#100 with Anthony "Pomp" Pompliano - The "Export Framework" to Business Creation

We're live. Sean and Pomp, you guys did a podcast together on Pomp's Podcast. I actually did it last year in New York, or this year before corona happened. Sean, who is this guy?

This is Pomp, known as— he's known as Pomp. His name's Anthony Pompliano. Pompliano, is that the right way to say it?

Close enough, yeah.

No, no, say it how you would say it.

Pompliano.

Pompliano. Okay, great. This dude's everywhere, man. If you don't know him, you don't know us, probably. That's kind of my rule of thumb. This guy's everywhere on Twitter. Investor, ex-Facebook guy, big time in the Bitcoin world. Everybody knows him if you're in crypto. And again, if you're not in crypto, you're probably not listening to this podcast. So I was going to ask you how it's going, but really all I want to know is who was better, me or Sam, on your podcast.

That's a horrible question.

Well, Sam got to cheat because Sam got to do it in person, and I can't remember if we live streamed or not, but it's always easier in person, I think.

It sounds like you're saying Sam, and, uh, that's not cool.

But I actually think on the, on the audio download, you're beating Sam in the first couple hours.

We'll see. Okay, great.

I have to go back and look.

That's all that matters.

Now, now Sam's gonna get competitive.

Well, so I just looked, uh, I'm looking at the, uh, someone already commented and they said, uh, I— they called Sean a goon, and I was like gonna hop in, but it was actually a compliment. They said, I listened to This Goon and the bigger goon Sam Parr on My First Million Ever Made. I was about to say, motherfucker. And then, but it said, then it said, hands down the best podcast out there. Sorry, Pomp, you're my second favorite.

I'll take second. That's fine. Second place to you guys is perfectly fine.

I was telling Sam on the last episode, I was like, dude, I prepared for this podcast interview I did. I was like, I've sent him an email being like, hey, you know, here's a bunch of shit we could talk about. Um, because I know if I'm the host, that's what I want to get. And so hopefully it turned out good. Anyways, everybody should go check it out. Go to Pomp's Podcast. Yeah, listen to us talk over there. We did a bunch of— I basically took— Sam, I don't know if you heard it. I took a bunch—

I did. I'm listening. I was listening to it right before this.

I took a bunch of our best ideas, uh, over there, and I was like, here's a bunch that we've brainstormed. And then yeah, we just shot the shit after that.

Yeah, my favorite part is that you sent me that, uh, really detailed email, which I told you, and I'll repeat again, was incredibly helpful. And then I didn't return the favor. So sorry.

Yeah, well, you know, not everybody's me. Not everybody can put in that prep work. This is like, you know, one of the things I always talk about is how I'm lazy, but then when I do something, I go like really over the top with it. So I just either don't do a whole lot of things I should do. Like for example, you know, now that I was on your podcast, I see all the smart little things you're doing. It's like, oh, it gets posted onto LinkedIn and it gets posted multiple times onto Twitter, kind of on like hits the different time zones. It's like, dude, these are, you know, basic blocking and tackling best practices. But I know I'll never do. And so we will never get the gains of that. I don't think Sam's gonna do that either.

It's just— if you want to— yeah, if you want to understand, uh, I think of it in terms of batches. So like, you got to do 50 episodes, and then you've earned the right to like learn, you know, 101 course stuff. Then like you do another 50, now you've reached 100 episodes, now you unlock like 201 learnings. Uh, and so as you keep going, like there's things that, you know, these folks who have done thousands of episodes They understand it way better than you guys or myself. It's just we gotta get to 1,000 episodes and then somehow we magically learn that stuff too.

Well, this is episode number 100, so this is a big milestone.

Yeah, so, Pom, you, you are known for this podcast you have now, and you're known for being a Twitter personality, right? I mean, that's like the high level.

To be honest, I have no clue how that happened. But, uh, yeah, I think that a lot of people, that's actually how they know me, which is pretty crazy.

How many people listen to your podcasts roughly?

Wow, wow, wow, wow. So you were— and before that you worked at Snap and you worked at Facebook. Were you an executive or a product manager or what?

I was a product manager at Facebook.

How'd you get this job at Snap, dude? I feel like you went from like, uh, you know, normal person at Facebook to you got a pretty big job at Snap. And I know a whole bunch of shit went down, so I don't know if you could talk about all of it, but can you talk about how you even got that job? Because it was a pretty legit role for what you had done before that, right?

Yeah, I think a lot of it is one, just the progression of people on the growth team at Facebook. So there's plenty of people who'd gone to go run the growth team at other kind of high-flying early-stage startups. So, you know, Ed Baker went to Uber, somebody went to Lyft, somebody went to Airbnb, yada yada, whatever. So that definitely doesn't help when you kind of come from the right farm system, if you will.. And then internally at Facebook, you know, really I kind of built my reputation internally, just right time, right place. I got there and they were like, hey, you should go do this Facebook Pages thing. And I was like, I have a page. And they're like, no, you have a profile. That's different than a page. And I was like, oh, okay, well, like, what's a page? And so, you know, they were just like, hey, go grow that. And small team, but just kind of worked on the right thing at the right time. And next thing you know, it exploded. And it was kind of like this greenfield, right? When you haven't optimized something at all, literally just like changing the color to a button can lead to, you know, 15% gain or whatever it is. And so very quickly it just became like, hey, there's this game of growth and you seem to be pretty good at it, so like let's move you around internally and kind of do a bunch of different things. And then I think really just reputation spreads from there.

