My First Million: Best of This Week: Feb 14th

Hello, welcome to another episode of My First Million Best of the Week edition.

This is Ben Wilson, also known as Producer Ben, and this episode is some of the best

clips from our episodes throughout this last week.

Nothing new, just a short rapid-fire recap of everything that went on.

To start off with, we've got a clip about the billion-dollar Bitcoin thieves.

So Sean had written about this on Milk Road, his newsletter, which you should go subscribe

to.

It's really good.

And he had the full backstory about these people who had stolen billions of dollars

worth of Bitcoin.

And then, strangely, Sam had actually met one of them.

It was a husband and wife team, and Sam had run into one of them at a party back in the

day.

And many of you pointed out that it seems like a strange coincidence that Sam also met

Ross Ulbright, another billion-dollar criminal.

And so is Sam actually a criminal mastermind?

Is he a real-life dandy ocean?

I don't know, but enjoy this clip where Sam and Sean break down the story of the billion-dollar

Bitcoin thieves.

I don't even entirely understand what happened, but I have a backstory about the people.

If you read today's edition of Milk Road, you will get the full backstory and 10 bullet

points.

So here's what happened.

2016, this crypto exchange called Bitfinex got hacked.

And at the time, I think like 120,000 Bitcoin got stolen.

That was like $70 million got stolen.

And it was bad.

That was like a big hack.

The price of Bitcoin that week dropped by 40%.

So it caused this huge fear shock in the market.

But the thing about Bitcoin is Bitcoin is on a public ledger.

It's a public blockchain.

So everybody could see the coins.

Everybody saw, oh, the coins are in this wallet.

And so all the other exchanges were like, look, this is bad for the industry.

We will try to prevent.

Like if that wallet tries to cash this out, we won't let them cash out the money.

So for many years, that money kind of just sat in those wallets or was moving in like

really small transactions back and forth between a web of wallets.

Clearly somebody was trying to like launder the money, essentially.

They were trying.

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 host relived 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.

Back to the show.

But but how did he how did they even get the first place?

So I don't know.

I don't know what the exploit was that let them hack the accounts and they didn't hack

all the accounts on Bitfinex.

They actually just hacked like some of the whale accounts.

So they were able to take 120,000 Bitcoin from not all the accounts.

And the funny thing is that Bitfinex didn't have the money to like make those users whole.

So what they did was they they reduced everybody on Bitfinex's balance by 33 percent or something

to like balance it out.

So like imagine if your bank did that.

That would be like insane.

I'd be like, oh, they robbed that guy's vault and you're taking my money away to like even

it out for everybody.

Like, no, thank you.

So anyways, it was bad.

And this is the reason why Bitfinex is not like, you know, the biggest exchange now.

So anyways, that the money kind of sat there.

Now fast forward five and a half years go by.

Last week, people start to notice bigger transactions coming from the Bitfinex hack wallets.

And so they like there's these alerts on Twitter, like whale alert, whale alert, like the coins

are moving.

The coins are moving $100,000 a million dollars.

The coins are moving $10 million, whatever.

And so and so the Fed go or not the Fed, sorry, Department of Justice goes kicks down a door

in New York into this this this husband and wife couples house.

And they look like, you know, your complete like average Joe clean cut like this is not

like, you know, doesn't look like a grimy criminal mastermind operation.

And I'll explain a little bit more about that in a second, the funny bit about that.

But basically they seize like their computers.

They find a bunch of burner cell phones.

They find like a bag of like $50,000 of cash.

They find a bunch of like the hardware wallets that had the bitcoins in them.

And then they found like folders on their computer that were like fake passport ideas

and like places to go places to run away like they found like folders that said that

shit on their computers.

And and they seized three and a half billion dollars worth of Bitcoin because the price

of Bitcoin has gone up so much.

So that 70 million has become three and a half billion dollars worth.

And so these guys were trying to launch.

They don't think these are the hackers, but they were trying to launder that money.

They may have been the hackers.

They don't know that that's not proven.

But they were trying to launder the money and the the DOJ had been like if you've seen

that meme of Charlie from it's always sunny where they had like the corkboard and he's

like trying to like find that find the crime or solve the crime.

