Our 2020 Predictions For OpenAI Came True… Here’s What’s Next

26:10He goes, I love the hustle. And I was like, all right, let's talk. I started talking to him, which just bullshit. At the end, I go, yeah, if you're ever in SF, just let me know and we'll help you out. And I meant it as like a way to end the conversation. And I learned at that moment, you should never say that. I get a message three weeks later and he goes, hey, Sam, it's the guy from England. And so my flight lands tomorrow and he just shows up and we have HustleCon, like my big event, and we make him work the whole event. And we're like, here, you could sleep on our couch. And we dress him up in a Texas outfit.

26:44He had never been to America before. We gave him cowboy boots and a hat that we had in an office and we called him Texas Sam the whole weekend. And he stayed with us for like five days, all because on the phone I was like, yeah, you know. So now I don't say those things anymore. If I don't mean it, I try not to say it. Wait, why? That sounds like an amazing experience. It sounds awesome. It was only... No, it could have been bad. That's a lemonade out of lemons situation for you. It could have been horrible. What was the other one? You had two. Was it Thrasios? Thrasios, yeah. So Thrasios was this company that was buying up all the...

27:14It was a roll-up, an aggregator of Amazon brands, Amazon FBA brands. One of the fastest growing startups ever. I think they went from zero to a billion dollars in market cap or valuation in like 12 months. And tons of revenue and then tons of copycats because everyone was like, oh, Thrasio, one of the fastest growing startups in the world. We're going to repeat this. And we had friends who did it too. Some of our friends went and did the same thing where they bought a bunch of Amazon businesses. May they rest in peace. But it didn't work, right? That was the problem. So, you know, I remember calling Andrew Wilkinson and I was like, yeah, what do you think about this Thrasio stuff?

27:48And I was like, I kind of get it because, you know, they're doing, you know, I think roll-ups in general are just like a really nice blueprint for a business, this roll-up kind of makes sense. Andrew had done a semi-roll-up with Shopify apps. And so I was like, do you see this as a really good opportunity? What do you think? And he goes, I think they're picking up pennies in front of a steamroller. And I'd never heard that before, but I guess that's a phrase, like a Charlie Munger type phrase. If Andrew says anything interesting, it most likely came from Charlie Munger. That's a zero. And Charlie has wonderful phrases.

28:25So most of the wisdom he has is from Charlie Munger. And I go, what do you mean? And he's like, it's like picking up pennies in front of a steamroller. You're picking up these little kind of like what seems like these little free cheap assets. And you think it's all going well until you get completely run over. And if you fast forward till today, that's pretty much exactly what played out. These guys bought up a bunch of businesses. They rolled up what looked like a lot of revenue. And then they got run over. And at the time we did an episode and the things we had said were basically, um, so I basically took Andrew's point of view and I was like, that does feel more right than the other way.

29:02And I said, well, what, what could be the problems? And I was like, basically these FBA businesses are not very durable. So if you're going to do a rollup, you kind of want durability to be one of the highest characteristics. Like normally in business, we think growth is the best thing, but actually when you're buying businesses, it's more about not being wrong than it is about everything. going right. And so you want durability when you're rolling these up. They bought trash. They bought like they would buy like one of the thousand vendors on Amazon selling Chinese dog leashes for$25. You know what I mean?

29:35Like they, I think they bought trash. So like, you know, Amazon is not durable for many reasons. Number one, the, you know, like the, your, your spot in the rankings for these commodity products really matters. And like, it's a constant battle to get your ranking to stay high, which includes things like people going and leaving fake reviews on your thing so that your account gets taken down. Like, oh, let me just spam you with reviews so that Amazon detects you and then delists you, right? That's shit like that. Or copycats or people who pay more or whatever. Then there's Amazon themselves launching basics.

30:08So for every good category, Amazon's like, cool, here's the Amazon basic. I don't, what do you know? It's at the top, right? Like that was also happening. Then there was the last thing that sort of the death blow, which is Andrew at tiny. They sort of believe what I think a few other of these like hold code types believe, which is that synergies are massively overrated. That like, it's very easy to talk yourself into. We're going to buy these five companies and then synergy. And it's like, what synergy? It's like, um, we're going to centralize the back office and we're going to, uh, cross promote with each other.

30:43It's like, no, actually none of these brands had enough brand love for you to cross promote anything you didn't nobody trusted you um the synergies in the back office actually just turned into like a bunch of people not really watching what was going on in these individual businesses the way they were when it was just one person owning them so what's the update on them so thrasy was basically dead um it's i don't know i don't exactly what the stage is is it let's say the fire sale bankruptcy but it's dead and so are all of the aggregators and so now there's like the opposite phenomenon there's like a deloading which is actually probably a better opportunity to go pick the best 10 assets from all these aggregators who are completely underwater and they just have to basically get rid of all these assets.

31:24And so, yeah, Thrasio and all the Thrasio copycats did not work out. All right. I'll tell you one that I wasn't exactly right. And the times that this turned out to be true, it didn't play out how I thought it was going to. So something that I've talked to you about, I think since 2019, 2020, was privacy. So if you look back on some of our episodes when we were still in their old office, so this was 2019, I had this insight from the founder of Pandora. So Pandora is the music service. The founder one time told me, he was like, yeah, like many of our users are like middle of America, like dentists who like have Pandora playing in the background.

