My First Million: AI Santa and Four Other Simple Business Ideas (+ Vice Goes Bankrupt!)

This is such a good idea, by the way, this is a phenomenal idea.

This is a 10 out of 10 opportunity and dude, he pitched me to why have I not invested in this?

All right, what's up? We got a banger. We got a doozy. We got a we got a two-man trio here and

It's just me and Sam. No guest today Sam. What's up?

Nothing. I've liked having guests actually normally. I hate it lately. I've enjoyed it. What's the difference? We should do more. I

Like the people we've chatted with it's been better. Yeah, not like those other crusty guests in the past

I have got a meaty topic

It looks like I don't know if you have meaty ones, but you have four good ones, but they're smaller

Is that right? All right, I'm gonna tell you about a business that I think is kind of interesting been been put this on my radar

Yesterday he goes he goes dude your sister should open a play street a play street

I was like what the hell's a play street? So I'm looking up

Have you ever heard of this thing play street museum? Probably not, you know, you don't have little kids, but

basically

imagine like a

Good for you version of Chuck E cheese

Let's start with that as the as the analogy. So like Chuck E cheese is you know

It's like

Come eat rat pizza at my child casino

Dude my parents used to say the there I always thought the Chuck E cheese near my house had burnt down

But they just that's a no it burnt down. We can't go anymore

If I drove by there when I got a license and it wasn't burnt down

I just thought I'd

That was their excuse

It's like one of those facts your parents tell you when you're five and you just believe it to be true

Like totally, you know, I think I thought my I told you my my father one time said real men don't drink with straws

But he was referring to like a jacket so like for years. I was like, oh, we don't we're not a lot of drink from straws

Like the Chuck E cheese is the Chuck E cheese on Chippewa burnt down. You know, it's not there anymore

That was the street Chippewa

Do good. All right, so this thing play street is basically you go there. It's a nice clean plate

It's like the like a dream playroom for your kids

So it's like they got a giant train set. They have some learning games

They got like, you know, the floors all it's like child safe and you basically pay 15 beautifully

And you get to play for an hour and a half or something like that

And so Ben goes, yeah, I've been going to this place and I see you that basically the one near me at least

He goes, I think they're doing 50 grand a month like a 50 grand a month

That's kind of a lot and he goes. Yeah, he goes. They basically they have and I forgot the exact numbers

But it's like seven sessions a day. It's $15 each

And you have 25 kids I think in the in the thing at once

And he goes they're basically 75% full in these sessions

You kind of do the math you're like, all right

That gets you kind of like to 40k plus you can host your kids birthday parties there in the nights and weekends

And so some people do that. He's like, I think they're probably you know an extra 8 to 10k of sort of event revenue per month

And then if you look at the cost, you know, you got your rent

It's probably like, you know, 5k and you have you know, you have your staff your teacher

You're sort of like your your supervisors or whatever that are like overseeing the the play space and like resetting it

Recleaning it in between sessions

I

Think I'm pretty sure this thing is like netting

something like 30k a month in profit maybe 25k a month in profit and and they have tons of these locations

Yes, so it turns out they're franchising or something like that

I don't know if these numbers are true by the way

This is like complete guesswork on my side, but I wouldn't be surprised my sister owns

Some preschools in San Francisco and the numbers are somewhat similar now. That's different. That's you know, they pay

You know a lot more but for for you know, regular schooling

But it's interesting to me that these play spaces can

Can do so well and it's like it's weatherproof

It's like, you know, you do it like I know with me like we go to Target three times a week

You might ask yourself Sean. What do you what do you need from Target so much?

You don't you know, you can order online and what I tell you is this is

This is daycare for me

Sean goes to Target so much that in his home you have this like Target

like a Target checkout place that and a

Target like grocery cart that you said you had to like find because it was like a collector's edition or like it was all sold

Out everywhere, right? Did you go crazy for this? You had to like buy it on eBay and do a big mark

Yeah, exactly these Target mini grocery carts

Kids love them because they're they used to see the kids like to do anything

They've seen their parents doing so the whole mini grocery check out plus plus Target cart is

Is I can hide a man so I go there often and I do it because you got to kill time

It's like how do I kill 90 minutes?

And ideally and I would do something that's like enriching to them

you know worst-case scenario we just go to Starbucks or Target or whatever and

This would be better

I would gladly pay 15 bucks for my kids to be able to go play in a place

That's not a park which is like weather weather dependent. So I think these are really cool ideas

Other than I think this play street thing is a cool idea and I could see this

You know this franchise doing like you know decently well probably not the best franchise in the world

But I think it could do decently well

Where are the locations? They're like Texas. There's like none in California none in New York

It's like bunch of like but what are they? It's like a it's like a blank commercial space

So like you don't need any food stuff. So you just you know, it's like a just a blank like retail space, huh?

