0:00
All right, we should talk about AI because you used to tweet about like boring steady Eddie cash flow businesses and I feel like for this one you just ripped off your clothes and you're streaking through the pool right now.
Search this video
0:08
So what what is your take on AI?
0:22
Dude, I am for the first time in a while I'm waking up grinning every single morning just like stoked to get to work.
0:31
Um, I feel like this is I was saying to a friend I was like this is like somebody just invented a new internet or something like that's how big this feels and he goes no no no no someone just invented fire, right?
0:42
Like it's it's freaking crazy and the best quote that I've heard on this is it's like we've discovered a new continent with 10 billion people on it and they're all geniuses and willing to work for free, right?
0:57
And so everyone's talking about this you know agents, right?
0:59
this you know agents, right? Agents is like a meme right now and what we're really talking about is digital employees and digital people and when you shift your mindset like that you go holy crap like not only is this an incredibly exciting time to be an
1:13
entrepreneur but the implications are going to be absolutely crazy like you know that saying there's decades what is it what is it there's decades where nothing happened and then there's days where decades happen and I feel like right now decades are happening you know like crazy. And here's here's the way I'd put
1:29
And here's here's the way I'd put it.
1:31
So if we just paused AI we shut down all the AI labs and all we focused on was just roll out of what already exists I think probably between self-driving cars and AI agents 20% of all current jobs are gone. What?
1:48
Can you explain examples of the way that um you're using it now to save and make yourself more productive like both personally and in a business level or is this mostly uh like theoretical where you're like it's almost there?
2:01
Well, it's a bit of everything.
2:03
So I'd say like we're in the AOL dial-up phase right now but like AOL dial-up it's still pretty freaking cool if you've never used the internet.
2:13
Um, so you know basic stuff that everybody should be doing like I have a I have an agent that preps me for every meeting.
2:20
So 30 minutes before every meeting I get a text and it says hey you're meeting Shawn and Sam you were emailing them about this topic you're going to invest in their company and here's two bios on them it goes to LinkedIn and just summarizes it.
2:32
So something very basic that otherwise a human would do.
2:36
Previously my assistant would do that.
2:39
Um, I have it monitor my stock portfolio.
2:41
I have it tell me about local events.
2:44
For the first one so how how did you set that up?
2:45
How did you what tool are you using to do the uh meeting prep?
2:49
30 minutes before you get a text saying hey you have this meeting with these people about this.
2:52
Hey so you guys know Zapier?
2:54
It's basically Zapier for AI agents.
2:56
So Zapier is freaking amazing.
3:00
Andrew, you introduced me to someone who worked at Lindy and her name was Lindy and I was like wait you I don't understand that.
3:10
We got 25 minutes into the conversation before I realized it was just a woman named Lindy who worked at this company called Lindy.
3:16
Basically they they founded the company and they were like oh like your name is an awesome name for a company.
3:20
Let's just call it that but it's also super confusing cuz she runs the sales team.
3:27
Yeah, I was like wait so you're like are you smarterchild?
3:31
Most people would it'd be like a quick like two second thing.
3:36
It's like oh Lindy yeah yeah that's cool how funny and then they move on and get into the sales demo whereas Sam for 25 minutes is like hold on you're so you're Lindy or this is Lindy?
3:48
Like would not let it go for 25 Hey, let's take a quick break to talk about our sponsor today.
3:51
HubSpot has put together a list of 200 AI business ideas.
3:57
These are business ideas that you could create using AI and it's a list of 200.
4:01
They did a huge brainstorm.
4:01
So you could check it out if you just click the link below you can get access to these 200 AI ideas.
4:06
I'll give you an example of a couple of them.
4:09
One of them is you could build an AI dressing room.
4:11
So let's say you go to an e-commerce site and you want to see what something would look like on you.
4:15
You can use AI to actually take a picture of you and show you what the clothes would look like on you or what the makeup would look like on your face. It's pretty cool, right?
4:24
Or AI tools for real estate brokers.
4:26
Maybe something that takes their listings and makes them more more fancy more more more beautiful and attract more buyers. So check it out.
4:31
It's a brainstorm of 200 possible AI ideas brought to you by HubSpot.
4:36
You can get it free in the link below.
4:40
So yeah like so think about think about Lindy like Zapier except you can build AI in between.
4:45
So Zapier might be when I when I press this button on my phone go to the internet and do this action or whatever but it can't think.
4:55
Lindy can add thinking in between.
4:55
So for example you can make a Lindy that looks at your calendar.
4:59
So the way it would work in this instance is look at my calendar an hour before any event starts go on Perplexity go to LinkedIn and I want you to write me a bio and then I want you to look at my email inbox and tell me what we're talking about.
5:14
So that's like pretty basic and what we're really talking about at this point is removing admin work, right?
5:18
So the agent that I have built is basically um by cobbling it together with duct tape and dental floss it's basically doing a lot of stuff my assistant would otherwise do.
5:31
And my assistant's amazing but the problem with a human is they you'll give them direction and you'll say I want you to send me these meeting briefings or I want you to write my calendar like this and over time there's drift.
5:42
They get busy you give them more projects and it just doesn't happen.
5:44
And so now all those things that let's be real are not really worthy of her time are now just being totally automated.
5:52
So that's like the basic level and I can name some of the other tools I'm using to do this but that that's where I'm at.
5:59
So I use Lindy to build these things when it's something I want that's custom.
6:03
Are you an investor in Lindy?
6:05
No, I'm not an investor in Lindy.
6:07
I'm just like I'd power user and I'm obsessed with it. Like here's an example.
6:10
So uh there's some restaurants in in town where they still require you to call in to make a reservation they're not on OpenTable.
6:17
I made a Lindy bot where I can type in hey make me a reso around 5:00 to 7:00 p. m.
6:25
tonight at this restaurant and it will call and an AI voice will talk to them book the reso put it on my calendar and invite the people I asked it to invite.
6:35
And if the person says are you AI it'll explain that it yeah it works for me and if it asks for allergies it knows my allergies. Like it's pretty cool.
6:45
Um, and so and then other tools so I use this one called howie.
6:48
ai and it's basically like you see see it and you just say howie can you find time for me and Sam to go get a coffee and it'll you know book all that stuff.
6:57
I use um fixer f y x e r.
6:59
It's this British startup.
7:04
It basically reads every single email that comes into your Gmail.
7:08
It sorts it based on whether you need to respond to it or not and then it drafts responses.
7:13
So let's say Shawn said hey do you want to get coffee?
7:18
It'll it'll draft a rejection or an acceptance of that in my language and it gets better over time.
7:24
So those those are like three tools that I'm using that are awesome right now and they're really just replacing basic admin. This is crazy.
7:34
I'm looking at this right now.
7:36
Um, Shawn where's this land with you?
7:37
Do you use any of this stuff and does this make you fearful of uh somewhere? Uh no not really.
7:45
I think everything just evolves, right?
7:47
Like ultimately I've you know this diagram that's always stuck with me is this K like a K-shaped future.
7:53
So what's a K-shaped future?
7:53
So if you imagine the letter K and you say all right this is where we are now that's the first line and then it's basically like there's a fork in the road with the K, right?
8:01
It's if you learn how to use these tools you're going to accelerate and go up at a fat way faster pace than you would have otherwise.
8:09
And if you don't if you just stick your head in the sand and pretend that these tools don't exist and that your job is always safe and that um your business can run is going to run with all humans doing all jobs then you're going to go down because you're going to get outcompeted by companies that are not going to do that are going to do something different.
8:24
I personally use it less for my personal and more for my business.
8:29
I basically in my business I almost have like a my own eval.
8:33
So Sam do you know what an eval is? No.
8:36
It's just like when a new model comes out like when Llama drops their new model they always post with pride like oh here's how we do on the benchmarking test the evaluation test and it's like some number you don't really know what it's based off of.
8:48
It's just this like abstract like oh we're a 73 and the last model from GPT was a 71.
