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I'm going to blow your mind, ready? So, Scotland.
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You know Scotland, you've heard of that country Scotland, right?
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You've heard of that place? Familiar.
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Land of kilts and sheeps. But also and red heads.
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But it's also home to one of the coolest SaaS businesses that I've ever heard of.
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So, it's called Petroleum Exports.
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Uh they it's known as Petax. Let's jump in.
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We got a bunch of stuff today.
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We're going to do what's called a business breakdown duel.
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Sean and I Is that a western duel?
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Uh is that a western duel, I guess.
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Is we both did a business breakdown.
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And we didn't know that the other one was going to do it.
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And so now we're going to compare.
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I'm going to go first, which gives you the advantage because the person who goes last always usually wins in rap battles cuz that's it's always like when you you know like when they do you know when they do the applause they're like person A, person B.
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And person B always wins.
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I get to hear you say your thing and then I can make fun of what you said. Yeah.
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So, anyway, you're going to you get the advantage, but that's okay. So, I'll go first. Okay.
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But before I go first, I've got to give a shout out to Andrew Lynch from Net Income. It's a Substack.
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It's where I found this particular business and I'm and I'm stealing a lot of his numbers, but I'm going to blow your mind, ready? So, Scotland.
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You know Scotland, you've heard of that country Scotland, right?
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You've heard of that place? Familiar.
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Land of kilts and sheeps.
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But also I think there's sheeps there. I don't actually know.
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That's how little I know about Scotland.
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But also Red heads, but okay. And red heads.
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But it's also home to one of the coolest SaaS businesses that I've ever heard of.
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So, it's called Petroleum Exports.
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Uh they it's known as Petax. Padax.
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It's a challenging name, I know.
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And it's a highly technical specialist software crucial for oil and gas operations. You can go to petex. com to check it out. So, pull that up. But Petax.
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It's a highly technical specialist software that's the backbone of some of the most important operations in the oil and gas industry.
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And it sounds boring and that's because it is.
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However, they last year they made 78 million pounds in revenue, which is about 100 million dollars USD.
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And on that 100 million dollars in revenue, about 67 million of it was profit.
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And of that of that profit, they basically took out all the money.
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So, they paid a dividend of 41 million pounds, which is about 60 million dollars.
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And that was paid to the owner.
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And it wasn't even retained to the company, which means for every dollar they took, about 52 dollars went directly to the 52 cents went directly to the owner's pocket.
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Now, here's the cool part. None of this is rumors. This isn't hearsay.
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I'm not like telling you I heard a story because in the UK, if you're a privately held company that hits a certain threshold in revenue, you have to submit your reports.
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And you can just log in, it's called Companies House.
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You can just go there and you can log in you can see all this information.
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And so I went and looked at many many many years of their data.
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And I'm going to tell you a story about how this company came to be.
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So, it was started by this guy named We're going to call him Abe. His name's Abe.
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His name he's he's a Muslim guy.
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Very very very challenging first and last name. Can you see his name?
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Can you tell me how to pronounce that?
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Do you know how to pronounce that?
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Abdul Hamid is the first name and then the last name it's very challenging.
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There's a D and there's a J together.
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That's a very challenging Oh, so you are calling him Abe or he goes by Abe? I'm calling him Abe.
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His last name is I don't think I've ever met many Muslim Abes, but uh We're going to call him Abe.
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His last name has a D and a J next to each other.
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I don't even know how to pronounce that sound. So, I'm sorry Abe.
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He's a wait, it's a very challenging name to pronounce.
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So, he started the company in 1990.
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It was based in Alb Alb Aberdeen, Scotland, which is basically like a hub for oil industry.
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It's kind of like similar to what Houston in America is.
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And the company originally served as a petroleum consultant for in consultant to the petroleum industry as well as retailers.
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And they would create these mathematical models to help people in the in the oil and gas industry manage their projects.
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And so today they've kind of pivoted from consulting to providing software.
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They only have 420 customers and their core product is composed of complex products which are complex features that with descriptions like a multi-phase network modeling and optimization and thermodynamics fluid characterization package.
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So, pretty complicated stuff.
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So, as I said, they started as a consulting business and they did have done 78 million pounds in revenue last year, which is about 100 million USD, 58 million USD in profit and 50 million in dividends.
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Meaning the company doesn't require much capital X.
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So, they made all this profit and most all of it, 58 million profit, 50 million came out of the business and went directly to the owner's pockets.
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And he's been doing this for years and years and years.
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Their business biggest expense is employees.
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they're based in the UK, they pay UK software engineer salaries, which are lower than the US, making their average all-in cost per each employee, of which they have 86 of them, only 101,000 pounds per year.
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So, the which means that they are doing 911 pounds 911,000 pounds in revenue per employee. So, 9X.
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9X basically ROI per per person that they hired.
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So, yeah, this company absolutely kills it.
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And I want to tell you, when I was analyzing this company and if you look up Andrew Lynch, his Substack, he does a really good job of explaining the technical details of the company.
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I want to explain some of the entrepreneurial takeaways that I had.
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So, if you go to the top link Sean in our doc, um or at the beginning of the story, you'll see the Substack where you can it's his Andrew Lynch has a thing called Net Income.
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And that's where I discovered this.
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So, I want to tell you some of my takeaways.
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Takeaway one, focus plus time.
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That's what this guy did.
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So, everyone talks about focus, but what does focus means?
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You basically, in my opinion, need to focus enough to turn your idea into a machine.
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And then after that, I think you can deviate some attention away from that if you want.
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But the company needs focus and that focus took takes time.
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So, I went back and I looked at a lot of their revenue and so did Andrew.
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So, if you scroll down Sean, you'll see a graph of the revenue.
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And what you'll notice is that it took them 15 years to get to 10 million dollars in revenue, 10 million pounds.
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I'm going to call it dollars.
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10 million dollars in revenue.
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And I know a lot of people, I think maybe you have done this with one of your businesses got to close to 10 million revenue in like 1.
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5 or or 2 years actually.
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And so 15 years, particularly in like the tech internet space, it feels horribly long. But I think that's okay.
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That's the right feeling.
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And so, what I try to do, something I've been thinking about for a while, is I ask myself, in 10 or 20 years, will I be happy if I started this today?
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And that's a really good quote.
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But that answer is incredibly murky more often than not.
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Sometimes it's like a I think yes. It's a very murky thing.
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And there's this famous story about Jeff Bezos when he started Amazon.
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He has this thing called the regret minimization framework where he says this story about he's like, well, even though I had this good job, I decided to start Amazon because in 80 years when I'm 80 or when I'm 80 years old, will I be proud that I started it today?
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The answer was yes, but in that same story, he also said that he thought at most Amazon could make is 100 million dollars a year.
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So, he he it's not like he had the full picture.
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So, it was like, yeah, I I think this can work.
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And so, I went and talked to Dharmesh, who's the founder Dharmesh Shah, the founder of HubSpot.
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I also talked to Kip, who is the CMO.
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And Kip joined HubSpot in year five.
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I asked Kip, how big do you think HubSpot could be when he joined?
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You know, how big did he think?
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So, HubSpot today is worth 25 billion dollars.
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When I asked him, he said, I thought it could hit a billion dollars in valuation.
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It's a little bit of a stretch, but I thought we could do a billion dollars in valuation, meaning like what's that? 80 million in revenue?
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I don't know how that works.
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And then I asked Dharmesh, I go, how big do you think he could get?
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He goes, really, I didn't have any idea, but I knew that all I wanted was 1,000 customers who would each pay 250 dollars.
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Which by the way, this is only 3 million dollars a year in revenue.
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And I thought that would be a pretty cool milestone.
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And so, the reason isn't all we or the outcome isn't always clear of is this worth it?
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Now, the reason this is important is because the biggest pain in business is not just failing, but it's failing slowly and spending like a decade working on something and wasting your the most non-renewable resource there is, time.
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Wasting that time and I mean, it's significantly worse I think than losing millions of dollars a year in one or two years and then quitting.
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And so, that's where the it's kind of an art, it's a skill, it's an intuition, it's talent.
