Finding +$1M Businesses From Weird Trends

27:07What is a great way to use this, you know, this thing called life and, and get inspiration from a bunch of people, then sort of craft your own version of that. That's what I'm trying to do, at least. No, and that's, that's exactly the point I was trying to make, which is whoever we talk about, I don't, I don't necessarily want to emulate that. But I emulate the people who are making the life that they that they have chosen to make. And I consider that to be success. One thing that I've learned from hanging out with some of these people I admire is even though it looks amazing on the outside, everyone still has similar issues, whether it's family issues or pressure on this or that.

27:41And so I always like getting to know these people like Rob Dyrdek. I've loved having him on and I've been able to talk to him once or twice afterwards. It's like everyone's shit still stinks once in a while though. And that always has given me a ton of confidence and actually made me happier. You know what I'm saying? Right, right, right. What do you want to do? All right, I'm gonna do a quick one. So this is called the Dr. Dre question. And this is a question that is useful when you are hiring. So I was watching this old ass Tim Ferriss episode where he interviewed this guy that I'd never even heard of.

28:14Cal Fussman. You know this guy? Is he a journalist? He was kind of like a journalist or he's like a writer. But basically, he's like a man who lived a very interesting life. Like he boxed Julio Chavez. He did like a bunch of interesting things during his life. And so anyways, old episode, Tim Ferriss, actually it's a very good episode. And one of the things he talks about is, so his things like the art of asking questions. And one thing I like to do is study people's lives. Another thing is I like to call, I'm a collector of questions. A great question is like very valuable to me. So I was interested in this episode.

28:48And during it, they say, there's a part where they go, okay, you've talked to us about asking questions. Who have you helped? who's come to you for help with asking questions? He describes a set of founders. And they said, we have this problem with our company. We are super passionate about our business, but when we're hiring, we don't know what to add. We're kind of hiring the wrong people because we just can't seem to find people that are as passionate about our business as we are. And on one hand, we could say, maybe just nobody's going to be as passionate about our own business as we are. But we just want people at least close to it.

29:24People just have a lot of passion. We don't know how to filter for that. Because if you ask somebody, are you passionate? They say yes. So what do we do? And he goes, oh, that's easy. Just ask them the Dr. Dre question. And he goes, here's the story. He goes, I was interviewing Dr. Dre when he was a journalist. And he's like, I said to him, hey, Dre, Doc, what's the longest that you've gone? What's the longest that you've gone on a project without sleeping? and he goes, oh man, when I'm really into something I care about, I'm in the zone. I don't even think about sleep. I forget to sleep. I'll just keep going until it's done or until I pass out.

30:01It could be 72 hours. So I took that idea, 72 hours. He goes, just ask a person this. What's the longest you've ever gone on a project you were passionate about without sleep? And their answer will tell you a lot. Either they'll struggle to even come up with a number because they've ever actually had an obsession, a project they're so passionate about that they kind of became a degenerate. They let other parts of their life go, like sleeping and eating and talking to people and answering the phone. They just got completely lost in it. Either that will be unfamiliar to them or it'll be familiar to them.

30:36And you'll be able to tell that right away. So that's a fork in the road. And it'll tell you a lot about the person. If they say, you know what? I get eight hours sleep every night because I function best when I'm like that and I'm fully charged. And you'll not be the right person for this. That's what I want in my CFO, but it might not be who I want as my head of product, right-hand man during the world. We're figuring out this project from scratch. And so the Dr. Dre question I thought is a wonderful little thing I'm stealing, a question I've collected in terms of being able to find the people that have that same streak of obsession and degeneracy that is like, if you have that, it's a very high likelihood that we can work together or we get a lot?

31:21What's your answer? What's your answer? 48 hours would be mine. I've never done 72, not even close, but 48 hours for sure, multiple times. And the funny thing is, it's on really stupid stuff. Like I basically did that with that all-in video the other day. Like I was up all night basically editing it. And then I, because I was like, I just want to ship this. I'm going to finish this. And I also don't want to work on this for more than like, I gave myself a day to do this. So I'm just going to work nonstop for 24 hours on this. And I was like, that day I was a bad dad. I was a bad husband. I was bad at fitness.

31:53I was bad at sleep. I was bad at eating. But I was fucking amazing at that video. And that's happened to me many times in my life. It happened when I was like, when we were doing our first startup, I remember many times me and my buddy Trevor, we would stay up and Trevor would keep going. Trevor's answer would be more like 72 hours. But we would stay up. We'd be like, we would see a cool commercial. I'd be like, can we recreate that? It's like, I don't know, download Adobe. Let's find a cracked version of Adobe on Napster. and like, you know, download this shit. And then we'd be like, okay, Adobe fireworks is a way that you can animate something.

