How to manufacture a billionaire childhood

20:13Sam Parr:And I distinctly remember doing that and being obsessed with it and building model airplanes, like assembling things that had clear instructions. I love doing. So, I mean, in a way, you chose to build things instead of doing 9 to 5, instead of doing a job. Yeah, well, I also loved, I had a huge passion for selling CDs. I remember I used to make like$30 selling like$3, you know, burned CDs. And I loved doing that. And for the longest time, I thought I was going to be in the entertainment industry. My hero was Ari Gold from the TV show Entourage. and I went to Belmont University because they had this degree called a music business degree, which I made it through three years.

20:53Sam Parr:And then I was like, I'm going to drop out of school. Just give me like the easiest degree I can get like with the credits that I got. So I didn't get to complete that degree. But the reason I got into media and the reason why I probably enjoy doing this and working in the content game is because I wanted to work with entertainment people. But then I realized that Hollywood is full of idiots and I hated them, but I can build my own little world like that. Yeah, I don't know how much of this is, like horoscopes or whatever, where you just sort of, you try to back test and fit anything into it. But I just was in Austin yesterday and I did a podcast with Monish Pabrai.

21:28And Monish has this thing where he tells these stories about Buffett. And he says, his theory is basically that a huge percentage of your personality is pretty hardwired and baked by the time you're five years old. And you don't want to spend your whole life fighting your nature. That's the first thing. And then he says that for kids, we do pretty much the opposite thing we're supposed to do. So he says the human brain, if you just look at brain science, is that there's a golden window between, I think he says, the ages of 8 to 18. So there's this 10-year window where a child's brain is developing in such a way that it can specialize and do some incredible things if you specialize during that window.

22:12and the people who do, and if you go look at like, oh, Bill Gates when he was coding or Mark Zuckerberg when he picked up programming or Mr. Beast when he started doing YouTube videos at age 12, like it's often that these people who become the extreme performers that they were doing something pretty specialized during this golden window. And he's like, in school, we tell them to do the exact opposite. Hey, go to school, spend 30 minutes in eight different subjects. Don't, you know, go an inch deep in each one. Don't care about anything. You know, don't specialize. become this like super generalist.

22:43That's the factory model that we have. So he's like, we're doing them kind of a disservice. He's like, your job as a parent is, you know, by five, their nature is somewhat baked. You observe it. And eight to 18, if they show an interest or an obsession in anything, feed it. Let them go crazy with it. Let them get obsessed. And lastly, like get them around as good of a peer group as you can. Those are really the only things you're going to be able to do is kind of his opinion. I don't know if I fully agree with that, but I think it's interesting. and then he tells a story of Buffett. And he's like, you know, when Buffett was a kid, he did all kinds of little hustles, right?

23:15Like he would buy a thing and he would sell it, right? So Coke bottles and pinball games inside of barbershops. But one of the things he loved to do was he would go to the racetrack and he would watch other people betting. And he didn't bet, he was a kid, but he would watch other people betting. He would watch the horses, study the track. And then what he would do is at the end of the day, he would go collect all of the discarded betting slips that the, you know, people go to the horse track, they drink, they watch the thing, they're having a good time. They just check away their betting tickets.

23:45And he would see that, oh, actually, this wasn't a losing ticket. That actually they got a third place payout here, they didn't realize it. Or they got a second place payout here, they didn't realize it. He would collect all the, you know, 80, 90 % of it's trash. But if even 5, 10%, he could make some money, then he would ask his aunt to go cash the tickets for him and that's how he made money. And like, it's not that different than what value investing is, right? He would go look at a thousand companies, a thousand tickets, you know, most of them are rubbish. But when he found one that had like hidden value, he would pounce on it and he would make money.

