to college, you go and you get hammered. I mean, a lot of people are still doing that, but a huge percentage of them compared to previous generations are not drinking alcohol. I don't know if like you've seen this in your children, but it's a little bit. Yeah, they're not. It's not like the whole party culture is not— it's not the same. And so I think that low or no alcohol stuff is going to be incredibly popular, far more popular than it is now, and it's growing very quickly. So that's that.

You know, again, a lot of people will look at these and they— and it's almost like you feel like this little anxiety. Which one should I do? Which one's exciting to me? And also is, you know, what's my— I always have this theory, you can't just be better. Like, I can't make a, just a better dictionary.com. I really have to have like my own unique thing. Like you may, you mentioned Urban Dictionary. If I make a better chess.com, for instance, let, let's just say hypothetically, somehow I, I make it better in some way. I figure out a way to make it better. It doesn't matter. No one's gonna switch from chess.com. Now, if you make a chess.com where. I don't know, there's a, there's, they have specific techniques where if you play, uh, you'll actually get better and you get money if you win. Like the people are betting on games and whatever, and you get a percentage of that if you're the player, then that might be different enough as opposed to just better that it becomes a valuable business.

Yeah, I agree. I think being different is better than being better.

And, and you guys, I think the success of, of both The Hustle and Trends.co is Like, look at your passion for talking about new businesses. There really was nothing like that, or it still is. There's nothing like trends.co, which is your high-end product. There's nothing like The Hustle where you could feel that the, the authors and the writers and the podcast and the audio, everything is so enthusiastic and about, you know, new business opportunities and entrepreneurship. And it's not bullshit. Like if I read TechCrunch, for instance, and I'm just making up generic, you know, Silicon Valley entrepreneur blog.

Oh, pick on them. Like the thing about TechCrunch and Vox and Business Insider, or you don't have to pick them. I'll pick on them. It's written by people who actually hate those companies.

Right. They're, they're very snarky and they want to, they don't want to show you how to do it. Like what was really great. Like I've always tried to figure out if I want to create, let's say, I don't know, my own brand of chapstick. Trends.co, usually there's some article in there. Well, here's where you source the ingredients. Here's the latest seaweed ingredients from this one island in Japan that you, that you look for. Here are the major distributors. Here's how you manufacture and dropship it. Like you really give the details how to start a business.

Yeah, we always, we try to, our, our motto is we default to optimism. Like we want to champion people building stuff, not bring them down. Long story short, non-alcoholic beer is awesome.

And so, and so what can you do as an entrepreneur now? Okay. Heineken's already doing it. How am I going to compete with them? That's the classic response.

There's so many possible answers to that question. The answer of, I can't, that is not an answer. So let's just get that out of the equation. Like you can, what would I do? Well, so I would go and talk to, uh, who are some, I would find someone at Samuel Adams, cause that's the largest American brewery in America. Uh, and then I would find someone at a fast growing brewery in my town, in my city. And I would interview them and like 10 other people. And I'm like, tell me how you make beer. You do this, you do— okay. Uh, what's the most popular one? Okay. And how can I make this with zero alcohol? Okay. And I would make friends with probably 20 of them and I would convince one of them, hey, if I pay you upfront or like give you a cut of the profit, would you make some, uh, non-alcoholic stuff? Okay, cool. Then I would go and interview people at Heineken. People at Sam Adams, people at the big companies. And I would say, based off of all your data, what's a way that you think you should be growing, but you're not doing it because Heineken says you're not allowed to? And they would say, you know, what's funny is, um, I'm again making all this up. We're really fast growing amongst, um, like bros, like big, like bro-y guys who, um, are actually embarrassed to drink non-alcoholic beer. And I'd be like, okay, then I'm going to go like the vulgar route. I'm going to make some type of label that's kind of vulgar and funny. Like I'm going to appeal to the irreverence side of irreverence side of these guys. I'm going to get that label done on fiverr.com and then I'm going to print it and I'm going to go to my non-alcoholic guy like, hey, we're naming this beer after Irreverent Bros. We're going to call it a Buffalo Wing Beer. I don't know, I'm trying to think of like all this shit on the spot. But anyway, like we're going to name it something like silly and stupid. And I think I'm going to appeal to like the bros of the world. And that's what I would do. I would go and I would make 200 of them. I would probably just sell it locally and then eventually I would figure out how to do it online and drive ads through Facebook marketing. And if I did that, I would sell— you'd have to buy a case at $24, $30, probably $50. I would sell it for expensive. You'd have to buy at least one case. You couldn't buy individual bottles. And then, um, I would start shipping it. I don't know.

