0:00
Can I just read you the menu of Shady Gators?
Search this video
0:01
Would you guys be interested in that? Yeah. I'd be very interested.
0:03
Tell me all the variations of tater tots. You mean gator bites? Everything.
0:07
Ultimate tater tots or loaded loaded tots.
0:13
For me All right, we're live.
0:22
Uh we have got Sam Rattner.
0:25
By the way, Sean, I I don't know Sam that well.
0:27
I think you think that I know him.
0:30
Well, yeah, cuz I don't know him.
0:30
So I'm like, how'd this guy get here?
0:31
He's uh he's here because Ari talked to her talked to him on the phone. We do these pre-calls.
0:37
And Sam, I got to say, like out of uh I don't know, every 10 pre-calls we do with people that we don't know, eight out of 10 are are kind of like, "Hey, probably not a good fit for the pod."
0:47
She talked to you and she was like, "You got to have this guy on."
0:49
So, I don't even know what you did, but you did something and you have some kind of story or energy or ideas that that she liked.
0:58
Yeah, basically what I know about you is By the way, you're like shockingly young. How old are you? 27? 26? Yeah, I just turned 27.
1:06
And what I know about you is you had this company that was a sports betting site.
1:10
You sold it for around $40 million to Fubo TV, like I think before it even launched.
1:14
But you've also done all these other strange things.
1:16
Like I think you bought Did you buy a riverboat casino or a riverboat?
1:21
Like you bought a bunch like you're into a lot of really strange things.
1:24
And for such a young person, you've done like a lot of odd I mean, just the fact that you've done a startup that you sold for a lot of money, that's already impressive.
1:31
But even amongst the impressive people, you've done a lot of like strange and unique things, right?
1:37
All right, so let's start with that.
1:37
You were you drop out of college and you start a company that you end up selling for Can you say how much you sold for? Yeah, it was 40 million.
1:43
Okay, so you drop out of college, you build a company, you sell it for 40 million.
1:46
At that time, you must have been pretty young.
1:49
How old were you when you sold it? 23. Okay, great.
1:52
So, 18 to 23-ish, uh what was what was the idea and how did you make that happen?
1:58
Uh so, I had gone I was actually at the University of Missouri for a year. Nice. Mizzou.
2:03
So I was I was at Mizzou.
2:06
Uh enjoyed my time there. Was not for me, though.
2:09
Uh always wanted to kind of start a company.
2:12
Uh when I dropped out, I didn't really have the exact plan yet.
2:14
Uh but I did always play a lot of online poker. I was very active.
2:18
I was the kid with 12 monitors uh playing online poker in the dorm rooms.
2:21
So, I kind of knew the community a lot.
2:23
Um and you know, started hearing whispers of them legalizing, you know, gaming nationally here in the United States, you know, lifting the federal ban, if you would.
2:32
And I thought the market would evolve it shouldn't evolve much differently than it does overseas, where it's very part of the culture.
2:38
You can bet when you're 18, sometimes 16.
2:39
You're betting, you know, at the Arsenal game inside the stadium.
2:43
But here, there was like a stigma to it, you know, if Grandma says she buys a lottery ticket, you know, uh you're like you don't think anything.
2:50
But if she says she took the Bears spread, you're like, "Oh, Grandma, what the hell are you doing?"
2:53
So, um I thought if that would be the case, I just sat down and essentially just wrote out for hours how I thought the market would evolve.
3:01
And my conclusion was that um there will be early players.
3:04
You'll have DraftKings and FanDuel.
3:06
They have, you know, audiences in fantasy.
3:09
But that it really would end up being dominated by either the brick-and-mortar casino companies or the media companies, which is now just playing out with ESPN and stuff.
3:19
And to date, all the technology had been built overseas, cuz it's been around for 50 years.
3:23
But it was like built in the early 2000s, where you had like these desktop applications to place a bet.
3:27
And then to get to mobile, they just like compressed it into a mobile experience.
3:32
They didn't like rebuild it.
3:32
They didn't rebuild it native iOS.
3:33
It didn't have any good API functionality to have ticketing and merchandising and these other things.
3:38
So I said, "What if we just What if I just rebuilt all that?
3:42
And then call these big companies and said, 'Hey, uh don't white label this garbage from Sweden.
3:46
Um you know, uh and pay some huge rev share.
3:48
What if we just do a deal?'"
3:50
Can you Can you pause that for a second? Yeah.
3:53
So you're you're describing what sounds like a pretty sophisticated process.
3:57
You're like, "I heard, uh you know, that there was this inflection that there maybe it was going to get legalized.
4:01
So I started thinking ahead of that.
4:03
And then instead of just jumping right in with my two dumb friends and starting to build a product, I I wrote down how I thought the market would evolve.
4:13
And then I realized that my good go-to-market would be to kind of undercut these rev share competitors with a mobile-first product on the platform ship.
4:19
Dude, you're like 18, 19 years old at this time.
4:22
You know, I couldn't figure out how my night was going to evolve, let alone how the how a market was going to evolve.
4:27
Like was this your first rodeo?
4:28
And why why were you so good at it at that time?
4:33
So in high school, I ran a snow removal business. Um which Natural pivot. Natural pivot.
4:40
And so, I had been you could call in business in a very rudimentary way.
4:43
We were plowing driveways.
4:45
Um but we had hundreds of houses.
4:47
I kind of knew how to build a business.
4:48
And what I realized, although I learned a ton, I'm like 15.
4:52
I'm learning what insurance is, cuz some woman slipped on salt.
4:54
I'm learning how to, you know, finance, you know, trucks to get plows.
4:58
Like So I kind of had this business sense.
4:59
And by the way, when you're talking about plowing, you're not talking about shoveling.
5:04
You just said financing trucks.
5:06
Yeah, like the plows you put on the front of trucks. Got it. Okay. Yeah.
5:07
So So you were sophisticated.
5:10
You're going door-to-door to get these customers for your snow business?
5:13
How did you get customers?
5:15
Initially, it was me and uh a good friend of mine, Ilya, who's now David Dobrik's right-hand guy, Ilya Fedorovich.
5:20
We went to high school together.
5:21
I went to Vernon Hills, which is where they went.
5:22
So Ilya and I built this snow removal business and we'd be like at used car lots negotiating for plows, essentially.
5:29
But what I learned from that were you making back then? 15, 16 years old?
5:34
I think we did like 50, 60 grand for the winter or something like that.
5:39
So, and I couldn't drive. That was a big problem.
5:41
Ilya only had his permit. I didn't have a license.
5:43
So we couldn't really get anywhere.
5:44
There was no Uber or at least we didn't have debit cards.
5:48
So like we'd like walk to like Mundelein, which is like the neighboring town, to like go look at the plows. It was complicated.
5:53
But what I learned from that is you could scale that business um and actually do really well from a cash flow perspective, cuz candidly, most people don't want to be in that business or they're like 60 years old and they've been just driving the same truck for the same couple commercial lots.
6:07
But what I learned is there's no value.
6:09
It can't It can't scale that well, that large.
6:12
And I was just always interested in like how big can I make something?
6:17
And I had that itch to do that.
6:18
So then I thought, "Well, if it's easy, there can't be any value in it.
6:23
If anyone could just get into it, well then there's inherently zero value long-term, like big if you want to build billion-dollar businesses."
6:28
So when I thought gambling could be big, it would have been very easy to be like, "Oh, we're going to have a fantasy site that is slightly different and you can pay to play and it also includes NASCAR or something."
6:40
And like all those things just to me, it's like, "Eh, how does that get to 500 million in revenue? I don't see it. I'm not interested."
6:46
So, I knew I had to really sit down and think, "How will the market evolve?"
6:51
And then I literally just looked at what are the pieces of this pieces of this evolution that cuz it's such a headache or capital intensive, no one will ever want to touch.
7:01
And then because of that, it should actually end up being a slightly less capital intensive, because no one wants to do it. And then you have value.
7:08
It was my thought, essentially.
7:13
Our software is the worst.
7:13
Have you heard of HubSpot?
7:15
See, most CRMs are a cobbled-together mess.
7:17
But HubSpot is easy to adopt and actually looks gorgeous.
7:21
I think I love our new CRM.
7:24
Our software is the best. HubSpot. Grow better.
7:28
And when you dropped out, was that a easy decision for you to go do this gambling company? Was it hard?
7:32
And basically, how did you live?
7:34
Cuz I always wonder this when people drop out of college, you're kind of college is a very it's a bubble that's like, "Here's your bed. Here's the bathroom. Here's the library."
7:43
You know, these are This is your place.
7:45
And then when you drop out, you're like out of the system.
