The Man Who Owns 1% Of ALL Bitcoin

So I can borrow $900 million at like 0.1% interest and put it into Bitcoin, which averages 100% annual appreciation for the last 10 years. Okay. What's— yeah, why not?

Yes, but there's another detail to it.

Pomp, dude, welcome. Last time you were here, I just went and looked it up, 4 months ago, the Bitcoin price was $37,000. Today, what is the Bitcoin price today? Today, Bitcoin price is sitting at $69,000.

Nice.

In 4 months. That's kind of amazing. And my question to you to start it off, why is the Bitcoin price going up?

Well, prices go up because more people want to buy than sell. So that's like the simplest example or explanation. But if you think about what's happened in those 4 months, probably the biggest thing is the Bitcoin spot ETFs got approved. And in those ETFs, it basically just gives a ton of people access to the asset that previously didn't have it. And so historically, we've seen these ETFs for certain asset classes get approved. Lots of money comes in, the price goes up over a long period of time. I think people are surprised at how quickly assets have come in. There's over $10 billion that have flowed into these assets. And then also how quickly the price of Bitcoin has gone up and set a new all-time high, you know, within 2 months of the ETF.

Sam, have you followed this? Have you been watching this, like, the ETF stuff?

I know that when I tracked my, like, net worth, which I look at like every 6 months, it changed. Yeah, it changed. And I, and I, and I saw that it went up and I had No idea why.

Like, be honest, when the net worth goes up, do you strut a little differently around the house? Do you look at Sarah a little differently? You expect her to look at you a little differently? Tell me the truth, baby.

We done it! We made it, baby!

Pomp was right, it's red panty night!

We made it! We done it, baby! That's what we say.

I'm surprised you only check, uh, every 6 months. Like, I check on a weekly basis and track it, like, pretty religiously. And I feel like things you measure move. And so if you want it to move, then you got to measure it.

Like, I track, I track income. I don't track net worth because there's nothing I could do about that, right? It's— I've— I'm not like you guys. I've done a set it and forget it. But now that Bitcoin, Bitcoin and Ether is close to an all-time high— Bitcoin is, I think— should I just, should I just sell it all and get out?

Uh, the number one rule of Bitcoin is you don't want to sell your Bitcoin, obviously. Um, no, I mean, look, the, the, I think the long-term kind of like thesis around Bitcoin is, uh, no different than it's always been, which is you have a scarce supply, uh, asset. There's lots of people who want it. That number of people who want it is increasing. Now the people who are banging on the door aren't like retail investors on the internet with $10. It's large institutions that have billions of dollars. Uh, they're obviously allocating to it. And probably the most exciting part over, you know, call it the next 12 months or so, is that at the same time that all this demand is coming in, the Bitcoin halving is coming. And that's just when the daily incoming supply, the number of Bitcoin that get created each day, is going to get cut in half from 900 Bitcoin to 450. So like I always joke, if you went to Economics 101 class, supply and demand, if supply goes down and demand goes up at the same time, then the price has to go up to accommodate everyone. And we've seen this happen before and it'll probably happen again.

Is most of your net worth in crypto stuff now? Pumps? I mean, no, I know it was. You still, you're still holding strong?

Yeah, I haven't sold anything. I bought more crypto stuff, but also we've built another, a number of other businesses and done a bunch of different things that it's not the same percentages, but it's still, you know, definitely over 50%.

Do you remember about 3 years ago, Sean made a tweet that I forget what the tweet said, but like some Indian newspaper picked it up. What was it? It said like entrepreneur Sean Perry puts all that worth into crypto. What was it?

I love how you could tell a story and get all parts of it wrong, but still the story's kind of right. Not an Indian newspaper, not all my net worth. Basically, when I, uh, when we got bought by Twitch, I had a bunch of cash come in and I was like, you know what, I'm moving. I put— I was like, I'm gonna— I tweeted out, I'm, I'm putting 25% of my net worth into Bitcoin. I just That was it. That was the tweet. And then a bunch of blogs like Bitcoin.com and stuff like that, not necessarily in the industry, but they all were like, Twitch executive says he, or then somebody's like Amazon executive, because Amazon owns Twitch. And they're like, Amazon executive, Twitch executive says he's moving 25% of his net worth into Bitcoin in a stunning move. And it's like, uh, you know, my net worth is like, you know, it's like, we're talking about like, oh, I, I put quarters in the vending machine here. Like, these are not huge sums of money that is moving. Like, it should not make news when I do something. But yeah, that was the story. And honestly, one of the better moves I ever did. That was in 2019. So that was a good bet.

I've always thought that the media, if they wanted really to get the clickbait instead of like Amazon executive or whatever, they should just label everyone future billionaire, right?

Like, you can't tell. Aspiring billionaire. Yeah.

Like, you can't disprove that, right? They just, everyone will click on every article.

So we had Michael Saylor on like a year, two, maybe two years ago now. He got, we got in a little, at the end, a little tizzy. He got angry at me. I remember that's about the only thing that I truly remember from that podcast.

Why?

Because he goes, I go, Michael, what's the downside of this bet you're taking? And he is like, there is no downside. And I was like, well, that's dishonest because with every decision there's upside and downside. And even if the downside is minimal, there is also downside. And he is like, no, there is no downside. And I remember, I think I said, well, I don't trust you then because if you're not admitting that there's downside to this decision, you're just being dishonest. What else are you lying about? And it kind of got weird. And I still feel that way. I still feel that way. But on here, we're on what you wanted to talk about. You're talking about Sean, I think asked if this is the craziest bet of all time. It appears as though it's working, right?

I want you to do two things. I want you to explain explain like I'm 5 years old. What did Michael Saylor do? And then after you've explained kind of like just the mechanics of like, what is the bet that this guy has been placing? But kind of like from the start of it to now, because he's kind of evolved it. And then I want you to tell me if you think this is sort of on the spectrum of idiotic to genius, where does this fall for you in terms of a bet? Because it is a colossal, colossal bet. So explain what he's done.

Yeah, he has definitely bet the company and burned the boats for sure. And the way to think about, you know, kind of how it started was he had a bunch of cash. I think he had like $500 million of cash, give or take.

Because he owned a publicly traded software company.

MicroStrategy, which is like a 20-year-old company at that point. And they did something completely unrelated to crypto.

Like they do business analytics, right? So they do business analytics. The $500 million was sitting on the company's balance sheet. He personally started to get interested in Bitcoin. He bought some personally. I think he bought like $250 million of Bitcoin. He disclosed that. And then the company said, hey, well maybe we should buy Bitcoin as well. And I think that there's like two different types of people who buy Bitcoin, especially for a company. Some are like, I'm going to go day trade the balance sheet, which is a horrible idea and will end in, you know, sorrow. And then there's another idea, which is like, I want to have an asset on my balance sheet that I have confidence in over the long run. And what he basically came to the conclusion, along with the board of directors and, and some of the shareholders, was, wait a second, the dollars are being devalued. Inflation is really high. And so we're like losing purchasing power. The number of dollars are staying the same, but the inflation is eating away at our purchasing power. And so he said, let's go try to buy something else. And they supposedly did this entire analysis. They looked at like real estate, stocks, Bitcoin, gold, you know, all these different assets. They came to the conclusion Bitcoin was the thing that they should buy. And so he was the first public company that wasn't like a crypto miner or something like that to go and say, I'm going to put like 85% of my balance sheet into Bitcoin. Now, if he had like $10 million, no one would care. But this was a company that was like a billion-dollar company, $500 million in cash. He made this big bet. And if the story just ended there, I think a lot of people would be like, wow, that's kind of crazy. But then he like doubled, tripled, quadrupled down on it. And he began to raise a bunch of money via debt offerings. So he would like sell bonds and get really good terms, get that cash, buy more Bitcoin. Then he was like selling equity at one point. Whenever the value of the company like was higher than what he thought it was actually worth, he would sell equity, uh, use that cash to buy more Bitcoin. And he went from owning zero Bitcoin in July of 2020 to today he has more than 210,000 Bitcoin, which is more than 1% of the Bitcoin network. Um, and it's worth, you know, I don't know, something more than like $10 billion. And so, yeah, it's an insane bet, but if it works, then we'll call it a genius bet. And so, like, history is written by the victors. Let's see what happens.