Yeah, I mean their branding is pretty pretty good

It's like how escape rooms work escape rooms work because right they require no specific real estate

They can operate in a very small footprint and they take like two staff to run at any all day

And so escape rooms actually are like, you know fairly fairly good, you know franchise businesses or they were for a period of time

Now unlike a escape room, which is kind of like you don't know if escape rooms are a fad or if they're gonna be like popular three years from now

These you kind of know are gonna be popular because it's like, yeah, every parent's got this problem

All right, let me tell you about another another thing like this another problem. You haven't really thought about this business called 260 sample sale

You're heard of this. No

So Google it. It's like kind of a cool New York thing

So what what they do is any e-commerce or fashion brand has a ton of

You know photo samples or product samples that they get from their manufacturer

They use them in their photo shoots

to create the pictures on the website or for advertisements or marketing or whatever and then

those don't live in the warehouse like they live like where the photographer is or where their office is and

You just end up piling up boxes and boxes and boxes of photo samples

You know over time because it let's say you you know most fashion brands or apparel brands have

You know thousands of skews for each skew you had a sample made before you had the production one made

But you didn't just have one sample made you have each of the sizes made and because you needed it for the photo shoot

To be able to show the range or be able to cast different types of models

And so what ends up happening is you get a ton of these samples over over the years that you can't really it's like not worth your time

To get rid of and so this business popped up again like

You know the markets are like, you know water and water is gonna just flow everywhere

There's an empty crevice and there's an empty crevice in this market here for getting rid of these samples

So what they do is 260 samples. Oh, so send us your shit brand and we will host a pop-up

But we're gonna sell you along with a bunch of other brands

All out of great markdown

So we have high quality brands at a markdown because these are samples

So you're not like training your customer that like, you know, hey, this is like TJ max discount or something like that

It's it's a good story. This is these are samples that you're gonna get

for less and

They'll like they'll just give the brand a commission back. They'll say, you know

Every time we sell something of yours you get a small commission. It's better than nothing. It takes it out of your space

How'd you how'd you find this?

This is totally out of your out of your dude

They're only based in LA Miami, New York and the pictures are like smoking hot women and then like

It looks like a picture of like a huge line out of a warehouse in Soho

So hot women and waiting those things. I don't do it. You know, your boy doesn't do it. Yeah

Yeah, none of this text your box

Yeah, your boys so married and so in the house that I did not go to this

You're right, but I'm in the e-commerce world. I got my own e-commerce brand plus

I know and talk to a lot of other e-commerce people and I know about this problem

So I heard about this solution and I think it's very clever. I think it is a smart thing to do

I also think these guys are not that well known and they're only doing it in certain

Certain areas certain locations and whatever. I think this could be done it many times over

I think I think like a spy wrestler could do this by vertical

So you could go get a bunch of health and wellness and fitness brands or beauty brands and be like hey beauty brands

Send us your products and we're gonna we'll have a

Stations where you can demo them and sample them and then buy them. So I think you could do this for other verticals

I think you just do this in other places like hey if these guys are doing New York in LA

I think that their locations are like Beverly Hills and Brooklyn or something

Do this in Texas do this in do this in different different parts of the country. I think you could have a

You know, it's like your own little farmers market

It's your own flea market that you you get to stock and run

But you don't have to do it as a full-time job

So you can do it with every quarter or twice a year or something like that and still haven't be successful

So I thought this is a cool. Have you heard?

Do you know Kingsford charcoal? You've you've seen it. It's like the most popular charcoal like the blue

Do you know how that was created? I think it's a byproduct of something else, right?

Well, was it exactly of wood Ford so Ford when when when Ford was making cars

They had to like, you know have all these furnaces making metal and they took like the leftover char

And they're like what should we do this and so they pushed it together and compact it really tight

And that's how charcoal came to be and that's like a byproduct business and I love byproduct stuff

You know, it's kind of like it's tangentially. It's kissing cousins with like the sharing economy

I love that stuff. I love byproduct stuff and this is one of those. That's awesome

This is actually quite cool. Their website is really challenging to use which is I think actually a good sign

Because I can't tell like apparently they do sell stuff online

But it's mostly but one thing I do hate whenever I go to New York

Dude seeing people wait in line to buy like supreme clothing

Like just put the gun in my mouth man. Like I'm never doing that. I'm not doing that. I'm not gonna wait in line

And spend my valuable time to purchase a thousand dollar like thing that should only thing worse than that is bottle service at a club

It's like the guys who are paying, you know, seven thousand dollars for a table

To end paying a thousand dollars per bottle that they could literally walk across the street buy for forty dollars. It's a

It's literally like tax. It's like, oh, you're a chump come to this line. Please. Please. Please. Yeah, come right ahead

You walk through the chump line

I'm not a man of God

But when Jesus made like the list of seven deadly sins the example of debauchery and gluttony was people waiting in line for five

Hours to go to a supreme store. I mean like whatever like I see that stuff

I've like this is the worst form of consumerism. I cannot stand this so I they have these pictures here

It turns me off

I

I would maybe buy this online, but I ain't standing in line

I'm not standing in line with the bunch of these people to buy this stuff

I can't stand now whenever I see that it makes me want to like throw away everything and go live

All right, here's an idea. You're gonna like more

Host share so got a DM from a guy named Michael Fisk and he shows me this thing called host share.co

And he goes here's the here's here's the here's the situation you have a short-term rental, right? Yeah a property

Yeah, shout it out. So people can go stay at marathon ranch.com marathon ranch marathon ranch. Is it dot com?

Yeah, or dot co. I don't know yeah dot com marathon ranch Sam comes by has dinner with you gives you massage. It's fantastic. So

You don't have a hundred percent occupancy, right? You have some nights that are unused. Is that correct?

It's a 60% occupancy rate is is a profitable money. So you got let's say 40%

That's unused nights. What you doing with those nights? This is the sharing economy, bro

What you doing with those nights? Well Michael Fisk has an answer for you

his answer is trade your unused nights with other

hosts who have unused nights you stay for free there they stay for free in your place and

I think this is a really smart idea. I don't know how many hosts. Let's Google this how many

Hosts on Airbnb. I don't know how many properties they have or how many hosts four million

Okay, so you have a market of four million hosts that you could make a inter host

Like network basically where you say hey if you're a host you get to travel for free

So you get to I know I don't know how they make things equal

So like if your property is way more dope than somebody else's I don't know how you make that that trade

Okay, how do you normalize the values across properties?

