$3.6M SaaS Founder Starts Selling Courses, The Video Formula That Made $500K

0:00How you can trick the algorithm into making your content viral.

0:30manufacturing news greater than reporting news and so when he says ghost creators i'm like what does this guy mean right again so his profile says 1 billion views generated destroying ads with ghost content at 10 to cpm and so he has this thing called virality.cc i know that's like a discord group there's another discord group called uh clipped.exe or something like that and then you have wop and what's happening is hiring a lot of these kids um and they're giving them these long-form pieces of content they're having them chop up to the different different different accounts and some will go viral some won't but he's just saying that if everyone's seeing the similar account at the same time it has a much shot much higher shot on goal or a chance to go viral and we've seen that I mean Neil that's not what you and I do but you and I have talked to a lot of people that do this and I think it's worth calling it out like it's not saying that we do it right now I certainly don't do it right now I don't think you do it either but if we did it we probably do something similar to this maybe I'm speaking for myself go ahead Neil the way i look at it is i think these are things that you and i would have done maybe 15 ish years ago maybe 10 and uh i look at it now as you and i try to look at things from a lens of what's going to create sustainable growth and revenue and what aligns with us in the long run and we think we'll keep working five ten years from now and if it doesn't we usually don't do it because we just think it's uh too short-sighted dude you want to see something you want so So I think these founders, so this is a company called AppMafia.

1:56I don't know if you heard about this, but one of their leaders is he's a founder of a SaaS. I think he's only like 18 years old. And they're doing$3.6 million in monthly recurring revenue. So let's just call that like a little over 40 a year in annual recurring revenue. The software is called CalAI. So I'm going to share my screen with you over here. The thing is he combined with a handful of other quote-unquote SaaS founders. And I'm saying quote-unquote because just watch this video real quick. And I don't know if you can hear it, but I'm going to play it right now. Are you ready? Yeah. My name is Zach Dadigari.

2:28I'm 18 years old. Can you hear it? Yeah. Last month, I made$3.6 million. Now, I live in a mansion with all my friends, party almost every night, and shit, I got to go to class. I really wonder why there are so many teenage millionaires now. It's because the game is easier than ever. Anyone can do it. And if you don't, you're just fucking lazy. The truth is, society lies here. And money does buy happiness. And you won't get there by playing it safe. ACs and tech billionaires have been gamekeeping this formula for decades. But we cracked it. And now we're sharing it. Okay. So get this. That's cool.

3:10I like the video. So get this. Because it's a little kid being like, screw you. We figured out a way to do better. I'm not saying it's real or not, but it's interesting. So$70 million in combined revenue, okay? 237 million downloads, whatever that means. And then they're selling a course. I think the course is like$5 ,000. And then they have all these testimonials here, okay? Now, my whole thing here is I think it's great. I think these guys know how to get distribution. The Cluely guys actually came and they copied them. So you had a bunch of Asian people in there saying, hey, we're launching a course to$5 ,000 or so.

3:44but there's people that are throwing shade at especially the guy doing um 3.6 million a month saying that look if you're doing 3.6 million a month why do you need to be selling a course right now and why do you need to be selling this lifestyle um and move into this course per month or per year month he's doing 3.6 million per month they're doing 70 million a month between all of them combined uh it says 70 million revenue so some of the numbers are off because i saw another guy it said 50 million in revenue so i don't i don't know what that is i just know for the very first guy, it's$3.6 million a month in revenue for his Cal AI.

4:16Got it. Yeah. So what are your thoughts? I don't understand why he's doing this if he's really making$3.6 million a month. That's just my two cents. Yeah. I think if you're 18 years old and you're, I think, so his justification was like, look, if there's a way to make money, we're going to make money. But that's what we would have done at 18 years old. I was still in college. And I think you had just started working for four years or so. So I think he was way more successful than either of us at 18 years old. And I think he'll learn. I think this entire group will learn eventually that it's not about the Lambos.

4:46It's not about showing off your watch. It's not about partying. Like, I don't even know why you're bragging about the partying piece. And you'll eventually learn that it is about the focus later. Because you and I, I mean, you just hit the, in your 40s. I'm about to turn 40, right? And I think you learn through, again, what I said earlier, experience comes from, wisdom comes from experience and you have to kind of go through it a little bit. And I think once these guys learned that, hey, this course collab thing was probably, your time was probably better spent focusing on whatever is your main app was, you probably would have made a lot more money that way.

