#60 - YC Demo Day Startups #2, Importing Foreign Innovations & Collaborative Copywriting

Alright, everyone, we have Jordan Harbinger on and I'm gonna tell you why. So we get a lot of uh a lot of people asking us questions on how to do different things that we talk about in the podcast, and that's great. Um and we do the same thing, Sean and I. Uh and one of the folks we turn to on a regular basis, I'm texting him all the time, is Jordan Harbinger. So Jordan um has he's had podcasts for thirteen years now. He's been in the top one hundred for uh almost that entire time. And he's got a great pod called the Jordan Harbinger Show where he talks about social engineering. Yeah, in particular he teaches uh Navy SEALs how to do social engineering. He teaches intelligence agencies special operations. It's incredibly fascinating. He dives deep with his guests to learn how they think, why they think, and it's really, really, really fascinating and it's something that I've been listening to for years. But he has one episode Uh that's incredibly fascinating to me. And that's about the guy from Catch Me If You Can't, Frank Abignale. Is that his name, Jordan? Yeah, Frank Abignell. He's a fascinating character. He came on the show and we h spent a long time talking about the psychology behind how he was able to trick so many people. So to refresh people's memory, he posed as an airline pilot, which is kinda terrifying, a doctor and an attorney.

All of these are pretty specialized. You know, look, if you're just pretending to know how to stock shelves at a grocery store, like that is something where somebody who does that for a living could probably catch you, but the n a normal person might not have any idea. Now, when you're pretending to be a doctor The stakes are pretty high, man. You know, l law kind of uh trickier to pass the bar exam, that kind of thing. So the airline pilot, of course, is the really takes the cake. He did this all in his twenties. And we spent a ton of time on the Jordan Harbinger show discussing and dissecting the concepts behind why people believed him. These same concepts work even now. He's told us that it's actually easier now for fraud, scams, con men to operate than it was back then. Because you'd think, oh, now we have computers, we can verify everything. Back then they didn't have that. The communication took longer. Now though people trust the machines too much. So you can trick people and you can trick machines. Things just got even more complicated and he d that's what he does now is teaches Law enforcement, FBI, and citizens like you and I, how to avoid common scams and fraud. All of course while dissecting the psychology behind it. So I loved this episode. It was one of my favorites. I remember watching this movie years ago, and then I immediately read the book and I was fascinated. I'm a schemer and and I like building businesses and uh

Just like what I call scheming. I like doing things and whenever you see someone doing something like this, I mean they romanticized it and made it uh and made it sound like like it was kinda cool to go and and become a a pilot and so he gotta use it a little bit for evil, but what are some techniques and tactics and strategies that he used to Persuade people that you think people now should capitalize on. So something that he used that I actually to a certain degree also used in my twenties. is the element of fear. And now look, I don't mean you're scaring people and pulling guns on them and making them freak out, but for example, I used to talk my way into concerts before I could afford to go to them. And the way that I did that was I would show up and say, Hey, I am from this magazine from this German website or whatever. And people would say like well, I don't have anything on the I have no reservation for you.

And I would say, Oh, well, that's okay. I what's your name? Juliana. Okay, I I just wanna make sure because I'm gonna go home, go back to my hotel and get some rest, but I don't want to get in trouble from my editor. So I'm just gonna be like, Yeah, Juliana didn't have my reservation uh on her sheet. And she'd go, Uh hold on a second, because nobody wants their name pinned to a failure in a business. So she'd go get her manager, I'd give him the same spiel, and then the guy would go, You know what, he he's doing the calculation in his head, right? He's going, either I don't let this person in and possibly the owner gets mad at me because this media guy came from Germany and was supposed to be doing this thing and it didn't happen. Or I just let'em in and it's no skin off my nose. So they can do the calculation in their head. Now Uh amateur person will try to explain and force you to do that calculation by explaining it to you and being explicit. If you can get people to think it's their idea and that's how they solve the problem, then that's the security hole, right? And it's kind of like sales, except for you're trying to unsell them on a certain idea and then you get them to push the issue

forward. Now that's it simplification, but that's essentially what he did uh in many ways in order to pose as a doctor, lawyer, and an airline pilot. He learned jargon so that he sounded more believable and we can f find we can do the same thing. If you know how to talk in the language of the target, you are going to have a huge advantage in terms of being believed. Uh a lot of military people find this You'll say that uh you'll see that military people can find who's posing as an intelligence agent or special operator by the words that they use. So if you can master that vernacular, you go automatically behind the circle of trust, right? They start believing you because you talk, walk, act, speak like them. That's dangerous mental fallacy to fall into. God, that's so fascinating. I'm just I'm sitting here just licking my chops and how I want to uh apply this. I really appreciate you uh coming on. So there's no money being exchanged here. We're we're promoting this because Jordan is is an amazing guy and has helped us grow this podcast. But also I've been listening to him for years and so this isn't uh don't take this lightly. We we love this guy. Uh Jordan, how can people find you? Yeah, you can find me anywhere you get your podcast. Just search for the Jordan Harbinger show, or you can google the Jordan Harbinger show or go to Jordan Harbinger dot com. I appreciate man. This is awesome. Thank you.

Sam. Sam. Do you have the coronavirus? Um, I was not able to get tested, but uh Uh uh it appears so based off of just symptoms.

Oh no. According to my doctor, so who the fuck knows. But you were saying so far kinda mild. Um, today's a little worse. Today for sure the way okay, so you know how everyone says it's like not that bad or bad. That's hard to quantify. So the way that I've been quantifying it is would I stay home from work today if this was last June. Right. And y yesterday was the first day that I would have stayed home. Uh And just barely today, for sure I would stay home from work. I see.

Uh so no, it's not that bad. But dude, shortness of breath is scary because Um Like uh it's not Bad, right? Like I can breathe perfectly fine, but it definitely is like oh my God, what happens if this gets any worse? Right. And I was That's scary. I've been following a bunch of people who are like pretty fit. Like there's one guy who's an Olympic athlete and there's um

He's a I think he's a r a swimmer or runner, Australian swimmer or runner, he has it. And he's like, Yeah, mate, this is tough and he's like, you know, shortness of breath and uh just you know, it's impossible to train like this and he you know, he's talking about it and then somebody's like retweet it and they were like, This guy's a Olympic athlete, by the way. Like and he was basically like, Yeah, this gets tough. And then there's the guy, um other another guy follow who's healthy guy Um He was the bachelor, his name's Colton, and he got it. And uh he's like a you know, pretty Jack guys he was an NFL player for a for a bit. And he's like when he does his little Instagram post to like update his fans about how he's doing it. It's bad.

Yeah, he's just like he you look at him, he looks raggedy as hell. Like he is not he is getting knocked out by this thing and it's been like a week plus and he's doing just at home treatment and he's like Quarantine in a room. his you know, girlfriend and her and their family they just deliver meals to the door. He kinda opens the door, drags it in, and then eats I haven't left the home. In about a week.

Like On Saturday I went for a walk but Besides that Or since Saturday I haven't gone on a walk. I haven't left the house at all. Wow.