All right, everyone, a quick break to tell you about HubSpot. And this one's easy because I'm going to show you an example of how I'm doing this at my company. When I say I, I mean not my team. I mean, I'm the one who actually made this. So I've got this company called Hampton. You can check it out. Joinhampton.com. It's a community for founders. And one of the ways that we've grown is we've created these surveys where we'll ask our members certain questions that a lot of people a lot of times people are afraid to ask. So things like what their net worth is, how their assets are allocated, all these like interesting questions. And then we'll put it in a survey. And I went and made a landing page so you can check it out at joinhampton.com/wealth. You can actually see the landing page that I made. And the hard part with this is with Hampton, we are appealing to a sort of a, a higher end customer, sort of like, like a Louis Vuitton or a Ferrari. So I needed the landing page to look a very particular way. HubSpot has templates. That's what we used. We just changed the colors a little bit to match our brand. Very easy. They have this drag and drop version of their landing page builder, and it's super simple. I'm not technical and I'm the one who actually made it. And once it's made, I then shared it on social media and we had thousands of people see it and thousands of people who gave us their information. And I can then see over the next handful of weeks, this is how much revenue came in from this wealth survey that I did. This is where the revenue came from. So it came from Twitter, it came from LinkedIn. Whatever it came from, I can actually go and look at it and I can say, oh well, that worked, that didn't work, do more of that, do less of that. And if you're interested in making landing pages like this, I highly suggest it. Look, I'm actually doing it, but you could check it out. Go to the link in the description of YouTube and get started. All right, now back to MFM.

So he, he currently has $14.96 billion of Bitcoin in MicroStrategy and it's up 97%.

All time.

So he's put in $7.3 billion and now it's sitting on about $15 billion of assets. Now, I think there's one other piece to be honest about, which is it wasn't just that he was like, hmm, we have $500 million on the balance sheet. What can we invest in? I think the truth was, and this is what we were trying in our original interview with him, this is what kind of started to come out. And I was like, this makes more sense to me. And I kind of wish he was a little bit more upfront about it, which was his stock was flat or going down for a long time. Like I think if you look at the MicroStrategy chart for like since, I don't know, 2002 to, you know, 2020, the stock, the stock was basically flat from 2007 to 2020 before he started making his bet. And that's a long time, right? That's 2007 to 2020. That's a, that's a 13-year period. And so What ended up, what he realized was he's like, why are they not giving us any credit? Like we're basically, we're basically valued at the amount of cash we have. They're not valuing the business really at anything. And the business is going to produce more cash, but they don't believe that we can invest this well or that we can reinvest our cash well to grow the enterprise value of the company. So we have two choices. We either dividend out all the cash or we got to do something with it that's going to get our stock price to go up. And I think the reality was he was stuck between a little bit of a rock and a hard place where he had this business that was too successful to not continue, but his share price would not move because investors just simply did not believe any of the stories about what they could do with the cash. And so he kind of had to do something. I think that's the part that's a little bit left out is like, oh, I completely agree.

And he was very loud about it on purpose, which I don't blame him for being.

I also think that like, it may be an extension of this is whenever you have a company that has cash on their balance sheet and it's like accumulating cash, it's usually because they don't know what to do with it. Like there's not a clear, how do I reinvest in my business and like drive more cash in the future? And so historically what those companies have done is they've either dividended out or they've bought back their shares. But if your shares are flat and there's not a lot of volatility to it, there's not a lot of opportunity to buy back the shares for less than what like the company's worth. And so this is definitely like, that's why I say it's like a bet the company burn the boats situation where he went all in on this strategy. Now what I think is very interesting about it is he essentially has pioneered this, like I have a, business that does software analytics and kind of business analytics, and that's supposed to throw off cash. And then I have like a treasury strategy. But if you really think about, you know, maybe companies in other countries, like this is not foreign to them, right? If you're in a country where like the currency is very volatile or it could lose value very quickly, a lot of times you're managing foreign currency risk and you're trying to get into dollars or something that's more stable. It's just that no one in the US ever thinks about this or worries about it. And so now he's doing it with Bitcoin. Now I actually think one of the most interesting parts of this story is that no one's followed him. Like there, there hasn't been a second MicroStrategy. I've talked to a lot of people and I'm like, you know, one company is a data point, two would begin the trend. And so I actually don't have a good answer as to like, if this guy has made basically $7 billion off of this bet, why has no one followed it? Usually in public markets, like somebody does something, you know, back like 2017, 2018, like companies were start changing their names to blockchain. Long Island Iced Tea changed it to like Long Island Blockchain, right? And they just start doing anything they possibly can. Right now, AI, like everyone goes and puts.ai at the end of their name to try to, you know, get some sort of a boost in their stock price. But no one's following Saylor, which like the omission of everyone else may actually be a data point that we should pay attention to as well.

Well, it's a very scary bet. I mean, in order to do this, I don't know if you have to be a public company, but you have to be large enough to be in that ballpark. And I, I don't know how much he must own the majority of the company because there's been like border, there's been so many times where like it could have been justifiable to fire him over all this.

I think he has voting control, but not, uh, majority ownership, but he's got voting control.

He has about, I think he has about 50% ownership of the stock. And so you have the unique combination of cash cow business, been around forever, founder CEO, publicly listed already. So he's able to do these bonds because when you listen to him talk, he's like, So I can borrow $900 million at like 0.1% interest and put it into Bitcoin, which averages 100% annual appreciation for the last 10 years. Okay.

What's—

yeah, why not?

Yes. But there's another detail to it, and I'm definitely not an expert on like convertible bond offerings in the public market, but these are convertible bonds and they convert at a premium to the current price. So without getting into all the intricacies, it's basically like people can get paid back or they could convert to equity. At maybe let's say 50% higher. So if the company's worth, you know, $10 billion today, it'll convert at $15 billion. So if the company goes up a lot, like you'll obviously convert rather than get paid back. And so it's not exactly the cheapest capital if, you know, you're basically selling equity, but you are selling it at a 50% premium. So it's still attractive to do.

And so do you, when you look at this, are you like, wow, this is genius. This is terrible. This is, this is riskier than it appears. What's the pomp takeaway? Because you've talked to this guy multiple times, right? We did an interview with him years ago and haven't really paid too much attention since. You live in this space, you know, day to day, and you, you know this guy a lot better than us. What, what's your honest takeaway of this?

I think it is riskier for a company to sit with $500 million in US dollar cash on their balance sheet than $500 million worth of Bitcoin. And the reason being that, or maybe the one clarifier is if you have a long-term oriented posture and you don't need that cash for day-to-day operations right now, Bitcoin will definitely do better from protecting your purchasing power over the next 10, 15, 20 years than the dollars will. Um, and so it, it's a unique aspect to be able to not only have the cash but also not need it to run your business. Um, and so yeah, I think that he's actually taking less risk than most of the public companies. And, and my expectation is actually that shareholders at some point will start turning on some of these public companies that have tons of cash and saying like, hey, if we're sitting there with, you know, I mean, Warren Buffett sitting with $100 billion of cash, like how much money is he losing for the business by leaving it in cash? And it's unclear what else he could do.

Do you know what's crazy is like, you know, there's— have you guys read the book The Outsiders? It's about 9 different CEOs and the whole thing is like they've gone from CEO to capital allocator, and that phrase is thrown around a lot, but that's actually a, a really hard— so for a person who starts and builds a company from scratch, typically their skillset is like they're a little bit of a wild card. They're probably good at product, they're probably decent at hiring, and oftentimes that means that they're not the best at managing. And I have found amongst my friend group, oftentimes that doesn't necessarily mean they're gonna be a good investor. And so it's pretty interesting to watch someone go from being like whatever you are when you start something, a tinkerer, uh, to a proper capital allocator. That transition is pretty rare, I think. Uh, I think typically the people who are good at being investors, they kind of start as an investor and they either buy a company just so they can get the cash flow to invest. But those skill sets, to see someone like transfer those skill sets or, or evolve as a, as an operator. That's actually really fascinating to see that.

The way I call it is you go from product manager to people manager to money manager. That's the transition, right? That is the levels of the game in business.

But that's rare.

Jump those 3. Yeah, very, very rare.

Very hard.

Warren Buffett has a great quote. He says, he goes, I'm a better investor because I was a businessman. I'm a better businessman because I'm an investor. And for those who have the disposition to do both, they can become very good at one because they were very good at the other. But you're right, most people aren't able to do, have both gears.

Like Sean, you and I, I think are quite good at, and I'm sure you are too, Pomp, but I know Sean more intimately. Like we're pretty good, I think, at going zero to one. Do you think that, and you've also invested, do you think that you are better at starting versus investing? And how's that evolution been so far?

Definitely not better at investing than I am at building because I spent 15 years building and then probably 4 years seriously investing. Right? So just in the learning curve, I'm more of a white belt, right? But I can see what Warren Buffett says, which is that when you have built and run companies, you are better at analyzing companies versus somebody who's only ever analyzed a company from a sort of spreadsheet arm's length away. They, you know, they take everything at sort of face value, right? There's a skepticism that gets built up, a healthy skepticism. When you've actually seen how hard it is to do some things. Or for example, a lot of times in the stock market, people react to the news. It's like Google puts out an overly woke AI thing and people are like, oh, Google's dead. Google's not. It's like, do you know how hard it is to compete with these companies? Do you know how durable, you know how strong these businesses are?

You know how hard it is to create one of these?

And so the Mr. Market, goes up and down in its mood, right? It gets euphoric and it gets depressed. But a business builder has trained themselves to not have that same swing of psychology to go from peak euphoria, everything is amazing and going to go up, and oh my God, it'll never recover again. A builder kind of has been through that themselves, and therefore when they're an investor, they don't get caught up in that kind of herd psychology that the worst investors do. What do you think, Pomp?