8:53
So we're the best model now.
8:56
And is there a standard like is an eval like a third-party standard?
8:58
People build there's a few different evals out there.
9:02
People are trying to build new evals whatever.
9:04
I have my own little eval which is in my businesses I basically picked a few tasks that I'm like today humans in my companies do these tasks.
9:14
And about every sort of three to six months we go back and we run through it again.
9:18
We say take the latest model take the latest product everyone's excited about and see like what's the real deal Holyfield.
9:24
Can we actually automate that task?
9:27
Can it actually be offloaded from the human being yet?
9:28
And there's basically like a spectrum.
9:30
There's like um can't do it at all there's you can do it but you wouldn't actually do it. It's not good enough.
9:37
Like the person you know that oh you wanted to use AI photography for your brand but every model has nine fingers and like two you know two mouths.
9:46
It's like all right well I'm I'm not actually going to put that on my website.
9:48
So like cool in theory but not in practice.
9:50
Um then there's you could do it if there's a human on top of it.
9:54
So you could train a human to like be in the loop to tweak it, to work with it, to make it better.
10:00
And then there's oh, we don't just we just don't need a human doing this anymore.
10:04
And so, what I've done is basically just figured out, all right, here's like 10 tasks that are real tasks that we do that have a real cost and a real human doing it in my companies, and I will know for myself as we get closer to AGI cuz those all just go from zero out of 10, which is where we started, to like three out of 10, six out of 10, eight out of 10.
10:21
Once eight out of those 10 tasks are like, yep, we just set up an agent and like we don't need to have a person doing those anymore, that's when I know, oh my god, this is like we've had like real, real breakthroughs because it matter because that's the real test for me versus I don't know exactly how these evals work, but it's like a it's like an abstract thing.
10:40
Or it'll be like, you know, they can pass the LSAT.
10:41
So, it's like that's cool, but I don't need it to pass the LSAT.
10:44
If the opportunity is AI agents in my business, then I'm going to test it on what can these AI agents do in my business?
10:50
So, what what's an example what's an example of one of these things that you would want to automate?
10:54
The simple example I gave is like e-commerce. So, photography.
10:57
So, every month we pay photographers to do shoots.
11:02
It's a real cost somewhere between, let's say, $5,000 to $10,000 all in for e-commerce photography.
11:07
And you have basically like product photography or you can have models in it, whatever, right?
11:12
So, there's like a little bit of a range there.
11:13
So, just product or models.
11:16
And so, I want to know like when can I get rid of that 10K a month?
11:18
So, when can I basically just show it my product um in a on a blank and be like, cool, put this on models.
11:26
Or we have other ones where it's like uh photos and videos.
11:29
So, I can where you know, you've seen these models where you you give it a static image and it turns it into a video.
11:34
And you see the demo on Twitter and it's amazing.
11:36
It's just a girl posing and then she starts like strutting with it turns it into an AI video. It looks awesome.
11:42
Cool, but then like you do it in practice and yes, she starts strutting, but then her face starts morphing like she's like being eaten by lava.
11:50
It's like, okay, I'm not going to put that on my website.
11:52
Like that would be a a bad thing, right, to do that.
11:55
Did you see the uh AI meme of Mark Zuckerberg staring at Bezos's wife's boobs where he like he like leads in extra hard to like smell them? Do you watch that video?
12:07
It's literally his eyes they dart back down for a microsecond.
12:10
Yeah, it's some guys made videos of him like not stopping and just continually going in.
12:16
It was um that's pretty badass. What were you saying?
12:21
Like another example would be uh you know, in e-commerce you have inventory forecasting.
12:25
This seems like a data problem, right?
12:26
How much inventory should I order, when should I order, and let's say, let's pretend you have five colors of a product, which color should I be ordering?
12:32
Well, it looks like an AI problem.
12:34
You got a whole bunch of historical data.
12:35
You have real-time sales data that's coming in, and then you should be able to forecast.
12:39
And like today we employ two human beings to do that forecasting.
12:44
They're not perfect at it.
12:46
It's very it's very difficult problem to solve.
12:49
Um can AI make them smarter and like do it better?
12:51
Can I go from two humans to one human plus AI?
12:53
Or can I replace the two humans and just have AI give us more accurate demand demand plan demand forecasting?
12:58
This is a problem that every every physical products brand in the world has this problem.
13:03
Whether it's uh you know, Hershey's chocolate bars or it's, you know, North Face jackets. Like it doesn't matter.
13:10
Everybody's trying to figure this out.
13:11
How do we order the right amount of inventory and not be stuck with too much inventory?
13:14
It feels like we're talking about solar power.
13:15
You remember like 5, 10 years ago everyone would be like, well, I mean, solar is really cool and all, but I mean like it's still not cost competitive, but if you look at the graph, it just keeps going cost goes down, down, down, down, down.
13:30
And if you just project it and you look at the rate of progress with these tools like we've been exploring for Aeropress doing the same thing cuz we spend a lot of money on big, expensive photo shoots and usually it's just an Aeropress sitting there really well lit with nice coffee in it.
13:44
So, we've been looking at Flare and some of these other tools, and I've been pretty blown away with where I can get to.
13:50
And I agree there's definitely like a last mile problem, but it'll be there in the next 6 to 12 months, I think.
13:58
And when it does, I think it it's really cool for your business, but it also represents competition cuz it just becomes infinitely easier to compete in all businesses.
14:09
And we'll talk about this more, but like I think that's what's crazy about all this stuff.
14:14
By the way, the most solved one of these is meeting meeting minutes.
14:18
Like I don't know, Andrew, if you used to this, but I used to invite my assistant into our meetings and say, "Hey, can you take notes, jot down any action items or follow-ups that we're going to need to do?"
14:24
Like that is just been completely that's completely gone off her plate, which for her it basically freed up, you know, 4 hours of time for my assistant a day on average, let's say.
14:34
And if now she's got 4 hours back that she can spend doing the other things um because I'm using Fathom, and Fathom just sits in my meeting, records all the notes, perfect transcript with highlights, with a summary, with action items, ready to go 24/7, never misses a beat.
14:50
And um so, I'm like, this is not only did it replace him, it's way better than she my my assistant can do it cuz she'd be trying to keep up and it just was not going to be good enough.
14:58
The level of accountability you can get to, right?
15:01
Like I I hate that feeling where it's like, oh, I did a board meeting with this CEO 6 months ago and I swear to god, I swear to god they promised me this one thing and then they're like, "No, no, I don't remember that."
15:10
And being able to pull that up I just did a um really a really cool thing actually.
15:15
Me and my girlfriend did a relationship offsite, which sounds really lame and nerdy.
15:20
Um Patrick Campbell actually was the one that gave me the idea, but we basically would talk about, "Hey, what are what are like our big strategic goals for the year for our relationship, for family, for life in general and stuff?"
15:33
And we recorded the entire thing with Otter, which is like similar tool to Fathom. And I was blown away.
15:37
Like we just chatted for 3 hours and it was able to spit out, "Here's all the action items.
15:44
Here's all the things that need to come out of this."
15:46
Then we're able to put it into Claude and it built a plan for us. Very cool.
15:53
You uh you By the way, I was giving you a hard time. It does sound nerdy.
15:56
And also, I do the exact same thing.
15:58
Uh we have relationship meetings as well.
16:00
Uh you you have the local news business, the the newsletter.
16:05
Sean and I both owned newsletters.
16:07
When I did it, AI didn't exist and I felt like um you know, hiring writers was actually the hardest part.
16:16
Uh like who could write in my voice.
16:18
Now, I would hate to be in the newsletter business because I see the stuff and I'm like, it's like it's almost ready to roll.
16:25
But it's definitely ready to roll as an editor.
16:30
Are you using this uh for your newsletter now for the uh local news newsletter?
16:34
I'm not right now, but that's what I'm working on.