32:26And we would sit there and try to learn it, watching tutorials. And we would just try to get better at it. And then like, I would pass out and go to sleep after the storytelling part was done. And Trevor would stay up and he would learn, like he taught himself Photoshop and After Effects and all these things, but he didn't teach himself in years. He taught himself on like four projects that were just like these like 72 hour binges. and then he just knew how to do those tools after that and like now his old career is like that but at the time it was unnecessary at the time we weren't getting paid for it at the time the things we made weren't even that good they were still like you know kind of janky but it doesn't matter is 72 hours three nights is that three nights i think you i would count 72 hours as you you basically uh you wake up you work you skip that first night of sleep you work through the next day, you basically skip the next night or you get a couple hours the next night and you wake up and you finish the next day.

33:22That's insane. I mean, I've done overnight stuff a bunch of times. All-nighter, right? Yeah, an all-nighter and then all day that next day. But like usually it's like I've been at the office and I'll sleep on the couch in the office for like four to eight or something like that. So it's really hard to go. It's hard to do overnight and then keep going the next day. That's challenging. Maybe it'll be like three hours. I've done overnight stuff. bunch of time but it's hard to go more than that let's say you had like a new year's eve party it was gonna get a little crazy and you have this friend and you're like okay i hope this is not too crazy for my friend and if you just asked him the version of the doctor direct questions it's like uh hey have you uh have you ever blacked out when you drink and if they're like no or one time it's like you should probably hang back from this party but if they're like oh like dude an embarrassing number of times then i can't count the number of times we'll be talking about?

34:14It happens. There was a phase of my life that happened a lot and now it happens less. It's like, okay, you should come to this party. You'll have a good time. There's a version of the Dr. Drake question for partying. There's a version of the Dr. Drake question for parenting. There's a version of the Dr. Drake question. I know a version of the question for parenting is what's the grossest thing your kid's ever done? And if they're like, oh, where do I start? When they lick the urinal? When they at the airport decided to roll around on the ground? There's like a constant stream of like fiascos that I'm, oh, they pooped in my bare hand, you know, because I couldn't find the diaper in time.

34:51Like, yeah, these things, this is like, I'm a seasoned parent. I've been through the wars of parenting, you know, like you could tell like kind of a first time parent versus second time parent based on the number of stories they have. In college, when I was a degenerate, my friends and I used to say, what's the best way to get through a blackout and manage it effectively? Practice. We would practice all the time.

35:16who's the most experienced uh all right we want to do another one yeah yeah i got another one okay so we've talked about one chart businesses before and this is the idea that like you could be the midwit in the midwit meme where you gotta explain and analyze and give you 10 reasons why this might be a good idea the pros and the cons and you're over analyzing it or you could just be the badass and the badass, the Jedi, he just puts the one chart up and says, this is why I'm doing what I'm doing. The first example we gave of this was, what's it called? When you don't get buried, you, cremation. Cremation.

35:53It was like a chart of percentage of funerals that are people being cremated, choosing to be cremated. And it went from 10 % to over 50%. And the guy who sent us the pitch deck was like, yeah, we make cremation easy. But like this one chart is the reason for our business existence. since this is our business plan, we are going to ride this wave. You've talked about how Jeff Bezos did that about the internet. Why do you quit his job in finance to start an internet company? Because the internet was growing 23 ,000 % a year or something like that. He's like, nothing grows that fast except for bacteria and a petri dish.

36:25So I'm going to go surf that wave. Yeah, I mean, there's the internet, there's mobile phones, you know, like there's those big ones, but cremation was a smaller one that wasn't as obvious. And what are you saying is the other one? So there's a new one chart I saw. I saw yesterday that is not as strong as those, but is legit. And it's the growth in homeschooling. And so we kind of knew when COVID happened that there was a bunch of people created little homeschools or whatever. You needed to teach your kids the schools were closed. What are you going to do? But it's actually sustained. So it's now the 2023 data is out and homeschooling has grown, I think like 40 or 50 % a year, year over year for three straight years.

37:06That's pretty aggressive. And public schooling is growing at whatever, no percent, three percent. Private schooling is like seven percent. And then homeschooling is 40 to 50 percent every year, compounded for three years. And I don't know if that's going to continue or not, but let's assume that it is or that it might be. That means that a whole bunch of businesses that were not really that viable, were too niche, are now perfectly niche. and so there's like you know this trend of um of like micro schools so out school i think is like grown like crazy yeah is a micro school considered homeschooling so there's homeschooling traditional homeschooling like uh jenny's at home i'm just going to teach her myself we're going to print out worksheets and she's going to do them and whatever i'm i'm the teacher then there's micro schools which was like for a variety of reasons i don't want my kid to go to school for some people Well, that was COVID for some people.