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That's where all this stuff comes into place.
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So, tactically, what does this mean?
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Ben Franklin said, a small leak will sink a great ship.
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Warren Buffett said, so you find yourself in a chronically leaky boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.
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So, the point being, only work on [ __ ] as long as your boat ain't leaking.
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As long as you don't got any holes in that boat.
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But here's the thing, every early stage company everything's leaky at first.
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So, I went back to Dharmesh and back to Kip and I go, guys, tell me about this.
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HubSpot right now, you guys' net revenue retention, I don't know what it is exactly, but I think it's like 105 percent.
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Meaning for every dollar that someone spends at HubSpot now, the next year they're going to spend a dollar and five cents.
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And he said and Chip and Kip they said a few things.
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So, I'm going to mix it up a little bit, but or I'm going to kind of interchange with what what they said, but I believe it was Kip who said, our churn at first was terrible. It was beyond bad.
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At one point, we were losing 30 percent of customers on an annual base on an annual basis.
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I then asked Dharmesh I go, was your guys' churn really that bad?
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He goes, yeah, it was definitely really bad.
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It it took about five years in order to like get it to where it was a good place.
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And I said, well, what did you do to fix that?
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And he said, our goal was not to make customers happy, it was to make happy customers.
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Meaning everything from our branding, pitch, marketing, sales, service, everything should be thought out in a process where the outcome was a happy customer.
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And that meant it was everyone's job.
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Marketing needs to be reaching better fit customers who are less likely to churn.
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Sales needed not Sales shouldn't oversell and make sure that they only qualify that these customers will likely succeed, which helps reduce the churn.
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Products needs to make sure they don't just build new features, but build features that reduce the churn.
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And they have to make these features make sure these features get adopted.
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And churn is churn reduction is a team sport.
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You also have to remember there's a power law, which is 90% of stickiness will be driven by 10% of the product and company features.
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And not to add 100 features and said just find ones that work and double down on those.
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So, the point being all ships are leaky at first, but hopefully you can figure out a way to do it.
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And last but not least, my takeaway, $10 a month, it's rarely going to feed a bunch of hungry mouths.
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So, our listeners, including you and I sometimes, I know this as well.
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I had a $25 a month product.
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A lot of times what we do is we look for arbitrages or we look for like small little hacks. That's neat.
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That's all cool and all every once in a while.
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It gives you that dopamine hit.
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But this company, the reason I like it is you know how much they charge per year?
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$300,000 a year for a license to their company.
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They only have 450 clients.
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And Andrew in his Substack article, he said something great.
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He goes, imagine you're running an oil rig that extracts hundreds of thousands of barrels of oil per day.
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Brent crude is currently crude is currently trading at $75 per barrel.
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So, every 100 barrel is $75 $7,500 in revenue.
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Your IT guy comes up to you and says, boss, Petex just raised their prices by 10%.
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I think we could save $3,000 annual if we switch switch software providers to another thorough dynamic fluid characterization package instead.
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You tell him to piss off. Don't touch a thing.
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Just make sure nothing breaks.
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I mean $3,000 is nothing in the grand scheme of a huge capital intensive business.
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So, they put their price up 10% and everyone movies moves on and and goes on before because look, it helps them solve their business.
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So, or it helps them solve problems in their business.
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It makes their business better.
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So, this is my breakdown of this company. I love it. I love this company.
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I love these Scottish guys.
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Jonathan's giving me a clap.
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What do you think about this one?
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Yeah, Jonathan, you like that one? Ooh.
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Yeah, that was you you kind of touched all.
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You got the opening story with Impact and then the three big takeaways at the end.
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And that like Q&A with Kev and Dharmesh was a nice touch.
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Yeah, that was a that was a good touch.
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I like how you brought that in.
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The um there was a a bit of a spelling and pronunciation challenge at the beginning, but you overcame that and I'm proud of you for doing that. You know what I say?
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I So, I went to speech class when I was a kid by the way.
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And I always used to tell people, I just got a big tongue. My tongue's real thick. I got a thick tongue.
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Some people have I'm big tongued.
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Yeah, I got I got fat tongue a fat See, I can't even say it. A fat tongue.
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It's just it's like a it's like a it's like a snail in there. It's like a slug.
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I got a slug of a of a tongue.
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I got molasses in my mouth.
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I don't know what to say.
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It's hard for me to say some words sometimes.
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It's like the further away from St.
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Louis a person gets or company gets, like the harder it is to to explain them. Um that's interesting.
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You know, I I I guess two things on my mind.
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Right now, I bet there's opportunity to create like another Petex basically, which is uh with machine learning and AI, you can go into these kind of like old school big dollar type companies and be like, hey, look, we have the ability to process your data or to give you insights that's going to save you money.
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Like, 10% efficiency gain, 20% efficiency gains.
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And I bet that these opportunities, you know, have existed, but the the more powerful ML and AI get, the more those opportunities open up.
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And the bottleneck is people who even understand what problems exist inside of you know, some shale gas company or inside of ExxonMobil and then being able to go sell into them.
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There was a guy who I met very early on.
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When I was doing my startup, I didn't really know any other entrepreneurs, but there was one guy who also went to Duke.
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And I wonder what happened to him.
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I haven't kept in touch, but I think his name was Evan Anderson.
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And he was building a company that was um selling to I was called Osberg.
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Yeah, that's that's exactly right.
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Let's see what happened with this company.
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Um so, it was selling to um companies that were in Oklahoma.
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So, I was like, whoa, you you moved to Oklahoma?
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And he was like, yeah, this is where my customers are.
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And I was like, who's your customers?
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And it was like all the oil and gas companies that that are in America.
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And what he was doing at that time was basically quote unquote big data.
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Big data for oil and gas.
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And I was like, that's a great idea. I'm looking at it now.
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He's still there as CEO 14 years later.
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So, I've got this company's been been pretty successful.
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And I was like, I would check in with him.
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I'd be like, you know, what's the challenge?
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At this time I'm working on a sushi restaurant chain.
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And he's like, you know, I'll spend six months just courting the right guy, the right suit at this at this company.
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I got to take him to you know, a football game.
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I got to invite his family over.
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We got to get to know him.
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We got to get him comfortable with this you know, the software.
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But once I get once I close that deal, these deals are going to be worth millions and millions of dollars over time.
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They're never going to rip us out once we get in.
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And so, um I I'm curious how this company's doing today, but I know that you know, 15 years ago I was like, this is a great idea.
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And I just I I intuitively knew it because I was like, the same effort it's taking me to do this silly sushi restaurant thing, he's spending the same amount of time.
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He's just working for a much bigger prize with much more defensibility and a much clearer value where he's going into an industry that's like never had you know, doesn't have this this sort of software capability.
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And he's like, I will sit here until I understand your problems and then I will build solutions for this.
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And I just love that approach.
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I think that's a like if people are willing to kind of like eat [ __ ] and go outside of their like kind of comfort zone of problem areas they understand, there's pretty big opportunities. Yeah, and it's cool.
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Did you see this graph from Andrew Lynch of this company's revenue?
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Yeah, I mean this is like a perfect hockey stick, but over a long period of time.
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Over a really long period of time.
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I mean that's the thing you talk about.
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Like this 15 years to get to 10 million.
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You know, respect for continuing and making it all work. That's not for me. What's the Moiz quote?
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Uh why does everyone make fun of getting rich quick?
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It's the best way to get rich.
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And I'm going to tell you about a company in a second here that said in their first week they did a million dollars of sales and never went less than that from their life.
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And you think that that's not true, correct?
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I think it's I think it's a lie. But I love a good lie. I love a good lie. Tell me about this. Give me a good lie.
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how much of startup stories are just lies.
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Okay, so here's my here's my big business breakdown.
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I see your duel and I I raise you.
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Um in my head by the way, we were doing an old fashioned western duel, but now I decided it's American Gladiators and you're Blazer and I'm Blazer and we're going at it on the joust.
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And so, this morning I was thinking about But who's lying out there? Who's lying? Men's problems.
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Let's let's explain it explain it that way.
