My First Million: #158 - Buying Michael Jordan's House (and Making a Profit), Investing in Athletes & Successful Startup-Studios

Hubspot Podcast Network Hubspot Podcast Network 3/5/21 - 10m - PDF Transcript

All right.

Quick break to tell you about another podcast that we're interested in right now, HubSpot

just launched a Shark Tank rewatch podcast called Another Bite.

Every week, the hosts relive the latest and greatest pitches from Shark Tank, from Squatty

Potty to the Mench on a Bench to Ring Doorbell, and they break down why these pitches were

winners or losers, and each company's go-to-market strategy, branding, pricing, valuation, everything.

Basically all the things you want to know about how to survive the tank and scale your

company on your own.

If you want to give it a listen, you can find Another Bite on whatever podcast app you listen

to, like Apple or Spotify or whatever you're using right now.

All right.

We're live, we're good, we keep getting two things that's kind of like keeping me up

at night.

The first, which doesn't keep me up at night, but weirds me out, why do people keep confusing

us?

Yeah.

And the second thing does keep me up at night is I don't know if they're saying it just

about me or about both of us, but they say that we look differently than they thought

that.

And I think both are like, I think both are insults wrapped in disguise, like they're

not saying anything bad, but the way they're kind of like laughing makes me think it's

not a good thing.

I don't think it's an upgrade for them when they see us.

Someone said that I write like a bro, but I look like a nerd and I'm like, you're insulting

both by looks and by, like, how do you make me, I want to look like a bro maybe and talk,

or wait, which one do I want to do?

I want to look like a bro and talk like a nerd maybe.

People mix us up.

That means for months, they've just been listening to this and they think I'm you and they think

you're me.

And when they follow us, they have it all wrong.

All right.

What do you think?

You know what that is?

No, never heard of this.

I'm about to rent one.

So it's a $12,000 device and it looks kind of like a wakeboard, but it has like a three

foot to four foot like rudder that sticks on the bottom of it.

And then the bottom of that rudder is a motor and it's like a boosted skateboard with like

a handheld acceleration device.

You lift off and you ride three feet above the water.

I've seen this now that you say, I thought you were talking about something related to

like, I don't know, microphones or voices.

You just switched topics with the hard left turn, but I appreciate that.

So I saw this because what's the name of that one surfer guy who's like a super famous

layered Hamilton.

Yeah.

I saw him doing this.

I don't know if his, I think his was like even taller, but basically he was surfing

with just like an underground fin and then he's elevated above the water and he was like,

and there's like a jet ski that he's standing on.

It was kind of crazy.

I was like, that's what this is.

Yeah.

Well, I'm about to go do it in an hour.

I'm pumped.

Is this the next pickable?

It might be.

It might be.

I'm getting ads for it constantly on social media.

It might be.

We have a good episode today because you brought something up incredibly interesting and I'd

went deep on it.

Before we get into that, can I tell you a quick story?

Yeah.

Go for it.

So a few weeks ago, I got mocked on the internet for doing this trap in a closet for with Andrew

Chen thing.

So this guy named Andrew Chen, what is a partner at Andreessen Horowitz?

He's got a cool startup blog, but I heard he told me one of the wilder stories I've

heard recently.

So when he was in, I think I might get some of the details like wrong by year or two,

but when he was in about sixth grade, he took the SAT and scored really high.

And when he did, I think it's the University of Washington does this thing where every

five or 10, they take five or 10 students per year who are in sixth or seventh grade,

sometimes younger, like 12 years old, whichever grade that is.

And they asked them to come to college, to come to University of Washington.

And he was one of the students.

And so at sixth grade, I think he skipped seventh grade and went straight to college

and he moved there in a dorm, went to college and I asked him who else was in it.

And he actually said Emmett Shear from Twitch was one of the folks.

Wait, wait, wait.

So he didn't go to college.

He didn't like become a college student.

He just went for like a camp or something or he's no, he like enrolled and now he's

a student.

No.

No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no,

Okay, then I think.

Okay, so here's where he came from, sitting in theซiggy house or stuff.

Like he literally instead of going to seventh grade, he moved into a dorm, went to college

and here's where it gets even crazier.

So he like moved there, moved away from home, which I think his parents are from the state

as well.