You know what's crazy so do you know how like you hear like Um T I and Martha Stewart and Doctor Dre all served house arrests. Their house arrests are uh definitely different because their homes are massive. Right, that's but uh alienate. But house arrests would suck still, now that I realize I'm like it it wouldn't be that cool. Right. It it is still a little bit of an arrest.

Yeah. It's uh it's crazy. Okay, well I hope you're Symptoms are mild. I hope it's just actually the cold because uh I think it's fine. Um We'll see. I mean, whatever. It's all the same, right? Right. Alright, well the show must go on. So uh what do we want to talk about today? So first you guys released this like book thing. What is that? I saw that yesterday. It's just to get more sales to trends. It's to get people in the door and it's incredibly effective. What we did was we put together all of our um

the best talks from HustleCon and we transcribed'em and uh when I first started the company, do you remember this book called uh Founders at Work by Jessica Livingston. Yeah, I love that. That book like changed my freaking life and it's not even a I mean it's a book technically, but it's like she didn't do any like work other than what you and I do every week. Right. And she just transcribed her interviews and so I was like, Let's do that. Yeah. And so we did. And so uh it's pretty cool.

Yeah, I I downloaded it and I started to skim through it. Um I was reading the Pandora guys one and so that's good. Okay, where where do people get it? If they're listening to this, they want that. Good question. I wanna see it we just posted it, um We just posted it Tuesday, so let me see if it even ranks on Google. Okay, we'll we'll put a link to it in the description if you want to read this thing. It's uh is it free or you have to you have to become a dollar. It's a dollar. It's a dollar and it The w everyone's like, What's the catch? I'm like, Well it's a dollar, and then you're gonna be automatically subscribed to trends, but you have two weeks to cancel. So

get value or sign up and try it and if you don't like it, then just cancel and you're out only out a dollar. Right. Um the so if you go to trends dot co Um you'll you should s you'll see it at the top. Like a like a like a link. Okay. Um, but it's not even ranking for Google yet. Um and hopefully we can link to it in here. Okay, cool. Um we'll do that. That's fine. That's exciting. I'm glad you guys did that. Yeah, it's great. The cold email extra one was even better. I mean that people love that shit. Yeah. Uh okay, cool. So we wanted to we we did a bunch of the Y C compan

Or not last week, a couple days ago. Yeah. Reaction was good. People wanted more. We only did five or six of'em uh that time. Uh the way I'm thinking about this is like I listen to a couple of sports podcasts, like the Bill Simmons podcast, and every year around like the NFL draft, it's like There's these special sort of annual events that you do like these deep dives for. And um to me that's kind of what the Y C demo day is. It's like Uh, I can see us doing this as a recurring thing in the podcast where it's like, Oh, that's our version of the N of L draft. You see all these hot prospects and you're scouting them and you're checking them out and you're you're using them to sort of see what are the

you know, what are the smartest people working on? Where do they see the opportunities? And then what do we think about those? Um What did your friend say? I uh'cause I talked to Jack and a couple of other guys about this and they go, I think the uh some of them are like I think the batch is pretty weak and I totally disagree. I think there's a bunch of amazing things. So people who have been going to Y C Demo Day for years They this is like their favorite thing to say. It's like oh yeah, Y C bash this year is weak. And like, um you know, I don't know to what extent that's true versus

Just a cool thing to say. You sound cool by saying it. Uh I'm always skeptical of those. Jack's not the type to do that though, so um But he didn't he wasn't he he was not like totally negative, but he was basically like uh it's okay. So what I heard from what I heard the sentiment I got from people who've been going to demo day for a while is Uh y you know, in the past it was like the glory days and there was less competition on the investor side and the companies were better and higher quality and there was fewer of them, so you could go deeper with them. One of the problems now is like for example Demo day has become something where They get up on stage.

They talk for I think one minute. They do a one minute presentation. And then it's like If you're interested, you know, come talk to me. And then there's a like line of investors already wanting to talk to that person from the one minute pitch. And um And it's so competitive, the deals are already uh half the deals are done before demo day just'cause people swoop in beforehand and then the other half get done, you know, very shortly afterwards. So a lot of smart people are like, dude, this is uh

A frenzy that is not smart. Now, this year they don't even do the one minute pitch. It's just a slide. One slide and two two paragraphs and then you decide To to talk to them more or not. And I think that's great, to be honest. If I was an operator, which I am, um Like I see these and I'm like Oh my god. For the founders it's fantastic.

Well I'm like I should do that. And e even for the investors, I actually think this one's better because it's digital. So it's like you say it's like Tinder. You basically when you see the listing, you say, Yes, I'm interested. No, I'm not. And if you s if you say yes, then they get a request that says this person wants to talk to you and then they can say yes and then it matches. And um So I think that's actually better this year because because it's digital, I think people are gonna take time to have conversations. Whereas when it's sort of uh a live event, you um It's l again, it's it's just like a a meat market. You're just sort of it's like, you know, the old Wall Street trading floor of people just standing up there yelling shit. Um it's a little bit faster paced and people don't feel like they're able to make thorough decisions. And what's in well, I think what we I don't know if we s told this to people. I don't know when we might have to blink this out. We won't name names, but

People can't see what you and I see. So we're reading off like a private list. I don't think we're breaking any of the rules. I mean it's not like fucking. Yeah, I don't think so. TechCrunch has reported on all these companies now and also there's some companies that say off the record and we just won't talk about those. No problem. You want can I uh to wait, did yesterday I was pretty hopped up on Dayquil the other day. Did we talk about uh

Did we talk about the s So here's w a theme that I noticed that I we talked about last time about how there's like X. of India. So right now I see Bill dot com of India. Right. Uh this thing for Lat uh this thing's for Latin America. Yeah, Flexport for Africa. Okay, so we saw that a lot we saw that a lot and I like

You said the India thing last time. I went back and looked. There's tw like twenty eight companies in the batch that are Indian startups. Like the Indian we took over the spelling bee and now we're taking over Y C. That's what's going on. So at first I was like I don't know if I like that. Not the country thing, but like s we're just gonna we're this co we're this business, but Of that. Region Uh I think I've changed my opinion. I think it's cool because Y Combinator is supposed to be all about innovation and shit. And it's not exactly innovative to say you're gonna be the smile direct club of Latin America, but I still think it's cool. And that's one I wanna bring up. Did you did we did we talk about that one? We didn't talk about that one, no. Did you read that? I d I didn't look into it, but yeah, we can talk about it.

Okay, so uh What was it called? They don't How do I do a search on here? Um

But anyway. Moons. Okay, it's and they just say Smile Direct Club for Latin America. And here's why I like this. In one of their decks they go Smile Direct Club became a billion dollar company in five years.

We're gonna do it in four. And and I looked up the people behind it, and the people behind it previously worked at Rocket Internet. Which is notorious for cloning companies and scaling'em in different Or uh

Thailand or something. And I love I mean, there's pros and cons to that, but it definitely creates some value. And the fact that they said that At Y Commander I think is like I just think they're ballsy and I love these guys. Yeah, so there's a bunch of these. Gusto for Africa, Acorns for India, Cameo for India, Flexport for Africa, Smile Direct Club for Laddam, right? Like this is a um You know, it's not like a groundbreaking idea, but it's it you it really does stand out when you look at the list. I wanna do the opposite. I want someone to tell me what's cool in India that's not in America. So I'm doing that. So I'm basically putting together a report of the coolest companies in India that don't have analogs here.