I think that's dead on. You see this not only in the public markets, you also are starting to see it in the private markets. How many of the great angel investors today are really just running companies or building things themselves and then they kind of angel invest on the side or vice versa? And so like Founders Fund maybe is like the best example where they're really, you know, putting a flag in the ground and they're like, look, we want to be operators and we want to invest by operating day to day. We learn, which makes us a better investor and vice versa. I just think of like to win in the dynamic world we're headed into, you have to be a ballplayer. And I always go back to the, like, you remember when you're 12 years old, you play like Little League baseball and there's like, okay, hey kid, today you're the pitcher. Tomorrow, like, you're going to play shortstop. Tomorrow you're going to be like the catcher. Oh, now you're like the designated hitter. Like, you just have to be able to do all the different positions. And there's not really like this specialization that you get maybe when you get into high school, college, or definitely in Major League Baseball. And so like that in entrepreneurship is like the most coveted position to be able to stand-in is like if you're a ball player, you can build things, you can invest, you can hire, you can manage, you can fire, you can do all these different things. But it takes practice and, and, and it's difficult to do just like anything. And so like being the ball player is really what Warren Buffett figured out, what Jeff Bezos figured out, what Elon Musk figured out. And that involves not only building things but also capital markets. And, and it looks like Michael Saylor's figured out a way to tap the capital markets in a unique way.

It's a good transition because you went from Pomp Bitcoin crypto guy as like main brand, and then, you know, it's like, oh, Pomp's doing this real estate conference, Pomp's buying these, you know, these sweaty businesses. You've showed some range, I guess, in the last few years. I don't know if it has a hedge or just where your curiosity went or whatever, but talk to us about what are some of the non-crypto weird stuff that you've been looking at? I know you were looking at some What was the line painting business? Talk about that. Talk about some of the weird stuff you're doing and why you do it.

So, I've always been doing this stuff. I just never talked about it publicly. You know, if you go all the way back to when I was a kid, like we always had some business we were trying to do. I built two companies right out of college and in between those companies, I remember that like I taught myself how to do like WordPress websites and I would go around to small businesses and be like, hey, pay me $5,000. I'll like build you a website.

Right.

And like, that wasn't going to be like some big thing, but it was just like a way to figure out like, could you, Gain a skill. Could you solve a problem? Could you make money, right? Do it over and over again. And so over the last couple of years, we, we've been doing quite a bit of work and building companies or, or trying to buy these businesses. But crypto definitely was the thing that I think most people weren't talking about online that we felt like we had a unique kind of narrative or perspective. The line business is a perfect example. So I was reading the biography on Elon Musk and in it every Sunday he would have the Tesla team bring him a car. And they would take him for a test drive of the self-driving Tesla. And so there was this one area on the highway where it was kind of like a really hard turn and the car kept messing up. The human had to intervene and grab the steering wheel because the car wouldn't recognize that this turn was there. And so what the engineers figured out was that the road, the painting on the road was actually degraded down. And so they were like, well, we're tired of Elon yelling at us every Sunday. So they called the Department of Transportation and were like, hey, get out here and like repaint this road so that the car stops messing up. And so they fixed the road, not the car. Then the car can drive correctly. Elon stops yelling. So like they just solved kind of their like local problem, but it made me think, I was like, wait a second, these like line striping or line painting businesses are going to be exponentially more valuable in the future because as self-driving becomes prevalent on the road, governments are going to mandate that the roads are painted more often so that the cars from a safety perspective can actually drive correctly. And so you probably can go buy these line striping businesses right now for like 3 times EBITDA and you start to scale them. And then as the government mandates them paint the road more often, like revenue will go up, there'll be multiple expansion. And there's kind of this thesis of like, you have smart cars on dumb roads, but like everyone wants to go compete with like the smart cars, but maybe actually the best way to make money is like go figure out how to take the dumb roads and just make them smart and interact with the tech. Uh, if we really want to dig into like the nitty-gritty details, like one of the hardest parts for people coming from the tech industry in doing deals with people who are not in the tech industry is there is a drastic, uh, asymmetric information advantage that tech people have. And what I mean by that is like, let's say that you guys start a company tomorrow and you're like, hey, I'm going to raise $1 million on a SAFE note. We pretty much like, you can pitch me, we can have a conversation back and forth, we can come up with the terms, the SAFE document is already pre-drafted, And we can have that done in like 2 or 3 days. Like tech has basically figured out these long-term oriented people, reputation's really important. There's some baseline shared knowledge. And so deals get done very quickly and there's not a lot of friction. And then because it's a power law game, investors are incentivized to invest in tons of companies. And founders understand that like there's tons of capital available. When you go into these like blue collar kind of industrial manufacturing businesses, like sometimes these people have been building the company, like the line striping business, they've been building it for 20 years. This is like their life. And when we were having the negotiations with them, like we were starting out with like, what's the point of the board of directors? Right? Like, like there's an education that goes into it. And so it makes getting deals done very, very hard because of that friction that exists. And so it's almost easier to do deals with people who have done lots of deals than it is to do deals with somebody who's done their first deal. Like this is the big one. And so like we're still trying to figure out how to solve that problem, but it's just something that we've noticed that doesn't get talked a lot about online.

What were the numbers of this company?

I don't want to say because they were super great guys, but these businesses, they're bigger than you think. I've looked at a bunch of these businesses. So there's like line striping. Another one is like traffic cones and barricades. And so if you think of that business, like every construction site, you have to have these things there from a safety standpoint. It's legally mandated. And it's like the greatest real estate business in the world. They can buy like a hip-height, you know, like 4-foot-wide barricade. They buy those for like $400 and then they rent them out for like $5 to $8 a day. And once you're on site, you're not allowed to leave the site with like the equipment can't leave until the job's done. So like LaGuardia, that was under construction for like 10 years, right? So like somebody was just renting them cones, paying, getting paid $5, $6, $7 a day for 10 years. And so like those businesses are really interesting. What ends up happening is my buddy Brent Beshore's got this quote. He says small businesses don't stay small on purpose. So a lot of times what happens is they'll dominate like a local area, but they have a very hard time kind of scaling. And so you can expect kind of revenue is like mid-seven figures. Usually they can get to like about $1 million, $1.5 million in EBITDA. And then the owners are taking quite a bit of compensation for themselves. Like if you're taking $500,000 and you live in kind of like a rural area or not a major metro, Uh, like you're rich, right? And so it's a pretty good job, uh, to have, uh, especially with the freedom it comes with. And, and do that for a decade, like, you know, you got paid $5 million and, and, uh, probably living pretty good.

There's also like a generational thing. So, uh, my father is a small business owner. My father-in-law is a small business owner. My father owns a, a produce brokerage, meaning buys fruit from a farmer and sells it to Walmart. My father-in-law owns a moving company. And I'm, I've like asked them questions like, um, like, do you, do you have managers? Like, how does that work? And they're like, what do you, what do you mean? I only have 18 employees. Like, we don't, like, there aren't really meetings. Like, I don't do one-on-ones. And, or they'll be like, well, how do you, do you just like do everything? Like, yeah, everything goes up through me. Or it's like, well, how do you hire? It's like, well, usually just one of the people who work there might have a buddy who hopefully like could, could do okay. You know what I mean? Like there's not a, the mindset is when you come from, I think a different generation and also you come from poverty and it's blue collar, you're like, dude, I make $800 grand a year, I'm rich. Like, what do you mean? Why would I do anything else? Do you know what I mean?

I also think that there's this element of like ambition can kill companies if you're in the wrong business. And so like we all get excited 'cause like Elon's like, we're going to Mars, right? Like I'm gonna put a chip in someone's brain. We're like, that's awesome. But I have one friend, he's got a retail store, he's got 3 locations in the United States. One of them is in New York. And I was talking to him recently and he's like, yeah, all of our profit comes from the New York store. Like, actually, I might be better off if I shut down the other 2 stores.

Right?

And so it's like, when you're in business, everyone wants you to expand, get bigger, like do all these things. And he started down that path, but he realized like, wait a second, like maybe actually the value of this business is that like, I know one market really well. I picked a great location, like it's a great business. And if I become ambitious, I will suck all the profits out of this business and try to reinvest it and end up just like blowing up. And so again, if you're running a tech company, like you have to be ambitious. The whole point is the power law. But if you're running some of these other businesses, like yeah, maybe you don't want to make more than $800,000 because in order to do that, you've got to double the team size. Your profit margin goes down, your stress level explodes, and like the odds of success don't actually line up with how much money you could make. And so I do think a lot about like, there's like an ambition product and market fit where it only pays to be ambitious in the right market with the right product.