So definitely that is, uh, one strategy. There was also, although many of them I think have left at this point, there was this like little angel investor mafia at Facebook, and it was kind of like the rite of passage. If you were leaving to go to a competitor, they weren't excited. If you were leaving to go to like a non-competitive but large tech company, company, you know, hey, well wishes. And then if you're leaving to start a company, you basically had to like go see the mafia, right? In kind of a very nice, friendly way. But really, it was just you could literally walk out of the door with angel investment, right? And kind of have your pre-seed round or seed round done. And so through that process, there's a lot of people who just say, hey, I'm gonna go build, you know, X company. It's like Y internal tool, but for everybody else.

And everybody gets it right away.

What was your title at Snapchat?

Officially, I think it was, I actually don't remember, either head of growth or growth lead. I can't remember. Basically it was like, hey, you're gonna come and run the growth team.

Awesome, wow, okay. What do you wanna do?

Everyone on Twitch hates it 'cause I just put random shit as my title on LinkedIn that doesn't match my internal title because my internal title is like a real technical, like it's like 10 words long. I'm like, no, I think what I really do is I lead international growth. So I'm gonna say I'm the head of international growth. There is no such a role inside of Twitch, but I'm the close— if there was one, I think I might be that. And it pisses people off to no end. But I'm like, dude, this is one of those things. It can't be enforced or nobody's gonna really enforce it. And it's just really funny how people do that. Everyone's like a VP on LinkedIn and internally they're like junior associate.

So one of the things that cracks me up, you know, I grew up on the East Coast, went to the West Coast, and there was definitely like this culture difference between kind of East Coast companies, but also like the Wall Street versus Silicon Valley type thing. And so now back living in New York, and what you see is like every single person, like, you know exactly where they are in the org structure by their title on Wall Street, right? Are they an analyst? Are they a principal? Are they managing director? Are they a VP? Like, it's pretty well documented and kind of, you know, level set, right?

Yeah.

And it's like, and by the way, and people like really want a title. In Silicon Valley, it's exactly what you just described. Like, literally people, you know, Hey, I'm the chief janitor, right? Like, they could care less about the titles, you know. It's just kind of like joking around, and it's much more about kind of work products. So I don't know, just an interesting tidbit that I've noticed kind of going back and forth between the two coasts.

And you're known as like a Bitcoin guy. I mean, that's like one of your worlds, right?

You guys are coming up with every label possible. It's like, hey, you're the Twitter guy, you're the podcast guy, you're the Bitcoin guy, you're the investing guy.

You know how like Sean's the framework guy. Sean loves framework. I, uh, I tend to like— I like to label stuff and I like to put it in these boxes because it helps me understand, even though I know that it's not, uh, the whole truth.

It's just 9 times out of 10, well, somebody will come on and they'll be like telling about their— it's like, what do you— what does your business do? We ask, as you should. They explain for like 2 minutes and Sam's like, I'm gonna say it, uh, like in stupid words. Um, basically what you guys do is you charge a whole bunch of money for people to read your newsletter or whatever, you know, like some random, like oversimplification.

It's great.

That's a super powerful skill to have is take complex ideas and get them into simple language.

Well, it's like, it's like, look, I know that like I'm gonna insult you, but you're basically like MySpace, but you're like a little better and different.

Correct. So, so what is your, using that logic, what's your description of The Hustle?

I usually say we're like Wall Street Journal, but for like 20-year-old dudes who are interested in entrepreneurship.

Yeah, that's not, that's not the dumbed-down version. That's, that's still like kind of congratulatory.

That's the sales pitch. Yeah, that's okay.

Um, that's what you want it to be.

We, we, we write about a bunch of business stuff and some people pay money to advertise and other people pay money to access the information. I don't know, is that right?

It would just be like every morning we send out, like, I send an email with the news, uh, and a shit ton of people read it. Like, that's, yeah, that's basically what you guys do.

That's fair.

That's what, like, saying, calling it a newsletter business is It's kind of simple, but okay. That is my own— you're giving me my own medicine. But you're known as— I mean, you do a lot of Bitcoin stuff, right? Yes. Got it. Okay. I'm just trying to give the audience some perspective here.

Yeah. All right. So look, basically, here's the way I think about it is I was in the Army. I then built two very small technology companies that essentially were failures, but I like navigated nicely. Yeah, yeah, exactly. Like, you know, did way better than I should have. Then went to Facebook, went to Snap, and started investing full-time and started out kind of full generalist early-stage investor and then like double and triple down on Bitcoin and crypto and all that stuff. And, you know, I still do some things outside of it, but for the most part, that, that's pretty much it. And I just think it's like one of the most innovative areas.

And did you make enough money at Snap and Facebook that you're using your own funds to invest in stuff? Is that how it worked, or did you raise money?

So in the beginning, one of my partners and I, we started out with personal capital and we did, I think it was like 8 deals or something. So it wasn't a lot of money that we kind of put out there, but it was definitely enough where we kind of felt like, hey dude, like we know what we're doing, right? Like, can we like find a deal? Can we negotiate the actual terms? Like, will an investor take our money? Like all the basic stuff that like if you're really kind of insecure when you're first starting something new, you want to make sure like if I'm going to lose money, it's going to be mine, not somebody else's. And it also is helpful when you've got a partner who He sold a company for almost half a billion dollars.

Yeah, that helps.

Any of them work?

Oh yeah. Yeah. So I probably can't share the financials, but people, a lot of people know. So we invested in Imperfect Produce, in the— I'll call it seed round. It was like $12 million valuation. That company has done incredibly well. We also invested in Everly Wellness.