5:16Yeah. And I think focus is something that it took you and I a very long time to learn. And we struggled with it in our early years. But I know it took me more than 10 years to learn. I don't know how many years it took you. I don't think I learned it till like age 34 or 35 when I was going through it. Yeah. Yeah, and I don't think I learned it until maybe like six, seven years ago. Yeah, but the thing is, it's not like we've solved it. It's always a constant battle. You're working it out every day. Dude, so the other day I meet up with some guy for dinner. And this guy for dinner, I won't talk about it too much.

5:51The first thing he tells me is like, hey, do you want in on this deal? It's a real estate deal. Someone has health issues. And it's hundreds of millions of dollars in property. but keep in mind, most of it is debt and loans. So he's just like, you can take it over. It cash flows in the mid-20s and your payments are, call it, a million a month. So after the payments, you're pretty much making around a million a month in profit, which isn't bad. And the first thing I said was, how much does the guy want? And they said 9 million bucks. So the first thing that goes off in my head is I'm like, So you want$9 million for me to make a million a month in profit.

6:36So 12. So I make my money back in less than a year. The first thing I was thinking is what's the catch? Yeah. Because I started looking at it. Sounds too good to be true. Sounds too good to be true. So I signed the NDA without getting into too many details because I'm not supposed to talk about the details specifically. you know and i look at it and i was like oh you know because i'm going through it and i'm like if it's true i'll do the deal and the guy's like when will you do the deal i'm like i'll close in less than 30 days like you want to close next week i'll close like if it really is true because on top of that i'll get bonus depreciation call it on at least like a hundred ish million dollars if not more right i would say probably more than like 150 to do you said this was a real estate deal?

7:25Yeah, commercial. Like really big skyscrapers, right? Tons of them. But in cities where that aren't Los Angeles, so they're more affordable. But they're still expensive. You're spending hundreds of millions of dollars on real estate. And I was like, I would do this deal right away because then I save on two ends. One, I'm cashflow. I'm getting my money back quicker than a year or two. I'm getting tons of bonus appreciation. So I had my team look into it. The first thing we started doing is we started calling every office building that's listed to actually look at the vacancy rates versus what they claim the vacancy rates are.

7:58Because you can just look at the square footage of a building and see how much is available versus what they're claiming is occupied. Right? That was the first thing. And then some of my guys on my end were like, hey, we need to double check this with them because some of the people are reporting different numbers. And then the second thing is we started looking at the loan terms. and I'm like, wait, you know, call it 60 to 70 % of the debt. You have to refinance in less than a year, which costs money to do. And some of the buildings are underwater in which you're spending more than what you're collecting.

8:31But the only reason the numbers are working is because it's a package deal. Some of the buildings are doing well. But I was going through all of this and I was like, you know, dude, if it's too good to be true, usually is. And then the second thing that hit me right then and there as I was going through this, because this document was long. It wasn't like 10 or 20 pages. You actually read it? Did you AI it too? I AI'd it and chat GPT just epically failed. Oh, that sucks. It was just terrible. Yeah. Chat GPT was like, there are five buildings for sale or four buildings for sale. And I'm like, what are you talking about?

9:01There's more than 10. And at that point, it was giving me some stats and I'm like, this is just already going to be off. Did you try doing this for fun? Try dragging in deep research for it and see how that does versus regular chat GPT. I tried both you did it didn't work did not well anyway continue sorry okay so you know I was going through this and I was talking to my team because we have an M &A team that helps us right and I was using my M &A team to figure out if this is worth it because it's my company anyways yeah um so then I was just like dude I'm like I just need to go back to focusing and the moral of the story is like there's always these shiny objects.

9:41And I'm like, I already got a good small business, depending on how you want to classify it. Some would classify it as a medium business. And it's great. Like it already makes good money, great revenue, employ a lot of people all over the world. I should just focus on this and ignore the shiny object. But you see, even at our ages right now, we can still get distracted by the siren very easily. And you almost got started like it's OK that you got sucked into it like that time is already gone. But to get sucked into even more would have cost you dearly. Yeah. And I look at it as it's like it's the reason I got sucked in is because someone telling me and it's someone I know and I respect someone telling me nine million investment.

10:30This person's sick. They just need out and you'll make 12 million a year. and they've owned these buildings for a long time and they'll give you many years worth of financials and they're audited. It's just like, all right, let me take a look. But it really is like, what's the catch? Because it is too good to be true. And they're like, oh, their family has money. They don't care for it. They don't want to deal with it. I'm like, this is just too good to be true. But yeah, and then they also sent me another deal, which was interesting. And it was in a physical product space and it does well into the eight figures in revenue.