Um, like for example, there's this company called Bijou. Have you ever heard of Biju? B Y J U B Y J U Yeah, this guy basically started off as a teacher and he would teach like essentially test prep'cause it's not a Oh you freaking love this. I think I've told you about this before. Yeah, this this guy he started off as a small teacher in a town, basically, and was doing test prep and then sort of got bigger and bigger and bigger people wanted to learn from him to the point where he was selling out stadiums of people coming to watch him teach math. And uh that was when I saw the picture of the stadium, I thought this is remarkable. Then uh he turned it into a online learning platform, a basic a video based teaching platform, sort of like Khan Academy, but for profit. And it's eight billion dollar company now. And um this guy Biju is sort of one of the youngest billionaires in India. He's a teacher but turned billionaire, which is very rare. And uh, you know, cool product, cool company.

And th there's actually a company in this Y C batch that's try that's the former first instructor of Bijou, he's like I was the face of Bijou because he was in all the videos. And he left to start his own thing. He's like, you know, here's the dirty secret about B Ju's thing. It has very low retention. Great at making money, great at getting people to sign up, but less than fifteen percent of people stick with the the course as it goes along. We're doing this other way and we're gonna win. And uh they're in this batch as well. So that's interesting. So I would love to ask you questions about that. First I wanna tell you that I'm looking at their Wikipedia. It says they do they're worth eight billion dollars. They do

eighty million in US dollars in sales. Um and then it says they only have five employees. Yeah, that's wrong. And also they do more uh they do more revenue uh recently. They were over a hundred million, I think the last like uh I read something where they were where they were doing over a hundred million. But uh but they have five choice. That'd be amazing. Why is this big in India but not America? Is it because Indians love math and science? I mean, education is like, you know, God in India. Like you you can be dirt poor in a village, but you'll do anything to educate your kids. And uh you know, even the sort of Indian people in America you probably have noticed are like

you know, their parents are pretty strict about education, you gotta get good grades, all that stuff. And so um Indians are willing to pay anything for education and they don't really pay anything for anything else. Um so you know, entertainment is is usually lower on the list, although Bollywood does well, but like on a per capita basis where you're gonna spend your money. um education is sort of number one for for Indians. So that's the first part. Second part is they have such a huge population. So you can take a really small amount of money from such a huge number of people and build a very big company. So that's the second part.

How how much bigger is uh India than America in population? What three times? Yes, uh uh four times I think. It's like one pol I think it's I think it's over one billion and US is at three hundred million, I believe. Um so it'd be like about four times. And um and of course not all those people have smartphones, not all those people have money, but like, you know, it's gr it's India has like sort of the largest growing middle class. So that's s some of the reason why this works. Um is because people are willing to pay for education and there's so many people that if you take a few bucks from each And everybody's willing to pay for this'cause it's education, that adds up. Um But the you know eight billion is

sort of out it it it is outpacing their revenue growth, right? So I think the part of it is the story of what this becomes and their sort of defensibility. That's probably why they're values so much higher than their val than their revenue would suggest. Do you think that that could uh That can be popular in America. Oh, I think so. Like I think Khan Academy is fairly popular and it's mostly in America. Um money though. It's just yeah, it's a non profit and they don't pour money into growth like these guys do. I'm sure these guys are aggressively trying to grow and using their payback to to sort of fund more growth. Um but yeah, I do think like something like this can work here.

Um But you know, we'll we'll see. There there might be other reasons why it doesn't. There's a whole bunch of other companies. I basically found these five guys on Twitter who are like in the Indian startup scene that are actually really smart. And once I started following them, I started seeing awesome companies all the time. And I'm trying to put together essentially the Mary Meeker Internet Trends Report um that she does every year for like global internet trends. I'm doing that just of India. State of the State of the Union, Indian startup scene. Here's what you need to know. Cause a lot of people in America wanna know, but are not going to do the research to figure out what's going on in the Indian tech scene. And uh I think I can distill it down. I am writing that down and probably gonna steal that. That is a great idea. Okay, great, great. What did you call that was cool. Uh like a trends report of d Mary Meeker for different countries.

Yeah, Merry Maker for for for India, basically. Can I tell you why I think that's a great idea, is because Have I told you about Kevin Ryan? Mm no. Maybe he's the he's he's in charge of that media company, right?

So Kevin Ryan was the twentieth employee at Double Click and Double Click uh ended up becoming a uh Ad sense or AdWords and Google bought it for three or four billion dollars. Very successful. And then so he was the CEO, he was the twentieth employee and then CEO. So he was successful in that regard. Then with his earnings, he made he told me that he made twenty million dollars, uh personally. With his earnings, he went and started this thing called Silicon Alley Group. And Silicon Alley Group. uh created MongoDB, which is now a publicly traded company in the billions of dollars. They created Business Insider. They created um about uh Zola, which is big, and they created about four other things. And one of the things that they did was they create a Gilt. Gilt group, which is like flash steals for women's clothing. And the reason he started it was he said

Uh'cause I called emailed him and uh asked him all these questions and became friends with him. And he told me that uh She was walking down the street in Paris and saw a long line outside of a women's store and he asks a woman, like what is this thing? And they go, Well they do they do these deals every day only for an hour at noon and so they're starting to do them on online but they still do'em in person and he goes, Oh, cool, I'm gonna do that in America And that's how guilt started. Nice.

Uh yeah, that's so you're basically saying import the sort of the behaviors and innovations you see in foreign markets back into the US, not just U right now US is an exporter of innovation. And it's a you're saying we can also become an importer of innovation. Yeah, I mean look you did it and you kinda or you try to do it with sushi trains. Yeah, yeah, yeah. When we did their sushi thing, yeah. Like in Australia that was like common and in the US never saw it. And I don't think it still has caught on, but you you did the same thing. Well, we tried. Well you tried you you definitely tried. It was a good swing.

I think it was a great swing. Uh in in case you're curious, I just looked it up while we were talking. Khan Academy because it's uh nonprofit, they uh All their Financial are available. And uh they do like eighty million dollars in sales.

Yeah. So actually on par with BGU. Um and does it say r real quick where you're at, how many students they have that active like active learners or anything? It does. So if you go to con Con uh con Academy annual report dot org. You can see all the information. Okay, I'm gonna check that out afterwards. And I'm gonna do a report on them'cause I'm a uh education nerd and so I'm gonna like

I'm gonna bring them to the table for the next podcast. Alright, so let's let's go back into the to the Y C companies. Uh let's just trade off. You do one that you find interesting, I'll do one that I find interesting. Go for it. I did Smile Direct Club for Latin America. Your turn. Okay, my turn. Alright. So uh I'm gonna do this one. I don't know exactly how you say it. Ease wholesale, easy wholesale. I love that you bring that up. Yeah. Really interesting company. So basically the premise is it's a marketplace for buying and selling used smartphones. And uh you know, I'll I'll tell you some of their stats. I haven't sort of verified how real these are, but they say that you smartphone sales are forty six billion dollars a year annual market. They say that two hundred thirty million Uh smartphones are sold per year. You can do math. See if that checks out.