That's what they had been doing because they had this web of all these wallets.

And finally they found that oh it's trying to cash out in this wallet owned by this guy

Ilya Dutch Lichtenstein or whatever.

But how how did what what type of idiot would use his name to get the money out?

And so the problem is like they were trying to get the money out through like Walmart

gift cards.

They were buying like five hundred dollar Walmart gift cards with Bitcoin.

They were doing like PlayStation games.

They were like they were trying all these small things that they could never move the bulk

of the money.

So if you want to move like in mass, you got to do something that had that lets you move

size and usually those.

Could you buy an NFT and then sell it?

No, like you need to get the money out of the wallet.

That's the problem.

So the problem, so in order to do that, there's like an off ramp, right?

How do you get it into, you know, US dollars?

For example, if that's what you wanted to do, you know, he left it there for five and

a half years and they were probably living off and spending in some ways.

But like you wanted to actually like get a lot of it out and get it and remove the paper

trail of the blockchain.

You need to get it as an off ramp.

But to get it as an off ramp, you have like a, you know, your idea, like these exchanges,

they require you to upload your license and like they have laws they have to comply with

called KYC, know your customer.

And so eventually they found that somehow the DOJ, they didn't explain exactly, but

they, they identified that the money was moving towards a wallet that was owned by a known

person.

That's how they ended up finding these guys.

Now the funny part is.

That's awesome.

Go ahead.

So that.

Well, so the, I, when I read about this, I was like, wait, that name sounds so familiar.

Both their names sound familiar.

So the guy, his name is Ilya, I-L-Y-A, I think it was like a very like weird name.

His last name is Lichtenstein.

So he spoke at the first HustleCon.

I'd never talked to him, but he had a company called MixRank, which was just a normal startup,

went through YC, and he spoke at HustleCon.

And then his girlfriend or wife, she was a copywriter.

And I remember talking a little bit with her because she, her name's Heather Morgan,

I think.

And she had a website all about writing sales emails.

Totally.

Is that right?

You remember her?

The day before the hack.

She had like a red dress.

Like five hacks for your, your cover letter for your job interview, like, you know, like

that sort of thing.

And so, yeah, she was doing that.

She, and so they, and the funny thing is like, the reason the internet kind of went crazy

with it was because here you had two very unlikely characters.

So we had a bunch of friends text us or text me because I was writing this, this edition

of the milk road.

And I was like, anybody know this guy?

And you knew him, but some other people knew him, they're like, dude, you would never get

vibes of like, this guy might just go laundered billions of dollars was like smart, like kind

of like his guy, like engineer type.

He like, he like showed very little emotion.

No, I did not think that this guy, like, yeah, and, and in her, she's like this like

super strange Kanye West level weird, you know, like person.

She basically, she had like an alter ego that was called razzle con and razzle con was her

rap name, and then she has like these super fucking cringy rap songs on YouTube.

Like, dude, okay, I have, you know, I have, you know, I think it'd be cool to be a rapper.

But if I hear myself, there's no way I'm publishing that because it sounds so bad.

And so it's horrible.

It's so bad that the top comment was Paris Hilton.

I'm going to prove to everyone that you can have that having money means you can rap good.

And then it said, Heather Morgan, hold my beer.

I didn't even know Paris has like a rap song.

So yeah, there's just like, she's like one of the strangest characters.

Like I watched, I went deep, dude, for this, I was writing this thing and I was like, oh,

let me get some examples.

And then I couldn't look away because like the train wreck, dude, it's so uncomfortable

and like she, she like forced everybody to like, they built like this golden mini Taj

Mahal that she sat in and then her bridesmaids lifted it up on her shoulder and brought

her in. But even the audience at her wedding is like uncomfortably clapping like off beat

because they're like, is this normal?

There's like clearly only 14 people in the room.

And then she does a rap performance at the wedding that was like equally cringy and she's

just like humping the air.

Oh my God.

To the guy, Ilya, Ilya goes by Dutch, I guess, dude, this freaking guy, I'm looking at these

pictures.