24:18And that's essentially how Warren Buffett, you know, invested for the first, you know, whatever, 10, 15, 20 years of his investing career. And he bought his first stock when he was seven. And, you know, so he was doing things in this kind of golden window as well, which I think is interesting, especially, you know, for you and I, we have kids not at that exact age yet, but, you know, I think about that stuff. I don't know to what extent you can control it or you want to try to control it, but it does seem like it's worth knowing that and looking out for the right signals rather than being blind to it.

24:46Sam Parr:There's this, I'm not religious, but I grew up going to Catholic school and you got to read the Bible a lot. And there's this biblical story where it's like someone's by a volcano or something, or I forget what it is, but if there's like a loud like earthquake or like a natural disaster, and then they're told like, you have to listen to what God's telling you. And they're like, well, I hear this really loud noise, but it doesn't like, I don't hear like a person talking to me. And they're like, even when things are really loud, the whisper or the God talking to you, it's going to sound very faint in a whisper.

25:18Sam Parr:And that's the challenge is you have to like, you know, like really pay attention when there's a lot of loud noise because the most important stuff is just going to be a really faint whisper. And you have to like try and hear it. And I don't really care about the message when it comes to God on that one. But I do think that like one, that's what this thing is because it's like that, that whatever you're being told what to do or you feel compelled to, it's a lot of times it's not a yell. It's like this really small whisper that you have to like, and that's like quite challenging is it's really hard to try and listen to like where you're being drawn to, you know, like or where your energy is pulling you to.

25:51Sam Parr:It's not a push. It's a very, very, very small, like faint nudge. Right. Yeah. And there might be false positives along the way. and it's only obvious in hindsight. Like when I was thinking about that, like what was I doing when I was 12? Because I wasn't, and I used to actually be like kind of insecure about this. I was like, I wasn't really selling lemonade as a kid and flipping CDs and sneakers and whatever. Like the pattern I see now that I invest in a lot of founders, I'm like, I didn't really have that. Like the light bulb didn't come on for me, at least in terms of like trying to do business until I was 21.

26:25And frankly, like I don't think I'm the best entrepreneur or CEO anyway. So like maybe that's true that that was the signal. But there were a couple of signs that when I did think back and I actually like took more time to think about, I was like, what the hell was I doing back then? What was I really into in a way that like, or what was I naturally pretty good at that I didn't maybe pay as much attention to, but now I can think about it. And the two that came to mind was, I randomly like entered like improv class and improv competition when I was like in sixth or seventh grade. and we like made it to like the Texas state finals or whatever for like what we were doing.

27:03It was like a duos improv, which like, that's what this is. This is duo improv, what me and you do twice a week. And like, that actually did come pretty easily. I did have a lot of fun doing it. I didn't triple down into it because I, you know, whatever, life happened. My parents didn't help me and I didn't know to ask for it. But maybe there was a signal there of like, hey, you kind of like this, making things up, thinking on your feet, riffing off a partner. If there was another way to do that, What would that look like? And, you know, I don't think I could have predicted podcasting, but it does make a little bit of sense now that I look back on that one.

27:34Sam Parr:Well, I did a podcast the other day and someone asked about you and I was like, in another lifetime, or maybe even this lifetime, Sean's going to be either like a comedian or something in show business. So that checks out. Yeah, I was in a movie or two when I was like a little, like in the same era, sixth, seventh, eighth grade, something like that. And then the other one that I noticed was I love video games, which is pretty common, you know, boys love video games. But the way I played video games was a little bit weird. And so if I said, hmm, what was, let's pay attention to the weird. You know, I used to play Madden or NBA 2K, but I would basically never play the games.

28:05I would only do franchise mode, which is just where you're the general manager. You're building the team, drafting the players. You're basically making bets. You're investing, essentially like scouting, investing, simulating to see the result. And I would just simulate like decades in these games without ever playing the actual game. And my sister would make fun of me. Like, are you ever going to play this game? Like, what is this like fantasy roster you're building? But yeah, I don't know. I think it's interesting to go look back. I'm not sure, again, how much of it is like forced narrative versus reality, but maybe there's something to it.