Um they have uh so what they did is they made a marketplace where you could if you have phones and you're a wholesaler, uh you can basically say, Hey, I'm uh either I'm looking to buy or looking to sell and they made it like a stock market. You you basically put a a bid up. You say I'd like to buy this iPhone. And um if somebody has it they can fill your order and they can basically like dude they can close your transaction out. They're your ticket out. Or you can say I'm selling a hundred of these specific Android phones. And somebody can say, I'll buy 10 of those.

And so they made it easy they said that most of this used to happen through Facebook groups, WhatsApp, sort of the the underground, um, you know, just using social tools. Yeah, there wasn't a marketplace. And um that was focused on this. And so They uh they've four hundred thousand in GMV so far. Now GMV Yeah. You can assume maybe they're making you know, in the tens of thousands of dollars themselves.

Volume. Volume, okay. So basically how much is total sold through their market. So if a cell phone sells for a thousand dollars, that's a thousand dollars of GMV, their cut might be five percent, ten percent of that. But Uh this is a m because the smartphone if the smartphone if the used smartphone marketplace is this big and they have some stats about how fast it's growing, they say that used smartphone sales is growing faster than new smartphone sales per year. Uh because You know, Apple is trying to like make the old model irrelevant so quickly. And sure, some people do upgrade, but there's all these other phones still out there that are still very good phones. I uh like I I can afford new phones. I uh uh uh uh up until my most recent phone, all of them have been used. And the the best part about these guys is so um

I believe that they were bootstrapped, I'm I'm not hundred percent sure. Uh but they so they've gotten to this point. They They themselves were former buyers and traders of cell phones and they had sold prior to this just as brokers eight million dollars worth of cell phones and then decided to create a sort of technology marketplace out of this. So If you think about it, market, love it. Um style of business, marketplace, love it. So I I love that love that they're going for used market used smartphones. I love that they're doing a marketplace. I love that they came from a background where they actually did this manually before and were sort of prolific brokers.

Um A plus plus love this love this company here on on on the Y C list. Okay, I like it. But let me play devil's advocate here, which is um Okay, so I looked up a few Okay, so first of all Um, I think that it this is a lot harder than people think. The reason why I think it's a lot harder is I think it's incredibly uh competitive with a lot of people who are already very established. Um so I think getting distribution and getting eyeballs on their product is gonna be prohibitively expensive, maybe. Right.

Um I also think that So there's a company called Swapa. Do you know Swapa? Uh no, but I see your note here. Okay, here's why this is interesting. I've actually used it before, but I didn't but what's interesting is I posted or I ha I have a thread that I found of the guy who's swap so Swappa is the same thing, but slightly different.

I don't know how it's slightly different, but it's the same it's a You w you buy you cell cell phones. Um what's interesting is that in two thousand eleven the guy who started Swap Up posted on Hacker News and he said, Hey, I'm launching this thing on the side, here's what it does and so you can actually go and like see how he started it. And it's I I I don't know how big it is right now, but it's uh it comes up number one when you Google buy use cell phones, so I would imagine it does I bet you it does Fifty million dollars in sales, at least.

Um because I'm comparing it to the person that's number two, which is Gazelle, which is a big company. But anyway, swap uh bootstrap. And so interesting. I If I was a greedy, if I was these ease guys, or how do you say it? Easy? If I was if if I was these ease guys Um an I easy or what wait, what did you say?

Let's go with easy. If I was easy, I would be greedy and want to raise very little money, like less than a million dollars, and just see how how I can just make this really profitable. But Um Yeah, they say launch three months ago, four hundred K GM V monthly, eight percent margin, profitable and growing at twenty percent month over month.

Of course, easy to be profitable when you have two people and you're not taking salaries, but um nonetheless I think this could be a profitable business because of the um You know, the the the sort of cut take rate. And here's why I but here's why I don't know if I would raise money if I was these guys is'cause have you did you see what happened two days ago? Do you know this m uh Offer up and let go. I know about them. Will some something bad happen?

Offer up and let go. Um Combined. Oh interesting. And who was the sort of Bigger

Parent, was it offer up? Yep, offer up was the bigger parent and they raised an additional hundred and twenty million dollars to make this all work. Um And so That's not a good sign. And they have a they have a pretty cool story. I don't know if you guys told it or where I read this, but

Offer up has a pretty cool story where it sort of started, I believe, I might butcher this, might be thinking of something else, but I believe it was they're in Canada. And people have these buy sell trade groups on Facebook. And uh they saw this behavior of Facebook you know, s uh sort of local used goods selling happening and then they started they they built off the back of that, of these Facebook groups for buying new stuff. And they built offer up off that um

Of that that community of people. So I uh okay, I I I dig that. They also raised like five hundred million dollars.

And and they haven't hit terminal velocity. I mean they're not like Uh they're not a player yet, compared to eBay and Craigslist. Um so I would say if I was these guys

If I was ease easy or ease, I would um I would be very happy to start and own that. If I was an investor, which I am And I just came across these guys. I think I would invest a small amount of money. Because I think I can make money off of it.

But Um, I don't know if I would raise venture capital like a significant amount. Yeah, I think they still need to prove a lot. Yeah, uh for sure. But I I think it's a good investment. I like'em. Alright, let's go to the next one. Okay, let's do um Uh build a plane.

Love this. If these uh this is a uh this could potentially could be a ten billion dollar company, I think. Um tell me why so build a plane what so what they do is they look at uh It it's boring. Let me see. I'll try to read the exact description, but what they do is they it it's project management for construction. So uh let's find it, build a plane. But here's why I think it's cool. First of all, the remember how I Go ahead. I was just gonna read their description so people have a bit more context. So we're a powerful dashboard for construction companies. We give them visibility and control of project finances, change management, documents, compliance, and communication, blah blah blah.

They uh built a different company that got acquired for eighty million. Um prior to this And um They say build plan is solving the core issues of being the center pa centerpiece of projects and powering full automation, blah blah blah. Okay, whatever. Um basically they're saying that

Um Total pro they're saying that construction costs uh controlling construction costs and and making them more efficient represents a sort of a ten billion dollar opportunity globally. Um Here's some of our features, here's our product, check it out. So when you're building a three hundred unit apartment building and you wanna see how much everything costs, you wanna see RFPs for your vendors, and you wanna know what what your cash flow

Simple, right? Yep. Um Yeah, I I think there's th the the this is one of those where if you win, you're in such a big space that your your prize is humongous. Um Hard for two reasons.

Hard to get. Uh any sort of blue collar project industry to adopt software is always a challenge. When you do it, it looks like oh yeah, obviously they used to be using paper and pen, or they used to just use clipboards and uh, you know, whatever. And now And it looks obvious in retrospect, but then there's also th so many cases where it's like, Yeah, we just Our thing is better, it would have saved them time and money, they just didn't put it in their workflow. So that's one piece.