That's hilarious.

This woman's really hard to look at.

That should have been her rap name, cringe city.

That would have been like, okay, I get it.

You're going to be the cringiest.

Cool.

That's like Henry C. Hudo.

The cringiest days of the day.

The king of cringe.

Yeah.

That's what she should have done.

Like it is super strange.

But but yeah, basically they recovered it.

And so now let's go ahead and anyways, there's a bunch of interesting little bits to it.

So the DOJ is going to give the money back to Bitfinex looks like Bitfinex had when

they they launched their own token at one point time called the Leo token that's like

used in their if you trade in their exchange, it'll give you a discount using the Leo token.

So they had to put it a thing when they lost a Leo token was like, Hey, if we ever recover

anything from that hack, we'll use 80% up to 80% of it to buy back and burn our Leo

token, which will cause like the price, you know, Leo holders to benefit from if we ever

recover from this.

And so now they're going to get like three and a half billion dollars to buy back.

So the price of Leo token like shot up like what are 60% in 24 hours, because people are

like, Oh, wow, that's going to be a lot.

But they said we're not going to just cause a bunch of sell pressure in the market.

We're going to do a controlled sale over like a multi year period so that it's like scheduled

and doesn't like affect the Bitcoin market or whatever.

God, this is such a good story.

This would make this.

Yeah, that's what everyone's saying is like, here comes, you know, incoming incoming Netflix

doc.

All right.

Next up, we've got a story from Sean about a pitch meeting he was in and a very small

and simple problem that he saw got solved.

And this led him down this idea of what he calls paper cut companies.

These are companies that solve pretty small and simple, but very annoying and persistent

problems and they can be extremely valuable.

Check it out.

So this founder was pitching me his company and he was just like screen sharing.

So he's showing me a product demo and it was like a, it's like a data analytics tool.

And he was like, yeah.

He was like, check this out.

If I go to Excel and then he like, he just opens up the browser and I never see this

before he goes.

He just opened up the browser.

He goes sheets.new.

He enter and then he opened up a Google sheet, like a blank spreadsheet.

And I go, I go, whoa, what's just, what was that?

And he goes, oh yeah, I'll tell you guys, I'll show you later because he was so annoyed

with me just going on tangents about every random thing he was doing.

Like you wanted me to show me his product, not the fact that you could type sheets.new

and save myself.

Like I fucking Google, I Google Google drive.

Then I get to drive.

Then I click new.

Then I go down the menu.

Then I find spreadsheet.

Then I click new spreadsheet.

Then I get to a sheet.

It's like this, like on the one thing I do six times a day.

And, and so just seeing this was like, well, that's awesome.

And it reminded me that there's a whole company out there called go links.

Have you ever heard of go links?

No.

What is that?

So, so I saw this in a, or when I was working at Twitch, the kind of like whoever the, I

don't even know his job title, like BP of everything, the kind of that number two guy

at Twitch, um, my boss, this guy, Dan, he was like, he's like, God, we have so many

documents in this company.

And now I just have bookmarks and tabs just with like all these docs open at all times

in this company.

He's like, and if I ever want to look up like, oh, the annual plan, it takes me like five

minutes every time on finding cause I don't know why we don't just use go links.

And what go links does is it lets you set up a thing that's like go dot annual plan.

Or like, you know, you could just basically type in like a human readable link and you

could anchor it to any doc.

And so let's say, you know, you've, that's anchor to the 2021 doc.

Oh, now it's 2022.

Cool.

We just swapped the link out.

We just, I said, we like, we could still always type go slash, you know, uh, annual

plan or go slash plan and go slash pan will now take us to the 2022 doc.

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And I saw this, I was like, wow, this is actually so useful to just be able to quickly find

and like revoke access properly to, to different documents.

And so, um, so I really like this.

Most people haven't heard of this.

And I think it's a very expensive tool.

I think it's like a pretty like enterprisey tool.

I see at the top here, they raised a $27 million series a okay.

So doing pretty well, obviously.

So I think somebody could build, this is like a very simple product.