28:35I've now heard this enough times where I kind of got to take it somewhat seriously. And I think it is important because it's like when you are screwing a screw into the wall or whatever. And if you start out crooked, right? If you're at the wrong angle, no matter really how hard you push, it's just constant friction, right? You're just like breaking the wall, breaking the screw and breaking your own wrist, trying to make it go in. And then if you get things like aligned, right, it's like, oh, just, you know, four spins to the right, click. And I feel like a lot of my life was pushing screws into walls at the wrong angles, you know, trying stupid projects, trying things that weren't really in my nature, trying to be somebody who I wasn't.

29:16And man, life got a lot easier and it got a lot more successful when I sort of figured out like, oh, what am I actually like naturally pretty inclined to doing? Well, do you think you figured it out? Yeah, I think like what we do is like probably the closest approximation to it. Like if I look at what I do today, I get to nerd out on topics, which has always been something that I would do. Like I would always go down these like rabbit holes. And then this kind of duet improv type of thing, like being able to riff on topics and being generative with ideas has always been good. And then the other side of it is investing.

29:48I don't want to like play the game, but I like being the GM. I like being the sort of the franchise mode of doing this. And so I've had way more success, you know, investing or even incubating companies with other CEOs as operators now, right? Like I think in our portfolio is probably like, forget like angel investing, just like in the companies we own a big chunk of. There's like four companies or so where there's four CEOs and I don't do any of the day-to-day work. And it's performing so much better than, you know, back when I used to do my own startup and I was all in on it, right? So it's a better fit for me to do that.

30:22I didn't know you had four. You're doing shit that you don't even talk about. Well, I want to talk about some of them soon. And hopefully I will have some news sometime in the next few months that I can come on and maybe start to tell these stories. All right, let's take a quick break. And I got a question for you. When a buyer asks AI for a solution like yours, does your business come up? Most companies have no idea. And by the time they found out, they've already lost the deal to another company that did. HubSpot has AEO, which helps you show up in the moments when the right buyers are looking for a company like yours.

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31:03Sam Parr:What did you think of Austin? Austin is a funny place. A funny place. I went to my hotel room and I walked in and housekeeping was in there. but I was surprised. And I came out and I told Ben, I go, y 'all got white housekeepers here? I had a white housekeeper that my wife hired and I was like, I bet you she's going to be a drug addict. And I was right. She was a drug addict. I don't hire these guys anymore. It's like, there's this great standup bit where I forget who it was, like Aziz or if it was Hassan or I forget who it was, like an Indian comic was talking about like how they made it. And they were like, I'm going to go adopt a white baby.

31:47Like just bring a white baby to like events and like stunt on people because it's like, yeah, I adopted a white child. So I don't know. Austin is a fun place. I mean, one interesting thing is because we're, I'm in, you know, I'm in Austin, which is much more populated city. And we were just sitting like in a coffee shop, basically working all the time. So many people came up that love the podcast. That was crazy, right? And then they would tell me their story. Right. And it's like, oh, wow. And so, you know, it's almost like you get a lot of ideas for the podcast. Just talk to these people. Like this guy came up and he's like, I'm all in on social selling, social commerce.

32:19I know those two words apart. Like, what is it together? What does that mean? And he's basically like, you know, people who are making, you know, hundreds of thousands, if not millions of dollars, just making TikTok videos for products. And they're just getting affiliate fees, just making content. And they're not influencers. They're not famous people, but they make like the best way to sell this soap. this teeth whitener, this, you know, these leggings, this hoodie, and that they're generating, you know, 40 ,000 a month, 100 ,000 a month, you know, 200 ,000 a month, 400 ,000 a month. What platforms?

32:57On TikTok and whatnot. So like there's like live selling, that's like whatnot and TikTok. And then there's like just short form video. And I mean, I'm not, I wasn't like unfamiliar about this concept. We use it in our e-commerce brand, but it's amazing just to hear the individual person's story. It's like, yeah, she worked at this like hair salon. And then she just took the product from the hair salon and started talking about it on TikTok. She doesn't have a following, but the way TikTok works is any video, you know, it's like America's Funding of Some Videos, any video gets to have its, you know, its day on the For You page.