But it was like moved half an hour or however far away from home.

Lived there as a college student.

And he understandably was kind of embarrassed and didn't really tell a lot of people.

And apparently he told me that he even dated a girl.

He just kind of acted normal and they didn't find out

that he didn't like hide it from them,

but he didn't bring it up.

And they didn't find out until senior year

or something like that when everyone was turning 21.

And they were like, when do you turn 21?

He was like, oh, I'm actually 17 years old or six, whatever.

It's a pretty wild story.

And I asked him like, who else was part of this program?

And he said the founder of Twitch was some person

running a huge hedge fund, just like baby genius,

like real baby geniuses, crazy fascinating story.

And apparently the University of Washington

still does this every year where they select,

I forget what they call the program,

but it's like a thing where they have psychologists

and therapists meet with the kids every quarter,

every month to discuss what's going on.

And it was incredibly fascinating.

And in a very typical genius response,

I said, isn't that weird that you skipped high school?

And he was like, well, what do you think about it?

Adolescence is really just like a societal constraint.

And I kind of experienced the same thing.

I was like, oh yeah, I mean, I guess you're right,

but like, thanks for proving my point.

I think it's just a figment of my imagination.

Yeah, is it that wild?

That is wild.

Also, I don't know if that's true,

because Emmett definitely went to Yale

and so did Justin Kahn, so I don't know what.

Maybe it was through Yale,

but he said that Emmett was part of the same program

or maybe he dropped out.

College dropout at age 13, I love it.

He said that Emmett was part of his program.

I don't know what program that they do it

in a ton of different schools,

but like a 13-year-old freshman in college.

Right.

Would you let your kid do this

or would you want your kid to do this?

Let's say your kid's 12, scores high on a test.

Would you want him to skip high school

and go and be a 13-year-old college student

and like amongst the crazy 18-year-olds?

So it's a good question because my gut instinct

is probably the same as everyone else's,

which is high school is important.

You learn about yourself

and it's important to go through all that normal stuff.

But we also complain that high school often

or that what you learn in high school is kind of bullshit.

What does the world look like if you do combine the two?

I don't know, but isn't that a wild story?

Yeah, that's crazy.

It's just such a fun fact about someone.

Yeah, I also think it's an interesting strategy

for the colleges, like why are they doing this?

I remember the reason I ended up going to Duke

is because they had this thing called the TIP program,

which is the Talent Identification Program.

And you would take the PSATs or something like that.

And then if you scored above a certain thing,

Duke would send you this kind of like kit,

this goodie bag.

And it basically was like,

it felt like getting an owl from Hogwarts.

And it's like, hey, you're 12

and we wanna invite you to this special school

for the gifted and talented.

And it just said, you scored high on this.

We have identified you as a talented person.

We would love to have you come visit our campus

and eventually, and the shit worked.

I went to Duke eventually.

I didn't put two and two together, that's why.

But if I think about it,

that's why I started paying attention to them.

And that's why I started following the basketball teams.

That's how I even heard about it.

Otherwise, as a 12 year old kid,

you don't even hear about colleges, right?

So I thought that was pretty interesting.

And if you think about it, these schools are for profit.

These schools are trying to get tuition.

They're trying to get people to come in

and pay the 40, 50 grand to go to school.

And so these little investments,

and who doesn't like to be called talented?

Who doesn't like to be called kind of like a phenom?

What parent doesn't want their kid

to be identified as a special?

That shit works.

And I'm surprised that more schools don't do this.

And when I start my school,

I too am gonna do this.

Yeah, I'm trying to like do some research on it right now

while we're talking and it's not really effective,

but you'll have to look up this program when you're done.

It's just a really interesting thing.

And it was funny to meet someone who went through it.

And it was just such a silly, fun fact about someone.

By the way, my roommate in college,

when we got to college, I was like, yeah, yeah, you know,

we're all 17 or 18, whatever we were as freshmen.

He would say like, yeah,

but then like I noticed his expression.

I was like, well, what?

And he's like, well, I'm like 19 and a half,

about to turn 20.

I was like, what?

Why are you so old?

And basically they do the exact opposite

when it comes to sports.