That's their like—

okay, so yeah, so Julia, I think we invested like $15 million valuation. They're absolutely crushing it. What else is in there?

These weren't crypto projects. You were just doing tech investing.

Yeah, these are all early stage, completely agnostic. Like what was really interesting is we lived on the East Coast in North Carolina. We were doing remote investing, only there wasn't the cool term for it at the time. It basically was like use your computer and try to be smart and like outwork people because you don't live in San Francisco or New York at the moment. And so we ended up investing, I think it was like 12 or 14 cities or something. Like we literally didn't care where people were located because it was all virtual. And the second thing was 25% of the founders were female, right? So 25% of the companies had a female founder, I think is the right way to say it. But like that wasn't a mandate. It's like after the fact, like all the MeToo stuff happened, like all that, we like, like, huh, I wonder how many, you know, female founders we have in our portfolio. We went and like did the math. And I do think that this whole idea of having like investing remotely just naturally like broadens the horizon. You're willing to kind of invest in other geographies, other types of people, whatever. Um, so it'd be interesting to see kind of the COVID impact to early-stage investing.

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So check it out. And then, uh, the last business I'll mention is a company called Cubcoats. This one's awesome.

I know those guys. Yeah.

Oh, do you?

Okay. Well, I've met him and then other friends have told me about Cubcoats since, since I met him because he was always doing a little internet internet trends basically. And I was like, this guy's smart.

Oh man, what is it?

How big is it?

It is 8 figures of revenue, we'll put it that way. Wow. So, so it's like a real business, right? It's not like a, hey, we sold $300,000 on Kickstarter and like, we're right. It's like a legitimate business where Kickstarter happened and then they built a scalable business on the back end, you know, both retail and online.

Okay, I want to talk about some ideas, Sean. Is that okay if we get into it?

I've never said no.

Okay, uh, before we do, well, this is kind of an idea. I want to— I'm writing down my notes of what you're talking about. I want to talk about this export stuff from Facebook, but I'm currently traveling, Pom. I'm looking for where I want to settle down. And there's this great book I'm reading and I'm learning about called Tribe. Have you heard of that? Tribe? Yeah.

And I have not.

Okay. It's called Tribe and it's all looks at like what makes tribes. And one of the guys, one of the points this guy makes is that in Israel, the rate of PTSD for soldiers is like 1%, but in America it's like 25%. Because soldiers go and do their thing. And they shockingly— well, this is shocking for me as someone who's never done anything like that— they are depressed when they come home because they love being in a tribe in the military. And they, even though they're risking their lives and they were drinking, like you showed me, non-alcoholic beer, and there were so many reasons to be unhappy because it was hard, they felt wonderful. Well, they felt camaraderie, and that gave them fulfillment. And it's like they are in the trenches to not really serve their country, but to help their peers, their partners in the military, and it gave them purpose. And in America, we do a really bad job of like, you know, we go to our suburban home and it's like, get off my property, or, you know, stay away from my home. This is mine. That's yours. Did you sense that when you came home from— you were in Afghanistan, you said, right?

Iraq.

Iraq. Sorry.

Yeah. So for those that don't know, I was in the military for 6 and a half years, ended up when I left the military as a sergeant in the infantry. Deployment to Iraq in 2008, 2009. Uh, was in Taji, which is like 12 miles north of Baghdad. So I've never heard it described as the tribes, and I'll read the book and let you know what I think about that specifically. But one of the things I've always told people is, uh, people, you know, are like weird and they always have like ask like stupid questions. And so they'll be like, why don't you have PTSD? Right? And I'm like, okay, well, I guess we're just gonna have that conversation.

Fine.

And like sometimes people ask like within the first 20 minutes of meeting them, you're like, man, you really have no filter. But the way that I've always like thought about it is I went from playing football in college, which is like a pretty violent sport, all dudes, a lot of camaraderie, like all that kind of stuff, to then I got deployed when I was a junior. So I literally got pulled out of school, got deployed, uh, to a much more violent situation, right? Obviously there's guns, there's bullets, bombs, all this kind of stuff, but still all dudes and a lot of camaraderie. And then when I came back, I actually went back and played football. So my transition back was not like in Iraq, 2 weeks on, you know, transitioning back, and then like working at, you know, one of my friends at Home Depot, right? Like, that's like a really, really, you know, black and white contrast. For me, it was going back into playing football, violent sport, right? Camaraderie, guys, like all of the ingredients were there. They basically just took away our guns, right? And so I've always credited that with like the transition being much easier. And it makes a lot of sense in this tribes kind of framework where we probably could do much better if we literally just kept people tied into something, right? Some identity or whatever.

Do you feel like, uh, where do you— you and your wife, uh, congratulations by the way, you and Paulina, right? Do you guys— you live in Manhattan now?

We do.

Do you feel like you have tribe, a tribe at all, in a high-rise building?

So in the building, no. I don't even think I could tell you a single person that, uh, we know in the building, um, by name. But, you know, I mean, you get like easy stuff like the doorman and stuff like that, that we talk to every day, whatever. But we got a lot of friends, right, that are kind of all throughout Manhattan. And, you know, we generally are social to some degree and try to kind of meet up with people every weekend or whatever. So I think that helps. It's just not, you know, building specific.

The reason I'm bringing this up is because this is a business podcast. And I think that there's a ton of opportunity that's going to happen. I think that Gen Z and now our generation because we're remote. I think there's going to be a massive, massive problem with loneliness. And men in particular above the age of 30 who are single have a huge problem meeting people. And I was reading the stats and it's crazy that since the 1950s, right after World War II, as we moved to the burbs and as we got a little bit more stoic, like where men aren't supposed to, you know, talk to men with a sense of love, although I think that's improved a lot recently. But anyway, I think men are going to be crazy lonely, more lonely than normal in the next handful of years. And as someone who's ex-military, I don't hang out with a lot of military guys. I was like, I wonder if he experienced that because there's some opportunity there, I think.