We calculate how many shared nights you would be staying in in exchange for 21

In exchange for the 21 days of travel per year the formulas this episode higher higher value properties share less nights lower value properties

Share more nights. So for instance, if your average night is $500 you'll share approximately 15 nights a year

Whereas if you're $100 you got to share 45 nights in a year take to the same minimum

That's great. So like what's your property per night per night right now?

Uh, $700 $700 you're gonna basically what they'll say is hey

Make your thing open for 12 days out of the year

And then in exchange you get 21 days free booking in this network. Would you take that deal? That's

Yeah, in fact, I do so go to live live kindred.com. So it's kindred k i n d r e d and then live

Live kindred exist. So I use this service. So my dream situation is I want to find like another couple that has like similar

Style or like once as I do that lives in New York

And they want to be in Austin and we could just swap and I've not found a good solution for that

but

There's this thing called live kindred kindred that I do that I have used where someone will stay at my home when I'm not there

And then I get credits for the marketplace and then like I'm going to go to tau's new mexico

Like I have like eight credits because someone stayed at my house for eight nights and I know that so I'm going to go

And stay somewhere else for free

And it's actually pretty cool. I wish that it was just like a direct swap

So I could do six months here. We could just swap six months for six months

But I've been using services like these I actually think that I don't think I'm not bold enough to say like this is the future

but I think that like

You know, there are a lot of people like me who do split time

Dude finding a place for those split like when you split time, it's really challenging. I'm always looking for a good solution

Yeah, that's uh

That's good. I didn't know that something like this exists. So with this, do you it's hard and I think they raised money by the way from

Yeah, you give up your space. Is that right? So you give up you put your space in the network

But you still have to pay or you it's free

Uh, I there's some type of service fee. Frankly, I don't think it's a good business

I don't understand how they make money and because what what I said when I signed up for I was like, I'm getting a lot of value

I'm not spending a lot of value. I don't know how you guys are doing this. So like that's like bc subsidy right now

You're getting that andreason horowitz value exchange

Yeah, so like we're trying to use our credits quickly because I think I don't know if they're gonna stay in business or not

Because I don't I don't understand how it works, but it is awesome if it's awesome if it does work

That's hilarious

So, yeah, I like these types of businesses where where uh, or that solved this problem. Uh, is host share popular?

I think it's brand new. I think the guy just created it

Yeah, if you could pull it off, it's pretty amazing. It's a smart model

I think it's hard to pull off because like I don't understand how host share makes money

I think they have to charge a flat membership. So I think they have to basically say

it's five hundred dollars or a thousand dollars a year to be in the network and um

You know, you only pay if you use more than five nights or something like that make it a make it a fair trade

And um, you know, I think I think basically then they they're trying to get a subscription, right? So they're trying to say

Can I get

50,000 people to pay us a thousand dollars a year?

um

On this subscription. There's a few things like that. I forget what the big one is called

But there's they there's things like for luxury rentals where I'm almost

Certain that they just partnered with hotels where you pay like five grand a year. Do you know what I'm talking about?

It's called avanta. Yeah, I don't know the name of it, but I know what you're talking about

It's like you get access to this like you know for boutique hotels

Yeah, and I've looked into them when I originally saw it. I didn't have enough money

Like I I wasn't in the spot that I could do it and so I've been looking for things like this

I actually I really like these businesses. There's one. There's this company called the the nerd wallet of england

I forget what it was called. It's called the money market swap. Oh, yeah

Yeah

There's a guy named simon who started it and so basically he started like the nerd wall

He started a blog that compared like mortgage rates and things like that

And if you bought one or got a mortgage through him, you got affiliate fee

It's uh, I think it's called super money market is what it's called. It's publicly traded in england

Anyway, the guy sold all of his shares after he took a public 20 years later

And he now owns this thing called like simons resorts

And so it's this rich guy who went and bought like 50 resort or 50 like really nice

Homes around the world and I actually don't know they they frame it up

Like this is his personal stuff and you can just use it when he's not there

But it's actually pretty cool

And so I love these types of things because I think they're just neat to like buy all this shit and share it with everyone

I think it's really cool. Yeah, I like that. Can I tell you about a little random experiment I'm going to do so

I want to make for this christmas season

a deep fake santa

So basically you're going to be able to come on the site and pay

$35 and you

um

And you type in your message you could say hey wish my daughter jessica

Merry christmas tell her great job with the soccer

thing and

Be nice to her brother

big sports

Great legs and soccer

And so you'll be able to type in that message and then

It'll basically create a video that's santa saying this to you

So what i'm going to do is i'm going to try this thing that replete has so replete has this new thing where you could basically buy

Developer cycles have you seen this?

No, but so you can go so let's say you need something built

You could basically just go and buy

You could put up a bounty. So you're like, all right. I want somebody to build me this deep fake santa

It's got to do a b and c and you put up a bounty you put up put up the dollars and then people will just build it for you

and um

And you can you basically have an award. So it's kind of like a uh

Uh, like 99 design design code. Yeah, exactly

And and you do it in their currency which is called cycles and so they kind of help you estimate like roughly how many

How many cycles should this be for this to to to work out?

But i haven't used it yet. I really want to try this bounty thing. I think it's great because so you're gonna, uh

You're gonna pull an emerson. You're gonna, uh, you're gonna be this smart guy who just doesn't money grab

Uh, no, i'm gonna bring i'm gonna pull uh, jesson mares. I'm gonna bring the joy

Of a christmas of belief really of the belief in magic

Uh to millions of kids around the world this christmas. What are you doing for the children this year sam?