11:06It's just mismanaged and misrun. And I was just like, huh, I can probably turn this from making a million in profit to like six, seven pretty quickly. And then, but they don't want, they would ideally want eight figures, call it 10 plus million for the business. And I was like, dude, I don't want this distraction for 10 million. I'm like, if they want to give it to me for what it's worth, because I'm just basing it off of what it currently makes. You want a multiple on what you currently make? Great, I'll pay you that. But I'm not going to pay you based on what it's worth to me after my team puts in all the work and fixes it and gets it to where it should be.

11:41I don't know. All of this stuff just sounds like a job. Like if it feels like a job, even though it's a good deal, it's still a job. And so we have a mutual friend. I was just speaking to him yesterday and he was thinking about a deal, buying a competitor. And this competitor has been declining for the last two, three years or so. I was like, just tell them you're not interested right now. And I knew exactly what was going to happen. He told them that they weren't interested and they immediately came back. And they were like, oh no, we're down to do anything. We're down to do a seller finance.

12:05We're down to do it. I was like, tell them you'll take it off their hands for nothing and maybe give them a little bit of profit and let them save some face, right? Just to say that they had an exit. And I think moral of the story is the reason I told them to reject the deal initially is I wanted to see, I was like, tell me exactly what you feel after you reject them. And he's like, dude, the moment I rejected them, I felt relieved. I was like, yeah, that's why you shouldn't do these things that feel like a job. Like again, if you feel like you're buying a job, it is a job and you already have a job to do.

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14:42yeah no i i'm with you i look at it as like i have so many people though that can just do that can deal with internet businesses i can create a division called like np brands and just buy quite a few of them and then my team can just make them more efficient and we've thought about expanding there i just a don't think it's the right time and b i need the right deals um if People want to do seller-based financing or I'm paying them when I liquidate their inventory or deals like that. No problem. I'll pay off their debt from day one, whatever bank notes that these people have, and I'll fix the business and grow them.

15:18But the big issue that people don't realize, when you have a declining business, most buyers, even if it's free, like if someone had an agency that was doing$30 million in revenue or$200 million in revenue, then it went down to$100 million, then$50 million, then$30 million. and you're like, Neil, I'll just give it to you for free. Even if I knew that we can run it at 10, 20 % margins, I don't want to waste my time on a falling knife, right? That's what we all call it. When something's falling, you don't know how much more it's going to fall. And it just becomes a scenario where it's a falling knife.

15:51And this is like, this isn't worth doing. Dude, speaking of falling knife. So remember we did that episode on interest rates a week ago. So George Gavin sent me a message. The guy I was talking about, I'm sorry, I have a poor connection. It's not Neil. So just so you know, Neil, it's me. So George Gammon, great macro YouTuber. Everyone should check him out. Really good at investing. He's investing content. It's great. So he was just saying, remember, especially in a rate-cutting cycle, interest rates don't control the economy. They're a reflection of the economy. So lower rates means a worsening economy.

16:24Higher rates means an improving economy. Lower rates might reduce borrowing costs, but it'll likely come with less demand, a.k.a. revenue. And so the last part he said, so I responded, I said, hey, but this also means risk on, which means assets are going to jump, right? Especially risk assets, because you're pushing into when interest rates are low, you know, you kind of go further down the risk curve, right? So he said, basically, bullish risk assets like crypto, bearish economy until economy gets bad enough. Crypto holders are forced to sell, then it's bearish for both. Remember, Powell rationale for leaning more dovish was deteriorating labor market.

17:01And I just said, I can see that. So I think my takeaway from this one is that things are going to go well for equities and maybe crypto for a little bit until the economy kind of loses it. But we haven't seen the economy lose it for a while. No, we haven't. Although the last three years have been bad. Yeah. At least in our world, it's been bad. And the other thing that I like looking at with interest rates being really high is for me, I have cash. And when I was getting 5%, now I'm getting call it 4 % on my money to just leave it in a bank account with pretty much close to no risk. I wouldn't say no risk, but close enough to no risk.

17:42it's just easier to leave it in a bank account and get five percent but the moment the banks are like hey we'll give you one percent on your capital i'll start deploying yeah because at that point it's just crappy returns and you have no choice and you start taking on risk because no one wants one percent on their money five percent's not bad i'll take that all day long you saw what pal said right he basically said that hey we're probably going to get away from that two percent target that the arbitrary two percent target they had set in like the 90s or something like that um so what does that mean he said that he said i didn't hear that yeah i mean that's huge so your reaction is huge right yeah that means they're accepting the inflation numbers they're gonna turn the money printer on yeah i mean it's already been on so okay i want to give i want to talk about one more thing and then we can move it to one more of your topics kind of around um content so this is a tweet talking about how one video formula generated 300 million views and 500k in revenue.