So two things that I would say is one, I definitely think that businesses that are able to build the communities, not just have customer bases, are going to do incredibly well coming, you know, coming out of this whole COVID thing, and then also just in general in a digital age. And some of it is like addressing the loneliness, and then some of it also is just the internet provides you the ability to find people who have similar interests, right? And like, that's really hard to do if you didn't have the internet and you lived in Manhattan. Like, you basically have to like try to go to bars and find like, okay, where's the people who like my sports team, right? Or like, where's this whatever. The internet, you just like go to, I don't know, chicagobears.com, even though they're not very good because the Giants are better. But, um, you know, this is like, that, that's kind of one piece. And then the second piece also is, uh, I still think that there's a ton of innovation to happen around meeting people. So you see some of this with like the, what is it, uh, lunchtime.ai or something, right? Lunchmate.

Yeah, or LunchBuddy or something like that.

Yeah, yeah, whatever it is. Um, you see this with like the Clubhouse kind of the, the drop-in audio, whatever. But it's just like I think a lot of people think of that category specifically as like, oh, it's over, right? Like, oh, we have Twitter, we have whatever. Like, I actually think that it hasn't even started yet. And even if you go to the extent of— so here's an idea for you. Dating apps. What's the number one problem with dating apps? And if you guys had to guess, if you went and talked to 100 people, what do you think their biggest issue would be?

For women, creepy men, I guess. Inappropriate men.

but would you— I, I would never invest in the dating space. Would you?

I think that again, going back to, uh, people think that category is over. I think it's probably one of the most ripe categories for not only disruption, but also too, those businesses make incredible amounts of money when done correctly.

Yeah, but so few of them are done correct. Like, like there's— it's like one of those— it seems like one of those spaces where there's a few winners that kill it and then everyone else dies.

Do you ever name a space that's not like that, right? What space does not have handful of winners and then everybody else dying, right?

Plumbers, cleaning services.

Like, fuck, are you gonna go invest in a plumber? Like, what is that?

I mean, like, I don't know. It— what I mean is, with a plumber, it's like a dating app to marketplace. So you need everyone.

That's the type of investing he does. You put in— you put in a dollar and you're trying to get over 100 back. And like, the only types of companies that can return 100,000x are going to be things where there's a few winners that, that win, that win big, right?

Okay, hold on. Do you guys know what Muzmatch is?

Yes. No, I don't.

I have a friend who did almost exactly that. Uh, not really a friend. I mean, I met the guy and he came to one of my kind of like founder mastermind things, and it's like, cool, what are you doing? It's like just a handful of people. He's like, I'm going to build this dating app for Indian people. I was like, oh great. I was at the time, I was a single Indian person. I was like, great, talk to me. And I realized it's definitely not for me because he was like, the name was in Hindi, Dil Mil, which means like hearts meeting or something.

And then basically what it was, was like, it's for people who wanted to get married.

So it was more like the Match.com or whatever. I remember, you know, the thing you're talking about where every group has like these small nuances that make a huge difference to them. He was, he did like login or sign, you had to sign up with LinkedIn. I was like, what the hell is this? And he's like, dude, Indian people care about like what your profession is. If you don't have a job, like, you're not a candidate. Like, you, you should not be in the pool if you don't have a job. And that's straight up, that's how like kind of old school Indian people think, is like, number one, you know, good job, good family, fair skin, tall. Like, these are the attributes. And if you're— you can miss one, but you can't miss like job, for example.

Dude, there's far— there's farmer dating. Yeah, there's like, yeah, what is that?

That's pretty badass. Good for him.

It's like just where everybody has written off at this point.

Yeah, it's just like consumer social 18 to 24 months ago, actually like pretty good time to start. And you see the rise of TikTok, all of a sudden you see, you know, all these things like explode. It's just right when everyone thinks it's over, like here we go again.

So Sean has kind of like invented this export business topic that I want to bring up in a second. So think about like what could be exported from Facebook or Snap or whatever.

I can give you an example of one that was, that I heard of.

Uh, well, yeah, yeah, tell you, tell your example, Sean, and then let them, and then we'll go to one topic and then come back so he has time to think.

All right, so the export example, um, there's a company called LaunchDarkly. Are you familiar with them?

But basically at Facebook and many big companies, they, they have obviously, you know, you got a billion users. If you launch a feature that sucks or is buggy or is going to decrease engagement, like leaving a feature that decreases revenue by 1% can be tens of millions of dollars for these companies. So you have to be really smart about how you roll out a feature. And especially with the App Store, you don't want to roll something out and then have to go through App Store reapproval and take 7 days. Like, this is how it used to be. So Facebook built a system internally, from what I understand, that was basically like, it lets you launch a feature with a feature flag, meaning it's off by default, and then the engineer from the backend can turn it on for a subset of people. You could say, I want 1% of users to see this only, and if it goes good with the 1%, then I'll, I'll turn my knob and I'll get— take it to 5%, 10%, etc. So this is like a standard feature that big companies have, but small companies were never going to build the infrastructure to do something like this. And so LaunchDarkly was like, you know, a couple of ex-Facebook people spun out and they're like, hey, whatever— I forgot the internal name of that tool at Facebook. It's like, let's call it whatever, codename Medallion. It's like, oh, we're taking Medallion and we're making it available to every SaaS company that exists. And these guys have crushed it. They've raised over $50 million, and it's because it's a sort of a known quantity that you're taking the R&D of Facebook, the infrastructure of Facebook, and then you're basically saying no other company, no small company could afford this investment. We'll do the investment once and we'll sell it to every small company for, you know, a small monthly fee. And so they've been tremendously successful with a small feature like that.