16:36
So, like the pieces that I'm the more advanced stuff I'm doing are like I've got a social media manager agent, I've got a marketer agent, I've got a tax advisor, an investment analyst.
16:48
And I mean, these are these are roles I previously would have hired for where I didn't either didn't renew someone's contract or I didn't make a new hire for them.
16:56
So, it's already replacing people that I would have hired otherwise.
17:02
Well, wait, can can you explain a couple of these?
17:04
Explain the tax advisor one and then explain the social media one.
17:08
So, social media is very simple.
17:08
It's like I post on X all the time and I'm lazy.
17:13
I don't like cross-posting on LinkedIn. I often forget.
17:15
I'll tweet about something and then not include it in my newsletter.
17:19
And so, what I've done is I built a Lindy bot a Lindy bot that looks at my Twitter and all my all my other channels and then once a week it summarizes all the stuff I've been talking about and asks me, "Hey, what do you want to include in the newsletter?"
17:35
And then it can give me a first draft.
17:36
And it's trained on my previous writing.
17:40
So, it can write and it's, you know, it's not perfect, but it's like 80% of the way there.
17:44
And if I didn't care about my my personal brand, like, you know, many people just want like a quick and dirty newsletter, it would be totally sendable.
17:50
And it's completely engaging if you prompt it right.
17:53
Like you can even say like, "Give me a subject line that will force the person to open the email, right?" And it it's really good.
18:03
What about the accounting thing?
18:05
The accounting thing is freaking like blew my mind.
18:07
So, um basically I exported I use Xero for all my accounting.
18:12
And for my personal like financials and my personal holding company, it's like a rat's nest.
18:17
Like I have like 200, 300 random investments, all sorts of weird assets and stuff in there.
18:24
And so, I exported all all of it as a CSV out of Xero.
18:28
I trained a Claude project on it and I started asking it questions.
18:33
Did you upload like a book like a Warren Buffett book or like what did you No, no, this is like basically to replace like right now, so I have I have a woman who runs my family office and I might ask her, "Hey, how much did we spend on software last week?"
18:48
It'll be let's say it's a Saturday and I'm kind of bored and doing a deep dive.
18:53
I'll email her on Saturday and I've got to wait until Tuesday to get a an answer.
18:56
And so, I was like, oh, I just want to be able to query Claude.
18:58
And so, I was like, "Hey, I want you to rank the top 25 things I spend money on."
19:03
Or I want you to look at my structure and I want you to tell me if there's any ways that I could save on tax.
19:10
And so, one it it was crazy.
19:13
I actually saved $100,000 a year of cash taxes by moving an investment from one holdco to another uh thanks to Claude, right?
19:22
So, it is very quickly becoming tax advisor, uh investment analyst.
19:27
I can get it to write a deal.
19:30
I can get it to draft legal documents.
19:32
Like these I mean, everyone's doing this, but like it is getting it's getting so good that I don't hire people. Let's put it that way.
19:41
Weren't you hiring for like an AI back office person?
19:44
Like what what you have some role I saw that you put up there. What was that?
19:47
Yes, so um the The who runs my family office, she's got a uh a family situation, so she's got to transition out of the role.
19:55
And so, me and my president were like, "Okay, what do we what do we really want out of this role?"
20:01
And when we thought about it, we were like, we actually just want someone who's like an AI nerd to automate away all the accounting and bookkeeping and stuff that nobody enjoys doing.
20:10
You and Trigger came up with that?
20:12
So, yeah, that's right, exactly.
20:14
I hired him right out of office.
20:18
Um but anyway, we yeah, we're hiring like an AI first CFO, basically.
20:22
Somebody where their job is basically just to build automations, financial automations.
20:26
You guys probably have someone who works for you who just basically manages Zapier.
20:31
And like Zapier, the problem with Zapier is that it's awesome when it works, but like for some reason [ __ ] breaks all the time, which I don't understand how like I don't understand enough about technology to know like, why's this [ __ ] break all the time?
20:41
And then the systems were so complicated that if that person left, it was like, "Oh [ __ ] what's the stuff that we got to go uncover because they've so much [ __ ] where it's like we just rely solely on this one person."
20:55
And it becomes actually an issue where it's kind of all automated, but it's sort of duct-taped together and the duct tape comes undone and there's so much duct tape that I got to go and figure It's like when your LEGO breaks, you got to like, "Dude, I got to like [ __ ] rebuild this whole [ __ ] I don't know where this one little [ __ ] piece goes." Totally.
21:08
I've had the same experience.
21:10
Like anytime I got really into no-code like 4 years ago or whatever, and you know, we'd build all these automations where oh, it'll go to this one place and then a Zapier automation will move the data into airtable and then you manipulate it in XYZ way.
21:24
And I think the difference here is that like Claude will just figure it out, right?
21:29
So, if you say like, "Hey, it's not working," it'll just sort it out or tell you how to fix it.
21:34
Whereas before I had that exact same problem. And totally agree.
21:37
Usually the automations just cause problems.
21:39
How are you guys using it at Hampton right now?
21:43
I mean, it's basically just like glor- it's like glorified Zapier, basically.
21:47
So, like it connects Airtable to HubSpot, to this website, uh update these records in HubSpot.
21:52
Like it's basically all back-end operational stuff, which I think is underutilizing it.
21:58
Cuz like what I would do if I was you is I would get a um Claude has this thing called I forgot what it's called, the model context protocol or whatever, and you can basically build a database of all all your members and then just have a way to query it where you can say, "Hey, we need a speaker for this event in LA, who would be good?"
22:14
Or or who's got a business in this space?
22:16
And just have like a live database of people in an LLM. That'd be sweet.
22:20
So so what I'm working on though, like the next piece here is actually like Sean, I'm basically lining up who are you know, what are the roles um that we can you know, not need in the future.
22:35
And most of this is not firing people, it's actually just not hiring people we would otherwise would.
22:39
But if you if you graph this out, you can see that we're all going to have virtual employees very very soon. And that's what's crazy.
22:49
Like I was watching an interview with Dario Amodei from uh Anthropic yesterday at Davos, and he basically said in the next 12 months, you will have AI co-workers in Slack.
23:04
Now, if you just project that out, right now it's text, right?
23:06
These are not people, but pretty quick it'll be someone on Slack that you're messaging, "Hey, can you make some new product images?
23:13
Hey, do you mind checking out the AdSense?
23:15
Do you can you write a report?"
23:16
And I think that within 24 to 36 months, these will be 4K video people that are indistinguishable indistinguishable from a human that you'll talk to on Zoom.
23:28
Now, I know that sounds crazy, but I really believe that's what's coming.
23:32
And I think if you just think about the the implications in terms of business moats and businesses that are going to going to be disrupted, it's just staggering.
23:40
Do your guys's parents use it or like your 10-year-old cousins?
23:45
Like how how My mom uses it. In what way?
23:50
Well, my mom's, you know, she her first language was Hindi, right? So, she speaks English.
23:53
She speaks it well, but she if she needs to write, it's kind of stresses her out.
23:57
She's like, "Oh, I got to write something. I got to write an email.
24:00
I got to write a letter, respond to something, write a note to the doctor."
24:04
And she's like kind of slow with writing and she feels a little bit insecure that like her writing is going to be like well-formatted, well gran- you know, grammar's correct, and uh clear.
24:14
And so, she was early on ChatGPT to just be like, "Oh great, I can just tell it what I want it to write."
24:19
And then it just writes a beautiful email for me.
24:21
And then I What she does is she has to like kind of mess it up a little bit to make it get it back to real.
24:25
Um but my mom has been using it in that way, but that's kind of all she use it, but I think what you're getting at is like even though for us a lot of these things we're saying right now seem obvious, that you're kind of right.
24:36
I think if if I know where you're going with this question, which is like you know, my sister, my mom, like how much has it crossed the chasm?
24:45
Like my sister uses it in her schools to create curriculums.