38:02It's school shootings. For some people, it's they don't like the quality of the instruction. For some people, it's the social. They're worried about social peer pressure and kids bullying and things like that. A whole bunch of reasons why people might want to take the kid out of traditional schools. And so a micro school is you hire six families get together. And they basically say, hey, for the cost of private school, we can actually just have like a literal private school. We can have our own pod here. Like a higher teacher. A hired gun teacher, that teacher makes double what they make in a public school.

38:35Instead of making$50 ,000 a year, you make$100 ,000 a year. We'll get a great teacher. We'll pay them extremely well. They only have six kids to worry about. They can get super invested in them. The teacher-student ratio is going to be really, really good. Instead of one teacher to 25 kids in a class, there's going to be one teacher to six. They're going to have friends and socialize. It's not like homeschooling. They still get the socializing aspect of it. Are they the same age? children. They're kind of like in a, yeah, it's usually maybe a little broader range. It might be like a year and a half window or something like that.

39:06Two years window, maybe. And they'll also be kind of an indoor-outdoor component. So like sometimes they have a dedicated facility. Sometimes it's like our backyard or they rotate through the parents' backyards or whatever. Sometimes it's a mix of indoor and then they go for like a long walk or a hike or playground or whatever. Like the teacher takes them indoor and outdoors. They get a better mix than like sitting at a desk all day. and this makes all the sense of the world to me. I'm actually super interested in doing this. I think this is actually a pretty dope idea. And then there's a business called Primer that Ryan Delk started.

39:39Are you familiar with Ryan Delk and Primer? Yeah, Ryan's cool. I like Ryan a lot. But his company that he started pre-COVID, this was that company, right? It was homeschooled. I think they pivoted. They started with more of that traditional homeschool, like what do you do if you're actually at home? And then now it's pivoted in the last year to, I think it's pivoted, to these micro schools. And it's basically like an operating system. It's like, hey, if you're a teacher, push this button. It's like Stripe Atlas. You could spin up your micro school. It'll be compliant with your state's regulations.

40:09You'll be able to accept all the school's choice vouchers. So that's the other one chart in this is that the number of like, I don't know this space very well, so I might get this slightly wrong, but apparently there's like a school's choice angle where like as a parent, you get like a$10 ,000 voucher and you get to go shop around to figure out what school is the most worthy of getting your tuition. So the government, instead of just paying the public school, pays the family. The family shops around with that voucher and picks the school that's doing the best or that sells themselves the best in order to send their kid there.

40:40And so the schools have to kind of earn all the federal funding or state funding that they're getting from the government. Makes a lot of sense. So now that thing is on the rise. The number of states that do this voucher program has gone up and up and up like crazy. And there's now thousands of, you know, whatever, uh, you know, uh, these vouchers that are very high ticket vouchers. So if you build a successful school, you can attract these vouchers. You can basically get a bunch of revenue that the government has given the families to pay you. And so what Primer does is they're like, all right, uh, spin up a school, be compliant, accept vouchers and have like your website, have all that shit done for you.

41:16You're back in parents. Here's a parent portal students. Here's a student portal. We are the operating system for micro schools. I think they have like three micro schools now. They're trying to get to like six and then they're going to get to like 18. And each of these micro schools basically generates like, I don't know, 75 K of profit for the owner right now or could become 100 K of profit for the micro school owner after you pay the teacher. So let's say you might, if you're the teacher and you do this, you might be able to make 75 to 100 K on the teacher wage plus another 75 to 100 K for your little franchise school.

41:49You're the little Chipotle that you built here. And so I think this is kind of a cool trend. And I'm, I don't know if their company is going to be the winner or like what's the right wedge to attack here. Like I would invest in this. Yeah. It's an ass. Is this the team is too legit. The price is going to be too high. They've already raised a bunch of money because they've been going at this for years and he's very like well-connected Silicon Valley. I don't even know the price, but I already know it's too high for me. But I think this idea is actually really great and highly investable because of where the puck is going.

42:19Would you say, are you going to, your kids are going to be close to school age? Are you going to consider this? Yeah, I definitely want to consider this. I want to either make my own pod or find a school or a pod that's around here. My daughter's about to go to school and she goes to a preschool right now, two days a week for three hours or just to get acclimated. and um you know it's kind of underwhelming when you go because you're like oh this is like you like you know you can pick up the toy be like this is from 1984 like is there new stuff anywhere here like you know she that one teacher is supposed to manage all of them like that's tough right you know like 10 to 1 teacher student teacher ratio that sounds really high uh i guess i could go shop around and try to figure this out but i don't know i'm i'm willing to be sold by a service like this.

