#160 - Paid Communities Making $20m+ (and How to Build One), Fighting Inertia & An Interview With Dave Selinger of Deep Sentinel

Hey, I've got a white male, 6'3". He's got a crowbar and I have— and he's trying to break into this building. Here's the address. I've just given them a description of the suspect, a description of the crime, and the existence of weapons. Every single police department in the nation, that's what their dispatch is designed to do.

And they just described Sam at his own house practicing crowbar combat.

I know, right?

Hey, uh, your thing looks pretty good. Uh, pretty good.

No, I think—

hey, hey, I think it looks—

I look— I look fucking fantastic. You look fantastic. This is the best. This is the best I've ever looked. If I look in a mirror, I've never seen this coming back. So whatever this camera is doing for me, this is— just know, if you're watching this, I'm uglier than this looks right now. So I think I'm uglier than this looks.

I think you kind of look celebrity-ish, like you got cool hair, you've got a cool beard. I think you look— I think you look like— I think you look cooler than you've ever looked.

Thank you. That's how I feel. I feel cool. And I think I need a tattoo or something. I'm just like, now I'm trying to triple down on the celebrity status that I see.

No, I think you look wonderful. Um, two things. First, today I want to talk about paid communities a lot, but before we get into that, the second thing is what I want to tell you. Last night my wife Sarah goes, "Good night, Sean," because everyone's been saying that. Dude, they say it in such a mean way.

Was she trolling or was it an accident?

She's trolling because someone tweeted like, "Well, we think that you are Sean and Sean's you because Indian guys typically have high-pitched nerdy voice and white guys like you have like low-pitched alpha voice." Turns out Sean's the one with the alpha voice and I'm like, fuck. So she called me Sean. Thanks.

Oh, that's amazing. I hope you guys were doing some great things while she called you Sean. That was awesome.

Yeah. Well, she burned me good, but let's get right into, you wanna get, you wanna talk about paid communities? I did a lot of research because this interests me right now.

Okay. Let's do it.

Okay. So paid communities interest me because I came across this thing called Tiger 21. And this sounds like lame that I'm bringing this up now after selling my company, but I've been interested in this for, for years. Um, do you know what Tiger 21 is?

I've heard about it. What I know about it is it's kind of like a mastermind peer group thing, but it's for a certain wealth level. I don't know if there's a— I don't know if there's an actual cutoff, but it's supposed to be for wealthier, and I think it's mostly older people. And, uh, we have a couple friends who are in it, so I, I texted one of them today about it, so I got a little bit of info, but Tell me what I missed. What do you know about it?

All right, so I texted our mutual friend Keith, um, and he's, he's, uh, he's a real estate guy. He's been on the pod. You can go listen to Keith's episode. And Keith's a good dude. And he goes— I go, you're in Tire 21, right? And he goes, yes, um, what's up? And I basically asked him, what do you think about it? He's like, it's an interesting group. He goes, it's all about investing, preserving wealth. Uh, it's mainly for older people. He goes, the typical meeting goes 4 hours. You do, like you said, a portfolio defense where you talk about what you're holding and why, and other people get interested in it. Sometimes there's speakers, sometimes it's an external speaker, sometimes it's somebody from the group who speaks, and there's a moderator. They also do events, because if you go to the website, you could see they hosted a Tiger 21 event at Magic Johnson's house. They're definitely trying to build this who's who network, this sort of like Soho Club, Soho House vibe, uh, to the whole thing.

And it, uh, yeah, so they do that. They also— you get like deals. So a friend of mine sent me a deal where they basically— when you're wealthy, you get this thing called umbrella insurance, which you pay $2,000 a year, and it's just like general insurance. And it's basically the story they tell you is like, if you get in a car crash and someone Googles you, they're gonna see you're rich and they're gonna want to sue you for $5 million, and this protects against all types of stuff. And so they give you a discount on umbrella insurance. And so by my calculation, I actually would bet they do $30 to $40 million in revenue, and they recently sold to private equity. And so it's a relatively big business. And I actually read about, uh, read up on it, and someone said like there's 90% retention rate, which is pretty amazing. I've also been following Reddit's, uh, FatFire, which is a subreddit similar to this, and it's like tripled over the last year. So So this space has gotten me incredibly interested, but this is just one example of a paid community. And so what I wanted to do was go through a few other paid communities that are interesting. I want to explain, I'm going to try to explain why I think they work and then where the opportunity is for other paid communities. Does that sound good?

Can I start with one opportunity, which is why isn't this just the business model for our podcast? Like, why aren't we starting Tiger 21 for people that are, you know, that have —let's call it a million dollars of investable assets, so a million dollars of sort of like liquid net worth that you can go invest into something. And why aren't we starting this now? This seems like the perfect thing to do for a podcast like this.