7:46
You're neither at home nor are you in school.
7:49
So, what was Yeah, so it was definitely uh my parents were not thrilled, as you can imagine.
7:54
Um uh and when you go home It's like when you grow up, uh you're my son, I love you.
8:01
And then when you turn 18, you're like that guy in the house.
8:04
You're like you're like, "What are you still doing here?"
8:05
Uh so, uh I I went home and lived with my mom.
8:08
Um although I essentially I went to Starbucks every morning and worked until from whenever they opened, 5 or 6 a. m.
8:16
, until they closed at 7:00.
8:18
And then I'd go to Lifetime Fitness.
8:20
And there were no yoga classes after 8:00.
8:22
So I would work in the yoga studio upstairs at Lifetime.
8:26
And they had free coffee, free all that stuff.
8:29
So I kind of had like an office.
8:30
And it kind of got to the point where I started leaving my stuff as like a setup in the corner.
8:34
And I think a lot of I think the instructors thought like, "Oh, that's someone else's class."
8:38
And it was just like my laptop and monitor and computer.
8:43
So I worked at a Lifetime for like three like a year.
8:47
Uh and it was cheap, because uh you know, Lifetime, whatever.
8:49
I was under the 28 age, so I'm paying like the reduced thing.
8:52
Um and I would just kind of work all day. So I lived at my mom's.
8:57
How'd you fund How'd you fund the company at that stage? Uh come on, Sean. Credit cards, baby.
9:01
Uh I essentially went What happened to that snow plow money? Oh, yeah.
9:06
Uh we had some cash from that.
9:08
But uh essentially like I knew I needed I knew You literally you kind of have two options.
9:15
If you don't have tons and tons of cash saved, you essentially you can work a part-time job.
9:20
Um uh I was unwilling to do anything but spend every waking moment on the business.
9:24
So I didn't want to do that.
9:26
And so I kind of just went and opened credit cards.
9:30
And I've always been a zero backup plan guy.
9:33
I perfectly I purposely failed every final before dropping out, so going back was not an option, cuz I'd be going back at like 23 years old as a freshman.
9:39
So I'm always a put it all on the line and you will figure it out kind of guy.
9:44
And uh You purposely failed your finals?
9:47
Yeah, that's that's what I that's what I say, too. So So I came home.
9:52
When I dropped out, I came home.
9:54
You know when you like you come home a little early and it's like you're surprising your parents and you're like, "Oh, like did you finish early?"
9:58
I came home early enough where it was kind of too early for them to believe that I had finished finals.
10:04
So, that essentially meant is I didn't show up to the finals and I got zeros on all the finals.
10:07
So, going back was now out of the question, which it removed the debate with my parents cuz they kind of said, "Well, he can't really go back."
10:14
You ended up selling Did you sell the company?
10:16
I was looking at the the site on web archive.
10:20
Did you sold the company before it even launched, right? Yeah. Like 18 months? Is that right? Yeah. Yeah, about. All right.
10:28
So, who who contacted you?
10:28
How did they even know that you were up for up for grabs?
10:32
So, what we had was essentially every component to a gambling platform that you could want.
10:39
So, we were an authorized gaming operator of the NBA, Major League Baseball.
10:42
I just willed my way into convincing the leagues to do a deal with me.
10:47
Candidly, I think they thought I was like kind of crazy and kind of cool and they're not used to cool and crazy.
10:52
They're used to like Disney.
10:52
So, they were like, "Okay, we'll do the deal with you."
10:55
So, it was like these people Explain that cuz I would think if a 19-year-old is like, "Yeah, I'm going to go become an authorized gaming uh you know, operator for the NBA."
11:02
I'd be like, "Yeah, it's not really going to happen, man.
11:05
So, what's your what's your other plan?" How did you do that?
11:09
Yeah, they they like offered you an internship instead? Yeah.
11:10
Uh Uh We had a couple things.
11:16
We at that time, we did raise a little bit of capital and it was from some venture funds in sports, media and entertainment that the leagues knew very well.
11:24
So, they were like, "Okay, this kid called us 6 months ago.
11:27
He sounds kind of crazy, but now it seems like there's this article out.
11:32
The people that invested in them 76 Capital also invested in a bunch of other companies we have deals with, so there's some significance there.
11:40
We also they were very familiar with our lawyers cuz our lawyers represent ESPN and a lot of other people.
11:43
So, you kind of just have to put the pieces in place that kind of give them some gut feel to they're not he's not just crazy.
11:49
He's crazy and he has some people that we know.
11:52
And so, at the time it was like DraftKings, FanDuel, MGM, Barstool and then like us.
11:57
And and the league was also like a little careful.
12:00
They're like, "Can we like we'll do this with you.
12:03
Just don't tell anyone right now and we don't really want to put out an article, but we kind of want to do the deal.
12:07
We think the platform's cool."
12:07
So, we kind of had all these assets.
12:10
We were an authorized gaming operator of those leagues.
12:13
We had market access, which I can get into, which is the licenses.
12:15
We were through compliance in mostly all legal states.
12:18
Now, back then it was 17 states or so.
12:21
Now, it's 35 plus, I think.
12:23
Um And at the time, if you wanted to be in the gaming business, you have to go through regulatory compliance.
12:28
Most public boards of directors have no interest in going through a regulatory process.
12:32
They have to disclose their financials and all these things.
12:34
So, and they also didn't know the business enough.
12:39
You know, you can be a big public company, but if you want to have a book in Jersey, you have to go down to Atlantic City and sit in old room with regulators and lawyers and convince them as to why they should give you the license.
12:48
And so, it was just like this old school process that they were unwilling to go through and we kind of spent the money and went through the pain of building the platform, getting it through compliance, getting the licenses, getting the deals.
12:58
And we knew that what we really wanted was an existing audience in sports.
13:03
Even if we went and raised $100 million, I think DraftKings at the time spent $100 million on corporate travel a year.
13:08
So, $100 million wasn't going to move the needle for us to go to market without any users.
13:13
So, we started talking about a joint venture with a handful of companies.
13:17
And at the time, FuboTV had just gone public. They put out a proxy.
13:22
They wanted to be in the gaming business. And my phone rang.
13:25
And it was FuboTV and they wanted to talk about a deal.
13:26
So, Um what you And so, they they they bought you for I think I read the SEC filings.
13:31
Like just about close to 40 million.
13:34
What what you do with the money? Uh I have it. What do you mean?
13:40
Well, I mean that's a that's that's a lot of money for anyone to get, particularly for a 23, 24-year-old.
13:43
Uh what you invest it in?
13:46
Um I'm mostly in the market.
13:48
And then I have these small random crazy investments that I feel really good about.
13:55
Um but I'm mostly in the market. I'm pretty long.
13:58
Here's why I'm long in the market.
14:00
If I want to do other things with the money, I'll simply take a loan against my portfolio and then take the risk.
14:03
If you sell the stock, now you have a taxable event.
14:06
You get less than like if you wanted to put a million bucks into something, you can either sell a million dollars and have some huge taxable event and the headache to deal with with paperwork.
14:16
And then you invest and then if it goes to zero, you're screwed.
14:17
Or you take a line of credit against your portfolio, say in the index fund like the spy.
14:23
And if I need a million, I'll take a line of credit.
14:24
They keep a million two as collateral.
14:26
And then I get to take my million dollar shot anyways.
14:28
And if it doesn't work out, uh all I got to do is wait.
14:32
And in 8 years, I'll have the money back cuz the stock would have doubled anyways.
14:38
You know, given what the interest rates are pretty low when you take a loan against like that.
14:40
So, I have most all my money for the most part in the market.
14:44
So, yeah, I was down like during COVID like millions and millions and millions of dollars.
14:47
But like if you're never selling, then it just doesn't really matter.
14:49
And if you don't need it.
14:51
Like I kept what I needed in cash, like whatever, but other than that, I'm pretty in the market.
14:56
But that's where your story gets kind of kind of interesting.
14:57
So, like all right, selling for that amount of money at the age of 23 pre-launch, that's that's you know, 1% of the 1%. That's pretty wild.
15:06
But I read that, you know, when I already talked to you and I'm and I read in our notes, I read that you bought this riverboat. What the hell is that?
15:14
And that's one of your crazy investments.
15:15
And you also were looking at vending machine business This is wild to me that you would do this. Okay.
15:19
So, when you're in the online gaming business, everyone who's in it for the most part is like the old Trump gaming people.
15:28
All the regulators are the same.
15:30
One time we got a document and they had still they sent us the wrong copy cuz my partner Scott Butera's name was when he was president of Trump.