24:48
So, uh she has it do curriculums and lesson plans and gives that to her teachers to um to work off of, which is something like either they would do kind of either procrastinated or or you know, half or she would have to do herself.
25:01
And so, I think that was a big win for her, but you know, it's it's kind of like you find your one use case of ChatGPT or you know, and you go there.
25:08
Another one like my mom was giving it like her Kaiser like data test results.
25:13
So like, you know, you go, you get blood work done or you get a you get some procedure done, I believe let's let's just take funeral home software, right?
28:02
So, let's say that there's one developer who built funeral home software, and he's had no major competition for 10 years.
28:09
With tools like Replit, you can literally go in like and you can reproduce basic software very very easily, right?
28:18
If if your software is like highly algorithmic and complicated, yeah, maybe not, but something basic like funeral home management where it's like case management basically, is incredibly easy to replicate in 10 or 20 minutes in Replit.
28:35
And so, my belief is basically that as more and more people don't need to learn how to code and can build software, software will become more and more commoditized, there'll be way more competition, and it'll be a way harder world for software businesses.
28:48
And I think that ultimately it just comes down to time.
28:53
For us, all of our software businesses we've bought, we've generally bought them in a way where we've de-risked, we've paid ourselves back, or we have some sort of unique competitive advantage or cost can advantage or something.
29:08
Like for example, we own a uh a framework uh hosting company for a framework, and a lot of people have standardized and built software on that framework.
29:18
They're going to keep hosting with us because we support that framework and nobody else does, right?
29:23
There's there's things like that.
29:23
Um but personally, when I'm underwriting software deals now, I am being incredibly conservative, and honestly, I'm what much more focused on communities and social networks as a result.
29:36
Um we still look at software when there's like a hardware component or there's some kind of lock-in, but I'm much less enamored with software right now because of this. This [ __ ] crazy.
29:48
Do you guys think I'm like out to lunch on this?
29:49
Am I totally like overthinking this or So say say the thought out loud.
29:56
What's the specific thought, right?
29:58
Well well, I think it's pretty wild implication that we may have mass disruption in terms of jobs and mass disruption in terms of every business that we know, that we think of as a good business, may not be a good business in and it's not long-term, right? This is not 10 years.
30:16
We're talking about a 2-year time horizon.
30:17
So let's take the business side of it, right?
30:21
Um the business side of your argument was basically software for the last 30 years has been an incredible business to be a creator of or an owner of, whether you're buying or building software businesses, and you're saying, I think that's going to change because um if it becomes so easy for anybody to build software that they need, then they're not going to be buying $5,000 a year or $50,000 a year software anymore.
30:48
And so maybe this one thing, vertical software, VMS, right?
30:50
Um or other other categories like that where it's like more of a simple CRUD database with a a user interface on top of it.
30:59
Um that those are going to become less valuable.
31:02
I totally agree with you that that's that those are less less appealing than they were before.
31:06
I don't think it goes to zero because in reality um it's sort of like anytime you've actually built software, it's the last 10% that takes you you know, you can get 90% of the way there, you feel like you're almost there, but then the last 10% will take you as much time as the first 90.
31:19
It's just like a a rule you see over and over and over again.
31:23
And it's the same thing with products, which is that to actually make something work and solve all your problems that you need that you're used to your current software solving, it will take time, effort, love, care, and whether it's just might just be somebody else building software that's a competitor to you or you know, if if somebody in your own company going to build that.
31:43
I think it's less likely that that becomes like a major disruption to all of software because like you were saying, like some software, like social networks or communities, the value is not the app, the value is the people and the connections and the habits that they formed.
31:56
So you have software where there's already habits, those will be safe.
32:00
Software where the value is the people or the data, those will be safe.
32:03
Software where the value is in the enterprise relationship, the service that's on top of it or the like fine-tuning and tailoring and the CYA, which is that if I buy enterprise software, I'm I don't need to save 40% on this bill as much as I need to not get fired for being like, yeah, we home-brewed our entire CRM and like the security wasn't very good, right?
32:24
Because we didn't I made this in [ __ ] Claude instead of it being software I bought from a vendor that's been doing this for 15 years and has actually like solved the security vulnerabilities.
32:34
And so I think that enterprise software will be safe.
32:36
So I think a lot of software will be more safe than software just as a category goes to zero.
32:41
Yeah, I would I would I would generally agree with that.
32:44
Although I think it's going to be a lot easier to offer incredible support, incredible sales, etc.
32:49
On the other side of it, you get the the market expands, right?
32:54
Because it's not just that oh, there's going to be more competition in this fixed pie, it's that now a whole bunch of software that really wouldn't have made sense to build because coders didn't understand the problem, so they weren't working on it or you would have needed too much funding to build it, it's not really worth it.
33:09
So all this new software is going to get created that was not really feasible or wasn't really easily accessible before.
33:16
Like I'll give you a stupid example.
33:16
I went on Replit the other day.
33:19
And Replit's amazing cuz it's literally ChatGPT except for when you tell it something, it makes a website for you or makes an app for you.
33:25
And so I had this like, you know, first-world selfish problem, which is that I like to log my meals um like I like to take I take photos of my meals when I when I eat them uh to be able to send to my my like coach, but um then my entire camera roll is just shitty pieces of chicken and my kids.
33:44
It's like beautiful pictures of my kids and then ugly pictures of chicken.
33:45
And I'm like, all right, this is kind of annoying that that's there.
33:48
So I I just told Replit, I said, make an app that when I open up the app, instantaneously the camera is on.
33:53
I don't want to like type in stuff.
33:55
I just like open the camera, take the photo, show me a thumbs up or a thumbs down where I can rate my own meal, and then save it in a calendar view where I can see like a streak of every you know, if I've been doing roughly good, make it green.
34:06
If I've been doing bad, make those red.
34:07
And can it make it an app that it gets approved in the App Store?
34:11
So that was So immediately Replit's like, hey, I can't make iOS apps yet, but I can make it as a website, you could add it to your home screen.
34:18
And you could use it on your phone, but it'll just be a website you open up.
34:21
I was like, all right, deal.
34:23
And then it made that app for me.
34:23
And as I you know, it's not perfect, like I've ran into some walls where that Replit's like, hey, I don't know why it's not working.
34:30
I'm like, yo, it actually is working.
34:32
It's like you're you're just being crazy.
34:33
But like, you know, okay, you get through the craziness and it's not exactly good enough I would say where I I'm using it every day and telling you guys how amazing this this tool is, but 9 months from now, pretty sure I'm going to be able to just do that, right?
34:44
So like I can be a software creator without knowing how to code, that's already a big big deal.
34:48
Because of that, any idea I have, I can make come to fruition.
34:52
So a whole bunch of new ideas are going to come into the market that didn't exist.
34:55
And I can do it for like other problems that weren't going to get solved maybe through like, you know, if you look at software today, it's like a um lowest common denominator.
35:04
Like I need to serve the most customers who are willing to pay.
35:07
So I'm going to like shave off all the edges and make some product that's what I think most people want.
35:14
Even if it's not what I personally want, all right?
35:16
Or what me and a cluster of people like me really want.
35:19
And so I think the overall market for software gets bigger because you can create way way more stuff.
35:23
So so that's the other counterpoint to like software being bad.
35:27
It's phenomenal for consumers, right?
35:27
As a consumer, I'm so excited.
35:29
It's more if you're buying these businesses and you're underwriting 10 years of returns, continued profit margins, all that kind of stuff.
35:38
I think it's it's a lot it just got a lot harder because before it was like, look, there's only so many programmers out there, right?
35:45
There's only so many competent macOS, iOS, whatever programmers.
35:49
And I'm with you in terms of like where Replit is at right now, where it's like, yeah, you got to you got to fidget a lot to get it to a point where it's shippable.
35:58
I've built a lot of stuff that is 90% that I can't put out into the world cuz it's not there yet.
36:04
Um but I think it's a little bit like stock photos.