Is that your you're gonna do the jesson mares pitch like

So we had a problem. We wanted to bring joy to children

But like and we thought what better way to do that than a $50 card in a world full of war and divisiveness

Joy is all we have left. It is what they call the last refuge

and

People say that magic is magic, but the magic is getting people to believe the magic

And how do you get people to believe using deep fake technology and that's what we

How do you get people to to believe in?

You lie

We're gonna we're gonna create a fake cartoon about a fake person. We're gonna charge real money and it's gonna be a fantastic result

Are you really gonna do this? Yeah, because I really want to try this

Bounty thing. Oh, I want to play with this. Uh, I think this can be called. What's the you're all gonna be? Um

I think it's gonna be called santa's real. Uh, you know dot org

Give it a dot org

Let's make all of our businesses.org just so we could like just so we can be better than other people

Yeah

For a long time, I wanted to make my businesses dot net so people would think that I've been around for a long time

Your personal website has to be a dot net and then your business should be a dot org

Yeah, but dot org is way better. I'm gonna do a dot org

That's way better than that stupid ass xyz crypto bullshit. I want a dot org

Is that what they are or like dot ai dot i o if you have a data i o like i'm not in

I want a dot org

We are a for-profit dot org. It's fantastic

Is that what dot org means? It's a I think you have to be a nonprofit to get a dot org

But who makes that decision is there like a governing I think you have to like present your yeah

I add for your 501 3c or something like that. I have no idea. I've never done this to be clear

I've always been firmly in the dot com camp, but I'm ready to uh, I made my nut and I'm ready to go

And get get my dot org on for the rest of my life

That's like uh on stage andrew or backstage we were like so what are you doing and he used the p word

I know he still expanded us with the philanthropy

Yeah, it's like dude if you don't say that word around me. Don't say philanthropy. Don't flex with me bro

and uh

So now instead of philanthropy, it's dot orgs

A wilkinson dot org go ahead and email me there

Today I want to talk about vice vice dot com

The reason I'm talking about them is because they are about to declare bankruptcy, right?

Cue the michael scott clip where he just walks out and declares bankruptcy

Let's think about that. I love that clip now

Yeah, I agree most every joke I said on this podcast. I've stolen from that show

So the reason I want to talk about them is not because of vice but because of the story of the founder

Shane Smith

And if you're under the age of

26 vice probably means nothing to you. They've actually like very quickly lost relevancy

But to give you some background of what vices

So vice originally was up like a punk rock magazines based out of montreal

So it was three canadian guys one of those guys being gavin mckintosh. You know who gavin mckintosh is

No, who's that?

Have you have you heard of proud boys?

proud boys like the uh political thing

Yeah, he started proud boys

Which a lot of people don't realize and so it was like these three like

Kind of like punk rocker guys and gavin mckintosh being one of them

Shane smith who i'm going to talk about today was the other one and basically the way it started was they got like a

Grant from the government where they were able to launch this magazine and that's how it started it started as a

Skateboarding punk rock magazine and they would write like these amazing articles where it was like

Vice's guide to drugs and they would like write all these stories about drugs. They would use the n word all the time

They would like they were like wow

It's kind of like you know how like some you probably don't know about this

But like in the punk rock community they like

Sometimes they'll like talk about nazis and talk about like use racist language

But they do it as like a shock factor because it's like i want to be in your face that type of thing

That's what vice was all about

I don't remember

I don't know if you remember like the old school covers of these magazines

But it would be like a tab of lsd on like a hot chick's

Tongue do you remember it like I don't remember seeing the vice magazine

I remember reading something you're actually they called it just zines

Is there a difference between a zine and a magazine because that's what that's what I just

Just the just the culture if it's someone's a zine, it's typically more it's like a punk rock thing

Whereas if it's a magazine it could be like gq. Okay, gotcha

So you've never seen these but it started out as like hardcore punk rock where they would write articles about

um

Doing drugs having sex like just rock and roll shit

And that started getting picked up and so they started this company in 94

But in 99 they moved to new york and that was like where things changed and that's right where like the internet

Just got started what looks like you're looking at something funny

i'm looking at the magazine covers and i'm and you're saying rock and roll and i was just thinking about like

This is what cool like basically like this is what influential people

It's like kind of like our musicians were influential people and they did this stuff

It's like the the tongue with the lsd on it. It's like someone just biting a tuft of hair

I don't know why there's a bunch of hair in someone's mouth and I was just thinking about pot and roll

And how it would be just like someone entering a cold plunge

Someone meditating. It's like yeah, we're part of that pot and roll things have changed

Yeah, we were the famous podcasters, you know what I mean? They're all just on a cold hot cold man is crazy

The temperature variance is insane

Things have changed things have changed

Cool has changed

Yeah, the definition of cool has changed which is actually part of the thing i'm going to discuss

But so the internet starts coming around in the late 90s. They raise a little bit of money like two million dollars. They move down to

They move down to new york and that's where they like really get going

And so they create the website vice.com originally was a magazine

There was a free magazine that they would just hand out and they would make money off ads

And it would be the three of them writing articles and they would do something that I used to do all the time

Where they would have like fake authors

So it'd be like someone who wasn't real just fucking making up stories is really what it was which is

You know, it was an entertainment magazine. So that's fine

But they start growing and it takes off after a handful of years and so

They kind of created this thing at the time

Now we just know as like branded

Content where it was now sometimes people call them advertorials things like that

but basically their whole shtick was

We're gonna make awesome content and we're gonna get the eyeballs of millennials which back then millennials were like the gen z today