33:30And she realized like, wow, if I just get good at kind of like authentically, and I use quotes because it's like obviously not authentic, but like they tend, they don't look dressed up. They're not in a fancy place. They're in their bedroom. They look like they're just talking informally to you. Like they're, Hey, y 'all just want to tell you about, Oh my God, this, or like whatever this thing is. And they're just making a killing on it. And so, you know, this guy was like trying to build the agency around it and a podcast around it.

33:56Sam Parr:What's an example of product soaps, you said just anything, anything, dude. I don't know if you've seen, have you, are you like, are you tapped into this like wave of what's going on? No, no, no. So I don't, I, I, I don't have a TikTok and I've seen whatnot, but I buy a ton of stuff off eBay. So like I know about like buying you stuff. I'm not stupid. So I don't know what you're talking about.

34:20It's not part of the eBay trend, right?

34:22Sam Parr:Like this is all new shit. eBay? I should say eBay. What I mean is social commerce, like it's all like new products. It's not like it's just commission based. Like they're selling someone else's stuff and they're getting an affiliate fee. They're not selling like... And it's without permission. So it's not like they needed to cut a brand deal. Right. Got it. You just grab the product from the shop and then you sell it. And then brands can see if you move product, right? You move weight on your corner and then they start sending you free shit to try their stuff. And then you could try to sell their stuff.

34:54And if it works, it works, right? And if your video is good, then the brand puts ads behind it. So there was a really good podcast by our buddy, Sean Frank. I think their podcast is called the Operators Podcast, like an e-commerce specific podcast. He did one with the CEO of Comfort. Have you heard his brand, BMFRT?

35:11Sam Parr:I see that guy and I see this other guy named Greg Lubecki who started a thing called Bloom, which I think is energy drinks. But I'm seeing these guys all over the place and they're using phrases that I've never heard before. Like I knew what UGC was, but like they're using it in way different phrasing. And they're also like implying that they have like tens of thousands of people making this content on their behalf. And this is a totally foreign concept to me. And so this company Comfort, as far as I could tell, the total outsider went from something like zero to$500 million a year in revenue in like five years.

35:42Sam Parr:And I went to their website. It's just like a fleece hoodie, I think. Right? Yeah. Super basic hoodie. But yeah, so they're a good example of this. How big did they get to? So the model is this. The model is you have a product. The old way of selling it was the old way as in the last 10 years was you run Facebook ads and you run Google ads. And for both of those ads, you, your team makes the content. You typically will have an ad creative team in-house, one, two, 10, 15 people. Their job is to come up with concepts. They do photo shoots. They do scripts. They do static images. Give it to the designer, the editor.

36:18You make it. You run it. You see what works. You're putting paid ads. That's what's been working. Well, there was a new game in town. And if you remember, I kind of hinted at this maybe a year or two ago where I said, I invested in this company and it's gone zero to 30 million in revenue in like a few months. What was it?

36:37Sam Parr:Can you say what it was? I can't, I don't want to say the exact brand. So the brand blew up. It was in a bad way, not the good blow up. It was a supplement brand. It was crushing it. The product was all fine, but they got banned off Amazon because they were like, like manipulating like reviews of other companies or something like that, like of other brands or something. and so Amazon was like, oh, you guys were the ones who wrote a bad review about them? Boom, shut down your ad account. They weren't playing by the rules. Ruined the company. But, and I think I even told you at the time, I go, this is growing faster than any e-commerce brand I've ever seen and, you know, zero to 30 million in a couple of months.