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Okay, so most people have heard Wait, you got a little you got a little situation? Is that the issue?
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You got a little situation? No, no, no, no.
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That's not how we got Actually, here's the here's the actual train of thought.
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I was thinking about um these t-shirt companies.
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Little segue here to tell you how my brain works.
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So, I'm thinking about these t-shirt companies.
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I don't know if you've seen this, but basically in the last kind of like four years, there's been a bunch of companies start started that succeeded, that did the most obvious thing.
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And I've seen this happen again and again.
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That there's these windows of time where big ideas are just hidden in plain sight.
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And so, basically in the last four years, a bunch of companies have started that do such a simple thing.
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They just sell basic plain men's t-shirts.
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And these were the big D2C ideas.
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So, like anybody who wanted to do e-commerce or drop shipping or D2C, build a brand, the opportunity was sitting right in front of everybody.
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It was just men's t-shirts.
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So, you have Cuts, Fresh Clean Tees, True Classic Tees, Built Basics.
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All of these companies that in the last sort of four-year window have built hundred million dollar plus companies.
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So, some of them do about 50 million a year in sales, some of them do 100 or 150 million dollars a year in sales.
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So, it's this kind of range.
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But to go in a like a three-year period to get to 150 million in sales, that's what True Classic Tees did, is just bananas, to be honest.
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And so, um I'll tell you the the numbers for True Classic.
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So, year one, let's see where they So, where did they go?
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Okay, year one, 15 million. Year two, 90 million.
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Year three, 150 million in top line revenue.
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And and they did it all through Facebook ads selling plain, you know, white, black, blue men's t-shirts.
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And that's the same thing I think Fresh Clean Tees is somewhere like 50 million north of 50 million in revenue.
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I think Cuts is over 100 million.
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Um it's crazy that these companies all scaled so fast doing this such an obvious thing.
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Where is the there was no massive innovation.
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And so, I was thinking about this.
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I was like, man, there's these windows of time.
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And then I thought about what what are other windows that I've seen like this?
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And I stayed in the e-commerce world.
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I thought about, oh, back in 2017, both Roman and Hims launched doing basically the same thing.
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And they launched within like a couple months of each other.
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Basically, people had the same idea at the same time, and both of them became billion-dollar plus companies doing the same thing.
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What they did was, you know, I guess the summary is they took advantage of a What do we call it? An inflection. The same What was this?
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Regulation inflection in this case. Regulation inflection.
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This was a regulatory inflection.
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And so, what happened was there was proven market demand for drugs like Viagra or Propecia or Rogaine.
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And so, hair loss or erectile dysfunction, there was a proven like business there.
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And they started like in the early '90s, and so by 2017, the patents expired for those.
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And when the patents expired, Have you ever taken a Viagra or anything like that? I haven't. Have you?
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No, but if someone If someone told me it's awesome, I would.
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But I've never I've never It's awesome. Go.
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So So, the patents expired, and basically now there was like generic versions of these.
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And so, what And at the same time, there was another regulatory inflection, which was that telemedicine was becoming more and more things were getting opened up for telemedicine.
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Meaning, you could prescribe drugs without going to the doctor.
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So, drugs without a doctor was a key kind of like just, you know, frame framework for for this type of business.
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And so, they both launched, and the Hims guy says, this guy Andrew Dudum, he goes, "We launched, and in our first week we did a million dollars of sales, and we've never done less than a million since then."
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I was like, "Wow, that is incredible."
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And it is true that Hims scaled really quickly.
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So, their revenue A million a week?
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So, he said they never did He said they never did less than a million a week after launching? Yes. Oh.
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Is that And I was like, "That's insane."
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I always think about that cuz I was like, "I've launched many things.
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The first week is You're talking about patching holes on a boat.
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That's how the first week is.
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It's like, you don't even have inventory.
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You don't have You don't have a million dollars of inventory.
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You don't have like to do a million dollars, how much are you spending in ads?
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Did you Did you just blast like half a million dollars of ads in in your first week?
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Facebook ads doesn't even let you ramp up that quickly."
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So, I was a little bit suspicious of this.
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And the revenue did ramp quickly.
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So, they launched the very end of 2017.
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2018, the full year, they did 27 million dollars in revenue with 27 million dollars in ad spend.
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So, they spent 100% of revenue on ads.
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So, they burned a bunch of money.
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2019, they did They went from 27 million to 83 million.
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And they spent 50 million on ads.
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2020, they were forecasting about 140 million, and then I have the actuals.
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So, then look Check out this revenue growth. It's pretty insane. 2021, they did 270. 2022, they did 540.
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2023, they're projecting to finish at 800 million in revenue.
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So, this is a pretty crazy run in what, 6 years to ramp up to 800 million in in revenue.
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So, they could get to a billion in revenue in 7 years. Exactly.
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They're burning money this whole time.
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Even now, even at 500 million last year, they only have 2% EBITDA margin.
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And that's the adjusted EBITDA.
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The real They actually burned 10 million, but the adjusted is that they, you know, they they they made a small 2% margin.
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And so, super capital intensive.
23:04
They raised like 200 something million dollars before going public, and then in going public, another 2 300 million dollars went into the business, I think.
23:11
And so, it's taken them a lot of capital to get here.
23:13
So, I would say three things.
23:18
Amazing story just in general.
23:18
Like, props to them for pulling this off.
23:21
Like, they they built this out of an incubator.
23:22
I ran an incubator for 6 years and couldn't get one thing to even 10 million in revenue.
23:26
And they This was like a big hit that came out of a a incubator, which is very, very rare.
23:32
Ro Ro Roman, which is now rebranded Ro, also came out of an incubator at the same time.
23:36
So, the the two biggest incubator hits were were sort of the these two companies that did the same thing essentially. One did it for hair.
23:44
So, I think Hims did it for hair hair loss, and Ro did it for ED, and then they both just added the other product as they went.
23:53
So, impressive in that way.
23:53
The revenue growth impressive.
23:55
The ad spend and the money burned incredible.
23:59
I now question, is this even a good business?
24:01
So, like, they basically showed that their their CAC, so their cost to acquire customers, is really high.
24:09
Like, their cost to acquire customers is basically, what do I have it here?
24:13
It's like 100 plus dollars to acquire a customer. Let me grab it.
24:19
I think it's like 150 dollars on average to to acquire a customer.
24:21
The lowest it's been is like 100 dollars to acquire a customer.
24:26
And they basically think that they think they 3x their money in 3 years, which is actually not very good for e-com.
24:31
Like, my e-com business, which is nowhere near the scale of this, is way more efficient than this.
24:36
Like, they're trying to pay back essentially, you know, a little over a year.
24:43
We try to pay back in in 2 months.
24:43
And so, like, you know, it's amazing what just pure aggression they approached this business with.
24:50
They were just like, "Yeah, we're going to scale this thing, and we're going to pour a bunch of money in.
24:55
We're going to burn a bunch of money, but we're going to ramp up, and like we're going to try to thread the needle to get this business to work when it's at the billions in in in scale."
25:02
And they kind of pulled it off cuz they went public with via SPAC, and they got liquid before the business really worked.
25:10
This week I had to chop down a tree at my farm, and I didn't have an axe.
25:14
So, I just used a sledgehammer instead.
25:17
And so, my wife was like, "Oh, you Do you you you chop down that tree?"
25:20
I was like, "I kind of smashed it down.
25:21
And I just sledgehammered it down."
25:24
And that's kind of what these guys did.
25:26
They just kind of sledgehammered their way into into the market.
25:31
Have you seen this guy that's on TikTok that just chops the tree and all like it gets like a million views, and it's all There's like hundreds of thousands of women commenting like like just like gasp. Like, "I need him." Is he hot? Is he shirtless?
25:44
No, is he shirtless and hot?
25:45
He's shirtless, and he just chops the tree perfectly.
25:48
Like, it's like it takes him like 10 strokes to crack down this giant tree.
25:55
Is that like an innuendo for sex or something?
25:59
Literally like I'm watching this thing, and I'm like, I don't even know why I'm watching this.