You know, it was like the elusive hard to reach audience

And they said we're gonna reach these millennials

And we're gonna make the best content and we're just gonna plaster your logo on there

And that's gonna be good enough for you and this is like pre facebook

So like performance advertising wasn't really much of a thing

And so it was like the way to advertise and eventually they blow up and

The important part of the story isn't exactly that they blew up because they did

But the story is like the antics that they went along and and built this thing with and so

They raised money from rubric murdoch. Who's you know, the founder of fox

They raised money from all these amazing people by com eventually they raised money at a six billion dollar valuation

Today they're nothing but they still make six hundred million dollars a year in revenue

And so I want to talk about some of the crazy stuff that the founder did as well as how their business model works

And so have you ever heard of the the guy shane smith who was the CEO and kind of the main man?

Never

All right, so he had a whole bunch of interesting things that he did

So if you google shane smith

You'll probably see like pictures of him like it's a it's a a guy who almost looks like a punk rock santa claus

Where he's kind of like a bigger guy

And he like you'll see like he's got sleeve tattoos and you'll see him shirtless all the time and smoke it a cigar

Do you like see any pictures like yeah, he looks like

He looks a little bit like the guy who's the number two guy in billions. I forget what the guy's name is

Like not not axe, but his his right-hand man

Yeah, yeah, yeah like that guy if that guy had just like chest tattoos if you just had like a tattoo around his nipple

That'd be this guy

Dude, so he's just like crazy

And so vice originally the way that they became respected is they would do all this crazy stuff

But it was him doing it shane the ceo and so he would go to liberia during

When they're having a civil war and he would just bring a camera and just get dropped in liberia and figure it out

In 2013 he traveled to north korea

Because he organized a basketball game between the harlem globetrotters and the national team of north korea

And that was like the big stick and then eventually do you remember hearing about denis rodman going to uh north korea?

That was for a vice documentary and they would make these like

Free documentaries and they would post them on it was originally their site

And then they moved to youtube and they would get lots of views and they would like

Put like an intel logo on there and that's how they made money

And so they and so he was known for walking around his office of like vice and i've been to the office

It's like as magnificent as you would think it's like the coolest of the cool and he would walk around shirtless and he would just like

Say crazy stuff. He was known for just being like this wild guy

And so one time when he hired a ceo

Her name was nancy. This was recently he said we're the monitor

We're the modern day body and clad and we're here to take all your money

And he would just say stuff like that all the time there was another time when they were just getting started

And uh, I believe it was into it. They came um

Was it into it or ibm one of those they came to the office in order to uh pitch or vice was going to pitch into it

And so what they did was there was a really shitty office at the time 24 hours before the meeting. He built like a glass

Uh conference room so it looks legit

And so you could see your employees and then he went and hired a bunch of like actors and got a tons of friends to come

And work in the office to make it look like they're important because he always like said something like um

We don't want them to think that were or what do you say we want them to think that were rich

Like they like he was like we're gonna act as it right and he did and they eventually got a 25 million dollar deal

From this company and it worked out and there was another time where

There was this uh 2003 vice made it their documentary on themselves

And he tells a story about when they started the company how he got arrested in Bangkok

Bangkok and he said something like a few years later

They were like, yeah, I remember that story you just talked about being imprisoned in Bangkok

And he was like, yeah, yeah, I remember that and he goes tell me more about that. He goes well

I made it all up

We needed a story on how the we needed a story on how the company started and I'd heard the story from someone else

So I just took it over and we needed and I just had to take make it mine

He's like I watched the hangover three and uh decided that was my life

Dude, he would do crazy stuff like that all the time. There was another time where I was reading this interview with him

He uh, there was this headline about how he spent 300 thousand dollars

At dinner in vegas and a reporter goes. Did you really spend 300 thousand dollars for dinner? He goes, no

It was 380 thousand dollars plus tip and it was barely dinner. It was mostly wine

and so

He's just he the guy's like wild he even tells

Crazier stories where he goes. This was a quote from uh, the uh, financial times

He would go I would be at the party and would just go get wasted

Take coke have sex with girls in the bathroom and then get uh, and then afterwards mail my

Advertisers drugs because I knew if I sent them a bunch of drugs in the mail

They would keep buying ads with us and he admits all this stuff. He's

It's crazy, man. This guy's wild. How could this have gone bankrupt? I just don't get it

Well, so check this out. Where did we go wrong? Was it when we

Mailed our customers drugs or when I did drugs during the day when I was working with my shirt off having sex in the bathrooms

Dude, he tells a story about him and his co-founders having three sums with like people who are going to buy ads with them

And he says that they were like mobsters who accidentally clanked shovels together while they are bearing a body

If that analogy makes sense when someone was like, what's it feel like having sex with your co-founder and you know

Do you guys ever like touch he goes? Yeah, but it's just like two mafia guys and our shovels accidentally clank while we're burying the body

Wow, this guy is a showman. He's a total showman

Of course, it didn't work out well

And all seriousness didn't uh totally blew it

It didn't it didn't work out well for the company, but it worked out for him. So google shane smith house

Yeah, I see a 50 million dollar house. I'm up two steps ahead. He already googled it

So this there's this amazing article that came out in 2008 where it's all about shane smith and it says shane smith's

Living large and it documents his new house that he purchased for 30 million dollars. I think and it's this beautiful mansion

Up in uh la somewhere

Well, he recently sold it for 50 million dollars

So like this guy has totally come out on top of this of this whole thing

And it's just really fascinating that he basically came in he spent about 15 20 years doing this thing

right before

Like tie the tide change and like these guys were the opposite of woke now vice is like the wakas of the woke

But right before that change happened

He got his money. He got out and he bounced and he hired a ceo

And uh his story is super super fascinating. And so you've never heard of him. I've never heard of him

Uh, I briefly knew that vice started as a as a zine or magazine

What's your main takeaways because this is entertaining because this guy's like philx denis just like reincarnated

Um, so what's your takeaway? You're a media guy

You're you're a bit of a wild man

Well, what's your take on this? I mean this this guy makes you look like a like a, you know

choir boy or something, but uh

What's your takeaways from this story?