37:14And I think I told you, I was like, I hope I can come on in a year or two and say the playbook that they use. Well, the playbook is more or less out now, now two years later, which is that what e-commerce brands do is you basically gift or, you know, called seeding. You seed your product out to not one, not 10, not even a hundred, but maybe thousand creators that are out there. And these creators are everyday people, non-famous people. So not influencer, not micro-influencer, not influencer. Person with time on their hands who has been on TikTok and Reels enough to know what type of content could work.

37:53and those people will make sometimes just like, you know, one video. But what ends up happening is that they realize, oh, I should just make 30 to 40 videos a month. I should make a video every day. And I'll have multiple accounts and I'll post it. And so they basically rapidly test content. And so now you've got, instead of having an in-house team of a couple people doing 10 to 20 creative assets a month and usually just thinking inside the box because it's like, this is my job. This is what I do. I work at the company. We have a way of doing things. You're just letting the market, letting the crowd figure this out.

38:29You're crowdsourcing your creative. And that's, UGC means user-generated content. So you're getting, in a given month, 3 ,000, 5 ,000 different pieces of content that go out there. Most of which get absolutely no views, but a few of which pop off. And then all of them look at you. Then you tell all the creators who are like, you know, on board, you say, look at this content. This hook works best.

38:50Sam Parr:This worked. And then they all start to remix. And then the hive mind gets smarter every single month. And they keep trying to do it. They keep trying to sort of one-up themselves. And brands like Goalie's a gummy, like vitamin brand. I don't know if you've seen their like commission structure for this. They started out with apple cider vinegar gummies and grew it to like, you know, whatever, 500 million or something in revenue in very short order. What? And then they got slapped on the wrist and they kind of tanked and they're coming back, whatever. But like point is they were pretty aggressive on this model.

39:21So what they were doing was as they found good creators who are good at making this content, they started incentivizing them more than the commission. So there's a default like commission on these platforms, right? 15%, 20%. You set your commission. What's a platform? TikTok. TikTok shop.

39:35Sam Parr:Oh, so you find all your influencers on TikTok? Usually, yeah. Wow. And so what you do is you go to those TikTok influencers. Again, sorry, not influencers, TikTok creators. and they get a commission. And so again, just to describe the system, it's crowdsourced, it's way higher volume. So you're talking about thousands of pieces of content a month instead of maybe a hundred. You don't control it. You don't operate it. In many cases, you never even met them. They just pull your product and your shop listing and they just decide, you just say, if you're an affiliate, use this tag so that you get paid if you sell product, right?

40:12That's the core idea. Now, what happens is on top of that, goalie started going crazy. So they were like, yo, if you do$10 ,000, you get 15 % commission. If you do$100 ,000, you get a trip to Miami. You do a million dollars, you get a million dollars in a month. You get this condo in Miami. You get this Lamborghini. They started giving away crazy shit. I'm making up the tears, right? The math made sense for them. But I have this like one cheater that goalie was giving creators. and like the top thing was a condo in Miami. The next thing was a Lambo. And then it goes all the way down to just like, yeah, you get like a bracelet.

40:48You know, like you go to Chuck E. Cheese and there's the prize wall. And like, you know, you end up with the shitty rubber frog. But like up there is like, you know, the Nerf blaster. And this is basically the model that they were doing. And so there's been several brands that, I mean, several, hundreds of brands that have aggressively used this strategy. And yeah, it works. It works very well.

41:09Sam Parr:What? I'm looking, I just Googled it. it said that they went from zero to$4 million a month in 30 days. Oh, they got way higher than$4 million a month. Maybe they did in 30 days, but they went way past that. Okay, so let me ask you a bunch of questions. This is so fascinating to me. One, is this stuff profitable? So a company like that, like that got however big, so four times 12 is 36 million. So they were at least doing 36 million a month. They were probably doing hundreds of millions a month. If you're doing that amount of money, are you actually creating a valuable company? Well, you ask two different questions.

41:41Is it profitable and is it a valuable company?