43:13I'm ready. And I think a lot of people will be. Yeah, so I went to private school almost my whole life. In St. Louis, you go to private school. And private school sounds a lot fancier than I'm describing. But my grade school was like$800 a year. And then I think my high school, it was like$10 ,000 a year. Nowadays, a lot of private high schools are like$50 ,000, which was crazy. Mine was nothing like that. But my favorite part about it was that the teachers could do things to me that public school teachers couldn't. Whoa. yeah that sounds that sounds that sounds weird when i but when i was they would touch me in a great way meaning when i was being an asshole i remember one teacher i was in the hallway and i i was being rude and he kind of pushed me against the locker and he's like what the fuck is your problem and he like grabbed me by the collar and i had a little bit of fear and i remember thinking all right if i i gotta act up otherwise there's gonna be consequences whereas my mother was a public school teacher and she mostly worked with handicapped kids.

44:10And there'd be times where the kids would literally shit themselves and she's like, I can't go to the bathroom with you. I'm not allowed. And I remember the difference in how much they could care and where that line was and it made a big difference to me. So at the private school, that was allowed or this teacher just crossed the line and it happened? Because it sounds like that probably wouldn't be allowed to grab a kid by the collar, shove him in the locker and be like, hey, get your shit together. The way that I'm describing it is a little bit more serious and actually was but it was just like i remember i was doing something stupid in the locker in the in the hallway and the teachers got in my face and kind of just like not like aggressively just kind of pushed me and it's like what the hell is your problem right uh like that type of thing and like there was other times where like i got in trouble at home and like i had to like i had to go to the teacher in private school and tell them what was up and they're like all right we'll help you out like i just i remember that the line was different as to what and i also by the way in high school i went to an all-boys school which i freaking love all boys schools are awesome because Because I remember being in ninth grade and the captain of the football team could also be in a play.

45:11And I remember when kids came out as being gay, at first you're like, oh, we're going to tease them. And then it's like, no, we are not here to impress a girl. We can all be homies and buddies. There wasn't as much of a cool kid club. Anyway, I loved all boys schools. But I remember in the private school, they could just do things that my public teacher mother couldn't do, even though I felt it was incredibly necessary. And the rules are different. And I really appreciate that private school environment. So we're debating at our home, even though we've got plenty of time of what we're going to do with our kids.

45:42I'm a private school, or I would totally absolutely do one of these micro schools. I think this is awesome. The only downside is like, are you going to be a weirdo? You know what I mean? That is like my biggest fear, which is are you going to be the wrong type of weird? At least they're with other kids, right? Like it might not be, you know, because I remember a lot of the source of social anxiety when I was a kid was the fact that I mean, I just felt like I was like, you know, have you ever watched like Finding Nemo where he's like, you know, he's looking around and all the other fish are swimming really fast and nowhere to go.

46:14And it's like, that's how I felt most of school. I just felt like everybody else knew where to go, knew what to say, knew what to do. And I was just sort of like lost, I guess, or, and I don't think I was actually that much more lost than anybody else, but it certainly felt that way. And there was like, because it's so big, it's easy to be lost. It's easy to be lost in the shuffle. It's easy to just be quiet and the teachers are just a quiet kid. That's it. You sort of give up on them. You just sort of label them. That's who they are. I don't have time to go rescue every quiet kid and try to get them out of their shell.

46:46Whereas I think if you're in a school of like six to eight kids, even if you're on the quieter side, I think the teacher and just the dynamics would allow you to come out of your own shell a little bit more because you could be more of a big fish in a small pond. And I think that's really good when you're almost like trying to get your legs under you and trying to get your social legs under you. Yeah, I think for a lot of personalities, that could be beneficial. You and I have a friend whose kid went to an alternative style school where there was no homework and no teachers. They were guides and all this thing.

47:14And he was like, man, he's just lacking structure. So he sends him to a Catholic school where it's like, you're there at eight, school ends at three, you have homework, and the kid needed the structure. He needed the discipline, and he started thriving in it. And so I get nervous because a lot of people, they just need to learn how to... In order to be successful in life, they got to figure out how to follow rules, how to work within the rules and not be free roaming all the time. And they need to figure out how to master grade school so they can get into a good high school. They got to master high school just so they can get to a good college.

47:45And they have to do good in college just so they can get a job with a high starting salary. And then they're going to do that until 55 or 65, but they're going to retire and they're going to have grandkids. For a lot of people, I think that that linear route of discipline is the right decision. And I get nervous in some of these schools that that would happen. Of course, you and I are always going to say, our kids are going to be different or we're in a different situation and we're going to figure it out. Maybe that's true. Maybe that's not true. But that's when I get nervous about some of these schools.