I have a bunch of takeaways and so but first let me tell you how their business model works because that's part of my takeaways

So a lot of people don't realize how they make money. They're going bankrupt now

But they still make 600 million a year in revenue, but it's just like wildly unprofitable

So they their company it's basically like I consider it like a mortgage backed security for media

And so do you remember like the mortgage backed securities of 2008?

Where it was basically like banks would buy like tens of thousands of mortgages in one tranche

Turns out like

4 000 of the 10 000 were shit. That's exactly what vice does and so they they got famous because

They only had like 20 or 30 million monthly visits to their website vice.com

Which isn't a ton. That's not a ton for hundreds of millions in revenue

What they did was they did uh, they partnered with omg facts dot com

Distractified dot com and all these other clickbait websites and they would roll that up

And so they would call them part of the vice network and so they would tell people

Uh, you know like intel or whoever the big advertisers are

look, we reach all of

Millennials and we have a hundred million 200 million monthly uniques to our network in reality

It was on like shit sites like, you know, all those other things and that was like once that came out

It was kind of frowned upon

And then the other way they made money was they had a agency called virtue like vice and virtue, which is pretty clever

But their whole company is basically a creative agency

So they would make content for snapchat

Facebook and then eventually hbo and and they would get paid like a service fee basically for it

And it was basically one big agency and that's how they made money

Which brings me to

The takeaways takeaway one

If you're going to be a company that makes money from multiple different streams of revenue, you got to nail one first

They didn't even nail one like

Stream of revenue. They had like five other things that added up to a lot

But not one of them worked wonderfully at least not enough to be profitable

So that's one major takeaway. The second major takeaway is they would always say they're going to be the next disney

They go, we're going to be a mini disney. Shane once said we're worth 10 billion right now

But conservatively, I think we're going to be worth 40 or 50 billion in a couple of years that couple of years would have been like in

2020 or something never worked out because we're going to be just like disney except with like cocaine

Didn't work out why because no one likes them if you're going to build the next disney

You got to be like people got to love you, you know, people love mickey mouse

They don't really love like shane smith, you know and all that stuff, you know, they like them

They don't they don't really love them. So if you're going to be a meaty company like that, you have to have

Something that people love

The next thing is news if you're going to be in the news business

That's really really hard because you have to stay relevant

And I actually think that you should be something that typically people don't grow out of but they grow into

Meaning a wall street journal a new york times if you're going to be like one of these publications

Economist financial times things like that you want to grow into it meaning like as you get older

You want to like aspire to be able to read it and like it and understand it and brag about it whereas the advice

It was like i'm no longer 28 years old reading about this stuff

It's not exactly cool. And plus the people working there

You kind of look silly. I've always said about this about bars barcels sports

I'm like, dude, Dave Portnoy is getting older like some of these antics are kind of not going to be cool anymore

They're more so like pathetic. Do you know what I mean? And that's kind of happened with advice. Yeah, you basically, uh

You either

Stay with the schtick

And you just start to look like a clown as you get older and older

Or you got to sell get out and change your life, you know change your lifestyle

And uh, it's pretty interesting because it's very hard to let go because a

If you weren't such a nut, you wouldn't have got that got this level of success in the first place

So it's kind of like a self-fulfilling prophecy. And then on the second second part of it, you know

It's very easy to get addicted to the character of the fame the money that comes with with acting a certain way

You're being rewarded rewarded rewarded

And then now you're 57

And you're or you know, you're vince mcman now or you're Hugh Hefner now or you're whoever right like it's hard to leave the character

Even though you might actually maybe you actually should, uh, you know grow out of it. Um

Anyways, but I'm glad that these guys don't grow out of it. It's it's for our entertainment. Thank you

Thank you for your service. Shane Smith. It is and the last two things

If you're gonna build a media company avoid new york city

like

When you're a creative services business, you need it's a it's a talent arbitrage

And it's really hard to do that when you're in a really high cost of living city like new york and also

You saw that they like became this woke company, which I don't entirely believe like go woke go broke like that type of thing

I do think that um

I think that like there's a niche you can make money in any niche in a matter of your woke or not

But they like changed that way when that wasn't originally what they did

And I think they changed that way because they moved like williamsburg and and everything like that and they totally changed their

Their their shtick, but the last thing is actually a compliment

So you texted me the other day right before you're about to go on to you're gonna speak at this conference and you said, uh

What did you say about to drop some showmanship on these bitches?

But show these bitches some showmanship

Yeah

And that is totally true and that is what he did and frankly even though he it seems as though he conned a lot of people

He kind of got the last laugh and he had showmanship throughout the entire thing

And had it worked out it would have been a lot cooler

But having showmanship it totally works. There's like people ask me like, oh, do you get nervous before public speaking?