26:02
This is like just from a purely objective level, this is very attractive.
26:09
I'm just going to say this. This is very attractive.
26:13
He just wears like suspenders.
26:16
He looks like a lumberjack, but he's like GQ'd out.
26:17
So, he's He's like a groomed lumberjack that's super like with a CrossFit body that chops down trees instead of going to the gym. He's incredible.
26:25
So, you're kind of like that.
26:27
You're like that, but like, you know, not.
26:32
I'm like I'm I'm like store-brand that.
26:35
Yeah, you're You're like in the in the in the zip code of that.
26:42
So, that's basically what these guys did.
26:43
They kind of brute-forced their way, but why don't you think this is a good business?
26:48
Well, I think that the I mean, just the amount of capital it took them to get to this business value. So, it's worth 1. 8 billion on paper.
26:56
And they've taken 500 million to get here.
26:57
So, like, if you just zoom out, it's like, "We 3 and 1/2 x our money."
27:00
Like, that's not the most impressive thing.
27:03
But like, when you frame it the other way, which is like, "We're going to hit a billion dollars in sales, and we've done this in 7 years, and like, you know, we've built the largest telemedicine health company for men and women."
27:14
And you could frame it one way, or you could just kind of look at it the other way.
27:18
It's like, "Well, here's a business where if I I have to pay 150 dollars to acquire a customer, and give them takes 2 years to pay it back if if that.
27:22
We'll see how it all projects out.
27:24
It's super sensitive to like, you know, they they pour so much money into marketing, and what if you know, Facebook costs change?
27:31
Like, you know, how's that going to affect them?
27:32
Like, there's all these factors.
27:34
I'm not saying it's a bad business, but like, compared to that Pedex company that does 100 million in sales and dividends out 50 million to the owner, I know which business I would want to own, right?
27:46
The business that didn't need a SPAC to to to succeed is the business I would want to own.
27:51
The one that's dividend out like a mega yacht every year to this guy. Like, that's sick.
27:54
And it has like, you know, 1 1 millionth of the notoriety of a brand like him.
28:00
So, what did you say about the Yeah, tell me the the the other interesting thing that you found? So, other cool things.
28:05
So, I think So, here's some notable things from the research.
28:07
I want to put these on the screen.
28:08
So, I put the put the images on screen on YouTube.
28:09
If you're listening to the podcast, just pause, go to YouTube cuz you got to see these.
28:12
So, if you go back through their history, first take a look at this thing I have on page uh What is this?
28:19
Page like three or something of this? The P&L. Do you see this P&L?
28:24
Um this was in their S-1 to go public.
28:29
It's literally it just says, "Revenue 27. Gross profit eight.
28:33
Adjusted EBITDA minus 68."
28:36
That's the P&L they shared in their investor presentation.
28:39
I was like, "What kind of kindergarten level of detail is this?
28:44
What kind of crayon P&L are you doing?"
28:47
Like, this is [ __ ] ridiculous.
28:47
And I was like, "This is why SPACs This is why SPACs went to [ __ ] cuz it's like half the P&L is just projections, which you can't do if you go public the traditional way, but in SPACs, you can do these like forward-looking projections, and that's how all these guys got away with it.
29:01
It's like, "We got a shitty business now, but like, 5 years from now, we are crushing."
29:04
And that's like, you know, they they were able to tell that story, whereas you can't make forward-looking statements in the traditional way of going public.
29:12
And then I was like, "This is some absolute basic beginner-looking thing."
29:17
I was just stunned that this This is like on the SEC website.
29:19
That's a That's an embarrassment. All right, second thing.
29:23
You can go to their website, and you can find in the web archive their landing page from the beginning. So, check this out.
29:28
This was their first landing page. This now.
29:45
And then it just go it just scrolls down and it just says sex. This is This is simple.
29:49
You need erections when you want them and not when it's convenient for your penis.
29:52
And there's an eggplant emoji and it says shop sex.
29:55
And there was another one for hair.
29:57
Like that was like the same.
29:57
It was like, she needs to run her fingers through your hair a lot.
30:00
And then it just says our best sellers and there's just a very basic bottle that says finasteride.
30:08
And that's like the the generic name for Propecia or like you know that for for like the hair male pattern baldness drug or whatever.
30:15
And they were just selling that for $28.
30:17
And then there was They only had two SKUs.
30:19
Finasteride and vitamins. Not even like vitamin C.
30:22
This is Guys, hey bud, here's some vitamins.
30:26
And so incredible to go see.
30:27
I love love love looking at successful businesses early landing pages just to see like how did they get their business out the door?
30:35
One thing that's interesting is from the beginning they actually had a pretty strong like branding and brand identity.
30:40
So if you go do this with like Snapchat or Uber, the first websites are just absolutely fugly.
30:44
Like I have this blog post on the internet that's called like You just search Sean Perry early startup landing pages medium.
30:55
Um 10 Okay, it's called 10 throwback startup home pages.
30:57
Um When did you write that article? I wrote this in 2015. So this was month? What month? June. Oh, you beat me.
31:06
On October 12th, 2015, I wrote an article that said proof that your favorite startup started out awful and it's a list of 10 landing pages. Yeah, you copied me.
31:17
I think we knew each other then.
31:17
So you can go look at Airbnb's.
31:20
It's like literally plain black and white and it just says forget hotels, stay with a local.
31:25
Uber, it looks like a you know janky thing, everyone's private driver, but it looks like a old school car service.
31:32
Snapchat, it's got one of these like yellow bubbles that's like the like buy now.
31:38
You know, like you know, half buy two get one.
31:40
And it just says free download inside and it says introducing Snapchat, real-time picture chatting for iPhone.
31:46
And it's two girls in their like bikinis and it just says 7 seconds on the screen and like you know, a self-destructing photo.
31:52
So you can see what early startup landing pages look like.
31:55
What's interesting that was unique in the Hims case is that they actually had their branding from day one, which I think was a smart move by them.
32:01
And they specifically branded it the opposite colors as every other male wellness product.
32:07
So every other male wellness product is essentially blue.
32:10
And they were like, no, we're going all neutral color scheme, lower case, like lower case font for the for the brand name and we're going to make it subtle because there's a stigma and a taboo around this.
32:20
It's not something you want to brag about.
32:21
We don't want bold, we want like we want to be able to give you this package in a discreet way and you know and I know and that's all who needs to know.
32:29
And I thought that was like a smart thing for them to get right from day one.
32:33
All their models are like it's usually like a cool looking black dude or like a an racially ambiguous guy.
32:36
It's like some it's like oh, I I can see myself in you.
32:41
I'm a young cool guy with like I wear like cool jeans as well.
32:43
Were your parents all of the Power Rangers?
32:45
Why are you all tall and handsome? What happened here?
32:50
It's usually like a like a pretty racially ambiguous good looking guy with nice teeth.
32:55
Yeah, the teeth are always on point.
32:56
Versus like a Viagra is always like Brett Favre looking guy.
33:00
And then this was one of their early um early ads.
33:04
So it's just uh it just says get hard or get your money back.
33:06
And it's just a guy holding a tiny pill.
33:11
Um and it's and then And what ethnicity is that guy?
33:14
Oh dude, his hand is like a gradient in Photoshop.
33:16
It's like all all colors are easier.
33:19
Uh so it says eggplant emoji rise to the occasion for less.
33:22
So one thing that they did really well was they figured out how do you advertise on Facebook with a taboo product?
33:26
So they would do stuff like they would show a picture of a cactus that was limp.
33:32
And then another and it would be like with Hims you don't have this problem.
33:36
So like how do you And so they were very clever clever with their marketing.
33:37
They also did stuff where they would create ad inventory.
33:41
So they would go to um like stadiums and they'd be like, all right, bunch of guys who are in our demographic are at the stadium.
33:50
We could either spend like $400,000 to get on the Jumbotron and along with like you know, BMW and a bunch of other big brands or they went to the stadium facility manager and they were like, hey, how much for the urinal space? They're like, what?
34:05
They're like, yeah, we want to put a little ad on the urinal and we'll give you guys like you know, X price to be in every urinal.