48:12Yeah, yeah. I think it's definitely... But you also wonder how much of it's self-fulfilling, meaning how much of it is nature versus nurture. And if you had that environment or if that was the expectation or the norm for you, that you were not expected to go down that linear path that you just described, that you'd be like, well, I guess that's what I'm doing. My wife, she grew up and in her family, everybody did business. So for her, even when she had a job in her head, she's like, oh, this is the temporary part before I have my own business. And sure enough, now she has her own business. That happened.

48:47Whereas for me, I grew up every single family member, aunts, uncles, cousins, parents, everybody. It was what you described. Good school, get to good college, good college, get to a good job, get a good salary, get to a better salary. Overtime, work your way up, become a good manager, right? Whatever it was. I knew zero people that did their own business. Now, I'm lucky that I got off that track and I was able to go into the world business through other influences. But that was not the default. And in fact, I think if I played my life out, you know, eight times out of 10, I would have been on the job side just because that's all I knew.

49:20That's what normal was. And, you know, I think if there's any like takeaway there, it's, you know, if you want something, if you have an inkling that you want something out of your life, you got to go where that's normal. That's why I liked moving to Silicon Valley. It was very normal here for people to be starting a company with a half-baked idea. And that was what the smart, capable people were doing. It's not what the like, you know, fringe weirdos were doing. Whereas everywhere else I lived, anybody who was like, I quit my job. I'm going to go work on this app for checking into restaurants.

49:50People would have been like, this guy's just weird. And he's off track. And so in Silicon Valley, if you're like, hey, I took this job at this, I'm working at JP Morgan. It's like, bro, you better have a side hustle if you're trying to get any respect around here. That is not what's the respected path. It's literally just moving. My body moved me in the direction of who I wanted to be. Because I just moved my body into a place where the norm and the default and the expected was, you're going to go create a company, right? That's what we do here. And so I kind of think it's the same thing with schooling.

50:23If you're in a school environment that expects you to be creative or dynamic or work on projects and not just sit down and take tests, I think that it's going to be self-fulfilling in a way. Dude, I remember being in San Francisco and I would meet people who worked at JPMorgan or just had a normal job, but they would introduce themselves as the founder of this thing. and we're like, what is this thing? And like, oh, it's just a project I'm working on. And I used to make fun of that back then. I kind of like it though. I kind of like it. Like their side hustle or their main work at J.P. Morgan?

50:58No, like, well, I'm getting this app off the ground, but as a side hustle, I worked nine to five at J.P. Morgan. Yeah, exactly. No, no, they turn into cheating husbands. They're like, I work at J.P. Morgan, but it's not what it looks like, okay? It's just a fitting that's temporary. This is not an emotional connection to it. I swear. I just had to do it. Two years, that's all. Then I'm going to do it. I'm going to do the real thing. I love that. You want to wrap up talking about poop? Yeah, let's talk about it. Well, guys, when it comes to banking, the only time I feel truly happy is when I'm using Mercury.

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52:06And the reason why is because it's a product that was not made by finance people. It was made by a founder, Imad. He's been on this podcast before. And he used tons of products as a startup founder. And this is the one that he wished he had. And I actually reached out to them to become a sponsor for this show because I'm such a big fan of it. So if you need a banking product for your startup, use Mercury. You will not regret it. It's amazing. For more information, check out Mercury.com. Mercury is a financial technology company, not a bank. Check show notes for details. Thanksgiving. I'm around a lot of family members.

52:38There's a lot of 13, 14 people in my house right now. There's a lot of bathroom time going on. Fiber is everywhere, dude. I think fiber supplements, I think are a little opportunity. So, you know, people, a lot of people age 36 and up are taking at fiber regularly. And when I look at these supplements, you know, Metamucil, Benefiber, like, these brands just, they literally sound like poop, which maybe is intentional. But I think there's an opportunity to make a fiber supplement that is, you know, just DTC a lot better. You know what's going through that right now? What? What's going through that right now is creatine.

53:17Do you know what creatine is? Bro, don't make me flex. Of course I know what creatine is. Creatine's like, I believe it's the most studied supplement of all time. but basically it's proven like constantly where it just makes you stronger and build more muscle mass i don't know by what percent it's like one or two percent but historically creatine was powder form and it doesn't necessarily have a bad taste but mostly it's neutral but there's this guy it tastes fine it's mostly neutral but you still like when you drink it it's kind of chalky but it's no big deal but um i take creatine all the time i love creatine and creatine when we were kids when we were in high school that was just like what the jock football players would it was like i was scared of muscles right it was like is this bad for you it's gonna mess up your kidney and your liver or something like that i was like i guess i stay away from creature i'm not that i don't need i don't need to be a bodybuilder right like yeah and it's and that's mostly nonsense creatine it's it's just like uh it's probably some health guy might yell at me for saying this but it's basically just like consuming more protein you know like it's just like it should be almost part of a of a daily routine like it's a very stable thing you're not particularly going to get sick, whatever.