It's like, I don't know man

Frowns nervous probably wouldn't be thinking i'm about to drop some showmanship on these bitches

It's a different attitude versus I hope I don't mess up

Dude, he's like throughout his career if you can like there's so many craziest stories about this guy

It's all about showmanship

He does the wildest stuff where he like tells stories the way he tells stories

It captures your attention and some of his employees were like when I'm with shane

I feel like I'm going to war and I'll go to any war with him

Or there's like, uh, Johnny Knoxville did a interview and he was talking about shane and he goes

He's the greatest leader you could ever have also the greatest drinking buddy

But uh

And like he like does this a lot of bio. Yeah

He like has all of these like amazing

One-liners even if they are full of shit, but whatever I hear him talk. I'm like, oh my god

I believe everything you said so for example. Have you ever heard me say

The best way to circumvent someone's bullshit detector is to not bullshit. I've used that line a couple times

I stole it from him

So he would like he has all these like amazing one-liners and that showmanship. It's absolutely captivating

There's like a story about him with rubric murdoch and rubric murdoch and shane are walking and rubric murdoch is like a

You know, if you see the movie sick or tv so succession. He's like that guy. He's like a mean old man

And shane sits down with them and goes

You don't have millennials, but I do I have everything you don't have and like he's talking to this billionaire

testosterone

The value of my youth

One of the things I don't have

All right

But he just like totally like swings above his weight and I think it's really fascinating to learn from this guy

So if you're listening to this google shane smith, it's there's like crazy stories about this guy

Good segment by you. Good. Good job by you. Good job. I like that one

I actually have a spin-off of that you mentioned a company in there

That I was like, hmm that sounds familiar. I kind of remember this name

So you said omg facts. Do you know who started omg facts?

I do I forget his name, but he's an oddball right this guy emerson sparts

And I met emerson sparts maybe 10 years ago

And when he was building omg facts and building a network called dose media. He's like a genius, right?

He is I met him and I was like, wow, this guy is super smart

Um, I actually think that he is kind of like if he had just applied himself to some other areas

he would have like totally uh done done some

Like you know, absolutely amazing things everybody would know his name versus just kind of me and half of you knowing his name

So I'm going to tell you a couple things about emerson sparts

So the guy when he was 12 years old

Built a website called muggle net and I don't know if you're a harry potter guy, but

I'm I'm a harry potter guy

And I was on muggle net all the time and I used to love this because it was the number one harry potter

fan site in the world tons and tons of traffic

I mean at the time harry potter was like, you know, justin beaver. It was a harry potter was was super super famous

And in between the books people wanted a place to discuss to post theories to post fan fiction to

Debates, you know, what should have happened blah blah blah

And so muggle net when he's 12

He builds the super popular site getting millions and millions of visitors when he's 18

He publishes a best-selling book his best-selling book is called

uh, it's called

Harry potter should have died

Controversial views from the number one fan site and basically it's like harry survived. What should he have?

Uh, you know, I run the world's biggest fan site for harry potter

And here's some of the controversial viewpoints that people have about harry potter

You can already see this guy's got the he's got the certain that oju that comes with the sandwich

He's got the sauce and uh, he's got the showmanship. And so he

I met him. Maybe he was I don't know how old he was maybe 22 or something like this at this point and um,

Where'd you meet him? I don't even remember man. I just I remember being on a call with him a video call

And it was him and I think it's a girlfriend at the time and they were creating something called dose media and I go

So what is it? He goes well, we were going to make like really viral content. So

Uh, they had omg facts. That was one of their companies. They had like four or five

websites like that one that was like science facts ones that was funny things one that was

Whatever controversial or pop culture stuff like references to tv shows and things that were hot right now

And they had these websites and I go, okay. So how do you like at the time in my mind? I was like going viral is

Getting you know lightning strikes you, you know, you it's just not something you try to do

It's just something that happens or it doesn't happen and it usually doesn't happen

He's like no no no and he had built a four-part system. This is the first guy. He's like, yeah

We're a different type of technology company

We have uh 18 engineers and we have four riders and we reach millions and millions of people a month and I was like

No, no, it was actually good. I was like, so what what are the engineers doing? He's like, well

basically

All the viral content on in the world starts

Either in one of three places reddit

imager or 4chan

And he's like basically I built a detector that would find stuff

That's going that's getting hot on those on those three platforms

First before it hits instagram before it hits facebook before it hits twitter

It's going to get popular there first and he owes so we built a detector

then we built a

Like a then the rider basically would would build like like write a summary and then we built a

ab tester that would basically create headlines

um

Headlines and uh and like different like uh frames of that same story

And it would test them really quickly that we had a tester that would spray that out

We would pay to get that in front of like, you know, 5,000 10,000 people

We would find what what's the winning angle and then we would have the post and then distribution, right?

And then we would actually distribute that to our audience and so we could engineer

A higher degree of virality in every piece of content. Why because we're finding the best stuff

Or packaging it quickly with our writer then we're remixing it with our automated ab tester

That's going to juice up the headlines and then the images then we're

Spraying it out getting data feedback telling us which of these 15 variations is the winner and then we post the winner

And um, I was like, dude, this is amazing and over the few years

I saw him build this up and he his traffic kept going up and up now the problem was

His traffic wasn't that valuable. It was kind of fly by traffic

It was kind of like the lowest common denominator of the internet and from facebook

I think it was very dependent on social networks and then facebook changed and

For a while facebook was like rewarding the hell out of anybody that could post viral content

And then he got two

Clickbaity on facebook and then facebook just manually went and unplugged the like viral engines for for for these companies

And so like 10 companies died like, you know in that transition

I don't think he's totally died, but I think it definitely slowed down

And I think he also grew up and was the sort of like what else do I want to do in my life?