Yeah, but like that takes forever at an early stage company. Like, of course, that's gonna take me 4 weeks to get like any interesting data, so I just gotta figure it out now.

Well, and what they would do is, uh, one, you've got to have the system to do the testing, right? Two, you gotta have enough data over a long enough period of time to actually know, did it lead to, you know, 30, 90, uh, you know, 2-year retention rates, all that kind of stuff. And then the third thing is you're gonna have the engineering capacity to change your product around to test all the different things. So I remember being like, oh, it's gonna be so easy, like, you know, it's literally like an internal tool, whatever. And he was like, what do you mean? Like, I have like one engineer, you know, two engineers, whatever it was. He was like, I can't do that. And so I started like Googling around and there was a company, uh, Amplitude, which I think now is like pretty popular actually. But that was like one of their big early selling points was like, hey, we can basically look at a bunch of your retention data and tell you like, here's the thing that is the highest signal as to having a retained user base. And then you can like basically manipulate your product, like make everyone go do that thing. So for Facebook, it's, you know, if it's friending, Let's force everyone to give us their contacts, their emails, like whatever we could possibly do, suggest the right friends. Once they hit their 10 friend quota or whatever, then we can back off and let them enjoy Facebook. But like we're super aggressive in the first 7 days to make sure that they hit that. Right. For every product there's something.

Slack has like, I think it's 1,000 messages was the milestone. It's like once you get past 1,000 messages, you'll never turn off Slack or something like that. Like a bunch of different companies have their their magic moment where it's like, once you pass this magical threshold, we, we know we got you. You're— you've hit core value, you understand what this is all about, and, uh, you're gonna have a great experience.

Absolutely.

So what I want to give you a second to think about that because— all right, because Sean put you on the spot a little bit, and— or we both did. But, uh, let me tell you something that I heard this week. Uh, there's this guy named Nick Huber, I think his name is, that I met. I was driving doing and doing a live Twitter thing, and he like started talking.

I go, dude, let me talk to you now.

And he like called my other phone phone and we did like a live interview on Twitter. It's kind of cool. And he was like, so what this guy did was he was in a service business and then he started to buy storage companies and put software on it and he's consolidating them. That's cool. But he was like, the thing that I learned about a service business is that it's not a problem about having too much demand because if I'm providing a service that's popular, like I'm always going to have customers who want it. The problem that I found is that I can't— like, the people who want to work in this industry, it's hard to train them. And I need to— and he's like, the real problem is— and I didn't want to solve this problem— was I needed to come up with a training system that I could teach a 5th grader how to do X, Y, and Z and have it repeatable and make it work well. Have you guys ever heard of this problem? I mean, I don't know anything about services, but have you heard of this problem before, Sean?

Yeah, I think this is the limit of every service business, is how do I have enough people? I can't scale my time. I don't either want to or I can't anymore. So can I get other people to do what I do without losing the magic of what works for me? Right? Like that's the biggest issue.

And so I started researching this. There's, and there's, there's a few things that do this. The first is there's a company called HealthStream. HealthStream is publicly traded. It's based in Nashville. I think it does $300 million in revenue and they teach nurses how to do the latest procedures. So if it like for Corona, it's like, all right, the new procedure for welcoming people is to do X, Y, and Z. And they just have like is basically they just make videos and everyone logs in and watches the video. What are some interesting businesses that this could work for? You know, it's, uh, and I've noticed it with my company, even like training people to do this thing is it's actually hard. Like I just create this Google Doc and I'm like, fuck, they're not even gonna read this even though it's gonna make their job better.

Well, it's two problems, right? So one is the people who know how to do the task, like one, they've got to be good at documenting it. And then two is you've got to get people to actually consume the content as well. Right, so it's almost like this twofold problem. And I got to imagine that there's a big business in every single regulated industry, right? So for CFAs, for nurses, you know, just go down the line where you mandate the training. So like, oh, there's some regulation or oversight committee or, you know, whatever the thing is that forces everyone to, you know, be up to date on whatever the latest stuff is. And if those rules are in place, then basically the demand is you know, infinite because it's just how many nurses are there in the country. They all have to take this training. And so like, I can just go build the business and I know that I can walk in every hospital and they have to buy from either me or one of my competitors, right?

My buddy is in the, like, I don't know if you call it like, he's like a professional speaker or something. He like goes and does workshops and his, his, he basically has 3, 3 types of clients. One is like high-end company, like a Ferrari or, uh, you know, whatever, Chipotle, like a big company, you know, you know, MasterCard. Will hire him to come in and talk. And then half the time when he's on the road, he's like, yeah, I'm at the Iowa Middle School District, blah blah blah. I'm like, oh cool, you're doing like a pro bono thing? And he was like, no, like dude, these schools pay more than the companies. And I was like, what? He's like, yeah, they have this like professional development budget that they have to spend, and then they have these like whatever the like kind of target is of the year. Like he's like, so for last year it was all about growth mindset, and so I'm the best guy for growth mindset. And so every single school district wanted me and had thousands of dollars to throw at me to come talk to 7th graders 4th graders about, you know, about this. And the teachers also, they, you know, they have, they have a budget for this. He's like, and then the next year it'll be around, you know, social-emotional learning or like whatever. It's like whatever the top level says, hey, this is the mandated thing you all got to learn. It's kind of like your nurses thing. It's like, we all got to learn this procedure or this technique or the best in class. And then some, you know, some speaker somewhere is like, oh shit, payday. This year I'm going on tour like Lady Gaga. And that's what he basically does. It's like incredible.