And would you get, um, would you get influencers involved?

Like, like, you know, yeah, yeah, definitely.

How would you get an influencer involved? Like, what would you do?

I would just find them on Instagram and DM them. I mean, it's that simple.

And then how much would you pay them?

I would have to do the math on, um, I would ask to see like how much were they paid in the past, but I would probably spend $1,000 a pop. Just, I would just be like, all right, I'm gonna give you $1,000. Just post it. And I would see, does that back out to where I can spend profitably to acquire a customer? And I would probably spend $10,000 expecting very little return, but I would do it to get a baseline of what I could profitably spend in order to get a customer. And then I would change that and fix my model to do it profitably. And then I would go out to a ton of people and DM them using that profitable rate. So I know that if you have 50,000 customers, I'm going to get X amount of revenue. So I'm willing to spend Y so I can As long as Y is beneath X. And I would just say, all right, you have 50,000 people. Here's what I'm going to pay you. Or you have 100,000 people. I'm going to pay you 2X of what I was going to pay this person.

That's fascinating. Yeah. So again, your enthusiasm for entrepreneurship shines through. It's a great example of do what you love because then you're able to create the best product in the space. And I do agree, you don't have to do what you love to make a business. Like for instance, I might not be fascinated by e-waste, but still that's a, as you point out, it's a profitable business.

Yeah. But you can be fascinated about business, building a business.

Right. And, and, but, but your interest, the great thing about doing what you love is, or at least finding some way to love what you're doing is you don't need energy to wake up and start working in the morning.

Like, well, that's what I think. Like if you say like, should you build this dictionary.com? You should build whatever you think that you could spend 80 hours a week for 10 years doing.

Yeah. No, that's a good way.

Not that you're gonna have to spend 80 hours a week. But like, whatever you think you have the most endurance for, do that.

That's, that's a great point. So, so out of all, let's say over the past 2 or 3 months, what's the best, most exciting, um, industry that you've come across that potential, potentially people can start up in?

I don't know if this will be exciting for everyone else, but it's exciting for me. So have you heard of Tiger 21?

Yeah. Yeah. I was, uh, I was not quite a member, but a, I was looking to be a member at one point. This is, this is like 15 years ago. B, I was running a hedge fund, so they were thinking of investing in me.

Um, so I had to do a whole pitch to Tiger Woods, or, or they get their members to invest.

They get their members to invest. They recommend it as an investment. So they basically, um, know all of their members' complete financial assets. Like, that's— to be a member, you have to expose all of your, uh, assets. You have to be worth at least $10 million. And, um, uh, and I went broke shortly afterwards, which is why I didn't pursue the membership. And, uh, uh, you, and also as a hedge fund, I was able to present to them. I knew a lot of the members, but number C was the most important thing. They actually informed me that one of the hedge funds I was invested in was a scam, and I was able to get out of this hedge fund in good time.

So for the listeners, Tiger 21, it's a community. It's a, it's a paid community. So you get access to your peers and Honestly, I don't even know what you get. I would love to hear it, James. You tell me. I have one friend who's part of it, or two, two friends who are part of it. It seems pretty minimal, but if you're— you have to have $10 million in investable assets to join. It costs $35,000 or $30,000 to join. And you do one of a few things. You have a peer group where you meet with and you defend your portfolio. So you show them where you've invested in, where you haven't invested in, and you— people critique you. Um, and it's basically a rich person's investors club is what it is. I don't even think they have a digital presence.

No, I don't think so. And it's very much invitation only to even meet them.