Dude, my father, when he travels— my parents now, once they got older, they go to Florida for 6 weeks every winter. He travels, I swear to God, with a file cabinet, a phone that you could plug into the wall, and a fax machine. And he's like, well, I have to have my work equipment. Like, I can't work without this stuff. And like, I'll get texts from him and I'm like, dude, are you trying to post on Facebook right now? Like, this is a Facebook post, isn't it? He's like, isn't that what I just did? Like, and so like the idea of like evolving to some of these tools, it's like, dude, I'm like, I don't give a shit about growing this. I'm just going to like bail and it's going to die. Like there is no, there is no exit. What are you talking about? The exit's when I die.

I also think that small businesses like if people don't understand what goes into running these small businesses, like you just are like, oh, of course the business just runs. It's somewhere like a tech company. But small businesses make up 50% of jobs in America. And the country is literally built off the backs of these small businesses, right? In terms of GDP growth and all this stuff. And we all probably know stories, you know, similar to this where like they're going around with their equipment. I know somebody who's an extended family member. He has a business where it, it's like a chemical business and he like mixes things. In order to create the product. And he won't fly anywhere. He will only drive because when he can drive, he can put all of the materials in his car and then he'll like show up. So like when I was living in Florida, he showed up and he's like, can I just like take over the garage? And I walked in there and I was like, this looks like a, like a science lab. Like he's just like mixing things.

Yeah.

And then he like makes the product and he goes to the post office every day and like drops the product off so they can ship it. Like all this stuff. And you're just like, Man, this is incredible what goes into building these companies compared to like the tech world where just like, oh, like somebody like wrote some code and just like operates 24/7, 365. Money keeps coming into my account because Stripe's awesome. It's just a whole different way to kind of like play the game of business.

Dude, there's a great quote in venture capital of like, you can't put rocket fuel into a car. Like rocket fuel is great, but if you put it into a car, the car explodes. And that's what your ambition thing is like that. Ambition placed into the wrong vehicle. Will often just result in pain, not growth. And I had heard another interesting thing. I was talking to a guy who's one of the, probably one of the most successful VCs in the last, I don't know, 20 years. And he was talking about AI and he went and he met with a guy who is like a mega billionaire, private equity type of dude. And he goes to this guy, this guy's like 80 years old or something. And he goes to him, he says, hey, you know, I'm here. I want to get your advice, your wisdom on what I should be investing in. Like, you know, I feel like the whole world is changing. AI is super exciting. I want to be in the game. I want to be investing in the right AI projects, but I'm not sure, like OpenAI could kill any project at any given moment if they just release a new feature. The valuations are a little bit crazy. What should I do? And the 80-year-old PE guy goes, I think you should buy railroads.

And he goes, what? Oh shit.

And he goes, well, when, you know, Buffett has this great quote, which is that change is the enemy of the investor in in their style of compounding, right? Because if you want something that's durable, that's going to compound over 20 years, you don't want to be in an industry of rapid change where the leader one year could be gone in year 3. That's not— it's great on the way up, but it's terrible on the way down, right? And so he was like, it sounds like everything is changing so much. He's like, my approach is go find the things that are not going to change. They probably have less people interested in them right now. They're probably undervalued. And what I like about your line striping business, Pomp, is that it's a mix of both. So it's like an AI-proof type of business because it's painted lines on roads, but it's also going to benefit from all the advances in AI. Like, one of the big advances is self-driving cars. And so you would be the beneficiary without the competition versus if you said, I'm going to go create a better LiDAR system or a, you know, simulation system for, for self-driving cars. Okay, cool. But you're competing against the smartest people on earth in the most competitive field ever, where technology is going to like make everything obsolete every 3 years. And that's just a very hard way to win. Somebody's going to win for sure. But, but it's a very hard way to win versus what you're talking about with the line striping business.

If somebody's listening to this and they have a line striping business, I know how to grow this nationally. Like, please get in touch with me. I will help you. Like 100%.

Another thing. No, no, no. Don't sell to that suit, dude. Come to me and Sam. You're relatable. You're relatable guys. You know, I got a cool baseball hat. Sam's got his like denim collection over there. You don't want. Pomp the suit. This guy's on TV. He's too busy for you.

Sean, have you ever been inside a Home Depot your entire life?

Yeah, dude, I go in there all the time for advice. I'm like, I'm looking for some men. Can some boys come fix some things in my house? Here's the case of my car. Go.

One of the other, like, maybe an extension of this is not only like what's going to change, what's not going to change, but like, can you bring fresh ideas to old industries? So, uh, there's this new podcast that I've been listening to that's Fantastic. It's called Rainmakers. And it's this guy out in LA and basically he's like trying to find investors that no one's ever heard of before. And so he went and found them like, and I think it's not like no one's heard of, but just like the new generation hasn't heard of. And so one of the guys that he profiled was Philip Anschutz, who he owned a bunch of real estate. He did a bunch of like oil and gas, bought railroads. And there's like a tie-through of this guy's career where he basically tried to find like value no one understood. So he would buy up railroad companies, not for the railroads, but he'd buy because there was oil underneath the ground, right? Or he bought up like a bunch of local sports teams because he figured out a playbook of how he could get the stadiums for free, right? And then he'd have a bunch of real estate. But the one I loved was, um, he bought Regal Cinema, the movie theater chain, when all of the movie theaters were crashing and everyone was like, oh, this is a horrible business. Like you can't make money on tickets and food. And what he realized in his like aha moment was for 20 minutes before the movie starts, you have a captured audience. They're just sitting there looking at the screen. And so he started to sell ads and he made the movie theater an ad business. And then all of a sudden he completely changed the unit economics and was able to like save Regal Cinema, became this huge thing, sold it, et cetera. And so like, one, okay, like that's awesome. But also like part of being a ballplayer and like understand this, I listened to that podcast episode and we had a conference coming up and I was like, oh my God, I have the same thing as the movie theater. All these people are going to be sitting there. And so we went to advertisers, we're like, does anyone have a TV commercial that they've already made? Pay us and we will just like play the commercial in the middle of the conference. And we did it. And so you like start to realize that not only are you taking new ideas to these old industries, but then once you like see it, you can bring this across all sorts of different applications. And I really think like that is the beauty of what you guys do on My First Million, but also like these podcasts and Twitter, etc. Is it's just like find the ideas and then like capture them and apply them into your situation. And this has been going on for a long time, but now all these ideas are just much more readily available.

Dude, this guy Philip Anschutz, have you— do you know who this is, Sean?

No, I've never heard of him.

Dude, he's savage. He's super low-key. But yeah, it started real estate and oil, but then now he owns AEG. Do you know what that is?

The entertainment thing?

Yes, the entertainment thing. It's basically, I think it's the second largest ticketing service provider behind Live Nation. AEG owns music events like Coachella. So this old guy, he owns Coachella. He also, you know, AEG, you buy tickets through there. He owns all types of sports magazines. He owns a couple sports teams. He owns entertainment parks. He's like prolific. This guy's super prolific. And you guys want to know something else about him, Pop? You probably didn't realize this. I was reading, I read a lot of history. I bought this book about the American West. This fucking guy's the author. He wrote the, he wrote the book on like, uh, America expanding into the West. This guy's super prolific. This guy, Phil, uh, how do you say his name?

Philip, uh, Philip Anschuetz. AEG is literally Anschuetz Entertainment Group, right? Is the AEG. Uh, he, he's super legit.

He's amazing. This guy's amazing. I, I've, I've been fascinated by him, but he's, uh, pretty low key. Like there's not, I don't, I don't think you could find a biography on him. Uh, he's very under the radar. This guy's super fascinating.

That's cool. Okay. I like it. I'm sold. The, the, he wrote the book was a great twist, by the way. That is not what I thought you were gonna say at all.

Very fascinating guy. Um, can we talk about Pompless? Uh, so we have this segment. Sean, we have to do like a redo on this segment. So it started out with, uh, like years ago when my wife wanted to go work somewhere, I was like, where's a company where you can own the stock and it could like 10x potentially, but it's like a really safe place to work where it's got 500-ish employees. You can get good maternity leave. Well, it's cool.

I think it's worth saying, how old were you guys at this time, roughly?

Uh, this was, uh, I was 27, so she must have been 24.

So she's 24 years old. Most people, when they think about a job, they're just like, I want a job. What kind of job? A good job, right? Like, what do you want? You don't even know what you, you don't even really know what you're looking for. Whereas Sam, you, you went all capital allocator on her. You're like, look, this is not a job. This is an investment. You are trading your time for restricted stock units. We are going to pick the best RSU package that's out there. And you're going to think about this as one concentrated bet where you're going to basically get I don't know, let's say a lot of these companies would give you maybe $40,000, $50,000 a year of stock in addition to, let's just use round numbers, like, I don't know, $150,000 a year of salary. And so you're going to get over a 4-year period, you're going to get $200,000 of stock. And what you were saying was like, how do you become a millionaire?

Right?