41:44Sam Parr:When I say profitable, I'm going to say cash flow positive. Should be profitable. Here's just basic math. Let's say you're giving a 20 % commission. So a way to think about that is you outlaid no cash up front. Okay, so no ad spend. This is, they take the risk of making the content. If they sell, then you pay. So you pay out of the revenue, not up front the way that normal ads work, right? I go to Facebook, put 10 grand in. I have no guarantee I get anything out. So with this, I only pay when they sell. I pay a fixed percentage of the revenue that they sold for. So let's say it's 20%. Well, that means my marketing spend is 20 % of revenue.

42:20Now, a normal e-commerce brand is spending somewhere 20 % to 50%, depending on their level of aggression, what phase of the business that they're in, etc., etc. Usually at the beginning, they'll run 40%, 50 % aggressively to go get a big customer base. And then those customers hopefully will repeat by. and that's where the profits come from those customers. And then over time, your ad spend as a percentage of revenue shrinks because you have all this returning revenue coming in. But at the beginning, you have no returning revenue. So it starts out pretty high. So is it profitable? Yeah, it should be profitable.

42:52It doesn't take a lot to make something unprofitable, but you should be able to do this profitably. Now, are these companies valuable? That's a different question. Well, hold on.

43:01Sam Parr:When we say profit, I'm actually saying like, can the owner pay themselves a huge sum? If you're making... Yes, but it depends on where you are in your life cycle. Year one, no. Year two, maybe also no. But also could be yes if you just decide to grow slower, right? So it's up to you how much you want to prioritize taking market land and going for the opportunity. Because Sean Frank will always say you could have a business. He's put the numbers out there. I forget exactly what he said, but it was something like$100 million a year. And the two owners are barely drawing seven figures a year. E-commerce is like startups where the spectrum of outcomes ranges from everything to, you know, you can go from loser shirt to, oh my God, this person is rolling in profit.

43:47I know people on all ends of that spectrum. There's operational excellence. How are you going to run? And so there's no like rule. What I'm saying though is that in some cases it's like, let's take startups for example. Startups, you're fighting gravity. Almost every startup fails, even the ones by smart people, even the ones by smart people who work hard, who are like doing all the best practices of management, right? They'll still probably fail because building a billion dollar startup, which is usually a novel idea or disruptive company, like the venture startup game. I'm not talking about like person who starts a barbershop.

44:18I'm talking about venture startups. It's such a hard game. The gravity is that you're going to fail. E-commerce is not like that. E-commerce is, the gravity is you should be able to succeed if you're smart and hardworking. And so same thing here. Now, are these companies valuable? No, not really. Because value is typically based on defensibility. And a buyer of this business doesn't know how long this channel, this tactic is going to last. And if this is what's driving all your growth, then you're going to trade at a much lower multiple.

44:47Sam Parr:This is for the folks out there who have a business that does at least$3 million a year in revenue. Because around this point, that's when you're able to look up after being heads down for years building your company. And you realize two things. One, you've done something great, but you're still a long way from your final destination. And two, you look around and you realize, I am all alone. I've outrun my peers, which means you're now making$10 million decisions alone, by yourself. And that is when mediocrity can creep in. My company, Hampton, we solved this problem by giving a room of vetted peers, of other entrepreneurs who are going to hold you accountable, call you out on your nonsense, and help show you the way.

45:25Sam Parr:Because the fact is, is that there's only a tiny number of people in your town who know what you're going through and who have been there. And they're hard to find. And if you can find them, it's hard to have this explicit time, this explicit place where you sit down, where the rules are clear, that we are here to help each other and to be one another's board of directors. The biggest risk is not failing. You have a company and it's working. You're going to be fine. But the biggest risk is waking up 10 years from now and saying, shit, I barely grew in business and in life. And for people like you who are ambitious, wasted potential and regret is what we want to help you to avoid.