Like otherwise you won't even know they exist, but they have 800 members at $30 grand a pop. So they probably do at least $24 million in sales. And I bet that they have advertising dollars as well. So I think they do at least $30 million in revenue and the annual, uh, annual churn I bet is Uh, at around 100%, meaning the likelihood that someone stays is quite high and they replace that person really easily.

I think that's true. And, and listen, if they come to your office and say, hey, we want to show you something, and they show you that one of your investments is potentially a scam or dangerous, that right there, you make back the $30,000 membership fee and then some. So I think that's valuable.

This business interests me because if you go to Tiger 21's website, it's mostly old white people. Um, and I know a lot of young wealthy people. Um, I know a lot of middle-aged wealthy people. I know a lot of people who have money that aren't— who don't identify with this like baby boomer old white guy vibe. Um, and like, are you on their website?

Yeah.

You see the pictures?

Yeah, it's like 100% white.

It's like all white. It's only dudes. It's— they're wearing like a Brooks Brothers shirt. Like, and I'm not like disrespecting that. That's cool. Everyone deserves like a community and everyone You know, they should appeal to their base, but I just think that there's a contingency of people who don't identify with this type of vibe.

And I think that, and, and, you know, also when you meet with, let's say you're presenting to them, they're very much like that category of people in a room. They, they very much, their egos feed off of each other. I don't know how they are in many cases individually, but there's a lot of, there's a lot of ego in those meetings and it's very hard to pitch to them actually, because they are, they're all, they all know everything.

So I think it would be— I'm fascinated by the idea of building a Tiger 21, but for a different group of people.

Yeah, I think, I think that's a good idea.

I think it's an interesting model. I think what I would love to do is to build that and then eventually create a chain of, uh, resorts and hotels, um, particularly, um, nature-driven stuff. Because I think that there's going to be a lot of young people who have a fair amount of wealth and they're going to want to disconnect. And I think it'd be cool to have community of them. Um, because I think that once you have that community, if you're Tiger 21, I think you could build a network of businesses focused on that group of people. And it doesn't need to be that many people to make it very interesting.

No, I think it's, I think it's a great idea. And then particularly a lot of those people in Tiger 21, one of the reasons they're rich is because they're in the money management business. So they are real experts. So if someone makes $100 million selling a chain of laundromats, They can really benefit from, oh, the 5 people I have to present my portfolio to is, you know, this guy runs Fidelity, this guy runs a big hedge fund, this guy has been a personal finance guy for 40 years. So you, it really, the very nature of membership attracts the people who can help others.

So anyway, that's just one thing that interests me.

So, so what, what, you know, you sold The Hustle, you sold Trends.co, what were best practices in building, uh, you know, obviously one best practice was you had great, amazing content and it was relatively unique. There are other sites like that. I think maybe starterstory.com is a, another kind of startup type of website. Uh, but what, what were best practices in building your newsletter to almost 2 million subscribers?

Okay. I don't wanna, I hate giving best practices, but I'll tell you what we did that I think was effective. So, cuz I don't wanna act like our way's the only way. So I, I, I don't wanna say best practices necessarily, but we'll talk about our way. A few things. One, I think that it should start from like a person. So like, it should, like, we started with me being like the guy. Um, the reality is though, as we grew, there was more guys, there was more women. So we had more people that were faces. And I, I think being a face is, is necessary. Um, and having a voice. Is really important, but you want to expand beyond that. I don't know if you, I mean, you did this thing where like you were the face of your thing, but I think you expanded beyond just you, correct?

Not really. Uh, it was, it was 99% me, but I do, I do agree. You get more equity value if you, if, if the name of the business is the brand as opposed to you're the brand and it's way less work.

So I think that like expanding beyond one person, but starting with one person is great for a variety of reasons. One, a user feels like they know one person better than they know a brand. One person, um, like, you need to be polarizing, and typically a community, a committee of people will never do anything interesting. You need one guy or one woman to just make the damn thing and to stick out. You can't vote on this. This isn't a democratic process. You just say, this is how it's going to be, and this is my art, and I'm going to go and make it. And so that's why I think one person is necessary.

By the way, I agree with that. I think too many startups fail. I think two people are okay as long as they do different things.

I agree.