36:06
2 years ago, you know, stock photos generated by AI were terrible.
36:10
Now I would not want to be in the stock photo business because it's it's perfect and it's only getting better.
36:16
I will say one other thing, like this same thing happened with media, right?
36:21
So like before, only people who could make media were media companies.
36:26
You would there was limited TV channels, newspapers.
36:28
If you owned one of them, it was amazing.
36:30
If you didn't, it wasn't, right?
36:31
And you're right that like owning those legacy media businesses kind of sucks in the world of social media where anybody can create content.
36:38
And so those businesses went down, but then suddenly new businesses, which are social media-based, emerge and the set of social media-based businesses are way bigger than the set of legacy media businesses.
36:52
Right, you have if you're if you're interested in whatever weird niche, you don't have to rely on the Wall Street Journal to write about it. Right.
36:59
So I think it nets out way ahead.
37:00
I don't know if you guys heard Larry Ellison yesterday when he was like going off about AI.
37:03
Like people are like, oh, what are you excited about AI?
37:04
And he like did this little rant, which I don't know how well-versed Larry Ellison is in like what's actually like possible with AI versus like Masayoshi, you know, showing a picture of a golden goose laying eggs and being like, that's why I'm investing.
37:16
Um but he was like he's like, with AI, here's what here's what's going to happen in the next few years.
37:22
He was like, you're going to be able to do early detection of cancer.
37:26
Then the AI is going to sequence what cancer you have.
37:29
It's going to be able to design a personalized vaccine for your cancer and cure you of cancer.
37:35
So why am I investing $100 billion? Because I want that.
37:37
And I want 100 other things like that.
37:39
And it was just like a very compelling like rant he did outside.
37:44
Did he deliver it in that type of compelling way?
37:46
Well, nobody's me, but yeah, he did his he did the Larry Ellison version of it. The B+.
37:49
But he did do like he was like uh that like he he was able to dumb it down.
37:55
He was basically like like he want it was like he was shaking somebody and be like, do you hear what I'm saying?
38:01
Like do you know what this is?
38:03
Like get this in your little head.
38:05
It's not about an investment for a data center.
38:07
It's we're going to cure cancer with this [ __ ] okay?
38:09
And it's going to save your like your mom's life.
38:12
Like you were that's what we're going to do with this thing, okay?
38:15
That's that's why we're doing this.
38:16
Let's not get caught up in Project Stargate and the politics and the the investment amount and the the infrastructure.
38:22
Like, okay, all that's a means to that end is kind of the way he was saying it.
38:25
Dude, this shit's so exciting.
38:26
He also I think he's obsessed with living forever.
38:28
I think he's one of these guys who's like into that and throws is, you know, the 10th richest guy in the world, so he can kind of throw his weight behind a lot of that stuff.
38:37
And I think that's pretty badass and that's probably a huge motivator.
38:40
Andrew, can we do one more?
38:40
You had this great thing in your notes that I don't I want I want to hear you explain. You said AI hedge.
38:46
Basically, you're looking for investments given that you think, okay, software might not be the best place to be investing, where are you investing and what what what is all this stuff I see here down below down below your AI hedge notes? Sure.
38:58
So I feel like you know, there's a bunch different scenarios here including that this scaling slows down and it's a mod moderate disruption.
39:07
We've got a couple years of some people being unemployed and then they re-skill, they go do different things.
39:13
Like you said, the economy gets bigger, whatever.
39:15
There's another possibility that there's what's called an AI fast takeoff, which is like Masayoshi's graph of like the singularity happens and you know, it's crazy.
39:25
And if that happens, it's like, does capitalism matter?
39:28
Does the free market matter?
39:31
Does the AI basically just become this like communist overlord that allocates assets and stuff?
39:35
But I've been thinking about um you know, what do you want to own in a world where that happens?
39:41
So you can go out and you can try and buy secondary in Claude or Anthropic or Open AI.
39:46
Those are very expensive.
39:48
You can buy Nvidia at 30 times earnings or ASML at 30 times earnings.
39:53
Some of these or or TSMC, but there's the Taiwan risk, all the other stuff.
39:57
And so, I've been trying to find stocks that I can buy that are actually affordable, but capture AI upside.
40:05
And I found a really interesting one.
40:08
Um so, I love stuff that's miscategorized and misunderstood by public market investors.
40:13
Public market investors are very simple in the way that they think about companies.
40:18
They have a series of boxes and they filter you through the boxes.
40:21
And there's a saying, you want to look like a duck and quack like a duck in the public market.
40:28
They do not like complexity.
40:28
And so, if you say the wrong keyword, their brain turns off and they just say, "I'm not going to invest." Right?
40:34
And so, let's let's A couple of those examples are uh cannabis, right?
40:39
They just put you in a box. Biotech, oh, high risk.
40:41
And Bitcoin is another one.
40:44
There's all these crappy Bitcoin mining companies.
40:46
Dude, when we sold the company to HubSpot, one of the reasons we went into the year with millions and millions of dollars booked of advertising, and we were probably going to do $20 million that next year, and they were like, "Yeah, just cancel all those contracts and give the money away, give the money back, and we're not going to do advertising anymore."
41:02
And I was like, "But, you could scale this to like a lot, to tens of millions or whatever."
41:07
And they're like, "Yeah, we make billions of dollars a year, and also we would have just have to report that, and that's a little too complicated and people won't understand it.
41:14
So, like the decision of them to not do that was worth more than the tens of millions of dollars of advertising revenue they could have made, which is wild.
41:23
Have you ever met one of those like really ADHD young entrepreneurs who's pitching you on their business and they're like, "Oh, we do this, but we also do this.
41:31
And also I've got a company that does this." Right?
41:35
And and we all the older statesmen, we always are like, uh you know, young Padawan, just focus and don't you know, don't do that.
41:41
Or or if you're going to do that, don't tell me about all this other stuff cuz it just confuses me.
41:45
I feel like public market investors are like that.
41:47
So, so here's the business I found. It's called Iris Energy.
41:52
Uh the ticker is IREN, I R E N.
41:57
And basically it's these two Australian guys who were infrastructure bankers, and their thesis supposedly was that compute was going to be a big deal in the next 10 to 20 years.
42:06
So, presciently they went out, they secured a whole bunch of huge data center properties that were right next to mostly renewable energies.
42:15
So, they'd find a power plant that's like a hydroelectric dam or something like that, and they would literally just buy a massive data center right next to it and build one.
42:23
So, for example, where I live in BC, um they have one in Prince George right next to like a big hydro dam.
42:29
And currently, the best use for these data centers they've built so far has been mining Bitcoin.
42:37
So, they've been doing that, and they're not Bitcoin bulls.
42:39
They're not like MicroStrategy or someone like that.
42:42
They don't hold the Bitcoin, they just mine it, they've got their GPUs and whatever, and they sell it immediately.
42:49
And right now they're making somewhere in the range of $500 million of EBITDA annually doing that.
42:54
Now, the stock trades at about a $2. 4 billion valuation.
43:00
So, you can buy it actually quite cheaply based on the Bitcoin thesis, right?
43:05
And Bitcoin would have to drop by about I believe I'm guessing based on some assumptions, but I think it would have to drop about 70% before they get to break even on mining these Bitcoin.
43:18
So, here's what's interesting about this business.
43:21
So, it's totally misunderstood by the public market because everybody thinks, "Oh, they're Bitcoin bulls, they're mining Bitcoin, there's all this risk or whatever."
43:29
What's actually interesting here is uh they're going to flip or we I hope or they've kind of publicly communicated to some degree that they're going to try and flip these data centers over to compute.
43:43
So, all these huge companies like, you know, uh Amazon and Microsoft and Anthropic and whatever, they all need data centers, and they need the data centers to be centralized in one place.
43:54
You can't have 10 computers here or 10 GPUs here and 10 GPUs somewhere else.
43:59
You For training, you need them all to be in a massive supercluster.