15:36
So, they sent us a Trump Entertainment Resorts form.
15:38
Like the regulators never change.
15:40
So, while the business is techy, you could call it, the industry is not.
15:44
So, everyone you meet is like has been in this casino business for 50 years.
15:47
And I stumbled into this riverboat because um to get a license, unlike a cannabis license where you can just apply as a dispensary, you have to get what's called market access and the you are sub leasing the licenses from the ones that have them.
16:02
And the only people that have them are the brick-and-mortar properties.
16:04
It's kind of like if you it's weird.
16:06
If you wanted a grocery store, imagine if you had to sub lease from Whole Foods like a license that they have the entry.
16:10
The reason that's the case is because uh you know, we took land from Native Americans.
16:17
We allowed them to have casinos on reservation property.
16:21
Uh then all of a sudden in 2018, the government goes, "We'll just legalize online gambling."
16:24
Well, then they were like, "Well, no one's going to come to our properties anymore cuz they can just log on DraftKings and you just screwed us.
16:30
So, you should give us the license and then we'll sub lease it to them."
16:34
So, they did that and then MGM and Caesars and everyone went crazy cuz they're like, "Whoa, whoa, whoa, whoa, whoa.
16:38
We're the biggest tax revenue drivers in the country besides oil.
16:39
So, if if the tribes are getting them, then we get them."
16:43
Fast forward, everyone got them.
16:46
Riverboats counted as properties.
16:49
Brick-and-mortar properties.
16:49
And before land-based gaming in the early '90s, everything was on the water because it was illegal.
16:54
And it started in the early '40s and '50s cuz all the trade happened up and down the Mississippi.
16:59
Candidly, mostly through St. Louis.
17:01
And people would just like truckers pull over on the highway, people would pull over their vessels and they'd have makeshift card games on a barge.
17:07
And then all of a sudden it trans Well, I don't think that like a guy like Sean doesn't know this, but I grew up in St. Louis.
17:13
And so, when you say you're going to the casino, we actually wouldn't use the word casino.
17:19
So, we would say, "Let's go to the boat." to the boat.
17:20
And all the all they're not some of them actually are like boats.
17:24
But a lot of them are just like properties that are somehow floating, but they they're not It's like I guess technically they're floating, but they're like not really a boat.
17:33
It's like they're the the boat is this like massive parking lot and then they built like a building on top of it.
17:39
But when I was younger, we would say, "We're going to Let's go to the boat."
17:42
It's essentially a structure built on a barge is really what it is.
17:45
But there's no engine room.
17:46
It's just floating there.
17:47
It's like building a house and then shoving it out into the water and tying it and you meet the state standard. Yeah.
17:54
So, I was talking with a buddy after I leave Fubo.
17:57
Uh and he was showing me this picture of his grandfather in Atlantic City.
18:00
And in the background are these riverboats.
18:02
And um he said, "You know, what happens to these things when they're done with them?"
18:08
And I was like, "What do you mean?"
18:09
He goes, "Well, like where do they go?"
18:10
And I was like, "I don't know. Like I have no idea."
18:12
And so, I hang up with him.
18:14
I'm like, "Where do they go?"
18:15
It's kind of interesting. I'm unemployed. I don't have much to do.
18:19
So, I emailed the general counsel of a casino company that we had done a license deal with at Fubo to get the license in Iowa.
18:27
And uh they were a riverboat property and I went to it a couple times.
18:30
We had to go set stuff up.
18:32
Um and I called the general counsel.
18:34
I said, "Hey Bill, I have a question for you. Your boat's really old.
18:37
I heard you guys are thinking about building a property on the land.
18:40
What are you going to do with this cruise ship you have sitting in front of the property when you're done with it?"
18:45
And he goes, "Well, you know, when you couldn't build brick-and-mortar properties, there was a market for them.
18:50
You know, they'd sell cuz they were just operating casinos like any other property.
18:52
But he goes, 'Now, no one wants them.'
18:54
So, they kind of just end up in junkyards."
18:56
And I was like, "You're got to be kidding me." He's like, "No.
19:00
These things are unbelievable."
19:00
I go, "You just scrap them?" He goes, "Probably.
19:02
Who would ever buy them?"
19:04
And um he just bought they had just bought two casinos in Baton Rouge that were both on vessels, but operating still, which they do in like places like Baton Rouge or Kansas City and stuff.
19:14
And I said, "Are there any near cuz I'm in Chicago, he's in Iowa. Are there any near us?"
19:20
And he goes, "Sam, if there are any boats near us, I wouldn't have bought them in Baton Rouge, Louisiana."
19:25
And then like almost like a movie, I'm hanging up the phone and I hear like, "Hey Sam, Sam, Sam, Sam."
19:29
And I'm like, "Bill, what's up?"
19:31
And he said, "We don't know where it is, but we think somebody somewhere in Iowa has the Catfish."
19:37
And he was talking about Catfish Bend Riverboat Casino.
19:39
And I said, "What do you mean someone has it?"
19:44
He goes, "Well, they built a property like 20 years ago and no one knows where the boat went." I'm unemployed.
19:49
I'm kind of like into this kind of stuff.
19:51
I have nothing to do and I was like, okay.
19:54
I have somewhere to be at like noon. It's like 10:00.
19:56
I'm going to give myself an hour and a half or two and try and find this boat just for the pure fun and if not, I'll never think about this again and we'll call it a day.
20:05
And so first I called every junkyard in the tri-state area in Chicago and Iowa.
20:12
I call there was this place I remember in like Demoine or somewhere and I and this guy answered.
20:16
I'll never forget this and I said, hey, quick question.
20:19
Who's the oldest guy at the junkyard?
20:20
Who's been there the longest?
20:23
And they were like on speaker and they're all yelling like, oh, it's Ricky. Everyone grab Ricky. Go get Ricky.
20:28
Go get and this Ricky guy gets on the phone and this was like I've been on the phone for an hour with junkyards and Ricky's like, Catfish?
20:32
He goes he goes, I would never forget if Catfish Bend came through this junkyard. We've never seen it.
20:39
So I'm like, all right, Ricky. So I hang up. I talked to 12 Rickys.
20:42
This boat has not gone to a junkyard.
20:42
It is not in a and I thought to myself, if they brought it down somewhere out of Illinois or Iowa, it got junked in Missouri, so be it.
20:50
I can't call every junkyard in America.
20:52
But we're going to move forward assuming it's still still a thing.
20:55
So I found I remember one time I got a ticket on my uncle's boats and wave runners in Chain O'Lakes and if you don't pay it, it ends up on the fishing and gaming or like the the fishing and hunting ticketing site.
21:09
So I was like, all right, whoever is goofy enough to buy this thing or have it definitely got like a moving violation or something.
21:14
I mean, this thing is a cruise ship. It's not like a Corolla.
21:17
So I said, let's assume they have a ticket and they haven't paid it.
21:21
So I went to the site and I sat there for an hour and I just clicked through hundreds of pages of tickets.
21:26
But you don't even see the pictures of anything.
21:28
It's just the entity name or the person's name and so I'm looking for like a random entity like some kind of sign and I'm like 194 page 190 something.
21:37
I see like CFFB whatever it is LLC.
21:40
It's like an acronym and I kind of go past it and then like I thought to myself, I was like, Catfish Bend River Boat Casino.
21:45
That kind of fits and I clicked it. Boom.
21:48
Big vessel moving violation $22,000 ticket from the company that bought it at auction and then I read the court filings and essentially Catfish Bend built a brick and mortar property, left the boat to rot kind of like Icon left the casino in Atlantic City to rot knowing that the city would pay for it to get cleaned up so he didn't have to pay for it.
22:08
They then said, all right, you have to move it.
22:12
We'll pay for the fees, but you have to auction it off and so he auctioned it off in an anonymous auction to a marina construction company in northern Iowa who does a lot of work with the Army Corps of Engineers fixing submarines.
22:24
So I thought to myself, oh, he they probably want it for the engine rooms and stuff.
22:31
But all I had was like an entity name and it was like random and I called a buddy in Iowa and I said, hey, what do you know about this um XYZ Enterprises or whatever and he said, what are you buying a boat?
22:43
And now I've been on the phone for 2 hours trying to find this thing.
22:45
I got like phone in the ear.
22:46
I'm like notes from Ricky at the junkyard and then I was I dropped everything.
22:49
I was like, whoa, how'd you know I was talking about a boat?
22:51
And he said, that company he goes, they fix everyone's yachts. I was like, no way.
22:55
So I called like their websites from the 90s.
22:59
Then phone numbers floating like at the bottom of the website and I just and I just called and I said, hey, is I did what I did with the I go, who's the oldest person at this company?