32:03And what we've noticed about them is they sometimes won't sign up because they don't want to click the link that says they agree to our terms and services and our privacy statements. And to me, that meant the average Joe cares more about privacy than a lot of people think. At the time, 2019, privacy wasn't that big of a thing where you just click yes, no matter what. I think that that, and so I predicted there's going to be a lot of businesses that are going to be created on top of that. Another example that I had was DuckDuckGo. DuckDuckGo is a privacy search engine that doesn't track you in the same way Google does, their searches have gone up like crazy.

32:39And the business has gone on to raise$100 million, of which most of it, I believe, was a secondary sale. So they're quietly killing it. But I thought that this was going to be more popular than it has been. It's kind of gotten popular because TikTok, so I think in Minnesota it is, or Montana it is, they have banned or are trying to ban TikTok for privacy reasons. They're mostly doing it because they don't like China, not because necessarily. So this is where I was wrong. They're doing it for the Chinese purpose, not exactly the privacy purpose. But I thought that this was by now going to be a lot more popular than it is.

33:13It's slowly growing, but it's not. We don't care if you give up all your data, but you better give it up to an American company. Yeah. You better give it up to us. Yeah. So that has that. We didn't I didn't nail that yet, but I'm still I'm still holding out. But I thought by now it would have picked up a little bit, but it hasn't. I'm going to give you one that we got right and wrong at the same time. Meaning we did an episode back in 2020, July of 2020. COVID has been like raging for three months. And we do an episode called, is GPT-3 the next big thing? Episode number 94. We're like in 500 now.

33:50This is 94. And we had gotten access to this tool called GPT-3, which at the time you had to like get an API key. They had to borrow that. You had to get a friend to get you an invite to get you. And it wasn't that good. It was okay. We were pretty stunned by it, mostly because we're 12 year olds and we like made it write like a rap song in the form of Cardi B for us. And we were like, this is hilarious. This is amazing. It just wrote a rap. Like this rap is actually good. I said, write a rap by Cardi B. And the title of the rap was Walk That Plank. And it was a very long, It was like it had rhymes as if Cardi B was saying it.

34:28It was very, very raunchy. And we were both so impressed. And we were like, this is amazing. And we were basically like, hey, this is super cool. And so we correctly, back in July 2020, before ChatGPT became the fastest growing product of all time, before OpenAI became a$100 billion company, before AI was the trend, we released an episode with the title is GPT-3 the next big thing? Answer was yes. However, I count this as an L. Why? Because we just giggled about the rap lyrics and didn't do shit else. We didn't do anything out of it. The move, the optimal move was drop everything and go work for OpenAI.

35:09Which you said in one of the episodes you said, if I'm smart I should drop everything and go work in that area. And I'm not smart, turns out, right? then i proved to myself that i was not smart i could have there was a hundred ways to make a hundred million dollars with this i could have started a company using gpt3 as the the backbone which the guys from jasper did they were like oh let's use this to help marketers write blog posts write tweet storms write uh captions write anything that story needs to play out still though yeah but they built a company that like got to one of the fastest growing companies i've ever seen Getting ARR over$50 million in one year is like insane.

35:50And so could have started a company, could have gone and worked for OpenAI, could have invested in the OpenAI spinouts like Anthropic, which is now a$20 billion company, or go through the list. Could have, what else could I have done? I could have just, yeah. So between investing, starting a company, or joining a company, there was a lot of different ways to capitalize on that opportunity that we identified. but I didn't. And I think this has happened, you know, many times where you sort of like you, the opportunity to the elephant in the room is the opportunity. And you just sort of like, Oh, that's cool.

36:26There's an elephant over there versus being like, Oh my God, wait, stop everything I'm doing. And let me reassess what I'm doing in order. What's this analogy? Do you kill the elephant? Are you going to kill the elephant? Look, look, you know how it is. This analogy is on the fly. Sometimes you got to weave two and two together. Do you kill the, are we going to kill it? the elephant needs to strike while the iron's hot. Now you got an elephant that's striking iron, right? Like we don't know where this is going to go. And the elephant's in Rome, my friend. It's like that Michael Scott, that Michael Scott episode of The Office where he's like, sometimes I just start a sentence and I have no idea where it's going to go.

37:02That's podcasting for you. What's the, what's the, Brian? Okay, so let me preface this. I, one of the things I like to take pride in is either hiring people before they get like, before they kind of reach the pinnacle of their career. I also like this on the podcast when we find interesting people and we talk about them. A lot of times they're still popular, but we got them before the curve. One of them was Andrew Huberman. We interviewed Andrew Huberman. I forget exactly when, but I remember when he interviewed us, he was just using his AirPod headphones, looking into his laptop. It looked like he was in a bathroom or something.