45:59Sam Parr:We have made so many of these groups and we have a thousand plus members. And I know this stuff actually works, whether you work with Hampton or you get your own group on your own. But having a group like this, a group of people who you meet with in real life once a month, it can change your life. It changed mine and I know it will change yours. So check it out. joinhampton.com It seems like you could start off being a nobody company and you sort of have a get rich mentality. I do think it's better to start off thinking my brand should be amazing, my product should be amazing, and that's how I should grow.

46:32Sam Parr:And I add ads and all these tactics on top of it. But I think that some companies do start off doing these stupid things early on, and they swap. They can switch. I don't know anything about Ridge. But there's a world where this was a silly, dumb thing, and then he switched it. I'm just hypothetically making this up. It could have switched to like, oh, this actually product is good and we are going to invest in our brand. I mean, have you seen like original athletic, have you seen the original athletic greens? No, was it lame? This is, you know, one of the early days landing pages of athletic greens.

47:09I mean, it's like, this is late night Beachbody MLM infomercials, right? dude with six pack girl eyeing him all your vital nutrition in 30 seconds or less money back guarantee 100 satisfaction limited time offer act now giant orange arrow rush my order is the name of the button for buying it uh the world's number one superfood cocktail antioxidant rich with great sweet taste uh okay so that's like you know an old version of that that's not even the original version that's the old version right and you go look at it today right if i go to like the ag1 website yeah it looks great it looks like you have hugh jackman drinking from a glass vase his daily, you know, green nutrients.

47:58Right. With clinical trials and blah, blah, blah, blah. And like, you know, who knows? Who knows if this shit works or not. But, you know, yes, you're right. Like you can absolutely start a little janky, a little move fast and break things, a little, you know, fake it till you make it. And then you can adapt and you could like, you know, go more and more legit over time. You can improve your formula. You can improve your packaging. You can improve your sales methods. You can get off one hacky sales tactic and get more diversified, right? Like go from there. I mean, Moyes who did Native, I think is one of the best examples of this.

48:35I think he's told all this publicly. So I don't think we're saying anything that's out of school here. Here's the timeline that I love. Moyes is sitting next to you in a coworking space. and he's at some point had this idea of, he looked at Etsy and saw that the number one selling product on there was a natural deodorant. And he realized, oh wow, that's market validation. Cool, like that. Contacts a woman on there, says, hey, can I take your natural deodorant? Can I put my label on there? You know, goes outside the office. There's like a restaurant.

49:06Sam Parr:It was like homemade, it was like homemade ammonium. I forget the drug or the chemical, something free, you know, What's it called? Parabens and aluminum and parabens. Aluminum free, whatever. And it was like a mom and pop thing. And he was like, let's commercialize this. Yeah. So he was like, I'm gonna put my label on it. We've both seen right outside where you guys worked, there was a restaurant or something called Native that looked exactly the same with the exact same logo. Somehow that ended up to being his name and his logo. You know, he grew the thing with cheap Facebook ads and grew it like crazy and was like packing orders himself on the kitchen table.

49:44when she was like, dude, I can't make like 10 ,000 bars of deodorant in my bathtub anymore. He's like, okay, like, can I buy the formula off you? And I'll move to like another person and figure that out. He used to put deodorant on his armpits, run around the block, two different sticks, two different formulas, run around the block, have his brother smell each one and be like, which one's better? And like, that was his like clinical trial that he was running. And so, you know, like you do what you got to do. Somebody asked him, I remember early on, like he told the story where somebody said like, Like, you're starting a deodorant company.

50:14Like, Moise, do you know anything about deodorant? And he goes, today, I know nothing about deodorant, but in six months, I'll know everything there is to know about deodorant. And that was true. And like, you know, ends up selling the company for$100 million to Procter & Gamble. And now it's in Target. It's like the best selling thing. Now it's probably a multi-billion dollar company. Multi-billions in revenue, right? Like unbelievable, unbelievable,

50:36Sam Parr:like sort of story, right? And there's an even better part where Procter & Gamble or someone was in the meeting to buy the company. And he was like, well, how do you expand? He's like, well, can you put the native logo on a shampoo bottle? And they go, yeah. I go, okay. That's what you do. Do you think you guys could print it on toothpaste? All right, you'll be fine. And by the way, there's another great story. People should go back and listen. He was like in the first 20 episodes of this podcast. I'm shocked that he says some of the stuff he says. Moise is very good with words. Oh, he's super entertaining.