How do you take that $200,000 of stock over that 4 years? How do you become a millionaire without having a great idea, without becoming an entrepreneur, without becoming a great investor, without without doing anything, right? No capital, no expertise. You're going to join as a, as employee number, I don't know, not even in the top 100, right? Uh, 1,500, 1,500, right? At a company that we all know about, we can touch and feel the product. So we're not betting on thin air here. And that fascinated me. You told me about this and then we created a whole thing around it called Sarah's List around her name, which was what are the 10 companies or so that we think fit this criteria today? And we did this and then we, we did like a round of it and they all turned out to be, or, you know, we hit like 7 out of 10. That would've hit the criteria that we had touched on. Pomp, we asked you to do your version of this, Pomp's list. Do you have any, we just told you about the prompt. We didn't hear anything you had to say. What are the companies today that you think fit this criteria? You could go be, I don't know, employee 500 or employee 1,000, get $200K of stock and might become a millionaire just off of the company continuing to grow and chug along these sort of later stage private company or public or private companies?

So I broke it up into 3 different buckets. The first 2 are like 10x reputation. So I don't think there's 10x left in the stock necessarily, but I do think that if you go and join now, they're still like kind of seen as cool and new and fast growing. And so your reputation, uh, and kind of your resume would 10x. Uh, those 2 are like pretty simple. OpenAI and Andrew, I think are both at this point where, uh, if you go and you join, like you may be able to make a couple hundred thousand dollars a year and like there's probably some upside, but OpenAI at like $85 billion, basically you have to build a trillion-dollar company to get, you know, 10 to 12x. And so, uh, I think that is like, you can make a really nice salary, you can probably get some upside, maybe, you know, 2 to 5x is like, uh, kind of base case. But really why you would join one of those companies is because the reputation and kind of resume 10x, uh, is kind of the, the value that you're getting there.

Androl was on our original list, my friend. We've, we've one-upped you on that one.

I don't even think OpenAI really existed Uh, the, the first time it probably existed as like a research lab at the time we did that episode and it was not on our radar. We, we missed on that one.

Yeah.

Well, one, I, I think that, um, you know, these companies, that's how they should mature, right? They should be like 10x economic opportunities and then 10x reputation. It never works the other way. Like there's no company that there's a 10x reputation opportunity first and then there's a 10x economic opportunity. Like the economics have to be captured to some degree and people be like, oh, that company is successful. And then that's where the reputation kind of follows.

So let me ask you, you worked at Facebook and Snap, two, you know, blue chip logo type of things, but also at one, you know, at different times have been incredible, you know, financial things too. When you joined those, did you think about them from a logo collector first mentality or a stock collector first mentality? What in your calculus, I'm sure both were beneficial, but which one was more beneficial in your case?

Yeah, I mean, Facebook's probably the best example. I built and sold this company. It was kind of like in social media analytics. We used a bunch of the APIs. I'd gotten to know some people at Facebook. When we sold the company, I like made enough money to like make more money than my friends who had jobs, but not enough to like retire or anything like that. And the guys at Facebook, like, what are you going to do now? And like, for whatever reason, I never even thought that like Facebook has like, you know, a building with like hundreds of employees or like any of this. Like it was just kind of like this thing I used and I talked to a guy over email. And so they're like, why don't you come out here and like interview for a job? And I was like, cool, what job? They're like, product manager. I had no clue what a product manager was. So on the way there on my Kindle, I bought The Art of Product Management, which is a book about product management. I read it, I went into the interview and I just regurgitated everything I remembered from the book.

The king of bullshit.

But I was just like, I mean, like, that's kind of what a product manager does, right? It's like, they kind of just like get enough information. And then just like say some buzzwords, right? And like get the product out the door. And so like definitely huge imposter syndrome when I started working there. And I remember the last interview actually was with Sam Lessin, who now is like, you know, very well known, et cetera. And Sam got on and I didn't know what to expect because they were kind of like, hey, like this is like the boss guy, right? So like, you know, be on your A game. And he got on and he was like, let's talk about Beacons. And I was like, what? And like the Facebook Beacons had just come out, like kind of like RFID stuff. And he just wanted to brainstorm. And I was like, oh, this place is different, right? Like, that's not like a normal interview. And so the reason I took the job was not the money. Like it was a good salary, but it wasn't anything crazy. This was at the beginning of 2014. The stock was probably like $50.

Oh, you got a 10x or then?

Well, I sold it and bought Bitcoin way back.

Were you about to say the reason you joined was kind of the people and the culture was different?

Because I, the first two companies I built, I couldn't get them to grow past a certain point. And so I pretty much came to this like fork in the road. I was like, I can go to business school and like pay to try to get this education, or I can just go join the people who seem to be like the best in the world at growing things, which was the Facebook growth folks. Uh, and they'll pay me. And like, that literally was the evaluation. And so I went to Facebook and they blew away my expectations. Like, sure, you get some, you know, resume, uh, benefit and all that kind of stuff. But what I found in my career is kind of like college, like no one actually cares where you went to college after like maybe the first like 3 to 5 years of your business career. Working at a place like Facebook, unless you're one of the first maybe like 200 to 500 employees, it kind of just is like, all right, you're like kind of legit. You know, you worked at a place that has some sort of high bar, but now there's 80,000 people that worked at Facebook as of like the end of last year. So it's kind of like 80,000 people got in, right? You know, does it have the same, you know, kind of cachet as it did a decade ago? Unclear.

Dude, Sam, did I ever tell you when I interviewed at Facebook?

You didn't know. I did not know that.

So when we were going through the acquisition process, Facebook, it was going to go, we were going to sell to Facebook, not, not, uh, not Twitch. Um, they had the higher offer, the better offer, and they flew us out to Seattle, I guess is where we went. And, um, they were like, oh, you know, as a formality, like your whole team has to go through this, like kind of like leveling thing. So you, you interview, you're all in, but like you have to get leveled. and you gotta do it too. And I was like, okay, great. I'm excited. I've always wanted to know what this process is like. But then a part of me was like, shit, I better not blow this one, right? Like the emperor has no clothes. Let me make sure I don't blow this whole deal here by, by going in wrong. So I do the interview process. During the interview, I was kind of like you, Pomped. I was just making up, like, I was literally just making things up every single question they asked. I had no idea what the answer should be. And, you know, it was completely out in the in the blue because I had done the interview process with the other people who were looking at buying us, right? And in theirs, it was like, tell me about a time where you showed resilience. And I was like, oh, you know, whatever. Yeah. This girl rejected me in 7th grade, but I didn't give up. 8th grade, I got her, right? Like, whatever. It was like some stupid, like, character type of tell me a story. Tell me about a time you disagreed with somebody, but you've found resolution. Facebook was different. They go, okay, let's pretend that you just released a feature. And, um, you know, you come in the next day and the chart of the usage looks like this. And he showed this curve where it's like, you know, it was like normal and then it like drops off a cliff. And he's like, but it's not around the feature you released, but this is this adjacent feature. Here's what the usage looks like. Walk me through, like, all right, how would you approach that? What would you do next? And I was like, and I'm so dumb, but I was like, well, I'd go, I'd go ask the guy who works on that and be like, hey, do you know, uh, what's going on with this feature? And they're like, Okay, I like that. And then what would you do? I was like, well, then I'd see what he says. And then based on what he says, that'd lead to my next question. If he doesn't know, then I would do this.

What a stupid interview.

No, it was a, it was honestly, it was a great interview. It was the best interview I'd ever done. All of the questions were like this, where there were real, real scenarios where they got you to basically, it wasn't a riddle, like some abstract riddle about like how many toilet seats are there in Bay Area. And it wasn't canned, um, you know, pre-prepped like character questions where you just cherry pick one example that makes you look good versus the, you know, reality. I was like, oh, they're, this is a problem solving job and they're trying to see how I problem solve. And there were all different variations of try to solve this problem, but it's like a real problem, not like a very arbitrary problem that like doesn't even, it's not even relevant to what's going on.

What level did you get now?

What, what was it last, last, last pod? I don't mean to toot my own horn, but beep beep. The guy told me that it was the highest, it was the, it was of all M&A that they had done, it was the highest, um, like feedback rating they'd ever got. Now, when he said that, I knew I had been pretty much bullshitting the whole time during the interview. So I was like, I respected them even more. I'm like, these guys just want to win the deal. Like that's clearly what they want. They don't actually care about my interview. They know that they didn't just flatter me and that this is going to totally work as it is working right now. I could feel myself blushing. I was like, wow, these guys are really smart. They threw out the actual interview results and they just told me what I wanted to hear to get me to pick them because they already had decided before the interview that they wanted to buy our company. Anyways, the last thing I was going to say, though, there were so many people that were at Facebook that you've never heard of because there's people you know of at Facebook. There's Zuck, there's Sheryl, then there's like the Chamath level. Then there's even like Sam Lessin. The guys I had taught, they interviewed with us. I guarantee you guys have never heard of them. Do you know this guy? Vijay, Rajeev, do you know this guy Vivek? You probably never heard of these guys, right? They were so impressive. These guys were so impressive and not just impressive, like in the interview, then their track record was impressive. I was like, so what are you even working on here at Facebook? I've never, you know, heard of you guys. They're like, well, we built the games, like the HTML games inside of messaging. And I was like, okay, how'd that go? Like, do some people use that? They're like, well, honestly, it kind of failed in this way, but there was this one part of it that was actually pretty successful. and it brings in like, whatever, it's like, it brings in $500 million a year now. And they're like, you know, that was kind of like an okay hit, but our big hit was working on this. And he's like, yeah, this guy Vivek, he's like, you know how Office went from like, Microsoft Office went from something you buy a disc and you download and you like type in the key, you pay $30 once to like this thing in the cloud, Office 365 that you pay every month for? He goes, yeah, he created that. Like he was at Microsoft. He like created it at his desk. Nobody kind of believed that that's the direction they should go. He did it anyways on his own nights and weekends. and then like powered that through and got that approved. Now that's like the way that Microsoft works. And I was like, you guys are the no-names at Facebook. Holy shit. Uh, the level of talent at this place is insane, dude.