23:10
And they put this like 90-year-old man on and I said, I've got a crazy question for you and I swear to God he cut me off and he said, tell me you're looking for the Catfish, baby.
23:18
And I said, do you have it? And he was like, yeah. He goes, I have it.
23:22
I've been looking at it every day for 20 years. I said, wow.
23:24
I said, no one knows you have this.
23:27
Like why like no one knows where it is.
23:28
And he goes, yeah, like, you know, we're quiet like whatever.
23:32
And he said, why are you calling me?
23:34
What do you want to buy it?
23:36
And I think my wife heard in the other room and she looked at me like, you are not buying this thing. And I kind of smiled.
23:42
I'm like, I don't know, maybe.
23:45
And he's like, well, why don't you come see it? And I'm like, okay.
23:47
So long story short, I drove you know, to northern Iowa and it was sitting there in a quarry.
23:55
He had planned to use it for parts.
23:56
Became too cost intensive to get the engines out of the engine room and uh I persuaded myself to buy it.
24:06
Uh so but what's the game plan here? Yeah.
24:09
Well, okay, so here's the plan.
24:11
It's first of all, it's 40 it's three interior stories all connected by elevators.
24:15
The thing's a full-blown casino vessel.
24:17
Um it's 40,000 square feet of some of the most unique real estate ever.
24:22
When you walk in, you think you just walked into Las Vegas with Elvis Presley.
24:25
The walls, the floors when I bought it, all the blackjack tables, all of the craps tables.
24:29
So first I was like, could be a movie set.
24:33
Uh could I mean I I know the gaming business.
24:36
Maybe I could open up a casino um or maybe I'll turn it into a restaurant or nightclub or something like that.
24:41
So I had some loose ideas, but nothing like in place. So I bought the thing.
24:48
Uh had to deal with the Coast Guard all this stuff and spent about a year going down the path to open up a casino.
24:52
Long story short, there's not many riverboat licenses left in America.
24:56
So you know, I was meeting with the chairman of one of the largest gaming companies in Goa, India.
25:01
He controls Goa, which is like Atlantic City on western India's side.
25:05
They have a bunch of vessel casinos.
25:09
Long story short, became too cost intensive to get it there.
25:11
But he introduced me to a deal in the in Southeast Asia where we had the deal on the one-yard line.
25:18
Long story short uh some of these countries in Southeast Asia are pretty corrupt and they made a big ask and my lawyer said that ask is not happening.
25:27
We're not talking about this anymore.
25:29
So now I'm kind of more pivoting back to you know, partnering with someone to open up a really cool restaurant or entertainment venue and move it down south somewhere like Florida or you know, Nashville, Cumberland River or something like that.
25:41
What did you end up paying for it?
25:44
Uh I might want to tell you that off the pod.
25:47
Over or under seven figures? Can you say that? Under. Under. Okay.
25:50
Um you this seems like a crazy thing to to be working on when you are able to build websites for free or with just your time.
26:01
Um Uh but you've done like you're you're kind of interesting in that you can root out these really off-the-wall ideas cuz you did another one with vending machines, didn't you?
26:12
Didn't end up doing it, but yeah, so I everyone was talking about vending machines all over Twitter.
26:18
Vending machines are the next gold.
26:19
I'm like, okay, what's about Well, we we had a guy who like we were joking about this last episode.
26:24
We had a guy who like was like, dude, I'm making 15 So we talk about you know, like big 100 million billion dollar ideas and then we had this guy who was like, I'm making 10,000 a month on vending machines and for some reason that interests everyone because when you're 13 years old, that's like vending machines is like one of the things that you're fascinated by.
26:42
And so yeah, we I don't know if if we helped to make it popular or we pounced on it because it was already popular, but we saw that too.
26:50
There's a chance I heard about it on on the pod. I don't even know.
26:53
But all I know is there was like maybe it was a year ago or so.
26:55
There was like this 30-day rush of it was like vending machines were like crypto or the next AI.
27:02
Everyone in the world wanted vending machines.
27:04
So I was like, all right, it seems like a terrible business.
27:05
So why does everyone want this?
27:07
And it's like high cash flow.
27:08
Like I get it, but similar to ATM business, you have to go there. It's physical.
27:12
You have to replace product.
27:13
I was like, eh, that can't be that interesting.
27:16
But like anything else, I always go down this path of like before I say no, let me do some diligence.
27:22
And I'm on like some one of those sites, BizBuySell or one of those type of sites where you can buy a company.
27:27
And there's this rural company in the middle of nowhere like Lewiston, Idaho. Not even Boise. Like Lewiston. There's nothing there.
27:34
And uh It did when I I looked at 20 companies and they all did about the same margins, whatever they were. I don't remember now.
27:45
This company did like three times the margin.
27:47
I was like, why is this company so much better?
27:49
Like either they're lying and fidgeting these numbers or something's going on.
27:52
And the broker convinced me to go.
27:55
So I flew into this like remote airport in Lewiston, Idaho and I drive 40 minutes to this like warehouse and we open up and it is just like full-blown operation. I have pictures.
28:07
I have like so many pictures of they had hundreds and hundreds of vending machines that they didn't even have out there yet that they have stocked. They had more inventory.
28:13
You thought they like ran a hospital.
28:14
There was so much inventory.
28:16
And I was like, okay, this is a bigger business than the numbers I saw.
28:21
And so I said, there's no way that the numbers I read is this business.
28:25
And he goes, yeah, they own five regions and we listed one of them, but if it was the right person, we'd probably sell them all. And I said, okay.
28:34
And I was trying to ask a bunch of questions and he kept just saying like you just have to go out with I'm spacing on his name.
28:42
Roger or some whoever owned it.
28:44
You just have to go out with him and you'll know why everyone loves vending machines. I said, okay.
28:48
So I spent all day in Idaho in the pouring rain and we drive around Lewiston, Idaho and I realize there's no grocery stores.
28:57
There's no convenience stores.
28:57
There's no Foxtrot coffee.
28:59
They rely on vending machines.
29:02
It's FedEx distribution centers.
29:04
It's like this is where they do build all the turbines that go on the propellers for the fields.
29:08
It's like it's like you know, the workers part of America and everyone's lunch break, they just go to the vending machines and a warehouse will have 50 of them.
29:18
Snacks, cold food, hot food.
29:20
Everything they eat is out of vending machines.
29:22
So I said, oh, like every meal of the working day is coming out of a vending machine.
29:29
And so then when I dug into how the business works, usually you're buying a contract from Coke or Pepsi and you're you're obligated to sell their product.
29:38
They give it to you for a rate and you have to use their machine.
29:39
Well, those are on like five or 10-year deals.
29:41
So then during diligence, I asked them to give me all of the contracts with Pepsi and Coke cuz what I knew is that this local library or this local warehouse, they don't want to have to deal with getting new machines.
29:55
They don't want to deal with that.
29:55
Um and so it'd be disruptive to the business.
29:57
So I realized that all of his contracts with Coke and Pepsi were expiring soon and I was like, well, the only reason the margins aren't absolute insanity is cuz I have to pay a $1.
30:05
20 for Fritos and I can only sell them for two bucks.
30:09
But what if I got an alternative to Fritos and and bought it for 4 cents and then and then sold it for two bucks?
30:14
And now the margins are insane.
30:16
And so I looked into like the legality of like, do I need to renew with Coke or Pepsi? And the answer was no.
30:21
I need to get new machines, but there's companies that'll finance them.
30:24
So I was like, what if I just buy this company?
30:25
Wait for all the contracts to expire, renew none of them, and then go in without Coke or Pepsi.
30:30
Now you have a little bit of a distribution headache cuz they'll bring them to Lewiston, Idaho.
30:34
But Lewiston, Idaho, there's all these like discount stores to buy product at. So it could work.
30:39
And near the end of diligence, I had just kind of had the idea to start my next company and I came to the conclusion of I don't want to end up having to move to Lewiston, Idaho because I bought a vending business and I need to save it.
30:54
Um and so while I think it's an unbelievable opportunity, I chose not not to do it.
30:59
How how big do you think that could have been? It was 5,000 machines.
31:01
Yeah, but in dollars, what what do you think it would have done annually?
31:05
probably would have made like I don't know, a million two a year, million three a year.
31:08
But it would have I had I'd have to run it.
31:10
I felt like I was going to have to run it for two years or maybe a year and then hire someone, but the other thing is you're dealing with physical stuff.
31:16
I need to pay drivers to go to the things.
31:18
I need to have inventory.
31:20
So everything had to be in Lewiston and I'm like, what am I going to move to rural Idaho?