51:08He tells a story of how when they were trying to sell, they didn't own the trademark. for Native? And he's like, shit, Procter Gamble is not going to buy this if I don't have the trademark for my consumer good that's going to be on the shelf of Target someday. And so somebody was squatting on it. And the negotiation story of getting that trademark was great. There's just so many great stories in the formation of Native.

51:29Sam Parr:A lot of people don't realize this, but Moyes, now that I think about it, it is, so Moyes used to have a company called Casker or Caskers, which, did you know about this? It was like a spirits brand, but I don't actually know, what was it? Was it actually a liquor or was it a DTC shop? What was it? It was basically like they would get rare whiskeys and I think wines that only had limited runs and they would do drops. So it was sort of like this was like during the guilt group or guilt craze where it was like, you know, crazy good deals. But you only have a limited amount of time to buy it. So I think it was basically like a email list of like wine and alcohol buyers of who like rare stuff.

52:08Sam Parr:and then they would broker deals where they would send out an email drop of like a rare whiskey. And he sold it. He sold it for, I forget how much, but he changed his life at the age of 30. But he has this cool blog post that interestingly, it's actually on The Hustle, my old website, but it used to be on Medium. But listen to the first few sentences. The hair of a dog is a sports bar located in Lower East Side of Manhattan. Like most sports bars in New York, it has an ungodly number of televisions, a beer pong table, and 3.5 stars on Yelp. More importantly, though, Hair of the Dog has a single dollar price rating, which is really important when your goal is to be drunk by 3 p.m.

52:49Sam Parr:It was October 2013. My co-founder and I were in negotiations to sell caskers, an e-commerce site we founded just one and a half years ago that sold spirits, meaning booze, not ghosts, online. Negotiations had already dragged on for a few months, and we were days away from our scheduled closing date. And then he goes on to explain the story of how he sold. But isn't that a beautiful first couple sentences? That's awesome. And then he gives five lessons about his starting casket. He called it Birchbox for men, if you ever heard of that. But he says, be frugal, be relentless. And then he says, be experimental, be careful.

53:23Sam Parr:And he gives all these cool tidbits about it. Last question. Can this work for B2B products? Why do people only do this for consumers? I think one of the great arbitrages is that B2B businesses don't do the proven tactics of B2C companies. So B2C companies are out there fighting for their lives with customers and marketing to try to build their brand. And B2B companies, if they simply borrowed the playbooks from B2C, not everything would work, but way more would work than doesn't work. And I think it's woefully underused. And usually the skill sets, a lot of people who are in B2B don't know this because they don't come from that world.

54:03People in consumer tend to stay in consumer or they go to B2B and they are so scarred they only bring over like a portion of it. But I think a lot more of it would work. This turned out to be pretty cool.

54:15Sam Parr:We were supposed to have a guest on. This is a little behind the scenes. We were supposed to have a guest on. Something happened to last minute and here we are and it turned out to be quite fun. That whole thing was live and improvised unprepared. Here we go. All right. That's it. That's the pod.

54:37Hey, let's take a quick break. I want to tell you about a podcast that you could check out. It is called The Science of Scaling by Mark Roberge. He was the founding CRO of HubSpot, and he's a guest lecturer at Harvard Business School. The guy's smart. And he sits down every week with different sales leaders from cool companies like Klaviyo and Vanta and OpenAI. And he's asking about their strategies, their tactics, and how they're growing their companies as head of sales or chief revenue officer. If you're looking to scale a company up, if you're a CRO or a head of sales that's looking to level up in your career, I think a podcast like this could be great for you.

55:08Listen to The Science of Scaling wherever you get your podcasts.