It is insane. I remember taking tours there. Uh, my wife worked at Facebook and I would just walk around the campus and I would just see some of the conversations and hear some of the conversations. And I was just starting The Hustle, which is just a daily newsletter. And I was pumped that I hit 100,000 people a day reading it. And I just remember walking around and I'm like, I'm, I'm a piece of shit. I'm nothing. Like, I am nobody. Give me one of these Facebook vests. I want one of these. I'm in.

Did you see the vending machine where they have like MacBook chargers that you could just like push A3 and it's just a giant like brick charger will drop out for you?

I'm like, dude, I just bought 4 computers on Craigslist for $800 a piece. And that was a big deal for me. And like, I'm out here and you guys have a vending machine with mouse and Dr. Dre headphones in it. Like, what the fuck? Sign me up. I'm in.

The thing that Sean was talking about with the interview, um, so there's 3 different tracks in the interviews when I was there. Um, and I would, I didn't believe I was a good interviewer. Like, I didn't know how to pick talent basically. And so one of the things that you can do is you can like volunteer to do the interviews more often. Um, as a product manager, like they don't have like, oh, that's the person who does all the hiring, but the current product managers hire the prospective new product managers. And so like the current team kind of like does the interviews, right? And so of these 3 tracks, the one that Sean talked about was the favorite one that I like to do, cuz it was like the most practical. And so the example I used to give is like, you launch something, 50% of your traffic is down. Uh, you come in Monday morning, what do you do? I probably did over 100 interviews in like an 18-month period. And so you hear all these answers and there's only one time ever somebody said something to me and I immediately was like, hire, like strong hire. He goes, um, I would immediately alert the entire team.

We have a problem.

Like everyone else would jump to solve the problem, but it was so obvious. Like this guy's worked on teams before. He understands like what happens in these scenarios. Like communication is key. Like everything that was wrapped in this like one single sentence. And I remember just being like, man, you can tell the greats from like the pretty goods in, you know, a 30-minute conversation, just walking through a practical example because all of the, uh, lessons learned show up. And so I do think that's one of the strongest things that Facebook does in terms of like talent filtering.

What are the other companies that you like? All right.

So there's a bunch of companies that I'm going to put in like the middle bucket, which are like the 10x potentials. Eight Sleep, I think is a huge business.

Really? I think they're huge. You think it's 10x though?

I think it's huge, but not a business.

No, no, no. Yeah, I think Eight Sleep. So like, You know, look, I'm very good friends with a lot of folks there. I think that they are probably one of the best operators, like team of operators. They do a lot of revenue. They have only like 80 or 85 employees. I believe that they've publicly said that the company's been profitable and they're selling a hardware product plus all of the software. And some of the things that they're building now are just like really cool. And I think a lot about like 10x economic opportunity is not just like, hey, can we make more money? But you also have to really, really strong mission. And so their whole idea of like, for 8 hours a day, no one tends to a human. Can they compress that? Can they make it healthier? Can they, you know, do things like body scans, et cetera? Like all these kind of cool things. I think that's a huge opportunity for someone. The second is Varda. The whole idea of like, let's go to space is not new, but let's go to space to help us back here on Earth is huge. And so what Varda does is they've created space manufacturing facilities. They launch them up into Space, they're right now manufacturing drugs in zero gravity and then they're bringing it back to Earth. And so I think that, that's a pretty big one.

Uh, explain that. I forgot. What's the reason to do the manufacturing in space?

It's a little unclear as to like what all of the reasons are going to be so far, but two quick ones are like, there are some drugs that, uh, it's either very difficult or not possible to, uh, currently manufacture, you know, with gravity. So like zero gravity is a huge component of it. And then the second thing is if they're able to do this correctly, it actually may be cheaper to do some of this in space than it is on Earth. And so it's like their big macro bet is just like use space for the benefit of Earth rather than everyone else who wants to go to space to like conquer Mars or, you know, the moon or, or, or whatever else.

But dude, how does that make sense? How could it be cheaper to do in something in space? You have to get to space in a rocket and you have to have labor in space. Like how could it possibly be cheaper?

There's no labor. So that's the thing is they've built this like automated manufacturing, like box basically. And so you don't need any labor. And then now, like the other thing you have to remember is like rocket launches are super cheap compared to what they historically were. And then it's not like SpaceX is like getting a rocket just for Varda, right? They're like bringing tons of things up there all at once. And so now you have like shared cost of an already, you know, 10x or more cheaper rocket. And so the math ends up working in a really interesting way.

We got, we gotta get that guy. What's his name? Deleon. We gotta get him on the pod to explain this. Yeah. I'm be like, and I'm not gonna let him do no hand wavy shit. I'm gonna be like, no, no, no, no, no. Oh, the box manufactures it in space and it's cheaper than renting a place in Lexington. Like, all right, walk me through that line by line. There's no way, right? Like, this is crazy.

You guys bring him on and we'll see what he says.

He's obviously right. Like he's, he's, he's not wrong. I just don't get it. And I want somebody to explain it to me cuz there's gotta be other people out there that are like, Uh, how does this work exactly?

All right, everyone, quick break. Cause I've got a thrill of the shill. I've got something to shill. So here's the deal. About 8 weeks ago, I released this new podcast called MoneyWise where we break down different people's financials. Meaning we look at what their income is. We look at how much money they spend and they break down their portfolio. And then we'll dive deep on a certain topic. That's a little psychological. Like what do you spend on that makes you happy? Things like that. Well, I said I was only going to make more episodes. A few people begged me to make more because they're really hard to make. And you did. So I made more. So we have a season of 7 episodes. The first one's released today. Right now it's live. And this first episode, it's with a guy who spends roughly $250,000 a month. And we broke down exactly what he spends his money on, his net worth, his portfolio, everything. It's pretty surprising that people give out this information. And so I'm really proud of this podcast. So you can check it out. The first episode is live now. Look up MoneyWise. You can find it on YouTube, but right now it's not video. It's only audio, but the audio is on YouTube. And then Spotify, iTunes, wherever you get your podcasts, check it out. And then tweet at me @TheSamParr. Let me know what you guys think because I'll make more after the, these next 7. But again, only if you love 'em and I need to know if you actually do. So it's called MoneyWise. It's a podcast by Hampton, my company, joinhampton.com. And let me know what you guys think. @TheSamParr is my Twitter. All right, back to the pod.

So the, the third one, I, I'm shy to share this one cuz Sam's head's gonna explode. But Figure AI definitely I think is one. So for those that don't understand what they're doing, you know, human labor is becoming a huge problem where there's just not enough people to do all the jobs. People get sick, they're tired, they only work so many hours, all that kind of stuff. And so this rise of like robotics, but not just like Boston Dynamic, like dog robots, actual like what they call humanoid robots. So these are like human-looking things that walk around a warehouse. They can pick things up, they can pack things, they can kind of do all the things a human could do. And one of the best things I texted Sean this, like one of the best ways to evaluate a company is like what enemies they pick. And so here the guy Brett, who runs Figure AI, he basically picked Elon Musk as like his competitor. And so like you gotta be a little crazy, you gotta be a little ambitious, you gotta raise a lot of money. This guy's raised, you know, I think over a billion dollars now to go after this opportunity. But the other thing that's really interesting is like, as an investor, historically people paid attention to demographics, how old a population was, you know, how fast it was growing, all that. Now you're going to have to actually pay attention to robotics. And Balaji Srinivasan has talked a lot about this, where, uh, if you don't have enough people in society, you're going to have to replace them with robots. And so measuring like how many robots are coming off the production line may be a better sense of like where you should be investing versus the human demographics. Um, but I think that's a big one.

Once they raised their first round at $300 million, I went and toured their like factory or whatever. And I went back, I go, Sarah, let's move there. You're gonna get a job there. We gotta— and she's like, uh, I don't know anything about robotics. I'm like, I already bought the books. You got some reading tonight. Uh, we're gonna get you to work, honey. It's gonna be okay. We're gonna get you caught up. It's like I'm the tiger mom. Uh, it's like, don't worry.

We, we enrolled you in Kumon. You, you'll be ready in 3 weeks.

Yeah, the coffee's brewing. It's gonna be a late night. So, uh, come on, chop chop, let's get to work.