31:25
So If if that business is doing a million a year in cash flow, what what's it sell for?
31:30
I think they wanted 4 million for the business, 5 million.
31:33
So four times cash or EBITDA or however they measured it.
31:37
So I went to a bank and I and they wrote up a loan.
31:39
I was going to finance it.
31:39
Um and then I was like, wait, uh what if I end up having to move to Idaho? This is a problem.
31:48
Um so So so your due diligence on these things the reason you're fascinating is your due diligence on these things is pretty in-depth.
31:54
Like most people, myself sometimes included, I will end with like I'll just do a few Google searches and it kind of ends there.
32:02
You're I mean multiple times you're flying to places and meeting people.
32:06
yeah, I mean I do a lot of times within 5 minutes.
32:07
I think we all on the back of a napkin know if a deal makes sense, but I usually try and figure out everyone else thinks there's a a way to make this business marginally better by consolidating and rolling them up.
32:17
But how do you make it five times better?
32:20
And then the answer is if there's no answer, I'm not interested cuz then I wouldn't do the deal.
32:25
So then I only try and figure out how could you make this five times better when everyone tries to make it 10% better.
32:31
And my thought was when I looked at the line item, the biggest line item, 90% of it was the cost of goods from Coke and Pepsi.
32:36
I go, how can I just not sell that?
32:38
Cuz I can buy a store brand Twinkie in wholesale for 10 times less than I have to buy Twinkie for.
32:42
And so I just read all the contracts and then I would call people like I'd call lawyers that I knew were in the vending business and I said, do I have to renew?
32:49
Like here's the language, it's kind of like and they said like there's always this like thought from Coke or Pepsi of like you don't really have to, but they give you the product, they distribute it, like it's names that people know, brands that people know.
33:01
But I thought in my opinion people's willingness to buy Fritos uh uh wasn't that much higher than a name brand because they have no alternative. Like like right.
33:13
So that was what I thought.
33:16
Uh they're on they're at the job.
33:16
And then and honestly, I could also lower the prices and those people would have been thrilled. And I talked to them.
33:20
I'd go in and be like, hey, is it cool if I talk to your employees real quick?
33:23
I was at like a distribution center and the guy's like, sure, just like don't take my vending machines.
33:28
Like that's all I was like, okay.
33:29
And I'd go up and I'd be like, hey, do any of you guys care if it wasn't Fritos anymore?
33:33
And then the guy said, well, would it be 50 cents less? I said, sure.
33:37
They go, I don't care what it is. Like Fritos are Fritos.
33:40
And I was like, huh, interesting.
33:42
So that's where I think the value in vending is if you're not just trying to build like some big cap like like I just wouldn't buy a vending route or an ATM route or anything like that to just try to improve it cuz I'm a better operator.
33:55
Like I think people think they're like you can be the best operator in the world, but the business is the business.
34:01
So um that's kind of how I look at those things.
34:06
Well, I love that you go down these random rabbit holes.
34:07
So riverboat gambling um vending machines I'm sure you've done more than we've just talked about in terms of thinking about ideas.
34:19
You seem like you're one of us.
34:19
You you have that switch it can't turn off.
34:20
And so regardless of what you're doing, you're always going to be thinking of of ideas or you're going to hear something that's going to make you curious and interested and you say, well, maybe not for me, but that for somebody that would be actually pretty interesting.
34:32
Uh do you have a couple of ideas you could share that maybe somebody in the audience might get get inspired by?
34:36
What are the other ideas, the silver better ideas, things that you're not necessarily doing um or you're just willing to share?
34:43
Um there was another business that would actually be a lot in my opinion, a lot easier than the vending business in Idaho.
34:53
Um I was at uh about two summers ago.
34:54
Um a lot of my friends, you know, they went to Mizzou, so we'll go to Lake of the Ozarks in the summer of 4th of July or something like that.
35:01
And The Redneck Riviera, baby.
35:06
Home of the uh home of the uh the wet t-shirt contest and and lost GoPros at the bottom of at the bottom of uh 40 ft of water. a good business, Sean.
35:16
Um if you if you want to hire divers, there's probably millions of dollars of GoPros at the bottom of Lake of the Ozarks.
35:24
So I'm at Lake of the Ozarks and I hadn't been since I had left college, so it'd been a couple years.
35:28
And we needed to get from our Airbnb to I'm sure Sam knows this place, a place called Shady Gators.
35:35
It is it is it is the uh Sean, if you looked up on Google Shady Gators, I think you would tell me you're not going is what you would say.
35:45
Um it's like classic spring break.
35:45
It says it says it says college spring break bikini wet t-shirt contest as it gets.
35:51
And unfortunately, the bridge at Lake of the Ozarks is on like the far side from where our Airbnb was.
35:56
And the only way to get there is to drive all the way around the lake.
36:00
Well, that's like a 50-minute Uber.
36:02
And instead of that, they have water taxis.
36:04
And I didn't even know about this.
36:07
My buddy's like, yeah, just call a dispatcher.
36:08
Like they'll send a a water taxi. What am I in Venice? I was like, okay.
36:12
So uh we we called this guy and like 7 seconds later, he pulls up to our Airbnb in the water and we just get on and all my buddies were drinking and we're on our way there and all I can think about is how how much is this guy making right now?
36:28
And I said to my buddy, I said, how much do we pay him?
36:30
I whispered and he's like, it's 250.
36:32
We split it between the five of us. I go, I'm sorry.
36:33
This is like a 3-minute ride. 3 minutes tops.
36:38
And I go and he just goes around.
36:38
And so I couldn't help myself. I asked him.
36:41
I said, hey, um do you like own this thing?
36:46
And you could tell he like he was driving it, but he did own it.
36:48
But he wanted he didn't want people to realize that the owner was driving.
36:51
He wanted to feel like it was a company.
36:52
He has the brand on the boat, like all this stuff.
36:55
And he was like, yeah, like He was like, we own it. Yeah, he said we. He said we. He said we.
36:59
Uh and uh so all my buddies are like getting off and they're running in the Shady Gators.
37:03
Uh and I am just locked on this guy. I go, hold on a second. Hold on a second. I was like, it's $250.
37:08
It took 90 seconds to get us here.
37:11
And he's like he's like, yeah, it's seasonal cuz it gets cold here in the winter, but he's like, we spew cash all summer and spring and summer.
37:17
I said, what does spew cash mean exactly?
37:19
And he said, well, I have three boats.
37:21
Um and he goes, all I do is I have a dispatcher and she sits behind a monitor and has like a live feed cuz they have like some they put like a drone up there with something.
37:32
So she can see where all the boats are and she has the GPS and when people call, she can see their IP address cuz when you call into the dispatcher, it's like some platform that shows you.
37:41
So they know where people are on the lake and then she'll load it into their thing on the boat to go where to go next.
37:47
And a lot of these boats have like GPS, so you just click accept just like you do on Uber and they drive around. And I'm like, okay.
37:54
Uh and I said to him, I said, uh would you ever like raise capital for this business or like do you need more like uh are there more people than you can get? And he said, by tenfold.
38:04
Well, how much was he making?
38:07
Oh, like like every boat made him like about 400 grand a summer. He had three of them.
38:11
So he was doing like a million two. Yeah.
38:13
And he's and he's from, you know, you know, he built this from nothing.
38:17
Started with one boat, used the money to buy another boat.
38:18
But he doesn't know how to like he's not he didn't he would wait too long cuz he didn't know you could just like go finance a boat.
38:23
He would just wait till he could pay 90 grand cash for a speedboat.
38:26
I was like, you can just put down nine grand like a car and you'd have 10 tomorrow.
38:29
So but he didn't know how to do any of these things.
38:32
So I said, if you had money um and you had 20 boats, would it be too many boats and now they're sitting around?
38:39
He goes, I could probably fill 10 boats as much as I fill these three, but I don't want to spend the cash.
38:44
I kind of use it to you know, I bought a house, we built a lake house, like all this stuff.
38:50
And so then I was like, okay.
38:50
That's that that's that precious Mountain Dew money, baby. So then I'm like, okay.
38:56
What if I This is also post buying the riverboat before my next company.
39:01
So I'm still in like the vending mode of like, can I blow up a business like this?
39:04
And so I called him cuz we were talking about maybe I would invest in the company.
39:08
And I said, hey Connor, I changed my mind.
39:11
Would you sell me this business?
39:13
And he was like, sell you this business? I was like, yeah.
39:15
He goes, I never thought about that.
39:16
Like I don't know what it's worth or anything.