44:04
So, the other interesting thing is you can't just go and build these superclusters.
44:07
You can't go build these data centers anywhere.
44:09
It takes a long time to get permitting uh and approval, and it takes a long time to build.
44:14
And so, basically there's a finite amount of this stuff to the point where you guys have probably heard like Bill Gurley talking about like trying to buy nuclear power plants and all sorts of crazy stuff.
44:23
So, basically, if they flip this business over to doing inference and to working with hyperscalers on training, this could be a massively uh a massive boost to the business and it could, you know, 5 10 20x, I don't know.
44:42
Um but, very significant if they sign some deals with hyperscalers, which I know that they're actively working on.
44:48
They've communicated as much.
44:48
Um so, basically, if you believe in a fast takeoff, it's a very interesting uh way to kind of buy something with relatively low downside and very significant upside um instead of buying Nvidia or Microsoft.
45:03
Obviously, You sound like you're uh Leonardo DiCaprio in uh Yeah, exactly. Do your own research.
45:08
This is not investment advice.
45:10
I do own the stock, um but I think it's interesting.
45:14
How much of the stock did you buy?
45:16
Um I only bought like a million dollars, but I look at it as like a small It's a very small position.
45:21
It's like buying fire insurance.
45:22
Yeah, what is What is this? A position for ants?
45:25
Just a million dollars, Andrew?
45:29
Well, Andrew, I know that was not financial advice, but I do appreciate the advice that you just gave me financially.
45:32
Uh Last public stock we talked about, I think was Weight Watchers, and like there was definitely a correlation from when the episode aired and when the stock I don't know if it was causation, but there was definitely correlation.
45:45
Uh I wonder if that's going to happen here.
45:46
You said the downside is like you have this Bitcoin mining uh free cash flow priced very fairly, right?
45:52
You said like 3x free cash flow basically is the the price.
45:56
And then the upside is if they make this AI switch.
45:58
One question, you said they they sounds like they're not huge superclusters, so Oh, no, they're they are huge.
46:04
So, they have a massive They have a massive site in Texas that they're working on building.
46:10
Now, here's here's the the probably the reason why it's trading lower is these profits do not just go to investors.
46:16
They are almost all being pounded back into building out these data centers.
46:21
So, if for some reason compute stops mattering or, you know, we move to distributed inference or something like that, there's definitely a downside scenario, which is why I'd say think about this cautiously.
46:32
Don't put your entire portfolio in it, but I look at it as it's like a good 1 to 5% position. I need to look into it.
46:39
That's not how I roll, obviously, but it was compelling and I I'm fascinated by their entrepreneurial story.
46:48
I'm amazed how this was just launched in 2018 and how fast they grew.
46:52
How much financing did they raise?
46:52
I don't know how much they've raised, but I do know that they have no debt, which is quite impressive for a business like this.
46:59
They have They have a lot of uh a lot of interest in retail.
47:02
Like a lot of retail buyers in the public market, and so they've been every time they need to expand, they do what's called an at-the-market raise.
47:09
So, they basically just issue stock into the market and then they raise capital to do it that way.
47:14
Um but the I mean, the way they die would be big amounts of debt, so they're avoiding that, I think.
47:19
Well, I forget what that online stock market club is that like Bill Ackman and all these billionaires are part of where they have got to pitch their stock and they have to make a compelling argument, and it's like really hard to get into.
47:28
This is like if that and Beavis and Butt-Head had a baby, that's what this is right now.
47:35
Have you ever been to Sound?
47:35
It's the Sound conference, right?
47:37
That's what you're talking about? No.
47:39
Yeah, that's what I'm talking about.
47:39
Is Is it online or or uh It's in person.
47:44
I've always wanted to go, but it It's an ordeal to go.
47:47
Maybe this was your audition tape. Yeah, there you go.
47:50
What do you think of it, Sean?
47:51
I mean, I I don't know anything about this company.
47:52
I've never heard of Iron until Andrew talked about it 5 minutes ago, but I like the I mean, problem is Andrew's very persuasive.
48:00
It's also the problem with me.
48:04
I can talk myself into anything.
48:04
That doesn't mean it was a good idea, and I I have done that to myself many times.
48:07
Um And so, you have to be careful.
48:12
Uh I apply basically a discount factor.
48:14
It's like a charisma discount.
48:14
So, the more persuasive somebody is about everything, the more I have to discount to some degree.
48:21
It doesn't mean I just like throw it away, right?
48:22
Uh but, I have to be careful not to get overly excited.
48:25
And then the opposite is true in the other case.
48:28
Like when somebody's got like the David Blaine deadpan delivery of everything, and then they're saying something that sounds exciting, I'm like, wait, if that sounds exciting coming from you, that means it must be 10 times more exciting than you're actually giving it.
48:40
There's actually like an amplifier there.
48:42
So, you got to be a little bit careful.
48:44
This is why whenever I read Malcolm Gladwell books, I have to be like, wait, this is just a theory. This is just a theory.
48:49
Like this is not a fact, necessarily.
48:53
Uh that's a That's pretty funny. What did you call that? The charisma the what? discount. Yeah. That's pretty awesome.
48:59
Yeah, like our friend Jack Smith, whenever he tells me something, he'll be like, yeah, this is pretty cool. I I think I like this.
49:04
I'm like, do you love this? Yeah, I think I love it.
49:09
Then I'm like, all right, I'm in.
49:11
There's some people who pretty good means it's incredible, and there's other people who are like, oh, it's the [ __ ] best, and that just means it's just another thing that they're that they're doing.
49:20
You know, it doesn't mean anything, right?
49:21
You have to like uh you know, it's like an audio mixer.
49:23
I have to turn some people's levels down and turn some other people's levels up on their microphone, you know?
49:28
Are you guys tracking those stock stock uh you guys did that like investment episode maybe like 6 months ago and you Yeah, TKO versus Ferrari.
49:36
Uh TKO won I believe Sean. I I think.
49:39
Yeah, it's up like 19% I think since we did that episode.
49:44
So I was you know, that one did pretty well, but I mean it was funny that we did a a stock picking episode just stock stockapalooza and like we just didn't just say the word Nvidia and then stop the recording cuz that would have been that would have been sufficient and like it was pretty obvious and in our face, but like when you try to be smart and make good content that doesn't mean you're necessarily actually making the best advice.
50:03
This is this is my fear of all all YouTube doctors by the way.
50:05
And I I like Huberman, I like Attia, I like all the I like them, but also they're content creators now first and so you again you have to apply the discount factor which is that their job is every week to come up with new things to say.
50:19
That doesn't mean that I'm not saying they're wrong either.
50:22
It's just that the best advice might have been, you know, 5 minutes long said once and never you know, and or just repeated 15 times would have probably be more helpful than listening to the 3-hour podcast about how like, you know, getting UVB rays in your ears in the mornings is going to help you right?
50:39
Like those might not be the things that actually will help anybody at this point, but that doesn't make for good content.
50:44
And so whenever somebody's primary job is content and I say this as somebody whose primary job is content, you have to like remember that before you before you, you know, get totally hooked and listen to everything that they say.
50:56
This is the thing I remember in 2013 or something I'd sold a business.
50:59
I was sitting on like 7 or 8 million dollars of cash and I was like, okay, I need to invest this and I read this Tony Robbins book.
51:07
I'm not a big Tony Robbins person, but he had that money I think it was called money mastering the game or something and it basically the whole book is just like buy index funds.
51:13
And I I have this disease and I think most entrepreneurs do where they say, well, that's the obvious thing. That's for the normies.
51:21
I'm going to go find door number three and I look back like I read Chip War which is like all about semiconductors.
51:28
I knew that Nvidia was an amazing business.
51:30
TSMC was an amazing business.
51:33
I saw Facebook trading at five times earnings, but it's like I have a really hard time going through door number one and I think going forward I want to be more I just want to do the thing that makes sense and is obvious and then forget about it and stop trying to be clever.