But I also think MasterClass is like a version of this, right? It's unstructured training. It's not for a specific job, but it's just like the self-improvement, professional development, whatever. Like there's a lot of people that buy that. The other element is like, who's paying, right? So like that nursing training, the nurse isn't paying for it. It's from coming from one of these budgets or whatever. But I do actually think that there's going to be— and not in like the— there's kind of like the sleazy, like, let me teach you to make money on the internet type stuff, but much more like, hey, how do you start a podcast? Hey, how do you, you know, create a successful newsletter, right? Like, like Sam, if you guys came out with that tomorrow, it's like you would sell a lot of whatever that is.

Well, don't worry, we are.

Okay, there you go, right? So like, but it's just like as you kind of go down the line, you could look at what are all the successful things that people have done on the internet, and if you understand how they did it, or you go get them to do it, if they just document their process, like there's somebody in the world who wants to be that person or have that type of business, and they'd be willing to pay for it. It may not be, you know, a billion-dollar business, but make a couple million bucks a year just selling, you know, training manuals on a million internet jobs, right?

My father-in-law is in the moving business. He owns a moving business called Eagle Transport where you live, uh, Pump, in Manhattan. It's a great company. And I'm like, why haven't you— like, it's a cash flow thing, it provides him a wonderful living. And I'm like, why haven't you expanded, expanded? And this is a common thread because my father owns an old-school company as well. I'm like, why haven't you expanded? He goes, I don't want to train these people. Like, it's too hard. Like, it's such a pain. And you work with like a— I mean, I'm just gonna sound like a dick. You work with like a lot of like lower-end people. It's like they're like have issues, you don't want to fucking teach them, and they're always a pain in the ass. And I'm like, why don't you— he's like, I don't want to deal with all these people. This is just enough already. And I'm like, what can I— what can I do to just teach?

I agree.

Is there any space where you've seen that you're shocked it's not automated?

I mean, like everything. I mean, it's a thing where like we all overestimate, right? What's Bill Gates say? Like we overestimate what we can do in one year. Like if you literally think of almost every single job, I think that we all believe is going to be automated. Like how many people thought cars were going to be automated and self-driving at this point. Like, there's a lot of people, right? How many people thought that the Segway would eventually turn into the, like, automated robot that goes around the office buildings and makes sure that, you know, it acts as a security guard, right? Or there's some level of shutting off the lights when no one's in the room so it saves on the energy bill. But right now there's humans that literally walk around a big office building, like, shut all lights off. Like, stupid little things that Each one of those applications probably ends up being a business at some point. And then you get the bundling of, okay, I'm just going to be the guy who goes and buys up all the businesses that optimize the operations of a commercial real estate building. So let me buy the security robot company, let me buy the light company, whatever. And then they build a big conglomerate and then somebody 20 years from now unbundles it all again and says, hey, I'm going to go and I'm going to compete, whatever. So I think business cycles in general play out that way. And You know, we're on the start of the automation one.

Awesome. There's an export one that's sort of related to what you're talking about, Sam. Yeah, Facebook, they have, they have this, uh, developer boot camp, right? So like, I have a friend who, he was my buddy, he was like a, I don't know, like a finance guy kind of thing, went to Facebook, worked in the fraud department, and then he went to the Facebook developer boot camp that they have internally, which is like, hey, in like 8 weeks or so you can learn to be an engineer at Facebook. You'll start at the kind of the bottom, but then you can grow from there. And, um, and now he's like CTO of some tech company in New York. And he basically, you know, after a few years at Facebook— so he did the boot camp, worked as an engineer at Facebook for 2 or 3 years, and then left and then went to this company that was like a well-funded, well-run company. It was like, they're like kind of doing the interview, and his, his pitch was so simple, it was so beautiful. He just goes, I make your engineering team work like a Facebook engineering team. He's like I know that process, that's how I work. I'll just use that. Like, I will take our playbook over there and I'll make them work over here.

What's that?

People don't understand how, how crazy that training process is. Like, as a product manager, I came up with 4 or 8 weeks, but when you first get to Facebook, like, you don't even have a team. Like, they're literally like, hey, you're gonna go here for like 4 weeks or 8 weeks, whatever it was, and they like teach you all about product management at Facebook. But it's not just product management, it's like product management at Facebook. Like, here's how we do things, here's why we do them, here, here's all the things you need to know, whatever. And Chris Cox, who was the Chief Product Officer, then left and then came back, uh, he talked to every single incoming class of employees. Like, I mean, it was like, this is serious to us, right? This wasn't like a, here's a one-day indoctrination, like, here's what the bathroom is, you know, here's who your manager is, and like, if you have any problems, like, you know, send an email to HR. Like, this was like a real thing.

When I got to Twitch, the first day onboarding, it was that— the first, you know, first half of the day was like, hey, you're gonna get your laptop. And then my guy like The IT guy was like, hey, sorry, we're short on laptops, so I'll get yours tomorrow. So I'm just sitting there while everyone else boots up, and then it's like, all right, it's lunchtime, your lunch buddy, someone who works at the company, will come get you. Guy never comes. And I was like, cool, onboarding complete. Uh, that was the whole— that was the whole thing. Like, this is a— this is a multi-billion dollar company. And so some companies have this like very rigorous process, like the Facebook car wash they put you through, where it's like you come in as like, you know, you know, smart kid from wherever, Harvard or wherever you are, but you're still going to go through that 6-week car wash and come out like, you know, Facebook product manager number 33403. And, uh, you know, that works for them.