34:11
And they're like, yeah, dude, we got like 30 seconds of guys focused time while they're touching their thing.
34:16
Like you know, looking at our ad.
34:17
This is actually kind of perfect.
34:18
And so they would create new ad inventory that didn't even exist before just trying to figure out how do we spend $100 million in a way that's going to be as efficient as possible.
34:27
So they're you know, really just like very they're like a very advanced marketing agency essentially.
34:35
Our software is the worst.
34:35
Have you heard of HubSpot?
34:37
See, most CRMs are a cobbled together mess, but HubSpot is easy to adopt and actually looks gorgeous. Think love our new CRM.
34:46
Our software is the best. HubSpot, grow better.
34:50
And another thing that they did I did a big breakdown on this one time was so if you Google Viagra alternative or cheap Viagra or buy Viagra online, they show up number one and what they did was they actually sponsored a ton of Twitch people.
35:05
And somehow that like got their links out there and they like they got tons and tons of backlinks really early on. So him's. com ranked quite high.
35:12
So they were able to get like it was I think if you I think it's Viagra alternative might be like third word.
35:20
I forget which it's one of those pages and that's where they got most of the revenue early on.
35:23
Oh wow, that's interesting.
35:25
You know, there's another cool thing.
35:27
I'll put this graphic on the screen.
35:28
Um it's this graphic from Have you ever read SACRA by the way?
35:31
I don't even know if that's how you say it.
35:33
SACRA like the research thing. I like it.
35:36
Yeah, they're pretty cool.
35:36
Uh I don't think people know about them, but they It's a like really good research.
35:39
S A C R A Yeah, so they had done a thing and they had this great graphic, which is basically they were like telemedicine was like this like trend like this like there's a lot of opportunity in telemedicine right now and they just showed this picture of like a guy and a girl and it's a diagram and basically it's like you could look from like head to toe literally from head to toe and you just go down the body you're like, okay, hair.
36:02
There's Hims, there's Keeps, there's Roman.
36:05
Okay, then you go down to like eyes and it's like there's prescription contact Hubble.
36:10
You know, it was was a D2C startup doing prescription contacts through a phone app instead of going to the doctor.
36:18
Then you go to their bicep. It's like TRT.
36:21
There's a bunch of TRT companies like Hone Health and and others.
36:23
And then you're like and then you go to you know, their abs. It's like weight loss.
36:27
You go to the crotch and it's like here's the the erectile dysfunction.
36:31
You go down to the toes like here's toe fungus.
36:33
Then he's got a little foot next to it's like, hey, here's Pawp.
36:36
It's it's insurance for your pet.
36:38
So you have like instead of going to the vet for everything, you can use Pawp.
36:41
And and so it's like uh and then they did the same thing for women and you could just literally see like if you've seen those diagrams that were like there was a big opportunity to unbundle Craigslist and they took Craigslist homepage and they showed how every little section of Craigslist became its own billion dollar startup.
36:59
They did the same thing to your body.
37:01
Every part of your body became a billion dollar startup essentially from one D2C wellness company.
37:07
And or or multiple in some in some areas.
37:09
So from skin care of their logos look exactly the same.
37:14
Lower case font, pastel colors. Hims.
37:18
I think By the way, what what one other little observation?
37:22
A lot of these D2C successes came from a certain type of founder.
37:26
Not all of them, but many.
37:28
From MBA like founders who went to like business schools.
37:31
Which is funny because like in the startup world business schools kind of like are an easy punching bag cuz you're like punching up at the institution.
37:39
It's easy to make fun of them.
37:40
They're like, bro, you don't learn business in school, you learn business by doing business.
37:43
And that's how I feel to be honest with you. So I'm like that's true.
37:46
But there is something interesting that a lot of D2C companies, Blue Apron, Birchbox, Stitch Fix, Warby Parker, Rent the Runway, Hello HelloFresh, and then this you know, this guy who did Hims, he went to Wharton as well.
38:01
So it's like a lot of these big I think there was something about the type of person who would do well in business school and the types of things you learn in business school where you like do this market landscape and you like figure out the opportunities you're like, okay, good.
38:13
I just need to be like good at marketing and then good at operations in order to like like put cash in here and get thing out.
38:20
It's not like very software based.
38:20
It's not You don't have to be the the innovator who's like you know, the one inventor of something.
38:28
Um I think it landed itself to that type of entrepreneur, which I thought I found pretty interesting, too.
38:34
Well, here's what our listeners need to do.
38:36
They need to either probably in the YouTube comments, they need to let us know.
38:40
I actually want them to know who won the duel.
38:42
I actually want them to I want to know if they think Hims is a good business, but also who won the duel.
38:48
So you'll have to vote by saying our names.
38:52
Um We'll include us a Spotify poll as well.
38:55
So you can just vote in the app.
38:57
And we'll do a Spotify poll as well.
38:57
And some guy in the YouTube channel said um um who's this blonde host and why is he so annoying?
39:04
So just for the record, the blonde annoying guy That's what someone said in the comment.
39:10
The the blonde annoying guy, that was Sam.
39:12
I went first and Sean is the brown less annoying guy. He went second for Hims.
39:17
So let us know who's the winner here of the of this duel.
39:21
Um I'm very eager to hear what people going to say.
39:23
I know which one I would rather own, but I think they're both quite interesting. For sure. For sure.
39:31
You saw this post by Mark Zuckerberg that he did the Murph?
39:36
I tweeted out the picture of it and it got like 5 million views. It kind of took off.
39:40
And I don't know so do do you know what the Murph is?
39:45
I had never heard of the Murph until I saw this and then I was like I must do the Murph.
39:49
It's named after Lieutenant Murphy, I believe context clues leads me to believe that he died in the military and his favorite workout, I believe it's 1 mile run, 300 squats, 100 push-ups and 100 pull-ups and then a 1 mile run all while wearing a 20-lb weighted vest. Is that the workout? That's exactly right.
40:14
Run a mile, 100 pull-ups, 200 push-ups, 300 squats, run another mile while while wearing a 20-lb vest.
40:22
And Zuck basically takes a like bro gym shot.
40:27
I got to use the Blackberry for this.
40:29
He's got the phone down here.
40:33
Not smiling, got the mouth open just and just snaps it with himself drenched in sweat and he's like just did the Murph.
40:39
Um He's like me and my daughters did he said picture of his daughters doing like push-ups and he goes I this year I got it done in 39 minutes and 58 seconds.
40:51
And I was like I read that and I was like that sounds like really fast.
40:52
If he had just said I did 100 pull-ups today I would have been like man what a day. Fantastic.
40:59
Forget forget all the rest.
41:02
I was already impressed by 100 pull-ups.
41:04
To say he got that done in weighted pull-ups to say he got that done in 39 minutes I was like that sounds ridiculously fast and sure enough all the comments were like that's an insane time for the Murph.
41:16
Have you ever done this workout?
41:18
I have it but the world record holder of the Murph is this guy named Hunter McIntyre who's DM'd me on Twitter and Instagram and I've talked to him because I I like him a lot or I followed him and I feel like I like him.
41:28
Is that what fit guys do? They just DM each other? Yeah, yeah, yeah, yeah.
41:32
That's like a club, you know, like once you can see the six abs you start following each other. Yeah. I'm one of us. Good to see you. And he DM'd me. He listens to the pod.
41:41
He's the world record holder and I think his world record is like 34 minutes and Zuck's time was 39 minutes which means he would have gotten like 10 or 15th place at there's like a Murph games or something like that.
41:56
I mean I had so many thoughts rush through my head when I saw this.
41:58
First I saw 39 minutes and I thought I've taken shits longer than that.
42:02
Like that's a that's a crazy fast time.
42:03
Then I thought I don't think I could even do a Murph in an infinite amount of time.
42:08
I don't think in my life I have done a total of 2 miles running, 100 pull-ups, 200 push-ups and 300 air squats. Like with a 20-lb vest.
42:18
I have just never done it period.
42:20
So my time is currently 35 years.
42:23
Then I thought this mother this guy has he decided yo, you know what?