So now I just went to by the way really quick before that before you go on to him

Did I have I told you about my partner at hampton joe?

He had a company called little things which was the same thing as that it was a content like clickbait website

He started it in new york and then I'm like he had all these he had multiple floors in an office building

And it was killing it there at 100 million in revenue

He had a deal sell they went through due diligence. The deal was going to close in two weeks

That changed that you just referred to it happened to little things at the time little things was the most

trafficked website

From facebook in the world

So it was like little things and then it was like huff po and then like buzzfeed buzzfeed. Yeah

The deal was about to close. I think for a hundred and something million

He was going to walk away with 50 million after taxes two weeks before the money was supposed to go through

That changed happened the deal

He lost the deal and weeks or months like only a couple months later

They had a shut down the company and it was all because they built everything on top of facebook

That's a mike tyson gut punch right like uh birds fly

Fish swim and deals fall through that is the the the the sad part about deals that that is too common

Yes, and that's very common. That's what happened to this guy. I'm it's smart. I'm it's spark. So what happened to him?

Emerson sparts

Emerson sparts, sorry

Yes, but uh, here's his bio now

um

He's his thing says like ai history complex systems of bitcoin then he goes goal

I want to die number one on the leaderboard of people who changed the world

And so his what he's doing now is something called non-linear and non-linear. It looks like is basically a

Is basically a

company that is

funding people working on ai to make it make sure that it's safe and so

So they they fund basically non-linear entrepreneurs people who are trying to work on these like exponential technologies

And so yeah, they we incubate ex ex risk ex risk nonprofits

I don't even know what ex risk nonprofits means

Uh by connecting founders with ideas funding and mentorship and so that's what he's working on now

But this guy's always going to do interesting things. This guy can't this guy can't be uninteresting

Dude, when I read about him, I I was like

Why are you doing this dude? Like you're doing this dose media thing like you seem like a genius. You're just absolutely wasting it

This is a what do you say? It's a uh, hi

High effort low or what do you say? It's a hermosi had a good one for this. It's a 10 out of 10

10 out of 10 entrepreneur going at a 4 out of 10 opportunity

And uh, that's how I felt when I met him. I remember literally like this is now 10 plus years later

I've not spoke to this guy

You mentioned omg facts and in my mind. I'm like that guy's smart follow up with that guy

Right because he left such an impression on me where I was like this guy is really really clever really smart

Really also like wholesome like even at the time he was like

Uh, even though he was working on something that's like typically I would say almost everybody

I know that's in this kind of like viral media actually just like lame. There's kind of shitheads and

And I mean that like in an endearing way like, you know

Some people are shitheads and it's all right. You're just like, yeah, I'm trying to I found this arbitrage. I'm making it happen

Um, and so he was not that he was really soft. So a really really nice guy

Ben says x risk is the risk that something can end the world. It's an existential risk. Okay. Yeah, good

So he's he's gonna save the planet which is dude in his website is a is a dot org. Yeah

Noble mission the dot org type of guy. I had a when I was in Austin

Um, a friend of mine was hanging out with Justin mayors who's been on the pod before

I think I can quote this because I think it's a good quote, but he said uh, he goes Justin said the best thing he goes

It doesn't matter how you make your first nut

She's got to make your first nut

But after you do that, then you want to work on a noble mission

And he's like dude, I he's like I like that

He's like, you know do whatever you got to do to make to make your first nut which is

You know get your the first few million dollars where you're financially free and you're in your uh, you don't have to have a job

You can work on whatever the hell you want

But then after that don't go chase the second nut go go after something. That's a noble mission go after something. That's awesome. And um

Yeah, very few people actually do that. In fact, I don't even think Justin is doing that at the moment, but but I

I love the quote. Isn't he doing like an fsa spending store. That's like the most like opportunistic thing I can hear I think of

The way that he pitched it it was pretty awesome

He said something like uh, obesity in America is like an epidemic and 60% of people are overweight

We want to make you eat healthier by making it easier to acquire like

You know this types of food and this type of health care and we're doing it via and then you like that's where the pitch comes in

All right, that's always a good look to his site. I think it's called true medicine

true med

So true med

He says food is medicine exercise medicine sleeps medicine

We don't mean this in a theoretical sense food exercise and sleep are all scientifically proven to prevent or alleviate

physical and mental illness

In short, these are all medicine

It's a true medicine payment integration that enables qualified customers to use pre tax hsa and fsa funds to purchase

Health promoting products and services from their favorite merchants

Soon it'll be available in the checkout flow for all merchants who are for merchants who sell healthy food supplements exercise equipment

And other health and wellness products. This is such a good idea. By the way, this is a

Phenomenal idea. This is a 10 out of 10 opportunity

and uh, dude

He pitched me to why have I not invested in this?

I didn't invest because I was just like saying no to everything and I deeply regret it

I deeply regret it because by the way, this is the best way to pitch a business

Which is like you like paint this like dreary picture like the world is obese

You know, did you know that like if you add up all the terrorist attacks all the guns all the car accidents

It would only be one tenth of the people who die

You know from being obese like you know that type of fact and you say like if we continue this

This is what the outcome is going to be this and that

And and so we need to solve this the way that we are happening

Happen to be trying to solve this is by doing x y and z and I'm like, all right. That's a great pitch. Yeah, this is uh

Wow, I am so jealous that I'm not invested in this. I'm I'm messaging him right now. All right. Um, yeah, that's it

That's the pod we're out of here

I feel like I can rule the world. I know I could be what I want to

I put my all in it like no days off on the road. Let's travel never looking back

Machine-generated transcript that may contain inaccuracies.