37:39As if he ran to some room. It wasn't a big deal. So that one was a cool one. So I got somebody here that this is all you. So you come on the episode one day and you go, you know this guy, Brian Johnson. And I'm like, nah, not really. You're like, you know, Venmo? I'm like, yeah, of course. And you're like, well, it's owned by a company called Braintree. You know, Braintree? I'm like, vaguely payments company, something. And you go, listen to this guy's story. So this guy's story is basically Brian Johnson. I'm not gonna do his whole life story, but like interesting kind of early on door-to-door sales type of guy ends up creating a tech company, Braintree buys Venmo, sells Braintree to PayPal for like 700, 800 million dollars, creates this like Neuralink type of thing, this brain reader.

38:23And you're like, but forget all that. I'm like, forget all that? That was a lot. That was amazing. You're like, forget all of it. Go to this website, blueprint.brianjohnson.com. And I go and it's like size six font. It looks like I'm reading from like a textbook. And you're like, this guy's measuring every part of his body, every single organ um he is measuring it and then he is optimizing it and he's doing crazy shit and look at this he's been doing this for like a year and i had never heard of this most people had never heard of this brian johnson now i would say like i think he's kind of tipped where like actually in the tech industry everybody knows about him yeah but even some mainstream people they'll call him the guy who's trying not to die or something like yeah oh that guy yeah i've seen him he looks weird right like it was like that like because i bring him up in like every conversation I could find an excuse to because he's fascinating.

39:11And people are like, that's great. Oh, I just don't feel like that's going to work. It's like a very polarizing thing. But you found this early and you were watching him. You were like talking about it. Then we got him on the pod early on. It was great. And we're about to release another episode. I went to his house. We recorded another one. But like, I feel like you spotted, this was your Uber angel investment, right? You spotted Brian Johnson way before anybody else was really paying attention to him. Let me explain the story. It's been long enough. I can tell the story finally. Here's how I found out about Brian.

39:40I can't name names. I have a friend that was going on a first date with this lady he had just met. And he goes, hey, Sam, I'm going to take this lady. She seems awesome. I want to take her on a first date. I'm going to take her. I have a little plane. I want to take her up in the plane. And we're going to fly around F1. You know, F1 was in Austin. We're going to go above the stadium. It's going to be an ordeal. Would you and Sarah like to come on this double date? I would love it if you'd come. We said, yeah, sure. Sarah gets sick. And I text him. I go, hey, man, Sarah's not in anymore. but I'll still go.

40:09And so I go on this date and we go on this date and she's a lovely woman, whatever. And she, it wasn't trying to be cool, but I was trying to hype up my buddy and I go, hey lady, have you ever been on a plane on a first date? Like, this is pretty cool. She wasn't trying to damp the mood or, you know, like rub it in this guy's face, but she goes, oh yeah you know this other guy i used to date it he he liked to fly and we're like huh so we asked a few more questions and we're like what does he fly and she named some jet that's like a 40 billion or 40 million dollar jet and we're like what and she's and and then she says something like yeah but he likes to fly it himself but he has a staff and we're like who the hell is this guy and so i google it like who this person is and that's how i find brian it was she used to date him and that's how i find out about him i just start googling and i come across blueprint that he just launched a few weeks prior.

41:06And I'm like, this guy's amazing. That's how I found Brian Johnson.

41:12How did that date go, though? It didn't work out. I'm a religious decision by you to join the date. I joined the date. Dude, it's them two in the front two seats and me in the back. And I have the headset, but I'm like putting my hands over there like, hey, guys, like...

41:33it was so funny i had never been up in a plane like that i was like can i pass this up can i still go and i was pipping them up the whole time i was like hey guy have you told lady uh about that one time you did this amazing thing but you're doing it through the plane headset thing which is like you have to yell yeah but i'm still leading up Like, hey, how about the time? Yeah, like, did you tell her about the time that you paid for everyone's dinner? It was$2 ,000. Roger. Yeah, I'm like, I'm trying to like, pip him up while I'm wearing this headset. You're like, pointing out like, hey, we could go there next week.

42:16Yeah, I was like, hey, guy, did you tell a lady about the time that you had the box seats at the F1 and you took all of your friends because you're so nice? yeah it was like that type of thing it didn't work out though i tried my best guy i'm sorry you know who you are if you're listening to this that's uh that's hilarious you um you had a couple more on here i don't know if you have time but you had a couple more in here that that looked kind of interesting so you had uh do paid communities and then what's this inertia one let's do inertia okay so you this was you you you talk a lot uh that's no surprise but every once wrong you say something that's pretty profound one of the profound things that you said it stuck with me this was in 2021 march of 2021 you had this episode uh where you it's just called inertia i believe and you said um inertia explains like uh inertia explains why 90 of people are doing what they're doing in my life i've had moments where i realized inertia is a bitch inertia is the reason why i'm doing these things not because not actually because i want to but because of inertia.

43:19And oftentimes, I've got to check myself and ask myself, am I really doing the right things? And I think that you were referring to a business that you'd previously sold, where it wasn't doing that well. And you're like, do I even believe this is a big opportunity? Would I even be doing this if I weren't already doing it? Would I have hired these same people? Would I work with these same people? The answer at the time was hell no. And that's when you decided to get out. So my question is, A, no question, comment. That was good. That was a really good insight. But question number two, you've since sold a business.