On the other side, I think there's a lot of competition. I know there's like Several companies that are You know. Every year there's like fifteen companies that try to do project management software for construction and uh the question is what do these guys know that they that the others don't or what is their unique angle. That didn't come through for me in this pitch. It did not come through to me either.

But just because the market is so big If I was these guys, this is one of the few companies where I'd be like Get as much cash as you can right out the gate and just throw it at the wall and go big or go bankrupt. Okay. I'm not sure why. Why why why do you advocate for that? Because it's just the What do you think the cash does for them? Wha why do they need so much cash? I would hire just a a math because okay, so

Uh there's a few ways that you can grow. You can grow through content marketing, you can grow through word of mouth, which happens way less than people think. You can grow through like network effects like Facebook. You can grow growth through uh paid advertising, which is really easy if your product is cheap. And then the sales or you can grow grow through hiring a sales team. I love products that are priced in such a way where you can afford to hire a sales team. You cannot afford to hire a sales team if your product is probably less than Ten grand a year. Um and so what I would do is I would create a fat office in Dallas A huge office in like Charlotte.

And then maybe an office in the or like Like N Nashville and Dallas and then like maybe New York. And I would just Re recruit all the salespeople from uh com older competitors and wrap my office in like the startupy bullshit.

And go for it. And I I think what what you what I the other part I heard that you didn't say explicitly is just And even though this pitch didn't have everything had enough where you're like, I need to know more. Uh I like I I I want to know more. Um so sometimes you know there's better pitches on this on this site right now, but there's not better markets.

Um and so like for example there's this one that's about like A rewards program for gamers. I hate this comp I hate this idea. I hate the market that they're in. Super hard to make it work. And even if they have a great pitch, even if they have traction right now. Um it's a stay away from me. And so whereas construction tech, it's a it's a co come closer. Right.

Freaking driverless cars right now. It's like uh You'll probably fail, but if you make it work, it's like the greatest thing ever. Um and another example is Homebound. Do you know Homebound? Not well. Okay, it's launched by Atomic. Uh atomic

Labs or I don't know what they call themselves atomic. It's like a startup I don't know, they just launched companies. They've launched Tim's and they've launched a few others. Uh create companies. Yeah. They launched one called Homebound and they're doing this but only for people who are building single family homes. And it's it's got some traction. So I got another company for you. Ready?

Please tell me it's the strippers on demand. Uh no, but that one's good. Oh we should actually talk about that. Uh so there's this cool story. This is not a YC startup, although it maybe it should have been. Um cool story, we're basically in Portland uh You know, right now with coronavirus everybody's getting deliveries, right? And so Uh I have a friend who runs a company called Farmstead. And they do grocery delivery. They've been doing this for, you know, two years now and they all they all Farmstead does is they deliver, you know, your staple foods. Milk, eggs, bread.

Stuff you need repeatedly. And you don't need you know, going to the grocery store every time you run out of milk kinda sucks. So they just deliver it to your door. And so They're like a a a version of Instacart that's just focused on the staples. Okay.

Uh and also a you know card key difference. Instacart goes to the grocery store and buys stuff and marks it up. These guys are the grocery store. So they just have a they buy wholesale and they sell retail, so they don't market up, they actually get good prices. Okay, good start up. They are exploding twenty X, thirty X oversubscribed on uh demand right now because everybody is ordering food in because of coronavirus, right? So everyone's getting uh to try this like delivery thing. They're sort of forced to do delivery for the first time. And what's it called again?

Those guys are called Farmstead. Oh not farm theory, okay. Farmstead, okay. Farmstead. Yeah, this is my buddy's company. Uh he listens to the podcast sometimes, so shout out if he's listening. So um cool name. Love the name. Yeah, great name, great brand, uh it looks good, and the product is good. So I I actually I like it a lot. Now one problem that they're having and that every delivery company is having right now is that uh they're short on drivers, they're short on delivery people. They have too much demand and not enough ability to fulfill. So this company in Portland started hiring out of work people from the coronavirus. Now what what industry was been affected by this? Strip clubs.

Nobody's going to strip clubs right now during coronavirus. So they hired the strippers to do delivery. And so they got a bunch of PR from this, which they're great. Uh I gotta d I I gotta find out which company it was. I don't know if it was Door Dash or whatever. I don't even know if the company really did this or the strippers just started signing up for this. It's like oh we gotta make money. So what are we gonna do? I guess we should become you know delivery people right now for for the interview. I see it. I see it. Which w do you know which company it is that they're delivering for? Does it say? He jokingly calls it boober eats.

Uh So it all started as a joke with Lucky Devil Lounge, one of his clubs. And no one was coming in and they go, We need to do like Uber for we delivery. Or Lubber for

The sex lube delivery. And I was like, let's do boober, which is Topless girl picks you up and takes you to a strip club. And so anyway, that's the joke is that it's uh I is I don't think it's real.

Yeah, but it did get PR. Yeah, Dig PR. I I think I think I I did read that they were uh like the gig workers are basically shifting from one to another, right? If you can't If if the if the demand has gone down in this area, it's gone up in delivery, then more people are becoming delivery drivers. And uh so anyways, I thought that was interesting. There's another one it's called Meals for Four Inch Heels. Meals and six inch heels.

Well I I don't know if it's smart to create your own delivery company, but I think uh If you're a stripper and you ought to work right now, you know. Girl's gotta eat gotta do something. I'd bring up another Y C one. Let's let's see what else you got. Okay. So Ditto. Um I think you'll like this one. Yep. So Ditto's tagline is it's a tool for teams to manage copy from design to production. So copy something we've talked about. Um

I r also I always define copy'cause I remember when I first moved to San Francisco and got a job in tech. And then somebody asked me, Can you give me some copy? And I didn't know what the hell they're talking about. I thought maybe they said coffee. Maybe I had to go make a copy of something. I didn't know what copywriting meant. So copyrighting is just like The words on a website. The words on your on your your product. Yeah, so so anyways, what these guys did was they said, All right, we have all these tools like Figma, um you know, Photoshop, whatever. We have Google Docs Spreadsheets, so we have all these collaborative, well made SaaS tools that help us collaborate on design. or on engineering or on uh modeling and on in Excel. And so um why isn't there a tool that helps teams

collaborate on their copy. And so they basically built a tool that says you know, their their pitch, which I think is you would agree with, is Copy is the most under leverage aspect of product building. It has a higher ROI and is easier to change than almost any other part of your product and can drive sales faster with better copy, which I agree with. And um what they're saying is that Teams don't have a great way right now to collaborate on your copy. And so they built a tool that lets you sort of

Point click and make suggestions of what the copy could be or should be, or look at what it was before, that sort of thing, um, on the product. I don't there the product's not super clear exactly what it is, but I left the premise. I I think it's interesting. Okay, but let's talk about this. The the peop okay, the people who started it. Um One of the women

Oh, they're young. But okay, o they ca you said they came from Venture Capital. They were like interns at V C, so I was gonna say Well, they're really young. Their first jobs before this were interns. Um, good for them. So I believe their claim w we think copy will be the new visual design.