Uh, like one person's the administrative guy and the other person's the visionary, and together they can help with execution, market, marketing, whatever. I do think team entrepreneurship doesn't work.

I, yeah, I, I, I don't think it works. And I think that we should embrace that. I think that far too often we have this culture of like, okay, well let's hear your opinion. Let's hear your opinion. Let's do a little bit of it all. No, no, no, no, no. So at our company, what we do, and I think it's really effective, is let's say Steph comes to me with an idea. I'll be like, Steph, I think that idea is actually really dumb, but you have a history of being right. Do it exactly how you think it should be done. I'm not even going to tell you how I think it should be done. Or maybe if you ask, I'll tell you, but I don't expect you to listen to me. I think you need to do it how you want to do it. So I think that's really important. So that's one of the things that helped us. Second is I think you should do paid marketing to grow your list, but I don't think you should do it at first. I think you should grow organically at first. We got to 150,000 or 200,000 subscribers without spending a cent in marketing.

And so, so mostly that was like, you'd send out this newsletter and word of mouth, people would share it and you would tell people, hey, for more of this daily content, subscribe here. It's free.

Correct. And we also blogged. I blogged a ton. Um, and then we did paid marketing and we spent a lot in paid marketing. And I actually think that that hurt us. I think that we should have spent less on paid marketing and relied more on organic growth because with newsletters, you have organic growth and you also have widgets that help you grow. So for example, like, you can do all these interesting tactics like upload your whole Gmail here and select who you want to invite to join the Hustle. Um, you can do other hacks like forward this to 5 friends and we'll give you a prize. Um, you can't really do that with blogging as much. And I think we should have—

what's the prize you would give out?

We've given out t-shirts, Uh, you know what does the best is just a freaking sticker. So we've mailed out tens of thousands of stickers, um, and that's worked really—

stickers.

Yeah, you see this?

The Hustle. It's a helmet, and it's got—

that's a sticker.

It's cool, right? I'd buy that for my helmet.

It's just like—

how many, how many stickers did you give away?

A ton. A shit ton.

Would you, would you ever do something where like, okay, what you're gonna get is— and we're only giving this to people who, who are XYZ You're going to get Sam Parr's, uh, uh, favorite, uh, tip of the, of the month for starting a business.

Yeah. So like, that's just one of many little things you could do. And you'd be like, if you refer 10 people, you get Y and Y can be anything. And 10 people can be 1 person or 100 people. It could be anything. And so we do that all the time. And you could do that with email really easily, far more easily than you can with a blog. So that's why I'm saying there's all these little hacks that you can build.

And I think these are all great ideas. You know, another thing is if you have comments, you could, you could reward You know, just with the title, like here's the top commenter, or here's the top commenter on dot com, here's the top commenter on bricks and mortar, and so on.

Yeah. So that stuff works really well. So I would highly recommend if you're doing a newsletter that you, um, you do that. Paid marketing works though. I do think you should do paid marketing. Find out your LTV fast and find out what you're willing to spend on paid marketing.

Where's the best place to do paid marketing?

Early on it was Facebook and it's still quite good. Um, TikTok is quite good, but there's this thing called co-reg that's really good. So we sign up on— we do this on co-reg. Is not like a thing if you're Googling it. It's like a type of advertising, or we call it that. I don't even know what the real name is. But if you go to producthunt.com, you might see our ads on there, and people copy us all the time. Um, so like, you might— maybe you'll see like Morning Brew on there now. But, uh, we, we advertise all the time, and we also advertise on a lot of job websites. And so basically you apply for a job or you apply for a scholarship, and after you apply, it says, thank you for applying for this thing. Would you like to join The Hustle where you can get your business news? And it's like more of an interesting inspirational thing, but they click, yeah, sure I would. And we pay that publisher like 50 cents per email subscriber. It could be a higher— I forget the exact number, but that email subscriber, they have to Open at least 5 emails in the first, like, 10 sends that we send them.

That'd be a great way to advertise, like, um, like business self-help books, for instance.

Yeah. And you can collect emails for like a quarter. Um, yeah.

So interesting.

So that helps a lot.