54:25It's just going to make you stronger and build more muscle. But what's the McCormick guy's first name? He started a creatine company that they basically made it like a Flintstone vitamin, but for creatine. And he shares all of his revenue online. And like six months after starting the business, I think it's doing like$800 ,000 a month in sales. And I actually really appreciate that this guy's doing this because he's taking an old supplement that is wonderful, but people are afraid of. And it's not really that easy to consume. So with his stuff, he made it into like a Flintstone gummy bear like style supplement where you could take, because you can't really take creatine in your bathroom unless you have a cup there because you have to mix it with water.

55:05He is a chewable that tastes kind of good. And I think it's really amazing what he's doing with creatine. So his name is Dan McCormick. I'm going to pull up whatever his last update is. So 3 million in all time revenue. So basically it looks like He's going to do about$3 million in the first year. But I remember he posted some of his margins and they were not very good. Oh, here we go. Okay, so here's his revenues. We can put this chart up. So December, when he started it, 21K. January, 64K. And then it basically goes up 128, 172, 244. And then the last August, September were 550K. Yeah, so what he's doing is he's taking creatine and he's kind of making it popular and making it easier to consume.

55:51There's another drug or a vitamin that I like. It's called ashwagandha. Do you know what that is? Yes. So ashwagandha, a lot of people use it for anxiety. So there's ashwagandha and then there's kava. So kava, I remember drinking it in Fiji. It looks like a mud, like it's like a powder and you mix it with water. And in Fiji, they'll sit around a fire and drink kava. And it kind of makes you a little bit high. But if you take it in small doses, like you can buy kava at the store and it calms you. And ashwagandha is another one like that. And so I like these ideas of taking a fiber, an ashwagandha, a kava, something that has decades or centuries of proven usage, but it's not packaged in a way that seems very approachable.

56:33I think that's a very fascinating way to go about this. People years ago did it with melatonin. Melatonin wasn't quite popular. Now it's incredibly popular. It's a very accessible thing. I love when people do that with certain supplements. Dude, I have a supplement story that's going to blow your mind. and I'm not going to tell you now. I'm going to tell you like a year from now because it's playing out right now. I have a very small part in this, but it is wild to see what a successful supplement company can look like. And it's too good right now. I can't say anything about it, but... Can you say what the vitamin is?

57:09No, I'm not saying anything. That's how you know it's good because I got to just shut up about it. You're an investor in it? I'm not going to say anything. A year or two from now, I will tell the story and it's going to be unbelievable. Oh, all right. I'm very eager. I'm very eager. You know, at once we had Derek from More Plates, More Dates on and he talked about his supplement business. I thought that that was it was pretty amazing. I wonder if it's Derek. Blink twice. I'm not saying anything. I'm saving this from you, too, because I want to see your reaction when it all plays out. I'm not going to give you any hints either before then.

57:45would you go into the supplement business? Yes. I need my soundboard. Where's the Bezos? Hell yes. That's how I feel about the supplement industry. Yeah. So I have nothing to do with any supplement business. And from an outside perspective, it just seems like an overcrowded space that's really challenging. I think it is saturated. It's very saturated. I don't think it's necessarily like anybody can play. But if you're good, it's the right type of e-commerce business to be in. I'm in the wrong type of e-commerce to be in, the hard slog e-commerce type of business to be in. If you're good, it's somewhat binary, I would say, in the supplement side.

58:33It's not easy to win. But once you get it going, if you have the right supplement and the right branding and the right go-to-market and the right advertising, If you could stack those blocks together in the right formation, it's a beautiful business. Why? Supplements, super high margin. Supplements are repeat purchase consumables. Supplements get bought by bigger companies all the time. So the exit market is fantastic. The multiples are good. Supplements can go into retail really well. The inventory is very simple. You only have a limited number of SKUs that you need to deal with. Usually, they're made in the United States.

59:05So your cycle time is very low, which means that you don't have a bunch of money tied up in inventory at any given time. You might even have negative cash conversion. So there's all these benefits of the supplement category if you can be in it. It's a clear problem solution, so it's easy to market. And it's expensive. I probably spend$100 a month on protein powders and creatines and a few other things. It's expensive. Yeah, for sure. For hundreds, probably. Yeah, way more than a hundred. I get a bag from Whole Foods. It's like$80. So my sister-in-law's in town. This is just a funny story. So my sister-in-law's in town.

59:37I was telling her about this supplement. and uh she is i i remember because at previous thanksgivings she was like tell me about uh she's like oh leaky gut oh you i was i was like i was like yeah what is that i've kind of heard that what the hell is that and she's like it's brilliant branding she's like oh my god you don't want leaky gut imagine like a leaky gut like it's just like you know like imagine your sewer has a hole in it right your sewer lines like you don't want that getting everywhere no and she's like it's toxic it's bad and i was like how do i know if i have it she's like you probably have it everybody has it.