I think that probably there should be something like this. I agree. If you go to the Tiger 21 website, you'll see like, you know, the type of models that people use on their website is like their ideal customer. And it's like 65-year-old white dudes who own insurance companies that are quite wealthy but not young or not like our kind of crew. So I agree. I think there's something there.

Okay, fair enough.

So let's go into it. All right, so let's talk about— where should we start? I've done a bunch of research.

I agree with you, but we are— It is more work. We're in one of the most lucrative niches there is. I mean, like if you're a comedian, if you're a What's that shit called? The two women who talk about sex all the time. Call Her Daddy. Yes. Like that's a little bit different. So how do you make money off that? That's a little bit different. And that's actually what we're gonna talk about with paid communities. So let's actually talk about, let's say, and I'm gonna bring that up. So let's talk about what makes them interesting and what makes them not interesting. So to me, what makes them interesting is that they can grow pretty quickly. So you had a podcast, you did this $4 million fund. Now building the audience takes a while, but you turned your fund on and you— it was $4 million in a matter of months. Very quickly. So they seem relatively fast to grow. They're really fast if you have an audience, but compared to like a software company, which could take 10 years, I think you definitely could build it in a matter of 2 or 3 years. Second, they seem pretty fun to run if the interest of your community is the same interest that you have. If you, if they don't, then it's definitely not as fun, But it's kind of interesting if you, or very interesting if that's what you care about. Third, you don't really need a lot of money to start one. You kind of actually need no money. You really could just start it with a paid Facebook group and you can have a really lean team to do it. And finally, they definitely seem pretty profitable because you can have a lean team. But let's talk about the cons. One, and this is what I've learned with our paid stuff and from friends, I think churn could be pretty high. Did you notice that churn was high in any paid communities you've been part of?

Honestly, the churn was not high in the paid community that I ran. But you did it for a year. Yeah, yeah, for sure. But it was a monthly fee, so you could churn out monthly, right? For Trends, I think you charge annually, so you don't know your churn until, you know, sort of later unless somebody actively cancels.

So it's not like enterprise software churn where it's like a net, like a 100% negative. Yeah. So that, I don't think that exists in most communities.

But I was, I think 7% is one year.

No, I'm talking about monthly. I was monthly churning 7%. And so, uh, so, oh, you're saying one year for it to go to zero? Yes.

I think if you have a 4% churn, that's 18 months.

And, and so when, with including my growth, I think my net churn was like 1%. So I think I was adding 6% and I was losing 7% basically every month. And, um, can you share anything about trends?

What was the retention like? Yeah, um, so we had some payment issues when we first launched. So basically we had some issues, um, where if someone signs up on day 1 and on day 366 they get a renewal The credit card statements, a lot of the banks will be like, whoa, whoa, whoa, what's this? That's fraud. So we actually had a big fraud, a problem with banks blocking it, but 80% of people were opted in to renew in year 1 or renew in year 2 in our first cohort. Yeah, ballpark, ballpark, about 80%, which is pretty good, but not— but like, it's hard to get new customers on a consistent basis. Yep. Um, okay, so, uh, the second thing is a lot of times they don't scale that well. And the reason they don't scale that well is if your community is kind of like Trends, where you value close-knit connections, or Tiger 21, more people makes it actually worse. Um, now if your community is content-based, which we're going to talk about in a second, it can actually make it way better. But a lot of communities like a YPO, like Or like if there's 150 people at your meeting versus 5 people at your meeting, one is worse than the other.

Because the scale gets worse for 2 reasons. One is exclusivity. So if the reason to be in this group was that it's exclusive, the more people in, the less exclusive it is. Or if the value is that, oh, I really like this conversation, this conversation was really, really nice. But now you get a noisy room of 1,000 people. Well, now it's just too noisy. I can't keep up with this. I don't know who these people are.

Some of these people are saying stupid things. I'm out of here. Here, right?

So that's the two reasons that the scalability hurts. Yes.

And it can work though, because if you're Reddit, which is a community, not a paid community, but it's a good community, you want more. You need more. You need way, way, way more people. If you are Quora, you need way more people. If you're some of the other examples that you need, you need way more— more people is good. And that's great. But it's not always good to add more people. So what I wanna talk about is a few communities that I found that I think are interesting. And then I wanna talk about opportunities in the space. And then finally, we can talk about what I think you need to build a successful community. So the first one that I discovered, and I've actually brought up here a ton, it's called Aventa. Have you seen Aventa? No. Okay, so Aventa, I know the first example is gonna, it's like, doesn't even entirely apply because I think Aventa is actually a free community., but you need to apply and need or get invited. So it's somewhat similar, but Aventa is a community, is a professional group. Um, I believe it has, uh, 18,000 participating members and it's for executives particularly. Uh, are you on the website right now?

No, I'm on our, our notes.