42:29
I'll just become one of the richest people in the world one of the most powerful people in the world and the one of the fittest guys in the world.
42:37
Like he's basically and wholesome. Top . 1% wealth, top .
42:42
1% you know, intelligence, top .
42:44
1% power and now he's top . 1% top . 1% Chad also. I am blown away. the age of 40. Yeah, exactly.
42:54
And he's got two kids or something like that.
42:57
I'm like I mean David Goggins should go to sleep listening to Mark Zuckerberg videos for motivation. This guy is incredible.
43:05
I went I bought more stock and I bought plain gray you know, cookie cutter t-shirt in his honor.
43:12
I was like this is I'm going to retire this to the rafters of my office.
43:16
I'm going to put a I'm going to hang a gray shirt just to honor this man.
43:20
He gets so much [ __ ] and man he's really turned his like public persona around.
43:24
Like do you remember he was he was the biggest dork.
43:28
Like not just like oh when he was young.
43:31
Like recently he was the biggest dork.
43:33
He he tried to do something cool like he would do he would when he did that like hydrofoiling thing and he painted his white face white like a geisha and like it's like man this guy is like and in American Pie it was just like it was like oh man like you know what? Keep all your money. I don't want to be you.
43:53
And now he's like you know, just got off work, did a quick jiu-jitsu tournament, came back, you know, [ __ ] deleted Snapchat off the earth.
44:01
I'm like wow this guy is just this guy is making power moves all day. He's incredible.
44:05
He's he's a very inspirational dude.
44:07
He's done it scandal free. So Zuck is only 37 now.
44:09
You know, probably fifth or sixth place. only 37? Something like that.
44:15
I mean he's still in his 30s. How old is he? 39. Yeah, 39.
44:22
So only 3 So he So basically he uh been married to the same woman, been with her since college, has two kids, seems like his family life on the on the on paper seems awesome.
44:32
There was a time where in like the most scandalous thing that he did was he had a video where he talked about smoking meats.
44:38
And every year he sets Do you remember that?
44:41
Cuz every year he sets goals.
44:45
that's not the most scandalous thing.
44:46
That was just like hilarious that he was a robot trying to be like hello humans, I am doing a barbecue with I have flesh on a grill with fire.
44:53
And it was like bro this is a robot.
44:55
The most scandalous thing he did was when he was in college and the the his AIM messages got leaked.
45:02
That was like, you know, a real wonderful day in my household as I like was like hey, cancel Netflix, I have my entertainment for the week.
45:07
I'm reading all of Mark Zuckerberg's AIM messages for the next week. That really made my day. of a deal.
45:14
What he said was pretty on par with an 18-year-old, 19-year-old person. Like if Well maybe.
45:20
It was a little one part was a little bit like uh is this what we want?
45:24
Like this guy's this is the guy running Facebook where he was like he's like yeah he's like he's like yeah just tell me if you want anyone's like you know, name, date of birth, address, whatever.
45:33
He's like these dumb [ __ ] just trust me.
45:35
They just put everything in the in the system.
45:39
And so that sounds like something a 19-year-old kid who invented this stuff would say. Yeah.
45:45
I would say that was the last time I was relatable with Mark Zuckerberg.
45:50
Ever since then he's created a gap.
45:50
He's he's outpaced me from there.
45:53
Every year he sets these goals.
45:55
One year it was he only wants to eat food that he killed or grew and I think he did it.
46:00
And then another year he was like I'm going to learn Mandarin because I want Facebook to come to China and I think his wife is Chinese and he was like I'm going to learn Mandarin.
46:11
And then he goes and he gives a talk.
46:11
I think he does it gives a talk to a Chinese university.
46:15
He he gave me an interview.
46:15
They go he they fly him out there they're like thank you so much Mark Zuckerberg for coming.
46:19
We are so happy to have you and he's like he's like you know, we'll mention he just starts speaking Chinese and they're like blown away.
46:25
It's it's like really great Mandarin where he's basically fluent.
46:30
And so the guy kills it, man.
46:33
He does great and like when he did the e-foil so he got into e-foiling which is basically surfing without a wave and he is doing it with an American flag and he has too much sunscreen on his face. That's my guy.
46:44
A guy whose biggest like flaw is that he's goofy.
46:49
That's the kind of my guy.
46:49
And then now that I Oh, you're you're zagging the other way.
46:54
You're saying Zuck bad move unrelatable too too good no vulnerability no no relatability now.
47:02
He's no longer girl next door hot.
47:02
Now he's just supermodel hot. Zuck's the best, man.
47:07
He just he you know, our friend Nikita Beer has this joke where he says something like I would never I forget why he says this but he says you never ever ever bet against Zuck.
47:15
How he's just a complete killer and he is wrong sometimes but not in the grand scheme and this is further proof.
47:20
Well, the funny thing is people will hate this segment cuz I think it's popular to really hate Mark Zuckerberg.
47:28
Um because they hate Facebook I think because they're like my data or like the Russians hacked the election.
47:35
I'm even sure I'm not even sure what the what the exact reason is for hating Zuckerberg at this point.
47:42
I just got to say like this is I mean he he is inspiring in that he is excellent and if you appreciate excellence that is kind of inspiring.
47:51
It's kind of like people who hate LeBron.
47:52
It's like okay, I get it.
47:54
You don't have to like the guy but uh I mean you got to respect you got to put some respect on this guy's name.
48:00
LeBron is doing a LeBron either by the way.
48:02
But he complains sometimes. Yeah, exactly.
48:05
Yeah, yeah, he switched teams when he was a free agent.
48:07
Um my real estate agent told me the story that she was driving by she's like that's Mark Zuckerberg's house in the in the mission.
48:16
Kind of like near Dolores Park type of area.
48:19
And I was like he lives here?
48:19
And I was like that's not like I thought he'd live in some private gated community.
48:23
And she was like well, I mean he has like many houses but this is one of this is one and this is like his main one for a while.
48:29
And she's like and he made it private.
48:29
I was like what do you mean? I don't see any fence.
48:32
And she's like no, he bought the houses next door.
48:34
Like he just bought all the houses in the area so that like you know, whatever.
48:39
And so he he knocked on someone's door himself.
48:42
So somebody opened the door and it was Mark Zuckerberg outside and he's like hey, you know, I love this house and I would you sell it to me?
48:53
And they're like no, I mean it's not for sale. We we love this house.
48:54
We're so close to the park, you know, my commute it's only 7 miles.
48:57
He's like I'll give you $10 million.
49:00
And they're like okay, here's the keys.
49:02
And basically he bought the house for $10 million.
49:04
It was probably a $2 million house and then house next like the houses nearby him two and a half $3 million and he paid 10 and just got the house right away.
49:12
Dude, that person who sold their house to him would have be the best dinner guest. Imagine that story.
49:18
Dude, imagine to have you on air.
49:19
If that's you, we would like to have you come tell that story cuz obviously I'm reenacting what I was told by a real estate agent.
49:26
I don't know if that's that's true or that's [ __ ] Um so yeah, Zuck amazing.
49:30
Let's wrap wrap up with this last thing this Nike thing.
49:35
Did you watch this movie? Uh yeah. Yeah, I did.
49:38
I thought it was awesome.
49:40
It was pretty sweet, right?
49:40
Like not the best movie, but like a just a solid base hit on a on a Thursday night, a Friday night, you know, you just need something that's I don't want to sit here and browse Netflix for the perfect thing.
49:53
All right, I'm just going to go on. I think it's on Amazon.
49:54
I'm just going to go watch Air and like just just watch the story of how Nike signed Michael Jordan.
49:59
They made Phil Knight look like a doofus.
50:04
Yeah, why did they do that?
50:04
I didn't understand that.
50:05
They Well, he does like appearance-wise look like a doofus, but they also made him act like a doofus.
50:10
Yeah, which I don't think he was like that.
50:13
When I read Shoe Dog, I didn't get that idea.
50:14
He's more, I think, they made him look like When he wrote his own memoir he made himself sound cool.
50:21
Well, I've read a lot I've read a lot about him.