I think that's I I think that's true. I think design got super important over the last ten years. Um, and now every company just sort of knows that hey, design is super important, usability u UIUX is super important. Well nobody talks about copy. It's not the fucking new version of that. It always has been. It just people just are in vogue in tech companies. Yeah. Like I'm at a tech company of two thousand people.

I don't think I've heard the word copy once. I don't think anybody has a strategy to make our emails better or our the text on our website better. But this isn't gonna I don't this won't do that though. This is like saying Figma is gonna make your website look better. Yeah, that's true. Yeah, the tool I think if you make it easier to do, people do do it more, but right now the problem is People aren't Um Aware

or sort of considering this as something they need to be focused on. So yeah, they n they need to educate the markets of of the market of the importance of copy first. And then of having an easy tool. I think it's cool. I think it looks great. There's one red flag that I have which is their Like uh the pricing it's twelve dollars a person a month. Um

Right. I It's gonna be har it's too hard to build something big when it's so cheap. You really need a lot, a lot, a lot of people. Right. Um I mean they'll need a you know, a million users at that rate.

Or not a million, but you know, a lot. Maybe a Well yeah, a million users to be like really large. Um, so I think their pricing is silly, but They might be able to figure it out. Um Great idea. I like the idea, but uh it's not there yet. But I think that

If you wanted to Bet on them. It's an interesting bet. So here's something interesting. Have you ever read this blog post by Stuart Butterfield called We Don't Sell Saddles Here? Yeah. Yeah.

And that it's old. It's old. It's so Stuart Butterfield is the founder of Slack. And um Before they launched Slack, he wrote this memo to the team. And he released it later.

And what he said was Uh he wrote this blog post it's great. If you're a founder, you should go read this. And I'll I'll summarise it very shortly. So We don't sell saddles here. What what does that mean? So he talks about let's assume you were a saddle company. You make saddles and you sell them. And so you could make saddles, sell them to existing horseback riders. And basically try to tell them why their their old saddle that they use is not great, and how they should be using your saddle. And that's tough because A you gotta get people to switch.

And B Um There's just not that many people who who are horseback riders today. And um he goes, you know, the better approach And the reason he says we don't sell saddles here, even though we're a saddle company is that what we need to do is sell the joy of horseback riding.

If we can make people want a horseback ride, we can tell them how about how awesome it is to ride horses, how it's fun, how it's great exercise, how it feels great to have the wind blowing in your hair. Then they'll wanna do it. And when they do it, they'll be like, Oh shit, I need a saddle and it's like, Don't worry, we got you Um and he basically says this is the Lululemon approach. So Lululemon doesn't go t didn't go to a very small at the time yoga industry and say Hey.

you should be buying hundred dollar, you know, yoga pants. What they did was they helped spread the joy of the of the sort of the lifestyle of a yoga lifestyle. Um they got more people that wanna do it. That's why they offer yoga classes in their store. Like who does that? Um

They want people to be in that lifestyle and then once you're in the lifestyle It's like do you want the best?'Cause we we do have the best materials. And so this is just a general strategy. If you're if you're operating in a niche, sometimes you have to actually Sell the lifestyle of being in that niche. more than your product to the existing people in the niche. I love that. And did and a lot of times not a lot of times, every once in a while

those like marketing things like and those selling the lifestyle actually becomes bigger than the original thing. So for example This is an example where one has become bigger, but it's become its own its own thing. You know Michelin Star restaurants? Okay, yeah. You heard of Michelin Star restaurants, it's like it's it's like the standard of what

Is good and what is it? Well, you know Michelin Tires. Created that. And they they did it because they created a guide on which to restrict like that they Michelin has been around since this car started. It was around even before that. They made rubber for all types of things. And then cars got popular and it was You guys need to get out and travel the world and you need to see all these amazing things and look at all these restaurants. This one we rate this one one star. You should go see it, but this one's four star. You have to go see it.

And if you do happen to go see it, make sure that you use our tires. How you gonna get there? You better drive. If you're gonna drive, you better have tires. Right. Michelin Stars got started. And there's a whole bunch of examples like that where uh These marketing schemes have become their own. their own thing. So anyway, um what's it called again? Ditto? So Ditto, I think they're gonna have to do that. I think they're gonna have to not sell saddles. I think they're gonna have to sell horseback rides. Okay, so p the i these people who are starting it are pretty young. Let's see if they're like aggressive enough to do this and I

Maybe they w they might be able to but selling Copy. It's really easy. Like If I if I like I could just go to you, I could say like look

You give me a blank piece of paper, and because I have this skill set, I'm an ATM. Like do you know what I mean? You're like like if just Or like there's like this uh there's this very famous copyrighting story of this uh very uh of this copywriter who sees a guy who uh is h a homeless guy who's holding a s a sign and he says, I'm blind Please help me.

Um and he goes and the copywriter goes up to the guy, he goes Hey, let me help you out here. And he just writes It's beautiful outside. Kama. And then

It fills in. And I'm blind. Please help. And the whole point is like, dude, if you just add two or three words it changes everything. Right. And so these people ditto their ad campaigns could be really good. So yeah, um good point, I'm on board.

Can I tell a quick story about uh and we're totally off the Y C train for a second, but this is a fun thing I just remember when you told that story. So my very first company Um, we had no money. We we were funding the whole thing off prize money. So I would be going out like a Like a busker pitching at at startup competitions trying to win them and every every time we won, we got more money to keep going. And um I don't know why we didn't just pitch investors, but like it was working, so we just kept doing it. So we didn't have a lot of money to hire anybody, but we realize we realized, hey, we were right next to the University of Boulder and we could get a bunch of interns.

And then the question was, how do we pick which interns? Uh how do we know who's good? So I was like all right, we're gonna design a test, a case. And so the case we gave them was and so we wanted a marketing intern. And I said, Hey, you know, near the university there's uh there's sort of a homeless population. Um, and they you know, let's say today they all earn on average Uh fifty bucks a day.

Let's say that's what they're making today. So your challenge to show me your marketing skills, your savvy, your instincts. Um I want you to come back and I want you to basically pitch me a plan. The idea was for them to actually go do it, but we never ended we never ended up having them actually go do it. But

We said come up with a plan of How of how you would earn the most money In a given week. So what would you where would you stand? So this was about like understanding locations, foot traffic, which is like essential for restaurants. So where would you pick that you were gonna go? What would you write on your sign? How would your image look? What would you what would be your sort of your your your look? And uh why do you believe that that would be the most effective way to get money? And this was our our sort of test as a little bit like not

Not politically correct, but Um Uh there was one girl who had a who had a uh she had a good solution where she was like Uh, I don't remember all the details, but it was like, Oh, I'm gonna go to this area because this type of person is uh she was like first I wanted to figure out who is the type that donates. And so she's like, First I would observe which type of person I'd spend the first day just observing which type of person donates. And I was like, That's smart. Um understand the customer first before you implement your plan. And then she was like, Okay, and then after that I'm going to

Um you know, I would target where that person's commute is, I would be there, and then I would have a positive message because I believe that the positive messages will sell better than the sort of the the negative uh messages. And I would try to tug at people's heart strings so I'd go for emotion and not logic on on why it can help. But that you know, I'm struggling and I'm a mother or whatever it is and like that's why people don't. So Yeah. Uh and it just proves how important copy is. And copy is not words, copy is understanding how people think and communicating it effectively. And it just so happens it often is used with words. Right. And speaking speaking of copyrig

Farm theory. That is an example of copy. So you have farm theory on here, which is Selling ugly produce to restaurants in India. Yeah. Is that a Y C thing? It's a Y C company, yes. Okay. It's in India.