18:38So let me just share my screen so you can see this. So let me, here it is. Okay, this is from the Startup Ideas podcast. So this one video formula generated 300 million views and 500k in revenue. It looks like luck, but here's how it actually works. Number one, farm content across multiple accounts until something hits. Number two, turn that winner into a series. So same concepts, slight tweaks. Number three, list it five times daily across 24 accounts. Number four, translate to Spanish, Mandarin, et cetera. Five, pay meme pages to$50 to repost. Number six, run the best ones as paid ads. So one winning video times seven platforms times seven accounts.

19:16Each daily posting equals inevitable virality. This is virality science. And so this guy basically was interviewed by Greg Eisenberg. And I think this to me reinforces what we're talking about here. You just want more shots on goal. I think we're talking about organic short-form content in this case. And how much revenue did you drive? 500K, which seems low for 300 million views, but if it's organic, then it's pretty good. How many videos? I'm curious to get that 500K in revenue. That, I don't know, but if you're posting 5X daily across 24 accounts and you're translating it, I'm assuming a bunch.

19:53Yeah, yeah, well into the thousands. I'd figure that. Well, look at this. Seven platforms, seven accounts each, plus daily posting. So is that 49? No, the language. Okay. Yeah, did you multiply it even more? Yeah. So this guy, David J. Park, apparently he has a startup called Jenny AI, and I guess that's how he's growing it. And he looks really young too. Let's just look at him real quick. He looks very young. His Twitter says burn the boats. So, hey, he's focused. Young guy, he's focused. When you say burn the boats on your Twitter, you're a focused guy. What's the Jenny group? What do they do?

20:27Do they have software that helps you do this? Because if so, that was a great interview, and it helps him drive more revenue. No. Okay. Dude, this is funny. Check this out. Check this out. Let me share my screen. So he has this link on his Twitter, and it's a dashboard to his revenue. So his MRR right now is 709K, and then year on year, he's up 14%. 57K subscribers up 38%. Average churn 10.7%, which is pretty high. Trailing 12 months revenue, 9 million, but he's doubled in the last year. But I don't know what his product does. I don't know. Here, let's check it out. jenny ai see now you have this curious oh it's an academic writer and research tool for students so this this this is a consumer sass and short form does well just like clearly cheat on everything when you do consumer with organic you you crush it yeah because it's broad tam yeah i love it good for him but that's another that's another signal dude dude if you look at the clearly people and you look at this guy um they've all kind of figured out how to as founders they figured out how to crack organic short form.

21:33And I think that just goes to show you if you're going to be like a young founder and even the guys from earlier, the Cal AI guy, 3.6 million a month, they've all cracked organic social. And so I think as a CEO, you do need to understand marketing. You can't just say, oh, I'm going to hire a marketer. I've seen so many companies, some of our mutual friends, we've seen them fail because they thought they could just offload marketing. Dude, a few weeks ago, I was with Om Malik, you know, the VC. Yeah, yeah, yeah. Who invested in a lot of amazing companies. Before that, he was one of the most prominent tech journalists out there.

22:06And we're talking about Google. And everyone's talking about how Google is afraid of chat GPT. I actually think that Google's, because with AI, Google has so much data. I do think they'll figure it out in time. I don't think the company will go to zero. I think they'll still do well. But I also think chat GPT will do well. The area that I think Google will struggle with is social shopping. So you look at Instagram and TikTok shops. It's like that's where Google is lacking, and I don't think they'll figure that out. They don't have a platform. People use YouTube in a very different way than they use TikTok or Instagram.

22:45And social shopping, I think by 2030, the last thought I saw was supposed to be around$7 trillion a year. So it's a massive market. I think that's going to affect Google really poorly, and it's going to affect Amazon. and neither of those two players have a solution to compete. Yeah, well, I mean, what did they say? I was looking at, where did I hear this? But ChatGPD should be worth like, can easily grow into like a$1.4 trillion company in the next few years. And they kind of mapped out the details. I think it might've been an all-in pod. But I mean, key point here, you're not too worried about the big players.

23:24No, they all do well and they'll figure it out. and by the way ChatGPT has to still figure out how to be a for-profit company cool alright guys that's it for today please don't forget to rate, view, subscribe and we'll see you later