43:49So you started and sold a business, I think, post this comment. Yep. Do you still think about inertia? All the time. And by the way, this came to me because... How often do you think about inertia? It's like the Roman Empire for some guys. For me, it's inertia. This happened because I had a come to Jesus moment. I was with our buddy, and we went to, we used to go in San Francisco. If you drive like 30 minutes down, uh, South out of San Francisco, there's these like casinos that are like half casinos. Yeah. So we go down there and, uh, we're hanging out, we're playing, we're having a good time at the end of the night.

44:29He's like, um, he's like, so why are you? He's like, so I don't get what you're doing. And I go like casino. What are you talking about? He's like, no, no, no. This whole thing you were, because I was at Monkey Inferno at the time. And to the outside, what I was doing was the greatest job ever. If anybody had ever seen, you've seen our office at Monkey Inferno. It was literally the nicest office you have ever been to in your life. I called it a billionaire's playground is what it was. And that's what it was. He literally built his, a billionaire literally built his dream office and we just got to use it.

44:59There's a chef every day and there's a gym and there's a, but it's like for only the 15 people that we were there. Yeah, and then you had 20 or 15, you had 20 or 15 engineers who are paid really nicely and you can just do whatever you want. And the job was, Sean, you get to come up with any idea you want. Here's a team of super talented engineers to build them and designers. Here's the funding. You never have to go raise funding. You get paid salary and you own the equity. By the way, you don't want to focus on one. Go ahead, do four at a time. Build four at a time. You have enough resources. Go ahead, do everything, right?

45:30And I'm 24 years old when he names me CEO. And at 24, that was the greatest opportunity the greatest experience ever at 25 incredible opportunity. Then I was 29 and I was still doing the same thing except for now the pressure of like succeeding, like at the beginning it was like, dude, this is going to be awesome. We're going to, we have so many shots on goal. We're going to do it. Then we took a lot of shots on goal and we made some good things happen, but no big, huge win, which is what we were all going for. And by the end, we were really trying to like force a square peg into a round hole.

46:07It just wasn't working, but our mandate was like, build the next Twitter, build the next Snapchat. It's like, dude, that's really fucking hard to do, but like, okay, we're going to keep trying. And so I got this talented team in this beautiful office. I'm CEO. I'm getting paid. Well, I got equity. I got everything you would want. And here's my best friend. The guy looked up to saying, what the hell are you doing? And I was like, he's looking at me like I'm a junkie. Like, dude, what are you doing with your life? And I'm like, what are you talking about? This is amazing. Of course, this is amazing.

46:35right and he's like told me how much money you made back then and i think it was like low six figures like over it was over a hundred thousand dollars but less than two hundred thousand dollars and i remember when you told me that i was like making 160 at the time yeah i was like that's the most money of anyone i know like you have a hundred thousand dollars like that way it was huge i remember you told me that month that amount and i was like you're so it was huge to me too i was like this is amazing and then i was like if any of these ideas hit this is great so he's talking to me he's just like i feel he's like i feel like you're just doing the same thing over and over again and not getting a result you want.

47:07And I was like, he's basically asked me a very simple question. He's like, you know, if you weren't already working on this project, if I just took the project away, if tomorrow this whole company had to fold because, oh, they forgot to pay their bills and whatever this folded tomorrow, would you pick up the phone? Would you call these same people and say, hey, we're still doing this idea, right? That's the biggest idea we could possibly think of it's the one we must do would you call these same people to work on the same idea and my answer was yes the same people hell no not the same idea he's like he's and i was like that's kind of a shitty realization to have it's like i was like am i an idiot and he's like no he's like this is common he's like inertia is a bitch and he's like almost all of us are just doing what we're doing because we were already doing it and like this this even happens with investments.

47:58After we got acquired, I got a bunch of Amazon stock. And so my portfolio was like super skewed towards Amazon. I was, you know, all of a sudden here's millions of dollars of Amazon stock. Okay. If, if you had just given me the millions of dollars, I wouldn't have put all of it into Amazon only, but because it was already there, I was like, should I sell Amazon? I don't know. It's a good company, right? It's like, because it was already there, my decision was totally different than if I had just re underwritten the decision from scratch saying, if I just had this money today, is this exactly how I would allocate it?

48:29The same thing happens in your portfolio as happens in the time of your life. Would I allocate my energy and my talents to this project? Or am I just doing it because I've been doing it? If I'm just doing it because that's what I'm already doing. And I think the sad answer is that for most people, they're doing what they're doing because they're already doing it. It's not the thing that if they had a blank slate today, they would just go back and recreate this. That's the same argument my wife gave to me about selling HubSpot stock. I've not sold any. And she was like, well, would you buy this stock anyway?

48:57My argument was, well, first of all, I do like the company. But do I like it enough to have that much of my portfolio in it? I don't know. But my argument is like, well, but I don't want to pay taxes. And frankly, I'm not sure if that's a good argument or not. But I am a victim of it as well. Yeah, of course. There's nuances to some of these things. But that same principle just applies to a lot of parts of your life. A lot of people are in relationships they don't want to be in. because they're already in the relationship. They're in jobs. I don't want to be in because they're in it. And I just kind of had this like, it was 2 a.m.