I think somebody could build a go links for like the startup level world more like Andy

Hackers.

I just, I just invested in one.

Oh really?

What is it?

Yes.

So I told you about it too.

I swear.

I told you about it.

It's called Nira.

And I am in this too.

I'm in this too.

Oh, I, so that's the same thing, right?

So this is, this is slightly different.

I don't think they do the, the shortcuts, the links, maybe this is a feature they should

add.

What they are doing, what Nira is doing is we all, all companies have all these docs

and then people get fired or they move teams or whatever, but people still have access.

It's like, oh yeah, I still got this link.

It just opens up the, like the numbers for the company or like, yeah, this contractor

we hired still has access to all of our files, but like who the heck can go audit and keep

up and scrub the access for this thing.

That's like, it's like a very big problem.

Like your company's most sensitive data is all in the cloud.

And then the cloud like access is shared amongst like so many people and there's no central

place to see who sees what.

And so Nira is building that they're building the, who has access to what?

Yeah.

But I think the link thing is a feature.

Maybe.

Yeah.

Maybe it is a feature.

I'm saying, I think it's a feature that can be standalone because adopting something

like Nira is like something that's going to go through my like, you know, chief security

officer type of thing.

Like this is going to go through our CIO or CSO, whereas this go links thing is something

that like, you know, me and my one person who I work with, like we're both just irritated

with these super long, ugly Google, Google docs links that like, you know, like we can't

find anything.

It takes forever to find stuff.

They have a free plan.

Nira does.

No.

Go links.

Oh, go links does.

Yeah.

Yeah.

Yeah.

I think, I don't know at what point they do this, but I don't know why this is not more

popular.

This is like a real problem.

I think this also just got me thinking like, what else is like this?

What are the other problems that are like these like, I call them paper cut companies.

So, you know, death by a thousand paper cuts.

So like, what's a thing that's irritating, but you do it so often that it's just a constant

paper cut.

That's just a noise.

You screenshots is another one that like sharing screenshots was one that was a big paper cut.

I invest in this company called bubbles that tries to make that better.

Loom.

Is it working?

I remember bubbles.

Yeah.

I don't know.

I haven't caught up with them in a little while.

I know it was working initially.

They raised much money from that, but I feel like it hasn't taken over like, you know,

the loom market yet, but maybe it's going into a different market.

I'm not.

Dude, the screen, the screenshot.

One's a good idea.

Also, the copy and paste.

The copy and paste.

I've been thinking for years.

How can I optimize a copy and paste?

Better clipboard.

Yes.

A better clipboard.

I've been thinking about that for a long time.

It's been, that's always an interesting thing to me is, is the clipboard.

It's really intriguing, but the problem with these types of products is you have to truly

be inventive.

I don't particularly have that muscle to like be that creative.

So people who invent things like this or like even like, um, what's that guy named

Howie who's got the huge company air table, air table, uh, creating something like air

table, which is basically kind of like Excel, but different and better, or even creating

like a notion.

I don't like these people kind of our geniuses who can like come up with like these weird

product features and like, they just know that like, if you hover your mouse over this,

it needs it.

Like that.

They're so complicated.

They're so complicated.

It's pretty amazing.

Yeah.

They, um, they're big on details and I'll tell you the best thing I heard about details

like this.

I'm not detail oriented.

Like if, if this camera showed my desk, you would see like, yeah, I'm obviously not organized

or detail oriented.

Like everything is sloppy.

My camera right now is actually slightly crooked, but I just don't care.

I just don't care about details and pretty much anything I do.

So that's why you're talking with like your neck a little.

Yeah.

That's why I often do this.

I end every podcast with a quick, um, but you know, like I'm not a sweat the details

person, but I remember the first time I used Slack, I used Slack really early on.

It was like in beta.

I should have invested in it.

I just wasn't an investor back then.

I didn't think about it that way, but I used it and I remember the first thing.

One thing I did was I, I was telling our designer, Hey, uh, yeah, here's the color for

like our logo or whatever, uh, or they sent it to me and they just sent the hex code.

So like, you know, hex, you know, like pound CFF or, you know, 373, and it just create,

it turned it into a small, tiny color swatch.