Um, so, so, so that's really interesting. So, uh, and is there anything that would you say was, um, uh, uh, like all of these kind of add incrementally and they all work well together. Was there anything you started or did that was like just a 30% growth game changer?

Having blog posts go viral on like Hacker News. Like anytime that happens, we get a ton of subscribers.

Yeah, that, that's a, that's a great place. Uh, and I used to write articles aimed at being in the top 10 for Hacker News, but they kind of figured out that I was doing that. And so a lot of my stuff, they had to like literally take off Hacker News once it hit number 1.

Yeah, so we, we do that a lot. Um, and, but we don't, we don't game the system, by the way. It just kind of like, we're just good at it.

No, no, I, I, I was sort of half and half in that I was good at the topic, but I would aim to be number one in Hacker News. Like I'd write and I would submit it to Hacker News and it would get voted up to number one or top 10 or whatever. So being on the front page of Hacker News is huge.

Yes. So that helps. Um, That's the Cliff Notes.

Yeah, that's great. And look, Sam, congratulations again, Sam Parr, on, on selling, uh, thehustleandtrends.co to HubSpot. Um, we're always happy to help. You're a, a friend of the podcast. You can come on anytime you want. We'll, we'll send it out. But do you want to come on in about a month and talk about like the next wave of industries that you write about? I want to, I want to talk about how to get started in the cannabis business. Now that it's pretty clear every single state is going to go Legal.

And then, um, okay, I'll do that, but, but I want to learn stuff from you. So we have this podcast, My First Million, and it's doing really well, but I wanted to get it in the top 10 of the category. What's the highest ranking that you've been for your podcast? Do you know?

Number 1. I've been number 1 podcast in, uh, on iTunes. What? No, I mean, I'm not there now, but when I first launched and when I first launched Question of the Day, we were— when I first launched Question of the Day, which was a podcast I did with Steven Dubner who wrote Freakonomics. We were number one for a week in the entire iTunes store. When I started the James Altucher Show in 2014, I was about number one for a week, and then I was top 100 for about a year. You know, the algorithm, um, uh, does not like duration, so it likes people who just launched. And so you basically go up when you get a lot of, uh, fast reviews quickly and subscriptions quickly, and both those things happen really when you first launch, as opposed to year 7. Year 7, it's more steady and you're, you're, the first derivative is, is rewarded rather than the actual line of growth.

So I get to be number 1 by launching new podcasts.

Yeah. Or if you, um, launch, yeah, if you spin off a podcast from the first million, or if you just encourage all your, all your subscribers to write a review that day, or if you have a, uh, uh, if it goes out on HubSpot, to all of their subscribers, you know, or all the employees of their customers, hey, to find out more about these tools you're using, you know, subscribe to the podcast, My First Million, that could launch it back towards the top 100. You got to almost think of it as like it's a relaunch and then that'll get back to the— but, but you even need more than podcasts that are launching.

So we get like 20,000 to 30,000 listens per episode and we do 2 to 3 a week. And right now we're in the range of maybe 400-ish thousand listens a month.

Yeah. So, so doing more episodes will generate, for instance, more ad dollars, but will not increase your ranking. And, um, there's other things too. Like I've been, you know, whether you have a short podcast or a long podcast, depending on the rules that day, and it changes a lot, that may help or hurt you. Um, but really the most effective thing is Simultaneously both getting a lot of subscribers in one day from varied sources because they look for people gaming it, and, uh, uh, getting a lot of reviews on the same day. Huh.

All right. Well, that's what we're gonna have to talk about next podcast, and I'm gonna email you about it because I want to get— I need to get to work and make this popular.

Yeah. And then, um, I have some other stuff I want to talk to you about. We'll talk about it like right after this podcast is over. But come back in a month and we'll, uh, exchange ideas again. I always look forward to having you on.

All right, man. This is awesome. I'm, I'm, I'm excited to do this. I, uh, I've stolen a lot of good stuff from you.

Well, and, and vice versa. I've, I've, uh, and Jay will make this a Side Hustle Friday, uh, episode, but thanks again, Sam. And, uh, I know the audience loves having you on, so look forward to having you on next month and we'll see how you're doing. All right.

Talk to you soon. Thank you.

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