49:31and I'm in this Chinese casino and my friend is telling me this thing. And I remember we drove to our office, a badge in at like 2.30 in the morning. We go to the whiteboard and we say, we're going to spend the next hour trying to figure out if we can actually make this company work. And if at the end of this hour, we don't look at a plan on this whiteboard that we feel is like, this is going to work. Like, I believe that this is worth a shot. Then I'm going to sell this company like tomorrow. I'm just going to get out of this company. And then at the end of that hour, we looked at it. We were like, this is, I mean, these are all just like random long shots that like, we can't sit here and say we have a ton of conviction in.

50:03And then like the next day I talked to our main investor and I said, I think it's time to shake it up. Like I need to shake up something in my life. This is all beautiful. This is amazing. I can't believe you gave me this experience, but like, I don't want this anymore. Let's either sell the company or you should replace me or something. Something's got to change. I can't unhear what I heard last night. And, uh, I have a lot of flaws, but the one good thing I have is that once I hear the truth, I just act on it. Like, I just agree that, like, I've heard the truth now and that's it. There's no going back from that.

50:34Whereas I think some people will see or hear the truth and then they'll go into denial or they'll delay. And I don't do denial or delay. That's a good one. Yeah, I always, I thought that that line, inertia is a bitch. I remember that one. So I had to bring that one up. Hey, quick message here, because you know that feeling when you send a wire and it actually works? No friction? Well, I've used Mercury for years now, and let me tell you, it just works. And that's why I use it for not one, not two, but eight of my companies. From credit cards to invoices, I have everything in one place. There's no janky dashboard.

51:07I'm never told, please visit a local bank branch. None of that tomfoolery. And a few months ago, I landed a big client. And the first I did? I sent them a clean, branded invoice. Boom. Deal closed. Cash in the door. That's the kind of banking experience I want, and that's why I use Mercury. So, if you're running a startup and you want banking that feels like it's built in this century, well, go to Mercury.com and get started in minutes. Mercury is a financial technology company, not a bank. Banking services are provided through Choice Financial Group, Column N8, and Evolve Bank & Trust members, FDIC.

51:38Maybe the last one is paid communities. So, I've been interested. If you listen closely over the last 550 episodes, there's like two to three things that I've been obsessed about. And I knew I was going to act on one of them. I acted on one of them. It's a paid community. By the way, can you say the two or three? What would be the two or three? Helping people find jobs. So I call it job boards. It's beyond that. But I've always been fascinated by that. And then creating somewhat related, but I've always been fascinated by the trucking industry or other blue-collar essential jobs that don't have a lot of technology or software in order to help them be more efficient.

52:20So those are two or three things that I've always really liked. And then, of course, B2B media companies and database and research businesses. But the other one that I really loved was paid communities. And if you listen closely, starting in 2020, I did a lot of breakdowns on different paid communities. So I mentioned Tiger 21, Vistage, which has since sold. So I talked about Vistage. A lot of people didn't know what Vistage is. It's similar to what Hampton does. It's similar to what YPO does. But the target market is CEOs and business owners of plumbing companies in the middle of America. It doesn't sound that huge, but it has since sold for about$1.8 billion, I think about 8 or 10 months ago.

52:58And now it's doing close to$500 million a year in sales, very profitable. and so i talked about paid communities and i talked about tire 21 a few other ones here's the i made a list of pros and cons back in 2020 so this was march 2020 and i'll tell you if i think the pros and cons are true since i've now run hampton for about one year so pros of paid paid communities they can grow quickly they seemed fun to run if you're interested in the topic you don't need a lot of money to start them they definitely seem profitable um and then the cons where a lot of times they don't scale that well. I think churn could be pretty high.

53:36And those were my two main cons. So the truth is that they can grow quickly, but you don't want them to grow quickly. You want them to grow slowly. So I was a little bit wrong about that. Can you start them with zero money? Zero dollars? Yes. I started Hampton with no money. We didn't even buy a website or a domain name. Can they be very profitable? Yes. The answer is yes, they can. What I got wrong or didn't mention was how meticulous you have to be about growth. And they can get big, but they just take longer. And that's okay. Because I think if they take longer, usually, not always, if something takes longer to grow, maybe that means that it's going to die, is less likely to die quickly.

54:18Example, Thrasios. Grew quickly, probably he's going to die very quickly. There's a lot of examples of that. And so it has, in fact, proven to be a big business, or it can be a big business. it's harder to grow than I thought, but not because of demand, but because you don't want it to grow quickly. You need it to grow slowly. You have to be really thoughtful. So I underestimated how challenging that is. But I did a lot of the work in front of people. I would have thought that someone was going to launch this. I even interviewed. The funny thing is you invited a couple of other paid community CEOs on the pod as guests, asked them a hundred questions, and then took their lunch.

54:56And I just find that to be an incredible story that I look forward to telling as this plays out. I need it to work. I need to work first. At the time, you had a community called Club LTV, which was an e-com community. I think it was making$100 ,000 a month pretty much right away. I think you actually... That name is wonderful. It was free. I didn't charge for it. But it was invite only. Like I basically that was I was running an e-commerce business, but I'm part time in it and I've never done e-commerce before. And so I have a strategy of like if I'm going to do something that I don't know how to do, there are hacks to learn faster.