And I remember thinking, why the fuck did they do that?

Like what level of care went into caring that the hex code would just auto format with a

little swatch next to it?

That's what I mean.

Nobody would do that unless you were like a real product designer who sweat the details

who use this product all the time and just dedicated yourself to like any time you could

just scratch your own itch and irritate, like remove one paper cut from your own user experience,

you're going to do it.

And so this is why also working on your own products, working on products that you want

to be the user of helps because you'll get so annoyed at the paper cuts, you'll just

get rid of them yourself.

All right.

Next up, we've got a clip from Max Litvin, the founder of Grammarly.

You might have Grammarly installed as a Chrome extension, if not, you really should install

it.

It's great and very helpful.

I use it all the time.

But what you might not know is that Grammarly, this Chrome extension is actually a $13 billion

company.

And on this clip, Sam talks to Max about how he knew this kind of random market could actually

be a really big opportunity.

What were your goals early on?

Like when you started the business for like, man, I think this can make $10 million a year

and provide a good lifestyle.

Or like, I think this could, or was it like, I think this could be like a multi-billion

dollar thing.

Like what were your goals early on?

I think we decided that it could be a multi-billion dollar business during our conversations with

Brad, partially.

So kind of Alex and I, we hoped it could be.

But then once we started talking with Brad about valuation plans and all that, when he

was thinking about joining, then it become pretty clear that, yes, there is a multi-billion

dollar market out there.

Are we going to capture it or not to be determined?

But at that point, but there is definitely an opportunity.

So the size of the opportunity became clear fairly early, but past there, that took years.

What was the vision that, or what did you see that made you feel that it could be a multi-billion

dollar opportunity?

And what was the vision?

And were there any, was there any numbers that you saw early on that would say like,

oh my gosh, there's something here?

Yeah.

So I think the breakthrough moment was when we saw that it is possible to help not just

professional writers, people who write for a living every day, but also help casual writers

or people who write as part of their job or part of their life, but not like a key part.

So writing is not their main product.

There are no novelists or researchers who are published and so on.

So when we saw that it's possible to make a product that's useful for everybody else,

then it clicked in the very simple formula.

If you look at amount of time we spend communicating and creating knowledge as a humanity, as all

people in the world, that is a huge percentage of our time and it's increasing because we

spend less time doing things with our hands.

Manufacturing is being automated.

It's not like we were doing it manually anymore as much.

So if you take this time that we spend communicating and creating knowledge and make it even 1%

more effective.

The impact is in trillions, not even billions.

So can we do something that makes communication 1% more effective on average for everybody?

That doesn't sound impossible.

That sounds like something is doable.

I had that same insight except I did it in such a horrible, worse way.

So basically I learned how to be a copywriter.

So I read books on copywriting and on persuasive writing.

And my theory was like, oh my gosh, with texting or online dating, I was single at the time

in 21.

So it was all about dating.

I'm like, oh man, if I learn how to write better in my messages to girls who I match

with, my life is going to be better.

And then I was like, wait a minute, if I learn how to write better, I could sell more stuff.

If I learn how to write better, I can make people feel emotions about this cause that

I want.

So just writing better, it changes, it makes life more practical, but also it makes you

think better.

So if you have an idea for something and you're forced to write it out, you'll see all the

holes in an idea and you'll force yourself to lay it out.

And so I was like, oh, I'll teach people how to write better.

And so I created a course on how to write better.

Of course, obviously creating a software product was out of my league, but that was clearly

the better move to do.

But the same insight was like everything that we do is via a text, whether it's a text message

or an email or a website.

And even if it's via like the spoken word, I have to write that anyway.

So like writing is like the most important thing that you can master.

I just wish I would have approached it in a software way as opposed to just selling a

$300 course.

Yeah.

Software is more scalable.

That's true.

And actually, what you said about writing, it also applies to speech.

When we do user research, we notice that people who use Grammarly repeatedly adopt patterns

of communication, more effective patterns of communication and translate it to non-written

communication as well.