39:20
And my thought process was, what if I can blow this up to 10 or 15 boats on Lake of the Ozarks and then go to Orange Beach, Alabama and then go and then start going around America and building up the water taxi business.
39:32
Baton Rouge, Louisiana, you need to get from Tiger Stadium to, you know, Fred's bar or whatever it is.
39:38
And then water is the only vertical that Uber doesn't have and Lyft doesn't have.
39:42
And then I called people executives at those companies and they said, "It's so difficult.
39:48
It's so regional, the weather, all this stuff.
39:50
We don't want to own boats.
39:51
We have to dock them, all this stuff."
39:54
But they kind of made a comment like, "But we'd buy it if it existed, but we won't build that." So I said, "Okay."
39:58
So now I have a willing buyer of this business.
40:03
So I thought if I could do this, um uh he was taking most of the cash for himself.
40:09
I would buy this business.
40:09
I don't need any of the money.
40:11
So I would take all the money and just buy more boats until I've maximized Lake of the Ozarks and then I would go, you know, lake town by lake town.
40:18
And uh lot of liability, a lot of logistical things.
40:24
Definitely think it's worth doing.
40:26
But it didn't I ran all the numbers.
40:26
I tried to estimate forecast out what I thought this business could do and I just I had decided when I left Fubo that the next thing I was going to do, I had no interest in if it could be worth at least a billion dollars in 5 years.
40:39
And I thought if it could be, it was the absolute ceiling and then you'd have to execute perfectly and hope there's no legal issues and weather and damage and like all this is a very physical business.
40:49
So I chose not to do it, but I think it's a big opportunity and I think we'll see Uber buy some water taxi company in like 2028. I think we'll see that.
40:58
Can I just read you the menu of Shady Gators?
41:00
Would you guys be interested in that? Yeah. Be very interested.
41:01
Tell me all the variations of tater tots. You mean gator bites? Gator bites.
41:07
Ultimate tater tots or loaded loaded tots.
41:11
To me, I'm going to start with the shrimp happens.
41:13
That's where I'm going to start.
41:15
Uh Sam uh for my friend Sam, he wants the Brazilian sizzle.
41:20
Those are the appetizers.
41:22
I mean, this place looks phenomenal.
41:24
This place looks like I think you were you you're focused on the boats.
41:26
You needed to buy a Shady Gators.
41:30
Uh this is an institution.
41:30
You know, like you know when rich people go buy like the Washington Post, this could have been your Wash Po.
41:36
You know, you know, you could have bought Shady Gators and be like, "I will protect this this uh this national treasure."
41:42
Shady Gators will cash flow for hundreds of years to come.
41:46
As long as there's boobs and there's white shirts, this place will stay upright.
41:53
We we have to take Sha- Shawn's never been to some of these places.
41:54
We got to take him a on a tour to uh Floribama down in uh Yeah, there's this restaurant, Shawn, it's called Floribama.
42:02
They even made a TV show about it.
42:04
It was like the Yeah, seen that.
42:05
So I've seen these all through the TV safely while I'm uh you know, under a blanket at home.
42:11
that's where that's where I spent spring break.
42:13
Floribama is right at the the Alabama-Florida line.
42:15
There's literally a line like in the ground and this restaurant is half on each side and it's where you go for just pure debauchery when you are 21 years old or 19 with a fake ID. These places are wild.
42:27
You have to experience a good Floribama.
42:31
a buddy from New York who when I bought the vessel, uh it's in like rural Iowa and uh he flew into this private airport because he had to see this thing and he had never been to He's We're like running out of gas on the highway and he's like, "We have to pull over. We have to pull over."
42:47
He's like flipping out and I'm like, "We're good, man.
42:49
There's a gas station in 8 miles and we have like a reserve tank.
42:52
Like don't worry about it."
42:52
Like he's used to New York Ubers and like just getting in Uber Blacks and like being in the middle of nowhere Iowa, he was like panicking.
42:59
He's taking pictures of like gas stations.
43:00
He thinks they're like He thinks they're like monuments.
43:06
It's like a safari for him. Yeah, yeah, yeah, yeah.
43:08
It's where people get gas. Right, yeah.
43:12
So So you know what I wish?
43:14
I kind of wish there was a Well, in general, I'll say this.
43:18
You're like We have the segment on this pod called the blue collar side hustle.
43:24
You're like the walking blue collar side hustle, right?
43:26
Like all of these ideas you're talking about are so middle America. I love it.
43:29
And they are so um just you know, hustle and ingenuity that I love it.
43:34
And you're finding really interesting opportunities that are off the beaten path, right?
43:38
It's like you want to do things that the 99 like if you you say, "All right, I'm not the smartest guy there is.
43:44
Maybe I'm in the I'm in the top 20% of IQ.
43:46
What you want is within that top 20%, you want to then go look in places where 99% of them don't look cuz now you're you know, you're you're operating in a field of your own and it seems like that's what you're doing.
44:01
I kind of wish this existed um nation wide cuz you what what you're finding is you're finding a bunch of opportunities that you know how you would execute them, but now they're no longer worth your time or the the the schlep that you would have to eat to do it.
44:15
You were willing to do it with your first business, but now on your third business, you're not as willing to do that.
44:20
Um you know, Peter Thiel did this thing called the Thiel Fellowship where he was like, "I'm going to pay kids to drop out of college if they're exceptional and they might create big things."
44:30
And out of that came, you know, Figma and Ethereum and some of the like kind of breakthrough multi-billion dollar tech companies.
44:38
I kind of feel like there should be a blue collar Thiel Fellowship where we just go and we we we post a flyer in a bunch of campuses that just says, "Sick of this Drop out and make millions."
44:50
And let's just see who shows up.
44:53
And it's going to be the person who's like, "This is probably but like I'm down.
44:57
What else am I going to do?
44:57
Go to organic chemistry right now?
44:58
Like I I got to see what's here."
45:00
There's going to be like eight people at the seminar and of the eight, you know, five will leave halfway through cuz they think it's a time share presentation.
45:05
And out of the three remaining, there'll be one person who's like, "Oh, you're telling me that you'll help me go find a business within a mile and a half of this campus right now that if I just like focus for 3 years can make me $9 million? All right, I'm in.
45:20
I'm in I'm sitting in I already go to, you know, Boise State or I already, you know, like at where I went to school at Duke, there was this one bar, it was our version of Shady Gators called Shooters.
45:31
And if anybody went and bought Shooters, it's like, "Guess what, sir?
45:32
You now have a monopoly on the nightlife scene of Durham."
45:35
And every single student will come there and like this place just hasn't changed and like look, if if the mechanical bull just took Apple Pay, your revenue would go up 10%.
45:43
Like there's just a bunch of easy wins that can be had just by like thinking about things slightly differently.
45:49
You know, the example I would give of Shooters would be "Cool, during the day, this needs to be essentially like a yoga studio and at night it's going to become the night club and now you're going to go from, you know, 10% usage to maybe 45% usage and that will be a big That's how you do your your 5x."
46:07
Um I feel like that needs to exist.
46:07
I feel like we need to find the Sam Ratners that are out there to They're out there right now in every college and they just need a little bit of inspo, a little bit of ideas and and a little bit of mentorship in order to do it.
46:18
with the businesses I've found is that if the value is in the fact that it's remotely located, well, then it's difficult because other than finding another Lewiston, Idaho that already has an operating business and has those dynamics if the town relies on it, you can't scale it out of Lewiston.
46:37
Um but the reason I love the water taxi thing is cuz there's 10 or 12 great water lake towns in America.
46:42
So I liked that a little bit better, but my concern was when I really forecasted it out, it'd be a big win, but it would take it would take 5 to 7 years and I was like, "Mm, nope. Just not willing.
46:54
Just just couldn't Yeah."
46:57
So that was That's always a problem.
46:58
But for someone who has, I don't know, I don't want to say it.
47:02
Uh for someone who is only pure want to execute and wants to retire and have 20, 30, 40 million dollars, I think that's a great way.
47:09
Well, for a lot of people, that's that's not necessarily where you have to retire, but it's like when you're at zero, $7 million sounds like all the dollars.
47:19
And uh and then once you have $7 million and you're now 24 and your friends are, you know, still paying off student debt and you're sitting there being like, "I learned so much and I have financial freedom.
47:28
I could do whatever I want."
47:30
They can do the thing you did and go chase down this river boat for, you know, 9 months where other people wouldn't think to go do that, right?
47:35
So it's it's a it's a gateway drug into doing, you know, more and more interesting things.
47:39
What were the other investments?
47:41
You said you made two investments that were awesome.
47:43
I assume one of them was the the boat. Yeah.