51:48
This is actually an instance of me trying to be clever.
51:50
What did you want to invest in and then you look back and you're like, ooh, dodged a bullet on that one. Oh.
51:59
Basically where was the where was the obvious thing the wrong answer? Yeah.
52:03
Cuz it won't be the right answer 100% of the time.
52:04
Nvidia was a yeah, Nvidia Facebook.
52:06
You look back and you think, I should have known better, but where was it the opposite?
52:13
I don't think I've ever really messed up on the one that's obvious that slaps me in the face and I don't like I'm actually really decisive when I see that, but it's interesting it mostly happens for for me in private businesses.
52:25
I think that's where my decision making is usually the strongest because I usually do what's obvious and will work for sure.
52:34
But in public markets it's very easy to get excited.
52:36
Have you had one Sean where you're like I almost did this and God, I'm thankful I didn't.
52:44
Well, I've had a a bunch of those, but is it specifically where it was like a obvious kind of seemed pretty straightforward, but it was a mistake? Oh, I have one.
52:52
So so my first designer was this guy named Adam Saint and he's the best the best dude.
52:58
Like he was one of our designers, but also like a great friend and he went off.
53:03
He left after a couple years at Metalab and he started this company called Bench.
53:06
And so he comes to me and he's like, hey, we're doing, you know, basically AI accounting 10 years early and I loved him. I loved his co-founder.
53:17
I loved the idea, but I looked at it and I was like, oh, it's a services business for accounting and low margin and this is going to be hard.
53:24
So I didn't invest and for the next 10 years I felt like an idiot because over and over and over again I'd see these big series A, series B, Bain Capital buys them for, you know, huge amount of money or whatever.
53:38
But it turned out that when Bain invested, I don't think they got any money off the table nor would I have as a shareholder and it I think a lot of people saw this, but he just posted a big post on LinkedIn about how the business basically went to zero and shut down overnight and was a total disaster.
53:55
And that's an example of one where I was like, man, I wish I was so badly wanted to be part of that business and I would kick myself for years and then in the end I'm like really glad that I didn't invest in it.
54:08
Well, I first want to cosign what Andrew said.
54:09
I think you know, I have meddled in the overthinking Olympics many times and I and more than anything the reminder is to do exactly what Andrew is saying which is like stop trying to be clever and just simply asking, what's the obvious here?
54:22
What's the obvious move here?
54:24
What's the obvious answer here?
54:25
And if there's not an obvious answer, just move on.
54:26
Like you don't have to do anything.
54:30
No action is required in most situations and I'm struggling to come up with a time just like Andrew.
54:35
Like I'm struggling to come up with a time where there was an obvious thing staring at me that I did and it turned out wrong which almost just reinforces even more how hard that is whereas the opposite if you said, hey, tell me a time where you kind of thought you got a little cute.
54:50
You tried to be clever and it didn't work out.
54:54
Your buddy texted you at 11:00 at night and said, hey, rounds closing tomorrow and these 10 cool people are in and it's this really cool founder.
55:03
I can't even blame anyone.
55:05
It's even simpler than that.
55:07
It's I was a believer in crypto early.
55:10
Sam, I was talking to you about crypto early for a long time and then one year last year or the year before or something like that where crypto had a dip, I was like, I'm going to tax loss harvest. So clever.
55:18
You know what I could do?
55:20
I could sell this [ __ ] I could buy it right back.
55:22
I still own the thing and I booked this beautiful tax loss.
55:27
Oh my God, I am 900 IQ and I just I'm I am the guy.
55:32
And so then I sell the thing and I book the loss and I tell my accountant.
55:36
I say, don't worry about this one.
55:38
I advised myself on this. I got it.
55:39
And they're like, okay, great.
55:41
We'll make sure we have the that booked for the year and I'm like, cool.
55:46
And then I'm like, I should buy back in.
55:47
I was like, you know, but I did just read this report.
55:49
I think it's going to go a little lower first. Let me just wait.
55:52
Just let it go a little bit lower.
55:54
And the stupid goddamn tax decision ended up costing me you know, what probably saved me maybe I don't know, hundreds of thousands dollars in taxes cost me millions of dollars in gains because I didn't just do the thing the the obvious thing was sell the thing, book the loss, buy it right back.
56:10
You're exactly where you were 5 minutes ago with with additional tax losses.
56:15
The getting cute or clever was thinking, you know, the knife's still falling.
56:17
Let me let it fall a little further.
56:19
And then it fell a little bit further and I just patted myself and I said, I'm so smart.
56:24
I knew it was going to go down.
56:25
It's going to go down a little bit more.
56:26
I was actually reading this article the other day and I saw this guy on Twitter who's got a picture of a [ __ ] cartoon and you know, he said something pretty smart.
56:32
Let me just hold on for a second.
56:34
Let me just wait till it goes down a little bit more.
56:36
And then it went right back up way past where I bought it and I ended up buying in at a much higher price.
56:39
I would have been better off doing nothing.
56:41
It's like you know, Ross Ulbricht was in jail and just got freed which is I know a big day for you Sam. Big day.
56:47
And so I'm trying to I've got to shave my legs for our first date.
56:53
He's walking out of prison by the way holding a plant which I love.
56:54
I don't know what he's just got a small house plant that he he had I guess.
56:57
I don't know what that is, but you know, everyone's like, oh my God, you know, I'm so glad he's free.
57:03
Must have been so tough blah blah blah and then somebody goes, well, government did do me a favor because he was basically forced to not sell his Bitcoin from 2011 or whatever when he was running you know, Silk Road and Bitcoin was like, you know, in the dollar range to now it's $100,000.
57:17
It's like yeah, they also did give him a gift by not letting him sell.
57:21
Wait, is that so he still he still he owns some still?
57:23
I thought that Tim Draper bought it.
57:26
No, that's what they seized.
57:28
Presumably they didn't seize all of the Bitcoin that this guy had, right?
57:31
Like he could have had Bitcoin in multiple wallets.
57:32
He could have had personal Bitcoin.
57:34
Like they seized what they got from the Silk Road.
57:37
That doesn't mean they had all of his crypto wallets necessarily.
57:38
You know how people say like buying a home is forced savings?
57:42
He he just had prison was his forced savings.
57:48
Yeah, 24-hour lockdown forced savings, my friend.
57:50
For example, I had the opportunity to invest in Coinbase.
57:51
Not super early, but like let's say series A or B somewhere there.
57:56
And I remember doing the math and being like, okay, I believe in Bitcoin.
57:58
Should I invest in Coinbase the exchange or buy Bitcoin?
58:01
And again, try to outsmart myself.
58:03
Answer should have been just do a little bit of both and let it ride.
58:06
And in the end I I did this analysis that showed me that you should just own the underlying asset Bitcoin.
58:09
It's going to grow faster than this exchange which is going to have multiple competitors, their exchanges, etc. etc.
58:16
And actually I was right.
58:16
Bitcoin outperformed, but the thing I didn't factor in was that I would have made more money had I just A done both, but B Coinbase you couldn't sell your shares.
58:25
So like Bitcoin price went down, you couldn't panic sell.
58:27
And so the forced savings of just being a Coinbase stock holder turned out to be more beneficial than being liquid with Bitcoin where you were now at the mercy of your own brain.
58:39
And there's been, you know, tons of examples like this. I have a good one.
58:40
I talked about this a little bit, but Metalab back in 20 I guess it was 2012 or 2013, we designed Slack and at the time Slack was actually a failed gaming startup and Stewart Butterfield was basically trying to do something with the remains of it and trying to build build a chat tool.
59:01
And so he comes to me and he's like, hey, I've only got $80,000 budget for this and I was like, well, we normally, you know, this would cost quite a bit more, but we really really want to work with you. We're like big fans.
59:14
And so he's like, hey, what if we did some stock?
59:19
And I'm like, no, no, no, no.
59:19
Like, you know, we don't we don't like Metalab would go broke if we just took stock. We don't do that. Whatever.