50:23
He he they just kind of made him look like a like a like a ditzy person. Like an idiot. Yeah, he's not an idiot.
50:30
Um but the guy they feature So, a couple things.
50:32
So, so first anything stand out from the movie Air but then I have I want to go deep on this guy Sonny Vaccaro cuz I think he's actually more interesting.
50:40
Who Would that be the main character?
50:40
I don't remember his name.
50:42
That's the That's the main character.
50:43
So, that's That's Matt Damon.
50:44
uh Matt Damon in the movie.
50:46
But um you know, in in in Nike in in the Air movie, I thought one one interesting thing I didn't know was they were they were talking about just do it, which is the Just do it's the slogan that, you know, everybody knows.
50:56
It's the Nike kind of like iconic slogan.
50:59
And they they were talking about like at the time even people internally were like, "Just do it?"
51:02
Like we got they got that from the ad agency Wieden+Kennedy.
51:06
And they're like, "I don't know.
51:06
What What does that What does that mean? Do you like it?"
51:09
I was like, "I don't know. It's okay, I guess."
51:10
They weren't like, "Yes, this is this is going to be this like marketing masterpiece."
51:14
And they go, "What What does that even mean?"
51:16
And they go, "Dude, it's from an inmate on death row who was about to be assassi- about to be executed."
51:22
And they were like, "Any last words?"
51:24
And he goes, "Just do it."
51:26
And so that became the Nike slogan, which is uh honestly kind of genius.
51:32
Um So, I want to talk about this guy Sonny Vaccaro cuz he's kind of a gangster that I've seen for many many years in the basketball scene.
51:40
And the movie was about him and he This guy's pretty fascinating.
51:41
So, what In the movie, he's famous because he's working at Nike.
51:46
At the time, Nike is the last player.
51:50
It's a It's just a running shoe company.
51:51
And they're the smaller shoe company.
51:54
Adidas is this global brand that's crushing it.
51:57
They own most of the sneaker market.
51:59
Uh I believe it's pronounced Adidas. Yeah, Adidas.
52:04
Um which has its own interesting story.
52:06
Then Reebok is like number two, and Nike's like a distant three, but they were doing like 27 million a year in sales through their running shoe.
52:12
So, good but not like nowhere near the kind of top tier uh of of shoe companies.
52:19
And so Sonny meets Phil Knight, and he's like, "Hey, I got an idea for a basketball shoe.
52:23
I want to create like a basketball division.
52:25
Like you guys are all running shoes, we should create basketball shoes."
52:28
And he's like, "Okay, like come on in.
52:30
You got this little basketball department.
52:31
Like go ahead, try to make it work."
52:34
And the movie is all about like one breakthrough thing he did, which was they had a tiny budget, and then in the 1984 draft, they decided to sponsor Michael Jordan.
52:45
And Michael Jordan was not interested in Nike.
52:48
He was going to go with uh I think Adidas or somebody like that.
52:51
And um he was known as a as a hot prospect.
52:55
He's like the number three pick, and they were like, "Well, we still want" And and Sonny was convinced, "We need Michael Jordan."
52:59
And so the movie's about them trying to go get Michael Jordan on board.
53:02
And And what ended up what they what the pitch was was basically they put their entire budget on one guy instead of spreading it across multiple players.
53:11
He relentlessly pursued Jordan and like met his mom and like just like drove out there to North Carolina to to meet them and try to build a relationship.
53:17
They didn't show Jordan's face in the movie, which actually was pretty cool.
53:20
It was basically the whole relationship was how do I impress his mom cuz I know his mom will have my back.
53:26
She's making the decisions.
53:27
And so they were like, "Well, um we're going to pitch him on his own signature shoe from day one.
53:31
And we're going to name it after him."
53:35
Um so it's going to be the Air Jordan.
53:37
It'll be a whole product line named after him.
53:39
And he ended up negotiating a royalty on every pair of Jordan sold.
53:43
And that's how Michael Jordan became a billionaire, not through basketball but through his shoes.
53:45
So, that's the the movie part. Okay, cool.
53:48
This guy Sonny actually did a bunch of other interesting things that I thought were pretty cool.
53:50
So, as a marketer, I just respect this guy's hustle.
53:53
So, here's some of the things he did to make Nike win.
53:56
Um he created So, he was like, "All right, we got to create like a like a kids strategy.
54:02
It's like, how do we get them while they're young?"
54:05
And so he created a high school All-American game.
54:07
So, he was like he called it the the Dapper Dan Roundball Classic.
54:12
He goes throughout the country.
54:14
He's like, "I'm inviting you to participate.
54:15
You're going to compete against, you know, the the 12 best players um or whatever, 20 best players in the country.
54:22
You're invited to come do this thing in in in Pittsburgh or whatever, Philadelphia or some [ __ ] like that."
54:27
And it was like uh And so he flies them out there, and he puts this thing together.
54:31
Now he's got the players.
54:32
So, then he goes and tells all the college coaches, "Hey, if you're scouting, you need to come to this Roundball Classic.
54:37
You can see all the best high school players at once."
54:40
And so then college coaches start coming.
54:41
So, now players are like, "Oh, if I want to get seen by college coaches, I got to get to the high school All-American game."
54:46
So, he just like created through brute force like a conference essentially that would bring together the kind of the core supply and demand.
54:55
And then he could find at that age the best young players.
54:56
And so he that's how he found Kobe Bryant.
54:58
That's how he found LeBron James.
55:00
They were part of his high school All-American things and his camp.
55:04
So, the second thing he did is he created a summer camp for only the best players called ABCD.
55:10
And he brand This is when he was with Adidas.
55:11
So, this guy worked for Nike.
55:14
Then he worked for Adidas.
55:14
Then he worked for Reebok.
55:15
So, he just This guy was just a hired assassin that went from company to company and would just try to get them to win in their market using whatever advantages they had.
55:23
And so when Nike needed something, he was like, "All right, you need to get them while they're young.
55:27
We're going to do this camp.
55:28
But also what we're going to do is we need to get college players wearing our stuff. They all wear Adidas.
55:32
And cuz it's the most popular brand, so that's just what they choose by default.
55:35
Or they choose Converse."
55:38
And so he's like, "You know, why don't we You can't pay college athletes.
55:43
But nobody's saying anything about coaches."
55:45
And so he just started He would go to the coaches, and he'd be like, "Hey, I'm going to give you 10 grand, and here's 26 pairs of shoes. Give them out.
55:52
Oh, they happen to be the sizes of like most of your guys.
55:53
Uh they don't have to wear them.
55:56
You get the 10 grand either way.
55:57
But we sure do hope you would you know, you would go ahead and uh and um you know, encourage them to wear these shoes."
56:03
And so he went to Jim Boeheim, and he went to like, you know, all the top college coaches, and he basically bribed them.
56:08
And it was like in this gray area where it was allowed.
56:12
And in one year, he just traveled like he would just fly city to city.
56:14
He would go to the campus.
56:16
He would make the coach an offer.
56:17
And at the time, they were buying this equipment for their program.
56:19
They're like, "Our kids need equipment, so we got to buy this this stuff."
56:22
So, he turned a cost into revenue for them and gave them free stuff.
56:27
And sure enough, all of them star- started wearing Nikes for free.
56:31
So, all of a sudden now Nikes being worn by all the best college players, and it's on TV.
56:34
And in one year, he just did a land grab across the country before the other companies could could react. He got all of them.
56:40
And I thought this was just like a genius uh genius strategy.
56:43
He started He started signing these high how far you can go with brute force? This was a sledgehammer.
56:49
This was a sledgehammer, and you can get pretty far with a sledgehammer.
56:55
Then Then he did another thing. He sued the NCAA.
56:57
So, he went to this guy Ed O'Bannon, and he was like, "Hey, we should sue the NCAA.
57:02
They're using your name, your face, your likeness to market the tournament and all this stuff, and you're getting nothing from it."
57:07
And now college players can get paid through this NIL rule, this name and likeness thing.
57:13
And it's because he won the case with that uh lawsuit uh against the NCAA.