47:47
Um I've invested not a lot cuz I really am focused on what I'm doing, but I have made some private investments into startups that I try to be as helpful with as I can.
47:56
You said that you want to start something that can get to a billion in I assume you meant exit value in 5 years.
48:02
You have a new company now.
48:05
Is that the one that you think is going to do it?
48:06
So Showroom So when I was at um Fubo TV, uh when I left, we were doing about a billion dollars a year in revenue. Don't quote me.
48:17
They're probably you can find the numbers.
48:18
I think about 700 million was the monthly subscriptions to Fubo TV. So $59. 99.
48:22
If you buy RedZone, you're probably near 100 bucks, whatever it was.
48:26
Uh and then 300 million uh give or take was the advertising, which is when you scale a streaming business, it's the whole business.
48:32
So I thought to myself, "Why are these companies coming to Fubo TV?
48:35
We're big, but we're not massive.
48:37
Uh so there's got to be a play here that they think there's value here."
48:40
Um and what I realized is traditional cable nation wide too expensive.
48:44
Disney+, ESPN+, and Hulu um all owned by Disney um kind of are at a scale where pricing's probably similar to being national.
48:51
Um and we were small enough that if you wanted six zip codes in Nashville, uh we'd give it to you.
48:56
Um and so what clearly the sentiment was from these companies was that uh it's very hard to get in front of consumers.
49:04
Uh Google Shopping uh while is okay for a user, is unusable for a merchant because no one's outbidding Calvin Klein for the word underwear or black denim jacket.
49:13
It's become way too corporate.
49:14
I think like 80% or maybe 70% of the brands that buy keywords for for fashion footwear on Google Shopping, I think in their last report, I think it was like one of like a few hundred brands.
49:28
And there's tens of thousands of brands.
49:29
So most of them aren't on there.
49:31
And I was in a meeting once with the former CMO of like a direct-to-consumer cowboy boot brand.
49:38
And uh uh she made this interesting comment in a meeting and she was like, "Yeah, we waste like 50 cents of every dollar we spend on Google."
49:45
And I was like, "Whoa, whoa, whoa. Hold on a second. Excuse me?"
49:48
Like stopped the meeting.
49:48
I go, "That's the craziest thing I've ever heard." I go, "Why is that?"
49:50
And she said, "Because we pay about $4 to own the word cowboy boots and half the time someone looks up cowboy boots, it's a third grader looking up cowboy boots for their third grade presentation.
49:58
They need a photo to like cut out and put on their poster.
50:01
They had no intent of buying $700 boots.
50:03
So, we waste 50 cents of every dollar."
50:06
And I was like, "Whoa, whoa, whoa, whoa."
50:08
And she said, and this is the first time I heard this concept.
50:11
She said, "That's why vertical search is so great."
50:13
I said, "What do you mean?"
50:15
And she had been an executive uh she was a senior or I don't know if she was a CMO, but very senior at cars. com.
50:20
And she said, "People look up Toyota on Google for all kinds of reasons.
50:24
Photos, videos, they might be looking at Toyota's stock price.
50:25
But if they look up a Toyota on cars.
50:27
com, they're a buyer or they're a seller. There's high intent.
50:31
You're not just browsing around cars. com."
50:32
So, I said, "That's interesting."
50:35
So, then I was like, "Okay, so those are really Google's competitors is all these vertical places to find what you want to find that has a better experience and more tailored than just traditional search.
50:46
So, essentially uh do what I always try to do like in the vending business, I called the lawyers who know the Pepsi contracts, I called as many engineers on the Google shopping team as I could get to agree to talk to me.
50:54
Um and the sentiment was they said, "Sam, we want Google Flights to be a really great experience for Google users, but not at the detriment of stepping on the toes of our large largest advertisers, Expedia, Kayak.
51:08
They want them to pay and they want them to battle it out.
51:10
They don't think it's not a good business to be in.
51:11
They would just rather them battle it out and battle it out means pay Google to be there."
51:17
And my conclusion was, "Okay, could this be done better now?"
51:21
And I was very anti-crypto, still am.
51:24
Don't like crypto at all. Never never owned it.
51:26
Um and so when all this AI start coming out, I had this initial sentiment of like, "Eh, this is crypto again.
51:32
I don't believe in this."
51:34
I have changed my mind on that.
51:35
Um and what I realized I was like, "If I showed you two black t-shirts and one's from Lululemon and one's from Gap, if we remove the brand names, the product descriptions, the actual copy is shockingly similar.
51:48
It's just describing a black t-shirt."
51:49
Um it's really inherent in the sentiment of the brand as to what that shirt is for.
51:53
Lulu's shirt is for one thing, Gap shirt could be an undershirt.
51:57
And so, um your inability to have like a ongoing conversation with a language model that knows every brand and product in the world um would be very limiting and you'd end up with Google shopping.
52:07
So, what we've done is uh we've built this huge infrastructure.
52:13
We have thousands and thousands of merchants, tens of millions of SKUs um that kind of organically come into this data set.
52:19
We've trained a language model to understand nothing besides what's in that data set and then that can communicate um to a user so they can have an ongoing conversation with essentially think about like not just Neiman Marcus or not just Macy's or not just a retailer who picked a couple hundred brands to carry, but you can essentially communicate back and forth with an inventory of every brand in the world.
52:40
And the reason why shopping's always had these big opportunities is cuz everything else has been dominated by Amazon or Alibaba and they have their market share in the like cheap fast fashion sector.
52:50
But Gucci's not on Amazon.
52:52
Burberry's not on Amazon.
52:54
Every brand at Neiman Marcus, Tecovas, Away Luggage, these companies like they might people might sell Nike products on Amazon. Nike's not on Amazon.
53:02
So, that's why companies like ShopRunner had come along where they're like, "We're going to be the Amazon Prime for everything Amazon doesn't have."
53:09
And they scaled and sold to FedEx for hundreds of millions.
53:11
The founder's on our board at Showroom.
53:12
So, there's always been these opportunities in fashion for product discovery and I actually think prior to language models, this is this is absolutely a business that would have been very very hard to build because you lack that brand sentiment.
53:27
Um and so that's essentially what we've built.
53:30
We're launching the beta here shortly.
53:31
We have thousands of people on the waiting waiting list. We're really excited.
53:34
We have revenue share deals with every single merchant in the platform.
53:37
Those revenue share deals fluctuate, you know, between 5 and 20% just depending on the brand.
53:41
You know, Nike pays you you know, a point probably, but you know, a direct to consumer brand is paying for growth, they'll pay you a 15% revenue share all day.
53:50
You're kind of doing what you did before where the with the betting site you're like, "Well, the consumers want this and I don't know if I can differentiate that."
54:00
And so, you went to the brand side, you know, if a if a marketplace has two sides, you went to the brand side.
54:05
You're sort of doing that with with this where you're like thinking, "Well, what's the problem for advertisers?"
54:09
But it seems like with these consumer products, the hardest part is getting the consumers and once you have them, often times you can figure out not or I don't know if often's the right word.
54:18
Some of the times you can figure out how do you monetize a huge audience.
54:22
Aren't are are you scared that you're not going to be able to figure out how to get the actual users there?
54:27
No, cuz I think inherent in the platform is the transaction.
54:29
So, then there's transaction fees, the merchants pay revenue shares.
54:32
If you're a consumer platform for like entertainment, social, entertainment's become a little bit of a commodity.
54:38
That's why Netflix does these originals, but everyone else like Fubo, Hulu, ESPN, Disney, we all just had ESPN and TNT and everyone has the same stuff.
54:49
And if you're social, you have to increase engagement.
54:50
But if you are something where there's transactions, well now inherent in the experience is transacting and that's where you can really make money.
54:57
So, that's why I think companies like the social the ones that get a big audience and then go social, I think it's a huge mistake.
55:05
Like Pinterest, big audience and then they went like social, not commerce.
55:10
Um and to me it's like, "Well, no one minds paying fees or having hidden fees into things that they were already buying."
55:16
People might complain about fees on Airbnb, but they were already booking something.
55:19
And so, I think the value is can you build a big consumer business that inherent in the journey is a transaction and your product is a 100 times better shopping experience than what they had before.
55:30
So, I always just lean on focus on the consumer, forget everything else.
55:34
If the consumer wants it, everything else is noise, you can push it through and consumers will want the product.
55:38
So, I want to ask you about the way your brain works cuz I find you very interesting and we always ask everybody before they come on, "What are some of your strong opinions or life philosophies that you would you you live by?"
55:49
And you gave us a couple, but I want you to explain them.
55:51
So, uh number one, never pitch twice. What is that?