So for example, if Grammarly keeps suggesting that you don't use kind of a wordy or wave

or weak sentence structures, you stop or reduce use of them in speech as well.

So kind of good habits rub off and translate to other modes of communication.

All right.

Finally, we've got a clip from Sam and Sean.

They were talking about whether the Olympics were a waste of time.

Sean thinks that the Olympics are a waste of time for many people.

And that's not what I'm going to post here.

But what this is, is the discussion they had afterwards where Sean talks about this idea

of not accidentally over-indexing on something that doesn't actually matter to you.

And I think it's a really valuable point and something important to consider.

Let's give it a listen.

I think that there's like, you know, like, for example, if my kid was like, had the

potential, if you told me right now, hey, your kid has the potential to be the greatest,

you know, like at whatever, the greatest third person in the bobsled in the country.

But here's what you have to do every day, every weekend for the, you know, the next

20 years of their life is going to go into optimizing their body and mind to be able

to do this, which essentially is what goes into like becoming an Olympian, right?

You're trying to become the best in the world at an arbitrary game that was made up.

And you have to sacrifice a huge amount of your life and focus and attention and energy

and talents.

You decide to invest into this.

And the thing you get out is character building life lessons.

And you get that in the Boy Scouts, you know, potentially a moment of fame when if you want,

if you actually did achieve the thing and you have the, you know, sort of the, the, the

knowing inside your heart that, that this was, this was good.

So like, you know, would I rather be, you know, Steve pre-fontaine, this, you know,

this good looking mustache runner guy or would I rather have been Phil Knight?

I'd rather be Phil Knight.

I think actually he's the perfect example.

How did pre-fontaine get out of, you know, Nike, nothing.

And so he actually died three years into founding the company from a drinking driving

accident.

So yeah, you're right.

Okay.

It's not so funny now.

It didn't work out.

Wait.

So he was actually a co-founder of Nike or he just inspired them.

He, he, he was, he was in their crew and he was their first sponsored athlete and like

their fifth or 10th employee or something like that.

And if you ask Phil Knight who, you know, who's, who's Nike's mentor or sorry, who's

Nike's mascot, they'll say it's pre-fontaine.

Yeah.

So anyways, my point is, I think that there's a lot of things that are fun and they're best

done as hobbies versus trying to become the best in the world at it.

Right.

I can play, you know, call of duty and have a bunch of fun with my friends.

I can even play, you know, the competitive side of things just cause I like to scratch

that itch and I play a couple hours a week, but once they try to become the best in the

world at it, the level of sort of sacrifice and over-indexing on that thing.

And hey, you could do it.

You could over-index on anything.

You can try to become the fastest typer in the world.

You could try to become the best photographer of brown leafs in the world.

And you know, like you could do all those things.

So choose carefully.

Choose which one you want, what you, what you really want to go into.

It's like people who dedicate their lives to be an average D three basketball player.

It's like, it could work.

You could, you could, you could go to the NBA, but like odds are the papers or the writing's

on the, on the wall, like it's probably not going to happen.

So maybe you should actually like study a real major instead of basket weaving or communications.

Right.

And if you enjoy it, fantastic.

If you're enjoying every step of the way, fantastic, but a lot of things in my experience

are most enjoyable when done as hobbies versus when done with the competitive pursuit of

becoming the absolute best in the world at it.

Are the guy you used to work out of his, his dojo, he used to tell me that I was like,

Oh yeah, I really like this.

So I might start a business around it.

He goes, Oh yeah, Dave grossplat, he goes, easiest way to fuck up a hobby is turn it

into a job.

And I remember just hearing that being like, that's interesting.

I actually never really thought about that.

Yeah.

Actually there are some things that are really fun as hobbies that become really unfun as

jobs.

Right.

It's like working at a Cinnabon.

Right.

It's like, Oh yeah, I love eating Cinnabon.

Well, working at a Cinnabon, smelling a Cinnabon, eating free Cinnabon anytime you want.

That's not so fun.

All right.

That does it.

Thanks for listening.

Have a great weekend.

Bye.

Bye.

Machine-generated transcript that may contain inaccuracies.