55:36One of the hacks is surround yourself with other people who are doing that playing the same game at one to two levels above where you're playing it, meaning they're one to two not just better at it than you are and further along than you are. and so when we wanted to grow big on on twitter i think both of us had a similar idea we created a group a text message group called the 100k club and we invited six people who all had that same goal and then we all talked in there about initially like stuff we were doing to make that happen then we all just became friends but like immersion into a small club of people who play the same or playing the same game at a one or two notch higher level than you is one of the one of the hacks to get better at something faster.

56:18And so Club LTV was cool. If I just create a curated group of awesome e-commerce owners, I'm going to learn a bunch of shit that I need to know to make my own thing successful. So I'm not even charging these people because I don't need to make money off this. I want the information. I actually wanted the network from it. And that's exactly what I got out of it. But you made money through advertising. And so you have sponsors. And that model actually works. So there's a company called Aventa who does this, but they did it with chief information officers. So these are like Fortune 500. And they sold for 17 times profit for$250 million.

56:53So they're making, I think, $50 million in revenue. And then whatever that profit is, I can't do that math. So that model that you had, it works. The downside, which I don't think you knew getting into it, logistically, it's a very operationally heavy business. It's very, very challenging. challenging. It's not, e-com is also operationally heavy, but it's more so like there's like three or four things that you have to nail. With people, there's like way more things. There's like people's feelings that you have to like account for. And it's a little bit more of an art and it's actually quite challenging to hire help for that type of business.

57:25But you were onto something and I actually think Club LTV, I think that one was a business that could have totally worked. Me and Ben, I remember we just had a conversation like, hey, do we want to actually turn this into a business? It can, it'll work, it would be profitable. We just saw better opportunities for ourselves. But like, that's one where if I knew the right person, I would have totally just handed over Club LTV and be like, you're the operator of this now. There's a clear path to make this a business. There's like one called e-commerce fuel that's out there. That's kind of like the older version.

57:55I was a paying subscriber. Really? Why? You didn't do e-commerce. I just thought it was awesome. Andrew, the guy who started it, I used to read his blog and I thought it was sick. It was$300 a year, I think. He listens to the pod and I talked to him every once in a while. I just thought it was cool. I thought e-commerce fuel was great. In fact, I was a paying member in Moise Ali, this very rich, successful guy. Sorry, Moise, I'm going to blow your cover. He used to use my account because he didn't want to pay$300 a year. He would use my, we would share a password. So like, it's pretty funny, but I liked e-commerce fuel.

58:29I thought it was great. It's still a thing and he limits it to 3 ,000 people, I think, right? Something like that. I don't actually use it because it's a forum and I don't really love like forums and there's like live events or whatever. I liked the way we did it with Club LTV. I thought that was more fun and easier, just easier to like actually participate in. So anyways, I thought that, yeah, that definitely could have been a business. Just, you know, you got to pick and choose opportunities. So long story short, what do you think is the, what's your takeaway from this? So like, what do you, okay, we made a bunch of predictions.

59:01We go back, we look, we see what we were right about, what we were wrong about. What's your, to the Chris Barling question that I love, what's the right lesson to learn out of this? The right lesson to learn, there's a few. The number one is we make money talking about this stuff. And that's great. You could say we make a great living doing that. I feel like a puss for not acting on some of these things. I guess I acted on one. But there's been five or 10 or 20 things where you've told me and I'm like, that's cool. I should go in on that. Mainly, there's only been three things that I've gone in on, which is TRT, but like, fuck, we talked about open AI.

59:40Like we should have put our money. I think you have in a few cases, but I should have put my money where my mouth was a little bit more. So that's one lesson, which is predictions aren't that easy or aren't that terribly hard. Having the courage in them is hard. Mine is the exact same thing, which is that the predictions that matter are the ones where you notice something early before everybody knows it but then you like that's you know it's kind of cliche right ideas are kind of cheap and excuse everything no no the idea is actually quite valuable however it's potential energy you got to turn the potential energy into kinetic energy how do you do that through like motion right so it's like chasing it down and actually doing something with it is um is where all the value gets created and me and ben have actually figured out a little bit of a better way to do this, both through like actually having like vehicles to invest in these things.

1:00:32But also we just continually stop and ask ourselves, like, I think in the last six months, there's probably been two or three times where we say, what's the thing that we see right now that three, four, three years from now, we're going to be like, dude, we talked about that. That was in front of our face. So why didn't we just go and meet the guy? Why didn't we go and invest in the thing? Why didn't we start one, whatever it is. Right. And so by asking that question regularly, like what's the thing that's actually hidden in plain sight right now for us? I think I'm going to turn that dial from missing a bunch of these opportunities to taking advantage of them.

1:01:07We should do a whole episode on what those things are. Yeah, I will. I'll tell you the way I learned that, by the way, was I met this guy, Anamitra. And Anamitra came to my office and he was the first product manager at Twitter. And I was like, tell me what it was like back then. He's like, well, there was like, I don't know, 12 people in the company. I join 15 people, something like that. I join and I was like, was it obvious at the time that like Twitter was going to become Twitter? He's like, no, no, no, not at all. Like Twitter was kind of interesting, but looked pretty frivolous and useless.