And that's a company in America. And what's it called? It's it's in India, so it's also one here, yeah, yeah, yeah. Uh, there's a there's like a farm to table box, I think. That's the ugly produce thing in America. I forgot what it's called. Yeah me too. I just Googled it. Imperfect food. Yeah, imperfect food. So I'll I'll give you the stats on these guys. So um so they're doing twenty two thousand a month uh of MRR.

They um Say forty percent profit margins, they say they're growing sixty five percent week on week, which doesn't mean anything'cause it's Y C. But they're on track to get to a million dollars ARR in the coming months. What they're doing is interesting. Taking um Farming is huge in India. So they're saying, okay, there's tons of farming, there's tons of produce produced, there's tons that's not gonna get sold because it looks ugly. It's not good for consumer retail.

But we can buy that stuff for cheap because it's just waste otherwise. We can sell it to restaurants who don't care about the aesthetic look of the you know, they're not picking like a consumer does in the in the grocery store where they pick a you know, the best looking one out of a barrel, uh, the restaurants don't care. They're chopping it up, processing it, turning it into food. If they can get lower food costs, fantastic. And so they're looking at Um you know, right now it's seven hundred twenty dollars a month. just for the restaurants in Bangalore, which is a part of India.

And um they're they believe it's a big market. They they claim a five hundred million dollar market just in Bangalore, uh just through the restaurants that are there. Sounds a little high to me. But Um the the value prop makes sense. The restaurant saves about thirty percent by buying ugly produce. The farm gets some revenue out of something that would otherwise be no revenue, and uh they take their cut in the middle. I like it. What do you think? I I like it now, but let me I'm always being like the negative guy. I like it. But let me tell you, okay, I'm a subscriber to

Imperfect produce. Um First of all, it's not imperfect. Like Th this is a shtick.

Of the of uh Farm theory of them selling like things that are ugly. Yeah. So what are you saying? They they look normal, you're saying? Yeah. It looks normal. I mean it it doesn't look like it's a it it's a wonderful marketing scheme, but it it's it it's

So like It's just normal shit, right? Uh and because I'm guessing you would not sign up for something that just says here's vegetable delivery. Correct. Yes. It's like saying there's a famous copywriter named Joe Sugarman. He wrote this great ad for a new Cast or is it called Cassio, a Casio watch, and he's like we use space age aluminum with quartz movement. And Fucking every watch has that same aluminum and quartz movement is used in nearly every single watch. He just ex he just explained it in a great way. And so this is a s this is the same thing with these guys. I and it's a shtick that works. It's a real it's like it's like Gennis b Gennis putting a ping pong ball in their beer.

Um I don't know about that. What is that? Guinness beer, if you buy it in the can, it cut there's a ping pong ball in it because apparently that ping pong ball has a little bit of Uh night is it nitric? oxide some type of like uh gas in there that keeps it super fizzy. I see. Okay. And when they released that ball, it like went up big time.

Um I love it. Yeah, so this is great marketing. I'm into it. I I don't know anything about India, so it's hard for me to say that. But I do know that I just Googled it, uh Imperfect Produce, they have two hundred thousand subscribers. What do you pay per month roughly? It's a weekly bill.

Um, I think I was paying two hundred dollars a month. Wow. So it's kind of incredible. Yeah, big market. So yeah. I it I think it would depend on how

talented these entrepreneurs are, but uh you definitely can build something significantly Significant here. Right. Okay, give me one that you like and then I'll be the bad guy saying why it's bad. Um Did we talk about upflow? Let's talk about upflow.

Okay. I didn't know this until Well, until I started my business. Um Yeah. Collections for

Collecting your cash flow is actually really hard. My father in law has a moving business and he's like, Yeah, it's a pain in the butt to collect To collect the money. With my business, you know, we make Uh let's say Eight figures a year. And collecting the money. I used to have a team of full two full time people whose job it was to collect the money. Now I but then I found an outsource service to help me with it.

And a lot of companies that even if you're small, let's say you only do a million dollars a month in sales, you need someone full time just to collect that money. And that person could be a seventy thousand dollar a year salary person. It's expensive. And so there's a lot of services that I've recently found, but there's not that many that help you collect money. And upflow is Upflow built software where Um They like you can track

Who owes you money based off of your quick books? And you can like constantly send email reminders to those people. Now the service that I use, it's literally a person who does it. And it's and it's incredibly effective. And I pay five hundred dollars a month for it, I think. And

Um it's like Easy. Like I would totally Uh I would totally Like that's the last business expense I'm gonna cut'cause it is so effective. So I like upflow for that reason.

Uh let me ask you a question. When you saw this, did you send this to your finance team and be like, Let's use this? Yeah, we saw I s I signed up for an account. And what was the reaction or w w you know what is the let's call it the friction in adopting something like this?'Cause you definitely have a workflow already to collect. Yeah, so that was the friction. I said E D This new Sean just showed me this new company. It's at Y C I signed up. It looks neat.

If you have any problems with our current vendor. Give these guys a look. Yeah, and so the friction is that we ha she said she goes, Yeah, our our people work really, really well, so I don't wanna disrupt it. I said, Yeah, don't worry about it. But if I was starting again from scratch, I would maybe use these guys. Now the problem the the You could be you could play devil's advocate. No no no go for it. The problem is is that the company that I use is like an old school company and they have like

uh men and women in their forties and fifties who are like in Missouri who are like pinging these people And that works. It's low tech and it's super effective. The problem that I would see with these guys is that if they try to get too techie into Silicon Valley, it could not work. Like what they could do is just hire like

two hundred people in Missouri to just do this manually and that could be super effective. So if they try to get cute with the tech, then I it could not work. And what do you w when you use the human solution, what do they take? Uh what's their I pay'em five hundred dollars a month. Okay, so they they don't take anything on the c actual collected thing. No, but I bet you If m there might be a scale. Right. Um I can tell you what I use. I think it's called Axim A X I M.

Okay, let's check them out. Axiom um Let's see. I think it's not a little bit more. Let's see. Maybe uh Okay, while you look that up, I'm gonna tell you.

Go ahead. I'm gonna tell you what I don't like about this. Um, because I'm just trying to put my hater hat on. In general, I like this idea. But I'll say Uh I hate the way they're describing it. We're building Venmo for B to B. Yeah, stupid. I I don't think that's what this is, and I think that's confusing. Um I think what they need to say is we help businesses collect X percent more revenue.