55:54
So, every investor I've ever had, the moment I pitched them and walked out of the room, called me 12 times, showed up at my door in Chicago and said, "I want in this round."
56:07
Um same thing with employees.
56:07
Everyone I've ever you know, I'm always recruiting.
56:13
Anyone who's ever wanted to join the company, the moment they wanted to join the company, they wanted to drop everything they were doing to join the company.
56:19
In my opinion, raising capital is an informative process, not a persuasive one.
56:24
Within 5 minutes of us getting on the call today, I think we all we had some preconceived notions of what we thought of each other and then within 5 minutes, I'd say you'd have a 90% cemented view of what you think of the person.
56:34
And so, when I'm pitching, um I'm going in and I'm uh giving them my full attention, but I'm informing them of what we're building and what we're doing.
56:42
Um and it's one thing if they have legitimate diligence questions as follow-ups or whatever, but I never ask twice because I know that everyone who's ever really wanted to do it didn't need to be asked twice. They loved it.
56:53
And so, I would rather just move on to the next one um and in my opinion, you give them the information, they've formed their opinions.
57:04
If you're ever trying to persuade them, you're on the wrong side of the table from a negotiation standpoint anyways.
57:09
Um and so, I just don't pitch twice.
57:09
Um I try to be as cognizant as I can that you always want to be respectful of like venture associates at the fund cuz sometimes by pure volume if it's like a big fund like a Sequoia, they their principals can't take every meeting, they need some layers, that's fine.
57:22
Um and if they have legit follow-on questions, I'll get back on more calls and answer emails, whatever, but I never pitch twice because I know that if I need to kind of sell it again, then they didn't want it.
57:35
And that doesn't mean that you can't have luck following up and being ruthless about the follow-up and you there's those stories where you push it through, but there's thousands of funds and my opinion capital is pretty cheap.
57:44
If you have a great business, you're going to raise the money.
57:46
And so, I kind of just move on to people that are so excited by it that they are willing to get on a phone on Christmas um because they know this could be a life-changing opportunity for them.
57:54
You know, so that's kind of how I view pitching.
57:58
You've got this other one that is um I don't know if controversial is the right word, but it's kind of a lot of people wouldn't agree.
58:03
So, you said, "The the potential you see in others is not real.
58:08
It's rarely potential realized, so take everyone at face value for what they are today."
58:13
Well, there's one one key line in there is that you said, "It's a mirror of what you would do if you were in their position."
58:19
Not what they're going to do.
58:21
thought about I always have like these I have like a massive massive note list on my phone.
58:25
And I have these concepts and and I have another notepad of concepts that I haven't really figured out a way to explain it the right way.
58:32
I always try to boil down this thought I have to like two sentences.
58:36
And recently on Twitter, I saw someone say this, which is the potential I don't know who it was, but the potential you see in others is rarely realized.
58:42
It's simply a mirror of what you would do if you were them.
58:47
I have spent a lot of time in my life trying to I don't want to say change other people, but I I think they have such great potential, but I always feel like it's like you're dragging a bag of bricks in your backpack to the office.
58:59
It's like they just if they don't want it on their own, you just can't change them.
59:03
And what I see in them is really what I would do if I were them, but it's not what they want to do.
59:10
And so, I'm not saying you can't put in effort to coach people up and make them great members of the team, but that's different than if they want to be there or not.
59:18
If they don't want to be there, you know, if they don't want to box, they're not showing up to the gym and boxing for 12 hours a day to go beat Floyd Mayweather.
59:25
They don't want to be there.
59:26
And so, if you think they're a great boxer and they show up every day, okay, you can coach them.
59:29
But I just feel like it's a wasted effort and you should take people for exactly what they are and what do what do those people love doing more than anything?
59:37
As much as I love running businesses and building businesses and doing things like this, what do they love as much as I love this and can I get that task to be something in my business cuz then they're going to do great.
59:49
But, if it's anything other than that, they're just better off going to somewhere else where they want that skill set.
59:54
And so, I just think that you should pretty quickly know it's like if you're a trainer um or you're a coach, does the player want to be there?
1:00:03
And if they don't want to be there, you can be mad that like ah they're 6'8.
1:00:06
They It's like in high school when your coach goes to the volleyball team.
1:00:09
They're like, "Peter, like stop spiking volleyballs.
1:00:10
Like you could play center, you know, at Duke."
1:00:14
And they're like, "Ah I like volleyball."
1:00:15
He just likes volleyball.
1:00:17
And anytime they've ever gotten that kid to say, "Fine, I'll play on the basketball team." He doesn't care.
1:00:19
He doesn't want to come to practice. He's never very good.
1:00:23
And you just don't realize the potential.
1:00:24
But, his potential, while it looked to you if you were 6'8 on the volleyball team, you could be a great basketball player.
1:00:31
Peter doesn't want to be a great basketball player.
1:00:32
So, it just doesn't work out.
1:00:34
So, that's kind of like my opinion on that that kind of stuff. Let's do one more.
1:00:39
You have one on here that I'm curious about.
1:00:40
It says the value is in the duck calls. Oh, this is a good one.
1:00:44
And I think that's the perfect one to end on here. What does that mean?
1:00:47
Me and who's um best man at my wedding, Jonah Roberts.
1:00:53
Give him a shout out, Jonah. He's from Memphis.
1:00:55
Sound like he almost forgot his name. Jonah and I were No, no. Definitely not.
1:01:00
Um Jonah and I were in Memphis, Tennessee in his hometown and he wanted to take me to the Bass Pro Shop, which there is like the holy grail.
1:01:09
Um and we're walking around what feels like hours and we cannot stop dying laughing.
1:01:14
Every single aisle, every product you could ever imagine you need for hunting and fishing and the home tools, they have everything.
1:01:22
And right when we think we've seen every product that anyone's ever made, we stumble to come around the corner to go to the like where the back of the store is and there's this big almost like when you go to a guitar store and they put all the expensive ones in a room.
1:01:36
There's this sign that says duck calls.
1:01:38
And there's like this glass door and we open and there's like what felt like a hundred thousand duck calls.
1:01:43
They've got metal duck calls, polyester duck calls, they've got stone duck calls, they've got duck calls with two heads, they have different colors, they have It's like this whole economy of duck calls that we didn't even know existed.
1:01:55
And so, what I realized is the reason I dig in to the vending businesses and the river boats and the water taxis is because the value's in the duck calls.
1:02:05
The value is in the things that no one knows about that are very odd, that have these niche ecosystems of communities and the people who love duck calls, trust me, they love duck calls.
1:02:16
They'll pay a thousand dollars for a duck call.
1:02:17
They don't go hunting for They don't go without them. It's like a big thing. They collect them.
1:02:22
And it's something I never knew about.
1:02:23
And so, whenever I hear about something that could be really big and then I hear a bunch of people I go I go, "I've never heard of that.
1:02:29
Like who would ever want that?"
1:02:29
And then I go on like one random brand's site in the duck call business and some random merchant I've never heard before has 800,000 followers and does $5 million a year.
1:02:39
That like cements to me that all the value's in the duck calls.
1:02:40
If it's in the things that people don't know about or are too complicated to find or are regional or are niche or one of those things.
1:02:49
So, I always kind of say me and Jonah always kind of say the value is in the duck calls.
1:02:52
I have I have a feeling, Sam.
1:02:54
Well, first of all, are you going to call your shot now?
1:02:56
So, your new business are you are you are you going to call your shot where in 5 years you're going to it's going to be worth a billion dollars cuz I what I want to look back in 5 years cuz I think you're good You clearly have the it factor.
1:03:08
Some You've already done amazing things, but something more amazing I predict is going to happen with you.
1:03:12
I don't know when, but is this going to be the one you think? I do.
1:03:16
And are you going to hit your 5-year goal?
1:03:18
How your year end doing it I bet? Uh yeah.
1:03:20
I would say that would be the goal.
1:03:21
What I wouldn't I would not work on it.
1:03:24
Every day I wake up, it's like every day you own a building, you own a stock, you're choosing to buy it and every day I choose to work on this.
1:03:29
I think more and more that it's definitely going to work.
1:03:32
And the moment that I think it's going the other way, I will not work on it.
1:03:36
So, we're going to look back on this December 2028 and we're going to see if you if you nailed it, but I have a feeling you're going to do something amazing and we appreciate you coming on, man. You're you're awesome.
1:03:46
No, thanks for having me.
1:03:46
I've been following the pod since you started in '19 when I was I I used to watch your videos out of the lifetime yoga studio. That's amazing. Awesome, man. Thank you for coming on. You're you're fun. All right.
1:03:59
We appreciate you and that's the pod.