1:01:36People were texting out like what they were eating. There was no app at the time. It was just, you just texted this number like four, four, four, four, four, or whatever, like whatever you were having for lunch. And in Silicon Valley, people were like kind of having fun with a little bit, but it didn't seem like a serious, like he's like, I had like job offers from Microsoft or whatever. Like I had serious opportunities. And then here was this like Twitter thing. Even the name sounded frivolous. And he's like, um, but I had learned one important lesson, which is that whenever you see like a phenomenon of behavior, meaning you see people acting in a way that seems strange, weird, or inexplicable or irrational, the natural reaction is to just write it off.

1:02:17Be like, I don't know. Those are weirdos. That makes no sense. Idiots and move on. And he's like, what I've learned is now he's a VC. And he's like, as a VC and as at the time, and he's like, thank God in my career, I realized that, which was when you realize, when you see that weird behavior that you don't understand, the thing is not to, the thing not to do is label it and write it off. It's to lean in and try to understand it. He's like, so I saw that people were like, like, why would you text out what you're eating right now? Like, what do you, why? And why do, why do you like to see what other people are saying in that same way?

1:02:49Like that seems completely like strange behavior, but people are doing it. He's like, anytime you see strange behavior and people doing it, like that's usually the inner, that's what a amazing opportunity actually looks like. And since he told me that I then saw that many times over, like we got acquired by Twitch. I remember in college walking into my, the dorm room, the guy next to me who lived next to me and he was watching a like a replay of someone playing a starcraft tournament and i was like you are king dork not only is starcraft on your screen right now you are not even playing you are watching some guy in korea play this game that is literally like the dorkiest dumbest thing i didn't and i literally made fun of him for like a year later when we got acquired and he's like oh you're head of esports at twitch now he was like uh he literally was like you fuck he called me he was like you used to make fun of me for this and i was like dude i agree i was totally dumb and wrong i should have by the way i i don't even play games but i watch people on youtube playing yeah and i was like i should have leaned in why would somebody do this behavior that seems completely irrational why would somebody watch someone else play video games on the other side of the earth through this replay that he had to download at the time there was no twitch at the time.

1:04:07It's like, you had to download this thing off the server for eight hours and then watch it at night. And I was like, weird. I don't want to hear it. And then of course, you know, so missing that five times has taught me like lean into that. Like, and I just remembered the open example, by the way, Sam Altman, president of YC, right? He is, he had the best job in Silicon Valley. President of YC was the best job of Silicon Valley at the time. YC is probably the most like a value generative company at the time or like organization. He's the president. He got picked over anybody else and he left to go join an AI nonprofit.

1:04:44I was like, yeah, you know, like something, something's up. These billionaires are putting a hundred million dollars into this AI research company, this nonprofit. Why would they do that? And again, I was just like weird Sam made doing a weird, inexplicable thing. Instead, I should have been like, Hey, the smartest guy in Silicon Valley just left the most prestigious job in Silicon Valley to do this thing that sounds sort of like strange to me, lean in. And yeah, that's the lesson I would share my takeaway of this whole thing. Let me wrap up with one quick thing. I forgot. I should have said this earlier, but we did this episode about this guy.

1:05:16I think he was in India and we called him in and he like talked to us without his video on. And I found him because he had this website called Uber Pro. I think it was called uber.pro. And I've Googled his name. I Googled his name last night. I can't find him anywhere online. Oh, he's gone. I can't find him anywhere. And if anyone can find him, please do this. This would be amazing. I want to see what he's up to now. He was 23 years old or even younger. And what I did was I gave him$1 ,000 and he gave me$10 ,000 in Uber credit. And for like years, I took an Uber black everywhere. because what he did was, I think this is how it worked.

1:05:59What he did was he found all of these Indian kids that were in his town. And when you rode Uber for the very first time and you referred people, you got$25 in free credit. And somehow, he made it so he could convince all these kids to take a free Uber to get$25 in credit and to continually refer themselves. I also think he ranked really high on Google for Uber discount code or Uber promo code. And so he accumulated millions of dollars of Uber credit. And you could buy the Uber credit from him for 10 cents or 20 cents on the dollar. And I found this website and I was like, I'm doing this. And I bought, I think$1 ,000 worth of Uber credit.

1:06:42And then you have to change your iPhone from America to Moldova. Your Uber account has to be in Moldova. And that was this loophole. And he was making a lot of money doing it. For a guy in India, he was making thousands of dollars a month, which I think in the pod, he's like, yeah, this is so much money. I think he was making$30 ,000 a month. And I've always wondered, what is that kid up to? I wanted to know. I remember having him on. He was fascinating. He was fascinating. That was a great arbitrage that the guy had architected for himself. Very, I don't know if it's illegal, but definitely against the rules, questionably unethical.

1:07:14But when you see things like that, they're going somewhere. And I've always wanted to know what happened to that guy. I want to leave you with two of the kind of, you know, I talked about like, why am I hearing about this three times? Don't just ignore this. Like I'm training my brain to not ignore these signals. Now I'll give you two of them for people who made it this far in the episode. These are the gem. This is the gem. Now this is the part where you're like, holy shit, I can't believe they saved this for the end, which is basically the two trends that I see right now that are strangely big.