Um by automating the you know collection service. Today this is what happening, so so I think they got cute with this Venmo for B to B and I don't see that at all unless I'm Totally misunderstanding the the product. No. I I I I totally agree with you.

Um it is kind of impressive. They have one hundred sixty paying customers and fifty fifty K MR. Uh that's Pretty damn good for where they're at. Um to be at fifty K MR this early. is uh is actually quite impressive. So they're definitely doing something right. I don't want to hate on it just for hating on its sake. I think they they have a good thing going here. I don't know about the competitive landscape. Um and I hate the way that they're describing it. I uh completely agree with you. I think that they're describing it very stupidly. Um I just sent you the link to the service that I use, Axim Inc. com. A X I M Inc.com. The tagline is improved cash flow, reduced risk, save money. We

W we manage your accounts receivable. Like So we outsource it so you don't have to worry about it. And if you click meet the team, the founder hit His his name is Axim or no, sorry, James the Mixer.

So It's Axim the name of the company is his last name backwards. And it looks like his son or his husband, some relative is also working there.

Uh And so and it's a very like low key unsophisticated way to go about doing it. And it works really doing like thirty million a year. Yeah. And like you could see who's collecting the money. Like they have the names of the people working there. So anyway I like this business. I just think that if the if it's if this company upflow is run by a bunch of young Silicon Valley guys, they n they have to be careful.

To not overthink it and get Cute. Because I think I think that like They could just do old school ways.

But just package it in a in a interesting way for breaks or for uh Sean's new startup or for Well whoever. Right, right, right.

Um okay, we'll do one more. We're almost out of time. Um, so I'll do this company, I don't know how you say it, Taive T it's T A I V. I have. Um Weird name. Don't know why.

They chose that name, but whatever. So um what these guys are doing is they you know how every bar or restaurant has TVs and they're playing sports usually or whatever it is. So what they're saying is, Hey, the commercial break That's a lost opportunity, right? Um

So what they do is they hijack the commercial break on that TV. And they just upsell stuff from your menu. So you know, you're watching the game, when the commercial happens, it'll show the wings that they have on the menu and be like nine dollars for these wings right now. You want it? Um it's a commercial just locally for your bar or restaurant. I love this idea because I think there's a lot of restaurants out there who Um

who are in this scenario, they have, you know, lots of bars, lots of restaurants that have T V so I think there's a decent market for it. Um I like the idea of helping them make money. Um, it's a very simple solution, but the thing is, most of these restaurants and bars haven't done anything yet. So like this is a There's a lot of low hanging fruit still available. This is one that I like. It's like sort of an ad block for those TVs. What?

I think might be challenging for them. is selling into bars and restaurants. I think that's gonna be a slow and painful process for them. Alright, I'll I I have a little background info information on this. Do you know Chive T V? No, what's that? Okay, so you know the Chive dot com? Yep.

Okay, the Chibe dot com, the founders, Leo, um It's and I I know Leo and John. Uh Leo's one of my investors and someone I look up to. He started the Chive and he uh now they have Chive TV. And the way it started was they would get like a lot of funny videos, like America's Funny, some videos look like dads getting hit in the nuts by their kids swinging a pinata baseball bat. Like just silly stuff. And In all of Texas, what they did was they would give these bar owners these little dongles, like these like fire sticks, like an Amazon fire stick, and they uploaded all this programming and they're just like constantly filling the pipes. And so if you go to the bar, you see just like America's funny sown videos in the background and Chive would put their ads in the in in the mix. And they made millions of dollars doing it. And so much so that they eventually to a different company and they call it Atmosphere TV. And they've just raised ten million dollars to launch it. And Leo was like, This is gonna be a multi billion dollar business. And uh Interest. So I ha now the verdict's still out if that's gonna happen.

But Chive TV was huge for the Chive atmosphere. He says it's gonna be the greatest thing ever, and he said that what they need to do is just go out and hire the same thing that I described earlier, hire a ton of salespeople. He goes, Yeah, we're just gonna hire a a ton of salespeople and we're gonna do this. And then another bit of background is you and I talk to the folks at Firefly. Uh I I won't put words in your mouth, but I have no problem in saying I thought that was a horribly dumb, stupid idea. And this idea is a little bit similar, but I think way better. Right. Yeah, more defensible for sure.

Um, Firefly's the company that puts uh little ad little billboard thing on top of an Uber. Um so an Uber driver can make a little bit more money. That's cool. But um this is this is a little bit different. This is more what I'll call Um It's not dependent on the ad market, which I like. You're internally advertising stuff in the restaurant or the bar to get people to have a little higher check size. Yeah, but that's not what they're saying. At first they're doing what you're describing.

Uh and they go they said all of our one year contracts are insanely profitable. But our next phase is to sell add time. At twenty five dollars per CPM. Interesting. Okay. Alright, so maybe maybe the in in in restaurant upsell is not as good as I thought, and that's why they're like already planning to go out of that. And I think that's a good market, but w in their numbers, what they're assuming, they're saying they're gonna have a twenty five dollar CPM that's gonna make us way more money and create this new thirty two billion dollar market. And be and the math is that we have X amount of impressions and we're gonna put twenty five dollar CPM ads on there. Now here's the problem, which is their fill rate is not gonna be a hundred percent.

Right. And it's not even gonna be close to a hundred percent. Yeah. Here's the other thing I don't like. Uh so they charge$4200 per location per year. That's really expensive for a restaurant or bar. Um they also charge a one time, fifteen hundred dollar hardware installation. And so I just think that they've added a lot of friction Um to the adoption of this. I think already it was gonna be hard to get people to adopt. That's a high price point.

and um a high one time installation fee that they're asking people to do. So I think that's That seems tough for me. That said, I think that this this could be a business that makes tens of twenty, thirty, forty, fifty million dollars a year in sales. This is a great company to own. Not a great company to invest Um

Not a great company if they Uh raise all this money. That's my opinion. Right. So I like this. They just have uh someone smart once told me, he said the only thing that you can't screw up in business is your cap table. And so when I look at when I look at a lot of these companies I think that could be good so so so long as they don't screw up their cap table. Right.

Uh yeah. That that is one way to uh die for the wrong reasons. That's a great way to put it. Um okay cool. Um so okay, we're gonna come back and we're gonna do more of this. I also think we have Brent Be Shore scheduled tomorrow. um to come in and talk about buying companies, roll-ups, that sort of thing. And so um so we'll see how we'll see how that goes. I need to confirm with him that he's still Uh but his name's Brett Bishore. Brett Bay Shore. Um he owns something callement equity. Yeah, he's he's smart.

Dude, I love Dave, yes. I definitely want him on. Uh I I've told the story before, but I when when I bumped into him at the the HustleCon after party We did a mini brainstorm right there and he had, you know, five bangers, uh, you know, five amazing ideas just come off the top of his head. So he's the type that I look for, which is like People who've got more ideas than time.

Yeah, let's do it Tuesday. Cool. Okay, thanks for listening, everybody. Stay safe, share the podcast, uh, tell your friends, post on Twitter, give us a little love. Um, we're trying to keep growing this thing. It's growing and we want it to keep growing. So share it.

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