59:25
And so I said no and my thinking was, well, I want to get as much cash as possible so I can invest it in my own businesses.
59:31
And if you think about what I was investing in at that time, it was my productivity software where I lost $10 million.
59:36
So, I instead put it into this money-losing productivity software.
59:41
I could have made $100 million or something crazy cuz it was at like a 20 million valuation at that time and it sold for $28 billion I think to Salesforce.
59:50
That That's a good one where it's like maybe maybe obvious Actually, that's maybe not that obvious.
59:57
But, it's still it's still a brutal one.
59:59
My most recent one is Justin Mares TrueMed.
1:00:01
He was raising for it at a I forget what it was reasonable valuation. Justin's my friend.
1:00:08
I think Justin's amazing.
1:00:12
He had I thought he had too much going on and I was like, "No way are you going to focus on this?" I passed.
1:00:16
And he just told me how things are going and I'm like, "Shit.
1:00:21
Like that was so obvious. You're a winner.
1:00:23
I should have just said, 'Yes, I'm in.'"
1:00:25
In my uh my e-commerce business, my I brought in a friend into the business. Gave him equity.
1:00:30
Um He knew e-commerce much better than I did.
1:00:34
I thought, "Okay, my rate of learning is going to go up with this guy."
1:00:36
And I was so excited for this like value add from this guy.
1:00:37
And his value add was like he's super good at a bunch of things.
1:00:42
One of the things he's really great at is marketing.
1:00:43
So, I was like, "Okay, he's going to be so helpful with marketing."
1:00:46
And so, we closed the deal, we signed the docs, and I set up the first session.
1:00:50
I'm like, "Oh, I can't wait for this guy to come in and just spill the beans on all the secrets that I don't know and make and solve all of our marketing problems.
1:00:57
It's going to be amazing."
1:00:59
And he comes in and he has that first first session and uh instead of spilling the beans, he just opens up a Google Doc and he's like, "Okay, what's the best product that you sell?"
1:01:07
And we were like, "Just this one."
1:01:08
And he's like, "Cool, what's the best photo of that product?"
1:01:12
We're like, "What do you mean?"
1:01:12
He's like, "Just like what's the best picture you have about that product?"
1:01:14
And we're like and he puts it in the Google Doc.
1:01:19
And he's like, "Okay, if um you know, like what do people say like why do people buy this?"
1:01:22
And we're like, "Well, I mean, they buy cuz it's great."
1:01:25
He's like, "Yeah, but like what like why do they buy it? Like what do they say?"
1:01:28
And he writes down the caption and then he like goes and sets up a Facebook ad of that product with that picture with that line of like what people say.
1:01:35
And he's like, "Cool, let this run for like the next 3 months."
1:01:38
And so then he So, that becomes our top performing ad. It took him 5 seconds.
1:01:42
And I'm like, "Okay, that was cool.
1:01:44
Um but like surely there's more."
1:01:44
And so, 9 months go by and I hit him up and I'm like, "Dude, you're like great friend and I was so excited for you to be in this thing, but like honestly, I feel a little disappointed.
1:01:55
Like feel like you could have done more.
1:01:56
Feel like the expectation was you're going to do more.
1:01:59
You know, like" And he's like, "Oh, I did so much."
1:02:01
And I was like, "Wait, what do you mean? Like what did you do?
1:02:03
Like where's the list of like what What do you mean?
1:02:04
What When you're saying you did so much, I'm saying you didn't do enough. What's the gap?"
1:02:08
And he was like, "Oh, I I stopped you from doing all the dumb things."
1:02:11
He's like, "I didn't do extra things."
1:02:13
He's like, "Remember when you got really excited about influencer marketing?"
1:02:15
I was like, "Oh, yeah, that was awesome.
1:02:17
I read this article and I met this guy who was crushing with influence marketing.
1:02:20
I wanted to go all in on influencer marketing."
1:02:21
He's like, "Yeah, remember I just told you like hey, Facebook's working.
1:02:24
Like uh just keep that going.
1:02:26
Like don't it Have you run into a wall with Facebook?" No.
1:02:31
All right then, let's just keep doing that. Don't get distracted.
1:02:34
And he's like, "That's what I did."
1:02:34
He's like, "The second thing you wanted to expand your products and like actually I just stopped you from doing that.
1:02:39
Then you had this genius idea to go subscription and I told you really like, 'Hey, like this thing's working.
1:02:45
So, let's just keep doing the obvious thing here and just keep it going.'"
1:02:48
And basically he laid out like four or five things that were all just simply like him taking the knife out of my hand as I'm a toddler and preventing me from stabbing myself.
1:02:57
And he was like, "Those were all super important moments that like this business would have gone a different way."
1:03:03
And I was like, "I don't know if you just Jedi mind tricked me into believing that you added ton of value or you actually just said something very very insightful to me."
1:03:11
And I I landed up I think he's actually very very insightful and that that is one of the best ways to help someone is to just simply prevent them from hurting themselves rather than solve their problems for them or give them some new tool that they've never seen before or will solve all their problems.
1:03:24
And this is why I love investing in private markets, right?
1:03:27
To Sam's point about houses being forced savings.
1:03:28
With a a private business, there's so many of our businesses that I've owned where if I could press a red button like a sell button or just just any given day because I read something or I'm paranoid or whatever, I would have way way less wealth because I would have panicked over and over and over again.
1:03:46
And when I look at my public track public market track record, I've actually had the right call over and over and over again, but then sold way too quick.
1:03:54
Like I bought Chipotle stock when they had that health crisis.
1:03:59
I doubled and then I just sold, right?
1:04:02
I could have made way more money.
1:04:03
Same with Meta, all these other things.
1:04:05
So, I think that having a psychological lock-in creates a really positive thing for people like us who are impulsive.
1:04:14
There was a guy at the event we just threw and it was like everybody was giving their claim to fame.
1:04:19
It's like, "Okay, this guy built this thing.
1:04:21
He's been spent 20 years building this.
1:04:22
It's He's been grinding every day and he built this empire."
1:04:26
And then this guy, he's building this this empire.
1:04:28
Jimmy's building this YouTube empire and then this chocolate empire on top of it.
1:04:32
And everybody's just like go go go go go try to figure it out.
1:04:35
And then there was one guy there and it was like, "Yeah, he's one of the most successful investors in the world.
1:04:40
He invested in all five of Elon's companies at the first round and didn't sell."
1:04:45
And it was like, This one way to do it.
1:04:47
It's like identify the best operator in the world or one of somebody who you think is just like absolutely brilliant and obsessed.
1:04:54
Invest in all their things.
1:04:54
Don't try to judge rockets are going to fail, but this is going to work.
1:04:58
Just invest in the jockey. And was it an Antonio?
1:05:02
No, I can't say the name, but um one of the wealthier people there in a room of uh the wealthiest people in America some of and someone was like, "What do you do?"
1:05:10
He goes, "Um I'm like uh the CEO of my kids right now.
1:05:14
Like I dedicate my life to my children and um like you guys work 16 hours a day on making money.
1:05:18
I work 16 hours a day on making my kids like happy and healthy and making sure they're well loved and all this other stuff."
1:05:25
And I was like, "You're the greatest person I've ever met."
1:05:31
Yeah, and he had that like simp It's not the right way to describe it, but like a uh simpleton mindset like the the midwit thing, but like where it was like, "This seems simpler. I'll go that route."
1:05:42
Whereas many other people refuse to sit still and and and stay the course.
1:05:50
What's the quote uh Pascal, "All of man's misery arises from an inability to sit quietly in a room." You know?
1:05:58
This guy did not suffer from that.
1:05:58
Um Guys, this is awesome. I could keep going.
1:06:04
I just I'm happy you're well, Andrew. Yeah.
1:06:07
Yeah, it's great to see you guys. I got to come back soon. That was fun. All right, thank you. That's it. That's the pod.