1:07:46Go to go to character.ai. and pull up how much traffic you see that that website has. Oh my God. I would have thought like 10 ,000 a month. And what's the real number? Oh my God. So 200 million. Exactly. 200 million. 180 million. What? This, like, you could go to the Wall Street Journal, it won't have 200 million. You could go to New York Times, it's not going to have 200 million. No, no media site has that. And it has an average visit duration of 33 minutes. it's beta.character.ai okay so i've been on this all direct talking about i've been talking about ai and i've been talking about like only fans and this like kind of sometimes the crossover between ai and like this like ai only fans thing and i'm looking at investment opportunities in the space there are so many companies that are doing this like chat with a ai type of thing replica character ai whatever and i never thought that would be a thing they all have ludicrous traffic we call it by the way we talked about replica like a year ago um girlfriends ai virtual girlfriends exactly and that's a lot that's a lot of how people use this character ai thing like they kind of chat with uh the chat i think goes into the gray area a little bit um i mean it's a lot of like smart people like einstein but but the the top person is ariana grande and billy eilish and then like some k-pop lady like there's probably a a weird thing people being willing to chat with ai for a really long time.

1:09:17So easy to write off as weird loser, but it's, it's my friend watching Starcraft tournaments in the room next door, right? Dork King dork behavior. I will not make that mistake again. This is death. This is definitely something. I don't think that these companies necessarily are the winners, but like, you know, every, every product, there's a kind of like the wave one of attempts, wave two of attempts, wave three. And then finally there's like the last mover, right? The last mover who actually nails it and builds a full on product around this. And so there's something in this space that's like ranges from companionship to naughty chat that's like with AI, that's going to be massive because the numbers are off the charts.

1:09:55The behavior of this strange thing is off the charts. Okay. That's one. Second one, which is less crazy is there's a bunch of really smart people that are now have a new business strategy and their business strategy is to buy wounded unicorns. And so heard it once, heard it twice, heard it three times. first heard this from Andrew Wilkinson. Andrew Wilkinson, he called me back a couple of years ago. I was living in my old house in San Francisco and I remember him telling me, you know what I would do if I was you is I would find one of these startups that's raised venture capital, but it's not going to become a billion dollar company, but they got to 5 million in revenue, 10 million in revenue.

1:10:32And you could buy these for cheap because they don't have it. They can't raise their next round and there's no way out. And so there's not really like a good exit market for that group. And those people don't want to like fire a bunch of the engineers, stop paying high prices for their San Francisco office space and like become profitable. They could in theory, but they're just not going to eat shit in order to do that. They're just going to shut it down, return investor money, sell the assets to whoever, and they're going to go start their next company or go get a job. He told me that first. He had then done that with a company called Meteor.

1:11:04So Meteor was this developer framework. And I think he bought a company that was doing like five to seven million. It was doing like five million plus in revenue for like one X revenue or less. I don't know. It was like some like ignore the multiple, the exact multiple. I think they raised$30 million or something. They had raised a bunch of money. It had customers, it had revenue, but it just wasn't going to be the next big thing, which is venture capital is called become the next big thing or bust. And what he realized was if they bust, we could pick some of these assets up. So Andrew had said it.

1:11:37Then you hear other people that are talking about this that are doing this. Our friends Xavier and Siva. They're doing this right now. If you're driving to San Francisco, there is a billboard with their company that says like whatever, like there's never too late for a second chance. It looks like, honestly, it looks like a divorce lawyer because it's KJ with her arms crossed and it says like you know, there's always a second chance or something like that. And I don't know what the billboard is. billboard entering samsung you know like when you come in on whatever the 101 it's like um uh it's right there and it's basically saying you know like don't just shut down your company sell it to us so they're doing this jeremy giffen is like he came on invest like the best and he was like yeah i think one of the big opportunities right now is to do this you hear this four or five times from smart people like you got to be an idiot to not realize that there's probably something there.

1:12:34And it's like, it's not, you're hearing it from the news. Like you got to know where you're hearing it from. You're not hearing it from the news or like the hype cycle type of things. It's like you're smart. People mentioned these things in kind of passing or these opportunities, but it's not consensus yet. And you realize like, Oh, that's probably one of these, like what I call like, you know, value spots or fat pitches. So like, what are the big fat pitches that you could go swing at? You don't have to go swing at it, but like you should identify that at any given time there's like a couple of fat pitch opportunities that you could be going for that's one of them i want to learn more about it i want to how do you find i mean i want to know i've got questions like how do you find them just run hampton bro don't don't even don't even think about it just keep running hampton you already got your fat pitch well um by the way love saying fat pitch by the way just a fun fun phrase to say yeah i agree uh that is a good one it's a good one Where'd you steal that from?

1:13:25Teddy Williams? Warren Buffett. Who stole it from Ted Williams? Who does? I know. He said it in his biography.

1:13:37I know. Hard to say. No, I said it very easily. All right. That's the pod.

1:13:54on the road, let's travel, never looking back.

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