So I'm going to read you guys— let me see if I can find it. Um, uh, so you guys know Gartner. So I, I mock Gartner a lot because, uh, I think it's kind of a— it's— I think it's a little bit of a scam. Not everyone agrees. I think it's kind of scammy how they do things. But Pomp, do you know, uh, what they do?

Like, you know, it's like the research and they poll people and do all that stuff, right?

I feel like you mock them, but you're just— it's like second graders that tease each other, but they actually like each other.

that's like the back of the DVD of like Taken 3. It's like I have an elite set of skills that I've been trained.

Sounds like boot camp, like literally like military boot camp.

They give you coronavirus on day 2 just to see if your immune system could survive.

Well, it's actually pretty interesting because when you think about a company, you think, well, it's their product that's amazing. But like, as someone who only works in small businesses, I'm like, I forget that it could be just like this crazy interesting— it's not even that interesting. Like, you're like, oh, go obviously do that. But a lot of people don't do it, including myself, about these like really good onboarding techniques. Another company that did it was Trilogy Software, which we've talked about on here, which a lot of people don't know about, but they were considered like as good as Microsoft in the '90s, and they would do the same thing where they would train developers like in a crazy good way, and that's how they became so valuable. And so that's kind of interesting, an interesting idea here. I don't know what to make of it, but it is something that I didn't previously know, that's for sure.

So back to the import-export thing, is there anything at Facebook that you think is—

Sam's all about this one. I said it.

So you said a few, but Snapchat as well. I find it so interesting. I mean, only 13 or 15 or 20, however many tens of thousands of people do work at Facebook, but they are world-class at so many different things.

What—

or yeah, let's do Snap. Snap's even more mysterious to me.

Well, Facebook is the easier one because I think that people will understand some of the tools, and it's probably more, uh, it's a better comp to like what most people are building. And so I would say 3 things come to mind. The first is The data science team at Facebook is absolutely world-class, and they understand better than anyone in the world kind of the pursuit of truth. And so if you look at the people who have left there, everyone from, um, you know, the Chamath of the world, whatever, like it's just this pursuit of like, I don't care what opinions are, like show me the data and I'm going to set up the test frameworks in order to actually get to the truth. And it all boils down to this one key insight that I had when I was there, and I didn't have like a eureka moment, like they literally just told me it. They were like, hey, when you run these tests, there's two things that are really important. One, you gotta have very clear goal, like what are we going to measure success and failure by? And then two, whatever the test is has to be executed perfectly. And if you don't execute it perfectly and then it doesn't work, you're left asking yourself like, was it because we ran the test wrong, or is it because actually we should go spend our time doing something else?, right? So it's like the perfect execution component. And so I think like this testing framework, there's been tons and tons of tools, but very similar to what Sean said about, um, kind of like, hey, I'll make your, uh, software team like Facebook, just teaching the art of data science and testing and like the pursuit of truth. I think there's a massive business to be built there. Consequently, there's a bunch of software that you can build around this as well. Like you could see yourself, you go in, you do the training and they're like, oh, by the way, like like, you know, here's all the watches underneath my jacket. Like, you know, here's my analytics tool, here's my screen recording tool so you can watch user pathway, here's my data science tool, you know, here's my way that you communicate with customers. Like you could just walk down every single touchpoint that, that growth team would have with a product and then just build your own piece of software. And so it's almost this like consultative sales piece where you're making a bunch of money up front on training and then on the back end you're following it with software and kind of getting long LTV out of it. Of it.

I have a funny story about this. So I met a guy, this is unconfirmed, so this might be total bullshit. I don't know, but I like it already. It's hilarious.

I thought it was definitely true, but by the time you're done, it's going to be true.

So exactly. So, uh, I'll just share it to, you know, hundreds of thousands of people because, you know, why not? So, so there's this guy works at Facebook, high up, and he uses these tools that you're talking about, the testing tools specifically. Uh, I believe that there's a tool— maybe it's called Titan, maybe it's not called Titan, I don't know exactly, but there's a tool that basically when you run a test, it tells you not just did your test work, like, oh, we made the button blue, that made, you know, did people— more people click that button, but it says, hey, here's every other KPI also, so you didn't fuck up something else while you're trying to fix one thing, you actually dropped another thing. So it gives you this like really great way to analyze the whole picture, not just your specific thing.

Anyways, I don't know much about this tool, but here's what I—

here's what I had heard. I heard that this person was like, okay, I'm gonna spin this out. I'm gonna export this idea. I'm gonna go make this its own startup. They recruit a couple of people from internal, like, hey, leave with me, let's go do this. They raise— they actually raise money. They go, they rent an office, everything, and they get some, you know, goes into the office to tell Zuck like, hey, you know, thanks for everything, you know, but like, peace out, I'm gonna go do this. And something happened in that meeting that I don't know, but we believe— here's what ended up happening. The startup never gets started. The office rent, they just pay it off. They don't ever go move into the office. Person keeps working at Facebook. And I believe what ended up happening was that Zuck basically was like, you know, you could go do that, but like, here's just, oh, a giant bag of money that I have with me. Like, how about this instead? And like, how about you stay and you take this bag of money and we forget you ever said anything about leaving? And then the guy was like, no, no, no. Like, I really want to do this. I actually, I've told my family, I rented an office space. I'm already 2 feet out the door. And he's like, oh cool, okay, so, um, so we're not gonna let you do this company actually. We're gonna, we're gonna have to pursue some action against you. But again, there's this bag of money and this is a great role. If you just want to stay with the bag of money and the great role, you tell me which way you want to go. And so, um, I don't know exactly how the conversation went down, but from what I have heard, there was a conversation like this that happened. Again, I might have been told bullshit, but I loved the story either way, and I choose to believe that this was true and this person still works Facebook.