1:00:08I'm like, oh my God, my gut health. I've just been totally my gut health over here. What am I doing? I'm sleeping on my gut health. My microbiome is just a fucking mess right now. And I was like,

1:00:22I was like, hey, are you still into leaky gut? She's like, I was like, scale of one to 10. How into leaky gut are you? That was last year. She goes, 500. I don't stop thinking about my gut. And I was like, so tell me. And I literally recorded, I have a voice memo of her describing all of the things. She's like, oh, fiber. Yeah, you got to have the... See, this fiber is bad because look, it has all these extra ingredients, natural flavors. You don't want that. You want this other one. It's super clean, a garden of life. It's got the three different sources of fiber because then you get the blend.

1:00:51And when you get the blend, the three fibers, and she's like drawing these diagrams. And then she's like, yeah. And like, you know, you just want to have living water. And I was like, whoa, whoa, whoa, what's that? What's living water? I don't know what that is. Have you heard of living water? No. And so she's describing living water and she's telling me about that. And then she's telling me about this other thing. And I was laughing so hard. And I was like, you are like, if I could take my Facebook pixel and I could just show my Facebook pixel your face, I'd be like only advertised to this type of woman.

1:01:20Like, you know, rich woman who's like believes in all of these things is like the best market. She is spending, got to be spending hundreds of dollars every month,$500 a month on just like for her, for her kids, for her husband. Does she consume all of it? And then she's like, yeah, I wish I was. She's like, I'm not even taking all the stuff I should be taking. I wish I was more on top of it, but I'm so busy with life. So that's why to supplement for it, then I do my water fast and then I do my three-day water fast because it's a detox. And I was like, you do all the things. And that's really what you want is like, if you're going to build a product like this, you are advertising to these women across America who are like, there's this demographic of women that will buy all of these products and they will do the fast.

1:02:04and they want to alkalize their body. And I'm not even saying that this is all BS. Maybe it's all true. Maybe it's all false. I have no idea. But they believe it's true. And as an entrepreneur, that's all that matters is that there are people that are all bought in. They are bought fully into a lifestyle. And in that lifestyle, you could then tack on other angles. So who knew that water could be dead or alive? I didn't. That's a product positioning play, right? who knew that you could sell collagen and all of these different angles to improving the quality of somebody's health in their body and it's just can you tell a story if you could tell a story because she told me all the stories she basically played back to me you know Facebook ads that she's read and then gone down the rabbit hole of reading about and if you could tell the right story that's fantastic like when Craig Clemens was on and he talked about probiotics and how he basically created the probiotics revolution.

1:03:04Did you listen to that episode? Do you know that part? No, I didn't hear that part. You've heard of probiotics. Probiotics were like a semi-big deal. Have you ever heard of prebiotics? It's like five-minute abs. Craig Clements taught the world about prebiotics. Yesterday, when she was talking, she was talking about prebiotics. And I'm like, you know, my friend literally created that word. Like there wasn't, like maybe it existed, but nobody knew about it. and I don't know if you've seen this, but Craig has this video that he created, this one ad that he talked about on the pod so I can share it here.

1:03:35He created one ad called The American Parasite. Have you ever heard of this? And Joe Rogan tweeted it out and he goes, this video is freaking me out. This is back then. It's 15 years ago now. The video is hard to even find online. I found it. But there's this ad called The American Parasite. Is this like a direct marketer video? No, this one looks a little different. This looks like a TED Talk where, you know, like the, have you ever seen the draw during a TED Talk? Like there's a TED Talk voice, but the hand is drawing on a whiteboard. Like what the guy's saying, it's kind of like keeps your attention.

1:04:06So it's - Oh, I see. I have it up. It's been viewed a lot. And so he, and Craig described this on the podcast. He's like, basically this went, this video went insanely viral. And I've heard him share on other podcasts. So they started with a long form sales letter and they were selling these prebiotics and they did like 10K. The first day they spent 10K and they spent 4 or 5K, they made 50K. He's like, holy shit. They did that again, did that again and they sold out within like a week. So then they made a big bet. They ordered a million dollars of inventory for the prebiotic because they believed that this thing would sell when it comes time.

1:04:45And when they did it, they relaunched it when they got inventory back in stock. First day they did 500K in sales. Second day they did 600K in sales. 1.1 million in sales in two days when this came back. And he created this video sales, this video ad. It's a 30-minute basically documentary talking about how our food supply is fucked up, how it creates a bad microbiome in your gut, and how that's like, he calls it the great American parasite that is eating away. It's sort of ruining your health. It's the reason you can't control your cravings. It's the reason you're gaining weight. It's the reason for all your problems.