57:19
That was like, you know, it happened The lawsuit happened in the last, I don't know, 5 years or so.
57:22
Then the rule came into effect like a year ago or something.
57:25
And so um So, I thought that was awesome.
57:30
Uh there were some great quotes about him.
57:32
Some guy goes uh "When Sonny dies, he's going to sneak his way into heaven.
57:37
And and when he gets there, the first thing he's going to do is he's going to look for a 6'9" kid to make a deal with."
57:42
Like he's like And And the other thing they said is, "There's only one man on Earth who could tell you who the best sixth grade basketball player in the country is, and it's Sonny Vaccaro."
57:50
And I just love that this guy just like owned his niche and just absolutely like went balls to the wall and really built like I don't know, tens of billions of value at least inside of Nike plus Adidas plus Reebok with these athletes.
58:05
And he would have also gotten So, he signed Jordan.
58:10
He signed he he got he poached Kobe away from Adidas.
58:13
And then he would have got LeBron, too, when he was at Adidas.
58:15
And LeBron was ready to sign.
58:16
He goes, "We need to offer him 10 million a year for 10 years, a $100 million contract to this 18-year-old kid."
58:22
And LeBron's ready to sign.
58:22
And then Adidas gave him the 10 million, but they changed the structure last minute.
58:26
They got a little cold feet, and they're like, "Well, we don't know if this kid's going to work out.
58:31
Why don't we make it part of it incentive based?"
58:32
And so they offered him 7 million guaranteed and 3 million a year of incentives.
58:35
And LeBron turned it down, ends up going with Nike, never looked back.
58:39
And like just a huge blunder.
58:40
Like basically this guy's whole life he was fighting bureaucracy inside companies.
58:44
And then doing like black market and gray hat [ __ ] in the like, you know, you know, in the streets.
58:50
And every NBA player is like know Sonny, their parents know Sonny cuz this guy was just working the streets.
58:56
And like there are certain companies that have had this.
58:58
Tinder kind of had this with um what's her name, the Whitney Wolfe who started Bumble.
59:05
She was kind of doing this from college campus to college campus.
59:06
Like going into the sorority houses and the frat houses and just brute force onboarding all the guys and girls in one campus so that Tinder was useful.
59:15
And then throwing parties and doing stuff like that.
59:18
And like you need these people.
59:20
These are like game-changing people for your company.
59:22
I remember when Coinbase went public, uh Brian Armstrong did this long thread.
59:29
He did something you never ever somebody do, which was company goes public, they usually just say generic stuff.
59:33
He actually talked about like what led Coinbase to be successful and he called out one guy by name that wasn't his co-founder, wasn't his main investor, it was just an employee, and this guy Dan Romero.
59:43
And he's like and you know, basically special thanks to Dan Romero who like just kind of like brute force built our relationships with banks and he he basically got them their relationships with banking partners and like I think maybe some stuff overseas.
59:58
Um and it was just kind of like one of those things like dude, I don't know how we're going to do this. I don't know.
1:00:02
Dan, that's your mission.
1:00:02
Send him on a mission to go do that.
1:00:04
And Dan basically joined Coinbase at Coinbase as an employee, ended up making like $100 million plus through this process. Um and I knew this guy. I met him in college. He was in my class.
1:00:15
didn't he didn't you like used to make fun of him and call him a doof?
1:00:17
I didn't make fun of him, but in my head I did.
1:00:21
He was we took a class called computers.
1:00:24
Again, I was going through campus looking for the easiest sounding classes.
1:00:27
I took giving rich I was in a class I took another class called computers.
1:00:31
And in computers they were talking about like That's like a class first year class is computers?
1:00:33
And they were just talking about like the internet and like internet I remember like they talked about net neutrality a ton.
1:00:38
I was like I don't know what the hell these guys are talking about.
1:00:41
Like I couldn't give less of a [ __ ] about this.
1:00:43
And there was one guy that every class had like strong opinions, was super informed.
1:00:48
I was like man, who is this like teacher's pet that's just like is he trying to impress him?
1:00:54
I was like no, I don't even think he's trying to impress him.
1:00:55
I think he actually just nerdy about this stuff.
1:00:56
He just listen [ __ ] just loves the internet.
1:01:00
This guy like wants to make out with the internet.
1:01:02
I just remember sitting in the back of class like I was like thank you for talking so much Dan Romero because I don't have to say a word in this class.
1:01:10
And um it's sort of like you know, revenge of the nerds in a way. It's like jokes on you.
1:01:15
Like this guy's passion and enthusiasm about the internet technology is what led him early into crypto, was led him to pick Coinbase and ended up, you know, like his passion for that led him to be a key person there.
1:01:25
This guy made $100 million hundreds of millions dollars probably is retired and uh and got to do what he loved the whole time.
1:01:31
And so like you know I I used to make fun of people who were like you know, overly enthusiastic and now I preach that you need like enthusiasm is massively underrated more people need Dude, and he's got a super handsome headshot now on LinkedIn. Dan Romero does.
1:01:46
And it's good you can afford a whole you know, glow up if if you if you get that Coinbase IPO and early Bitcoin money. He's got great hair.
1:01:52
This guy's definitely takes Hims. He's a good looking guy. How are Hims easier?
1:02:00
And he just bought $13 million $13 million property in Venice and another one in Park City. Dan won. Yeah, Dan won for sure.
1:02:07
I and you could tell that he's ripped too.
1:02:10
I this guy definitely has abs. Dan won. Good job, Dan.
1:02:19
I'm just like you just Google him and see his face.
1:02:20
You know this guy is fit. I should DM him.
1:02:30
I'm on the edge of the group chat. Say no more.
1:02:32
I've seen enough through the crack.
1:02:35
Yeah, you could tell by his jawline this guy's got one of those like V's that goes down his through his like junk.
1:02:38
No no NFTs just lift up your shirt 6 inches.
1:02:43
I'll tell you You qualify.
1:02:48
So um Dude, this guy Sunny sounds awesome.
1:02:50
I I did see the movie and they made him look like a guy who could just put up with a whole lot of pain.
1:02:57
That's what they made him look like.
1:02:59
Um they made him look like a guy who like he would just get [ __ ] on constantly and he always pulled through.
1:03:06
That's what they made him look like.
1:03:08
Uh and they also made him look exhausted and then terribly unhealthy.
1:03:12
Which is the price to pay. true. Yeah.
1:03:15
They made him look horrible.
1:03:15
And if you look at photos of him, granted he's like looks like he's he was born in 1938 I think.
1:03:20
So like you know, you are what you are at that point.
1:03:23
But like he definitely looks like he smoked a lot of cigarettes. 1938? That sounds very old.
1:03:29
Is that I looked him up on Wikipedia. I think it's 38. 38? Wow, yeah. He's 83? Wow. Sunny. Yeah.
1:03:39
So he you know, he he's alive and and so that's good enough.
1:03:44
guy's name is actually John Paul Vincent Vaccaro.
1:03:48
Quote and change it Sunny.
1:03:50
That god damn I like you have to have a nickname that everybody in your town knows you by.
1:03:58
That's like to me that's like one of the great honors of life.
1:04:03
It's like yeah, his name's name's Sean but everybody called him Sunny.
1:04:04
Whole life everybody called him Sunny.
1:04:06
It's like that's just like such a cool I wish I had a calling card like that. That's an Italian thing.
1:04:11
That's like I feel like all the there's always a Sunny in the mafia movies that I watch.
1:04:14
Yeah, he he operates like a mobster for sure.
1:04:18
I like this this is a good find.
1:04:18
I saw that movie and I thought I don't want that guy's job.
1:04:22
It sounded like an exhausting exhausted little existence.
1:04:29
It's it sounded very challenging.
1:04:29
But I did like the movie.
1:04:30
They made him they made Phil Knight look a little goofy which I'm a big Phil Knight fan so kind of hurt my feelings.
1:04:37
But uh no, I thought it was a good movie and this is a good find. All right, that's it. That's the pod.
1:04:43
Let us know who won this the the duel, the annoying blonde hair guy who went first or the less annoying brown guy who went second. That's the pod.