The, um, I've got 3 more for you is, uh, Traba. I don't know if you guys have heard of, uh, of this company. It's one of the fastest company, uh, growing companies in Founders Fund's portfolio. What they figured out is, uh, similar to like Uber where you press a button and a car shows up, all of these light industrial manufacturing facilities they need tons of labor. So kind of the other side of the problem that Figure's going after. So that what they do is they go to these like temp, uh, work providers. But the problem is that the temp work providers, you'll be like, hey, I need, I need 50 people tomorrow. And they'll be like, cool, we'll send you 30, because that's all they have. And then of the 30 that they're supposed to send you, like 20 of them show up and 5 of them are like hungover from the night before, right? So it's just like, it's a horrible experience, it's super expensive, all this stuff.

And this is the company where like the investors brag about the, like, on their about page, they're like, we're a 996 company, right?

Savages. I, I met the founders and they were like, we have an Olympian's work ethic. And I was like, I'm in. Like, we're just gonna outwork everyone.

You know the truth about this company. So I, um, I should have invested in this company. I had a chance to invest in this. I was like, I, and then before I even heard their pitch, I said I'm in because I heard something very similar to what you just said, Pom. Not the Olympian's work ethic, The spelling bee champions work ethic. The guy who started the company went to Duke and I know his brother and they both, the brothers were like ESPN on the ESPN spelling bee. Like, you know, one of them won it and then the, the guy who started Traba, he's the guy who fainted mid-word. Do you remember that clip of the guy who starts spelling the word, he passes out, stands up and finishes the word? It's the most incredible clip. I did not know that in ESPN history. Forget LeBron, forget Michael Jordan. This kid starting to spell a word, passes out, gets up, Does nothing about passing out and just finishes spelling the word flawlessly was absolutely incredible. He's the founder of Trabba. When I heard that, I'm like, I'm in. Just send me, tell me where to wire the detail, uh, wire the money. And then unfortunately got too smart. I asked my partner who knows a lot about staffing. He's like, well, it could be hard for all these reasons. And I was like, I guess, you know, more than I do. I'm just basing this off the spelling bee performance. Probably turns out I should have just trusted my gut.

Turns out he's done all right.

I met him, I met his brother at a party and he had won the Scripps spelling bee, right? I've seen him on ESPN. I see him at a party. I recognize this kid from ESPN. I'm like, you, I've seen you before. I was like, you're the spelling kid. He's like, uh, yeah. How'd you know? That was years ago. And I go, dude, this is annoying drunk Sean. Dude, dude, everybody wait, dude, spell my name. And he goes, I don't know your name. I go, it's Sean. And he goes, I don't know, S-H-A-W-N. I go, no, I beat him. I beat him. As if I spelled something, as if him spelling my name S-H-A-A-N meant anything. And that was the only time I ever interacted with this guy. The next day I was mortified. I was like, dude, what an absolute douche I was last night. And I've been hoping to meet this guy again so I could apologize for this 15 years ago. I'm like, bro, sorry I made you spell my name at that point.

Now we know why he didn't send you the wire details.

No, no, that was his brother. Yeah, that was his brother. Two different guys. He became, his brother became like a very successful poker player and then did a bunch of interesting things that way. Both, I think spelling bee is like one of those hotbeds of like, if you can get obsessed and about this like intellectual pursuit, you know, means two things. Your parents are incredibly overbearing and you're incredibly smart. And so, you know, that usually will lead to success.

100%. Next one is placer.ai. So I, I've invested in most of these companies. The only one, OpenAI, Anduril, and Figure AI, I wish that I had. But Placer, they basically— it's this Israeli guy and he was like, hey, I'm going to use like cell phones to create better mobile analytics. Not like what you're doing on the phone, but like where you are. So originally his like pitch was like, hey, I'm going to like be able to tell people when you drive into the parking lot and like what aisles you walk through in the store. And we're going to sell all this analytics like really, really granular. Kind of location data. They just publicly announced that they're doing $100 million in annual revenue. And so when you look at that, again, like it's for real estate, right? That's where they've seen a lot of people buy. But like, I think also like some hedge funds and a couple of other folks buy the data as well. You know, $100 million is pretty much de-risked it. And this is like if you want to have a career in like B2B, you know, software analytics, like obviously you're not going to go to like an Anduril. right? This kind of like off-brand, off-industry. But I think placers are like still got probably a 10x potential upside.

What's their valuation in their latest round?

I think the latest public one is like $1 billion. So kind of like 10 times revenue. So it's not hard to see a business that, you know, already doing $100 million in annual revenue, growing pretty quickly. You know, so it's got some upside to it.

This is probably my favorite one of yours so far. You got any other ones? You had one more maybe?

I've got two more that are kind of related. So everyone's all excited about like the deep tech stuff. I invested in this company called Rainmaker. And so Rainmaker makes it rain. They're flying precision drones into clouds and they're dropping chemicals in the clouds to make it rain. And so like, that's kind of crazy. That is probably the riskiest one.

Wow.

And then Kind of simultaneous to that, uh, if you look at like what's like the cybersecurity version of all these deep tech companies, there's this guy Joshua Steinman who left, uh, I think he was on the National Security Council, uh, in the Trump administration. And he like realized, wait a minute, like there's no companies that protect all of our public infrastructure. So like the example he gave me was, uh, imagine what happens if someone can hack like the water treatment plants and change the pH levels of the water. And have like massive, you know, carnage or like, you know, really, really screw with like a local area by simply hacking this like one facility that's public infrastructure and doing something nefarious. And so he's creating a company called Galvanic. Uh, again, it's super small, probably, you know, on the higher end of the risk, uh, spectrum, but just like a really cool mission of, um, if you're able to protect public infrastructure, there's like unlimited demand for this type of service. and you can see how these businesses could get quite big, uh, given, you know, all the concerns with our adversaries and people kind of getting better at cyber warfare, etc.

Dude, you know, I love that idea. That's a great idea.

That's great. And what was that called?

Galvanic. G-A-L-V-A-N-I-C-K. Wow, that one and this Make Rain thing are, are pretty wild. Yeah, the Rainmaker one, like, um, people have been doing, it's called cloud seeding. People have been doing that for a while. Uh, and they're specifically doing it in like China and the Middle East and stuff. But, uh, there's a world where like, not only can they make it rain, but also if you can change the weather pattern, like you may be able to like prevent, uh, hurricanes from hitting land and, you know, doing stuff like that. Now, of course you get into this weird world that like the second someone's like, hey, I can like change the weather. People are like, right. No, God, like, yeah, you're trying to play God, whatever. But I think that where they're starting in terms of like going to farmers and being like, hey, you know, get what is basically precipitation in the clouds just to fall. You know, it's a worthwhile mission and the founder's awesome. He's got a mullet. He works out, he has a squat rack in the office and he's just like, we are going to be successful. So, you know, let's see what happens.

Maybe I should do that for all my portfolio companies, just gift them a squat rack. Just increase returns in my portfolio 20%.

I mean, there, there is definitely, uh, gotta be some sort of study that like, one, people who just are in better shape, like you have more energy, you think clearer, you know, all that kind of stuff.

Dude, we gotta ask you about two things. This Solana bet you did, explain this. This was, uh, this was baller. What, Sam, do you know about this?

No. What happened?

So, um, I had a bunch of, uh, ETH, uh, Ethereum. Back from when I was mining it and it was just kind of like sitting there, had gone up a lot. And towards the end of last year, I was sitting there and I was just like, why am I holding this? Like, deciding to hold an asset is an active decision every day. So I'm basically like saying I should go long Ethereum every day that I don't sell this. And I'd been scared about triggering taxes and like all like the normal lies you tell yourself as to like why not to make a decision. And I just said to myself like, okay, if I am going to sell this and not buy more Bitcoin, what else would I buy? And so I like went through a bunch of the cryptocurrencies and I was just like, I think Solana is going to go up a lot. It's going to go up a lot more than Bitcoin. I think it's going to go up a lot more than Ethereum in this specific bull market because of the smaller market cap. There's a lot of energy and excitement around it and all that. And so over the years I've learned how to kind of like put positions on. Which I think is also like a very underdiscussed thing. I didn't like sell everything and then just buy this asset. Instead, what I did is, uh, I bought a little bit of Solana at $48. It started to go up a little bit more, and usually when that happens, people are like, oh cool, I was right. Instead, I doubled the bet at $55. Like, the position is going in your favor, and so I doubled down because it's telling me— like, the market's telling me I'm right. It kept going up. Uh, I then sold 100% of the Ethereum and I bought Solana at $73, I think it was. And so it gave me like a blended price around like $65. And so Solana just went on a tear, went to $120, and I was like, oh wow, that was awesome. Like, hopefully it keeps going. And that was it. I was like, done. But then the price started to fall, and as it fell, it fell from like $120 to $110 to $100. And I woke up one day and it was at $80. And over the years, I've just learned like nothing's changed with the thesis. I got no more Ethereum to sell to like, you know, convert over. So like I'm going into the bank account and I just went and got more cash and bought it at $80, which happened to be about a 30% drawdown, which historically in crypto has been like a pretty good spot. And then it's ripped all the way up to like $190-ish. And so it's been a great trade, but also it is— I'm only able to do it because I've been doing this long enough and like learned how to put the positions on, how to think about like when the position goes in your favor to add, not like sell and take profits. But you also have to know what you own. And I don't think I'll own Solana 5 or 10 years from now. It's very much like for the next year, I'm very bullish on this. And then we'll see what happens. Whereas Bitcoin, I'll hold forever and don't think that I'll ever sell it.