1:05:19It's not you. It's this parasite in your stomach. and isn't that a convenient explanation that somebody wants to wrap their arms around and so he took that and basically that thing was viewed like hundreds of millions of times people were sharing this like crazy this was back when there wasn't a lot of ads and so people were a lot more willing to share on social media when they found an interesting video and so this thing went crazy to the point where he said that Coke changed their formula for Diet Coke, they took aspartame out because this video was causing so much public awareness and uproar over these fake sugars that people were putting in things.

1:05:56And then, over six months, Coke sales went down because Coke without aspirin doesn't taste as good. And then they put it back in six to nine months later. What was the name of Craig's? Key Biotics was the name of his company back then. And how much did it make? A lot of money. Oh my god. So he kind of popularized or created the prebiotic market in the United States. but that's insane yeah i'm looking at it now have you heard of um do you know ancient nutrition yeah that's the liver king guy no it's a different guy oh no card of our company yeah well no a different one uh ancient nutrition they've raised a hundred million dollars so i have to imagine they're doing hundreds of millions in revenue and it started because this guy named josh axe dr axe is what his name was or his name is and he's got a of course it is of course his name is Dr.

1:06:45Axe. It's Dr. Axe, spelled like an axe. And he had a blog. And the majority of the blog at the time, it talked about leaky gut. And he would sell info products on how to fix the leaky gut. And then eventually they were like, all right, let's actually make stuff. And that's how Ancient Nutrition started. And it's like a huge, huge business. But a lot of his whole thing was leaky gut. And he helped popularize leaky gut. The branding of leaky gut is brilliant. brilliant it's it's kind of like it's kind of like when people talk about doing a cleanse and they act like their blood is like a pipe and like doing a cleanse is like putting a pipe cleaner through it yeah it's like it's like i don't know if arteries work that way but powerful visual image that now i automate yeah like i don't even know if that's true it probably even isn't but for some reason you've made me believe that that's how it is same with leaky gut you're like so like first of all i don't even know what a gut is is that your colon so like this organ that has poop in it is just leaking to the rest of my body is that what you're saying?

1:07:45Of course that's a huge deal, I don't want poison in my body and I don't even know, I have no idea if that's how it works or if it doesn't work, but they do a great job of making me believe it because of that phrase, leaky gut. Right, right yeah, Scott Adams I forgot what he called it, like he had these two words that he said, he said he had one that was called a linguistic kill shot and he did another one that was about visuals so what did he say I forgot what he called it but let's call it a visual kill shot like I think that idea of the pipe cleaner or the leaky gut these are visual kill shots it's words that make you see things and there are things you can't unsee once you've seen them right and it's like that's and you know Scott Adams used to say Trump did this he called Jeb Bush when Jeb Bush was the front runner in the Republican debates because he's you know he's a Bush and you know he's a whatever he was the governor of Florida or whatever the hell he was and then he goes low energy Jeb entire Jeb and basically every time you look at Jeb Bush from then on out you're like he does look fucking low energy and it's just like sleepy Joe sleepy Joe right crooked Hillary right like she does not just like immoral Hillary or like you know whatever crooked it's a visual word right the wall it's going to be a big beautiful wall right he wasn't saying better border control policy.

1:09:07He said, we're going to build a big wall, beautiful wall, biggest wall you've ever seen, right? You have a visual of the border being strong and protected. And so Trump was kind of a master at this shit. And Scott Adams, he's pretty interesting the way he described what Trump was able to do with these visual kill shots. Okay, well, in one year, we're going to play the clip of you saying, I'm not going to tell you now, but we'll tell you in a year. Because I'm very eager now. You've got me on the hook. You've used... You've gotten me. You've gotten me hooked. And I'm so eager to know who it is.

1:09:39I'm eager to know everything about it. So I guess we'll end there and you got to come back in a year and tell me. All right. That's the pod.

1:10:02Hey, let's take a quick break because there's a quote that I love. I want to read you. It's that we shape our tools and thereafter they shape us. And as an entrepreneur, if you're using a bank that was built in the 90s, you're operating like you're in the 90s. And trust me, I've been there. Clunky portals, random holds on your money,$50 wire fees, and then being told, please visit your local branch. Well, that's why I switched to a different type of banking solution, Mercury. It turns your financial chores into a smooth workflow. You can do wires, invoices, cards, reimbursements, two clicks, and I'm done.

1:10:32If you're already using Mercury, respect. If you're still using one of the old big banks, I got questions for you. So go visit mercury.com and give it a test drive. Mercury is a financial technology company, not a bank. Banking services are provided through Choice Financial Group, Column A, and Evolve Bank and Trust members FDIC.