Did you guys read the, uh, the text messages? Yeah, so Sean like is obsessed with this, and I— he got me obsessed with it where he was like, he like goes and like emails the founders of huge companies, like, hey, forward me the emails when you were describing the early idea of your company. I love seeing the evolution, and I want the raw text.

I'm like a fucking paleontologist looking for the original source material.

It's pretty cool. I like it as well. He's got me into it. And so, uh, to the listeners, uh, last week this, this some type of chat transcript got out of Kevin Systrom, the founder of Instagram, talking to a friend who was talking to someone who I think was an investor of Instagram, but who also worked at Facebook, I think.

Yeah, this guy Matt Kohler, he was early at Facebook and he's a big-time VC.

And they were chatting back and forth and Kevin was like, hey Matt, Zuck messaged me, like he wants to, he said this, I think he means this. And then they were talking back and forth about what that could mean, and they were like, he's gonna crush you. So like, if you don't do this right, like, he doesn't care. He only— he's gonna— he's gonna destroy you, so play ball.

The exact quote in there, Kevin Systrom asked, he's like, if we say no, will he just like go into destroy mode? Yeah. And the VC was just like, yeah, probably. He's like, fuck, okay, so what do I say? That will not trigger destroy mode. He's like, maybe we could just say, oh, we're just trying to do this little filter thing. We don't really see ourselves as like, you know, becoming a social network. And he's like, yeah, he's also really smart. Like, he's not gonna go for that.

He goes, he's too smart. And he's like, well, should we tell him that we're gonna sell to Twitter? He goes, you could, but he'll destroy you. I thought it was amazing. Did you, and I know we're about at time, did you ever have moments of like that where you're like, oh God, this guy's like Genghis Khan, he's gonna, He's gonna, he's gonna destroy.

I don't remember how many times I met with Zuck, but it was always in a group setting, so it was never like we had like a one-on-one. But, uh, I was fortunate to work on this very small team that was specifically trying to help figure out like, how do we grow Mark Zuckerberg and Sheryl Sandberg's personal Facebook pages, right? So interesting, they didn't want to like manipulate the product, right? Like you could— I literally remember we were, I remember we were like one meeting and like one of the ideas that at one point was like, well, why don't we just like put it in interstitial and be like, everyone follows up, like kind of like Tom Myspace style, you know, type thing. And then part of the beauty of like a diverse team was like, somebody else was like, no, like I grew up in a country where like the president used to like come on television and like take over the screen and like with his like, you know, message of like conquering the people basically. And he's like, like there's certain places in the world, like you don't want to do this. Right. And so what they ended up saying was like, okay, like we're just going to have to do this without manipulating the product. And like, that's like the most fair way to do it. And so we'd be in these meetings and the thing that always struck me was like you've got a guy who runs a, you know, multi-billion dollar business, been working on it a long time, and he could be talking about like super long-term company strategy and then immediately like there's a presentation up and he would like zero in on a screenshot and be like, uh, why is that button's pixel like what? And you're like, dude, you just went from like 100,000 feet to like ground floor, you know, level feedback, back to 100,000, and then shifted like left or right on various products. And we've been in here for 7 minutes. Like, like your capacity in terms of like ingesting information and also being able to like sift through high signal, low signal stuff is just like bar none. And so I was telling somebody internally at the company, they're like, well, look, first you have to remember like he has the most context here. Where like he's literally been at the company the longest. And so like he's seen like these iterations of the product. He remembers the conversations before they got launched, the things that went right, the things that went wrong, like whatever. But it was still this thing of just like, man, this dude's on it. And so like I'll read articles even today and people like say whatever they want about Zuck. They've like never talked to him or never met him or whatever. And I'm like, do you think he like built a multi-billion dollar company because he's an idiot? Right, right. And the thing that I'll leave you with on Zuck is A friend of mine was talking about them when they first announced Libra and going into crypto. He's like, look, there's a lot of people who probably don't like Zuck, but there's not that many people who think he's dumb. Right? So you may not like him for whatever your personal preference reason is, but if he's going to do something, a lot of people are going to be like, wait, why is Zuck and Facebook going to do it? They were talking specifically about crypto, but I think that's generally true across a lot of different things. And so if all of a sudden people hear like, you know, they're making a huge investment in VR, there's a lot of other people who are like, wait, why is he doing that? Like, what does he know that I don't know? And, you know, they try to start looking around the corner. But I think what you saw— I didn't see the text messages, but I saw some emails or something, I think, from an Instagram thing. It's just like, look, he saw the future, right? Or at least like where he thought it was going, and he like pretty much was like directionally correct, which is pretty impressive.

Yeah, that's crazy interesting.

I love those stories.

Thank you.

Me too.

We should go.

Yeah, you want to wrap this up?

Damn, I feel like we were just scratching the surface, but this was, this was great. Pump, thanks for coming on, man. Hope you can come on again. I think people are really gonna like you and your, your, uh, your thoughts. So I appreciate you coming in.

Absolutely. Thanks guys for having me.

We'll definitely— awesome. Thank you.