So in sports, the common thing to do

is to like sandbag your kid

and basically hold your kid back a grade

or like send them to school a year late

so that they're always bigger, faster, stronger

than all the other kids in their grade.

And you're always like the star athlete

because you have like an extra year of development

or you have a better shot, I should say,

of being a star athlete.

And so he was from Wyoming.

He's like, oh dude in Wyoming, that's par for the course.

Dude, every, you know, every sixth graders

like an eighth graders age

because everybody wants to like have their kid be,

you know, captain of the team.

My first two years of college, I was an athlete

and I would compete against these guys

and there was two groups of people that we would like

and I was friends with them

but we would tease about they're not really.

It's like, it's a little unfair

which is the first was Kenyon.

It's okay.

Machine-generated transcript that may contain inaccuracies.

MFM #158

Andrew Chen story

University of Washington has a program for gifted high schoolers who want to do college early. Andrew took part and graduated at 19.

He met some pretty cool people doing this including emmit of twitch, and head of hedge funds.

Shaan got into a Duke program as a teenager via TIP program by scoring high on PSAT. Shaan: This is a great marketing trick -- he’ll do this when he starts his school

For athletics, the opposite is done.


MJ’s house

Michael Jordan’s Chicago home went on sale for $30m many years ago, but hasn’t sold. Today it’s on sale for $14m.


Idea #1: Buy the house using crowdfunding and through NFTs, any fan can own a fraction of the property. From there, the property can be turned into a museum.


Idea #2: Instead of turning the house into a museum, turn into a great Airbnb. Obama’s Hawaii house (the Plantation Estate) rents for $6k a night or $180k a month.

You have to make it the dream “man cave”/sports fan getaway. Make it an alternative to Vegas for bachelor’s parties. Fill the house with Jordan memorabilia, and make it an incredible experience for fans to come to.


Famous homes: There's a precedent for taking famous homes and turning them into museums. 


Graceland: Elvis’ former home receives 600k visitors each paying ~$30


Painted Ladies: Painted Ladies and “Full House” house are mainstay attractions. “Full House” house sold for a premium above market price. 


Counter: Sam is sceptical of crowdfunding on Rally Road because of the difficulty in liquidating. Shaan counters by saying fractional ownership makes liquidity less of an issue. Also many aren’t concerned about selling. Would rather wait and hold.


Big League Advance


BLA: Offers cash to minor league baseball players with the promise of making money if the baseball player hits it big.

Fernando Tatis Jr: Took cash when he was in the minors from BLA, but now has to pay out ~$30m after signing a $300m+ deal


Opportunity: Baseball is the easiest to model, but the NBA presents a great opportunity because of guaranteed contracts. If a player gets a $100m, 5 year deal, you can offer them $80m upfront for the contract. Instead of 


Counter: This is a risky business. The business only works if you can model properly and get big hits to cover the losses.


Startup studio

Instead of investing in companies or starting just one company, startup studios invest and incubate several businesses at once.

Shaan: Historically very tough and didn’t work. Garret Camp, Mark Pincus, Kevin Rose, and Michael Birch (Monkey Inferno where Shaan worked) all had studios which had no big winners.


Successful studios: The tides may be shifting as a few studios have begun getting hits. Thrive Capital by Josh Kushner (Oscar), Atomic by Jack Abraham (Hims), Prehype (Barkbox and Ro)


Atomic: Only works at one project at a time and the team has 9 months to raise a series A or else may be out of a job. Also focused more on B2B than consumer.

eFounders: European studio that only does SaaS. They’ve been able to make the model successful


Kevin Ryan: Part of DoubleClick when it was sold. Made about $20m and created AlleyCorp which incubated companies like MongoDB, Business Insider, Zola and Guilt.


Good: It’s a dream job because you work on multiple ideas. Unlike a traditional startup, when failure happens you can just move onto a new project as a team


Bad: For a startup to work, you need laser focus. Often what happens, when a startup hits a plateau, you can pivot to an area that’s working. At studios, the team is more inclined to move onto another project altogether. No do-or-die, back-to-the-wall mentality as with startups.

---------
Have you joined our private Facebook group yet? Go to https://www.facebook.com/groups/ourfirstmillion and join thousands of other entrepreneurs and founders scheming up ideas.
Editing thanks to Jonathan Gallegos (@jjonthan)