First of all, I mean, kind of very good trade. So first of all, very, very well done. Not easy to do what you just described. The psychology around what you just described is I think more important than on the why. But I do want to ask you, you said the word thesis on Solana. So I have a buddy who has an insane amount of Solana. He owns like $40 or $50 million of Solana. And I think this guy's nuts for doing it. He's a very smart guy in general, but I'm, I asked him, I'm like, why, why do you own this absurd amount of Solana? This isn't like, what do you know that I don't know? Please tell me so I can go buy it if you have some like incredible thesis. And he's like, I just, I think it's going to go up. That number go up thesis. And he's like, well, I think it's going to be a bull market. In a bull market, it's usually these kind of like second, third, fourth, fifth coins that like get the highest run-up. I see a lot of energy in the ecosystem. People like these, like all of a sudden it starts to sound a lot like, I don't know, like, you know, we're talking like horoscope type language for me. And so I'm like, and I've been telling him, I'm like, dude, please just sell this thing. And then he's like, oh, I just feel like the energy. I feel like I see it a lot on Twitter. It's like, oh my God, dude, are you sure that this is the reason to have $40 or $50 million of Solana? That is an absurd amount of this thing.

Yeah. On one hand it sounds crazy. You're like, oh, it's like the energy, whatever. On the other hand, like in this person's defense, what I would say is when I first started investing, somebody told me like, follow the developers. Like that's like a great investing strategy. And so there is like a lot of development activity that's shifting. The other thing is there is a pretty like well-thought-out investment strategy of like, I want to buy the things that everyone's going to buy tomorrow today.

Rather, like, I—

like, if everyone else is going to build a thesis around something, then I want to buy it, uh, before they do. Like, be contrarian, that becomes consensus. And I love the George Soros quote. He's like, when I see a bubble, I rush in, right? Like, the whole point is that bubbles kind of like go bigger and further than you think that they can. And so let's just say that like Solana is a bubble. Selling an asset at the beginning of a bull market is usually in crypto like a pretty bad strategy. But also as assets get bigger, the returns go down. And so I don't think it's crazy to say like, oh, there's a lot of activity around this. There's a really strong narrative or meme. There's tons of coins and things that are being launched on this. And Bitcoin, Ethereum, and Solana probably all go up. But if you had to pick one of the three that goes up the most, well, it's probably the smaller market cap asset that likely will outperform. And, and so I don't think it's like the craziest theory. The question is, what is your thesis on when to sell? And that's what people in crypto, including myself over the years, like we have messed that up over and over and over again because timing markets is nearly impossible. And when an asset goes up hundreds of percent, you're like, well, of course it's going to double from here. And then next thing you know, it's down 50%. You're like, shit.

So what are you thinking with the Solana one? What are you going to do?

My theory in crypto now is selling is less to do with price levels. Like, like in the public markets, people will hold a stock and they're like, okay, if this ever gets overvalued, I'm selling, I'm trimming the position. In crypto, it's much more cyclical. And so I actually think that selling is more about what— where are we in the cycle, like time, than it is like value, right? Because there, it's hard to like, what is the value versus price? And is this overpriced or underpriced? Like, it, it, it's very difficult to do for these assets. So I think about it a lot more as like, is it the end of this coming year? Is it, you know, the beginning of next year? Is it the summer of 2025? Like, there's some timeframe that I'll come up with and I'm like, I don't care what the valuations are. Like, I'm just selling because it seems like the right time in the cycle more so than I have a price target for any one of these assets.

What was the second thing you were going to ask him about, Sean?

Andrew Tate.

Uh, Pomp interviewed Andrew Tate before he was Tate. You, you were on Tate Before Tate. Uh, what's the guy like? You met him in person, right?

Um, I did meet him in person. He, uh, uh, did an interview together in Miami.

Um, why'd you interview him at that time? Was he kind of big? Is that, was it like kind of interesting person or what was the context?

I don't really think that he had, maybe it said a couple of crazy things online, like crazy in the sense that, you know, people were like, oh, whatever, like reacting to it. But, you know, he's a 4-time world champion kickboxer. We had like DM'd a couple of times. I actually thought that he was just like an interesting person from the perspective of like he had a lot of commentary about things that people either weren't willing to say or like made me think and didn't mean I agreed with everything. It's just like when you, when you find those people, you kind of like, hey, tell me all your worldviews and then I'll sift through the bullshit and figure out like what I agree with and what I don't. And so I interviewed him and he definitely said some like things that I was like, oh, I can't release this interview. Like, you know, this is kind of like a little spicy. And so what was interesting is I was like, hey, I don't know if we're going to like actually ever release this thing. Like, let's just kind of put it on ice and we'll go from there. And then a year later, like society had changed, culture had changed. And he started to like become much bigger. He went on a couple of podcasts. He said a lot of the exact same things. And people didn't have a problem with it. So like, it's interesting, like he was saying the same thing for like a year or two years, but actually culture became like a little bit more acceptable of some of the commentary and including things around like, you know, uh, um, the vaccine and like that type of stuff. And like, I think people just had more information to kind of evaluate these situations. And so I was like, all right, it's still a little spicy, but like, let's release it. And one of the like final points to deciding whether we were going to release it or not, was I didn't really care so much about the like really hardcore perspectives as much as like, who are you as a person? Like, how do you make money? Like kind of like, you know, the business and the person behind these thoughts.

What was his business at the time? Hustler University? Like his course?

He had a bunch of them. They were like online businesses. You know, he described them actually. It was the first time that ever a podcast episode I had done was like cited in articles where people were like, writing hit pieces or like, you know, critiquing him. And then they were like referencing things on the podcast. So I'd get like a Google alert notification, like, oh, like you've been mentioned in like the New Yorker or whatever. And I'm like, oh, must be awesome. Like, obviously I'm a cool guy. And then you go and you're like, oh, I'm in an article where they're like, you know, talking about misogyny and like all these things and like, oh, okay. Um, and so, uh, at the end of that interview, he, he asked me, he's like, what's the one thing you disagree with me today? And what I say to him in the interview is I said to him, I said, every single thing that you're saying has like this like kernel of truth, but then you like extract it and have this like bombastic rapper that basically is going to go viral online. And he kind of like cracks a little bit and breaks character. And he's just like, ah, you're a smart man. He like shakes my hand. And I think like that was the biggest takeaway was people don't become viral and successful without being highly intelligent. And he very well understood the human psychology and the way the internet worked. And so he had a message, he wanted to get that message out to people. He was able to communicate in a very effective way. And so people might not agree with everything he said, but if you look at his tactics, they have pretty much become standard in a lot of people's like marketing today. And so people kind of like saw this guy be successful on the internet, get a message out. And now you have a bunch of companies and individuals that are trying to replicate it. And maybe it's not the same message, but like that structure was pioneering. And so you've got to be able to like evaluate people and say, hey, I understand you for who you are. I agree with some things you say. I disagree with other things you say. And then like, can I learn something from you? And to me, the learning was he really, really understood marketing and communicating on the internet in a way that I don't think a lot of people did before they kind of saw what he did.

Yeah. And he kind of paid the fucking price for it too.

Well, in hindsight, like that's the second lesson is like, don't become the main character.

Right? Or if you are, you better be ready to pay that price.

Yeah. And it's just, you know, I ask myself a lot, look, I have a number of very successful friends who nobody's ever heard of before. Right. And I'm sometimes like, man, that's an amazing life. Like you figured it out. You figured out how to be super successful and also no one knows who you are. There's a lot of other people who like, they enjoy talking to folks, right? You know, Patrick Bet-David, I saw a clip of him recently and he was talking about the fact when he sold his insurance company, he was like, I wanted to do something for the rest of my life that I enjoyed and talking to people and learning from them was like the thing. And so he went and he did all this media stuff and whatever. And so I think you just gotta like know who you are as a person. Like, what are you trying to accomplish professionally? What is your comfort level with like privacy and like personal you know, kind of notoriety. And it's different for everybody. And so yeah, if you wanna become the main character, then definitely you gotta be ready for, you know, everything that comes with that, good or bad.

Well, dude, you're dressed as the main character today.

Yeah.

You came on here.

You're looking good.

Best dressed award for 2024 is in your hands.

Nice.

Somebody has to come take that belt outta your hands for My First Million. Thanks for coming on, dude. It's always fun to talk to you.

Thanks for having me.

All right, that's the pod.