Okay. Uh, basically it's for Fortune 500 or Fortune 100 people. Um, it's people like the, I don't even like, because I've never worked at a company, I don't even under— understand all these roles, but like a CIO, Was that a Chief Information Officer? So I said CSO. I'm looking at their website. CISO. I don't even— I don't know what CISO means. Was that Chief Information Security Officer? Yeah, CISO. Yeah. So these are like things that I don't even know. I guess they have CFO. I know that is Chief Financial Officer. So it's basically executive.

You just turned into a glossary section for Sam to figure out. Well, you know what a CHRO is? Yeah, that's basically your HR, the chief HR officer, basically. Okay, I guess that one was easy.

Interesting. Uh, it's interesting, but I think, you know, if I'm most people, I'm like, okay, the hard part of this is going and getting the CIO of Nestlé or the CMO of Delta to join some group. How do you do that? And I remember, what's the name of the mastermind group that's the more popular company, not Tiger 21, but like the other one we've both studied? I can't remember the name.

YPO, Young Presidential Organization?

No, no, the one that does like $100 million a year.

It's a competitor to YPO? Yeah, it's like the— Yeah, yeah, yeah, yeah, yeah. What's that? I don't remember what that's called. It starts with a C, I think.

I look, I host an event called HustleCon. I've over the years, I've probably had 150 speakers, tens of thousands of attendees. When I started it, I didn't know any of these people. I cold emailed them and there's a way to play it off that it's cool to be part of. There's a way to get customers. I think that's a little bit better than cold calling. I know I think cold calling, cold emailing like that should exist, and you should do that. I think there's a few different ways, like having a podcast, and there's a few interesting ways to do it. But nonetheless, I think it's an interesting community. The second one that I want to bring up, and I got hold of their deck a year ago, and I could have invested into it, and I I skipped it. I passed, and I think that might have been a mistake, but it's called SoleSavvy. Have you heard of SoleSavvy?

It's like a shoe thing. Yeah, it's pretty interesting. Sneakerhead lover community, something like that.

Yeah, so it costs $33 a month, and you basically— when, when I got their deck, it was basically just a Slack group. That's all it was. And I don't know if that's what it is anymore, but there's a lot of kids, probably grown people as well, who are want to get insider tips on when a certain drop of a shoe is, and they somehow game the system. Like, it's what— it's called cook groups. So there's these like groups where they team up and somehow— I don't know anything about the space, but they somehow get insider information on when a drop is going to happen, and they collaborate and scheme together on how they can get access to these certain shoes. Now what SoleSavvy is doing is they started with shoes. It was just a Slack group, which I think is Stupid, by the way. I think if you're building one of these on a Slack group, that's not the right move. But they get— they get— because they have a group of, I think they have 5,000 members now, so that's $160,000 MRR. Um, because they have this contingency of 5,000 like really big shoe fanatics, they can probably give them special access to X, Y, and Z. They can do interviews with special people. It's kind of interesting. They raised $2 million, uh, recently. They say that they're adding 400 people to their waitlist a day. I don't know if that's true, but it's an interesting space nonetheless. What do you think of that?

I think you did good by passing on it. I think it's a cool business for the person who owns it. It's definitely not a— as constructed right now, I don't see how that becomes a super large business worth investing in, worth why they need $2 million and how they're going to turn that into, you know, a $200 million plus company. I don't really see that because Like we said, communities themselves, these chat groups don't scale. And you're looking for diehards who are gonna pay. If you're paying $33 a month, right? Like, that's more than, it's like you're providing more value than Amazon Prime. You know what I mean? Like that's double, that's triple the price of Amazon Prime. And so, you really have, yeah, the hardcores are gonna go for it, but also the more people you let in, then the more people who all have access to the same information, the same tips, the same drops that they're trying to go buy, the harder it gets for you to actually go buy anything that's valuable. So I don't really see how this becomes a big, big venture-scale business, but I think it's a great idea for somebody who's a big shoe fanatic to create a community like this. I think that's an awesome lifestyle business to own, and, uh, like, if that's your thing, that's great. I love it. I agree with you.

Um, so let's talk about 3 ideas.

Right, or the one, like you said, with Tiger 21. So Tiger 21 is actually like that, right? When you, when you go and you hear somebody's portfolio, you're going to get investment ideas. And even a single investment idea, a single like improvement to your portfolio, if you have over $10 million in investable assets, one good idea is going to more than pay for the $30,000 a year membership, excluding the friends you'll make and the deals you'll do together and that real estate thing you'll buy together and all that good stuff. So excluding all that. Now, on the other hand, if you're looking at something like the Aventa or whatever, where it's like, what is the CMO of Nestlé gonna do when she meets the CMO of Delta? Like, they're not gonna directly get revenue out of it. I don't think that's why. I think it's like, how hard were— how hard is it to accumulate this group of people in a room? So if it's really hard to reach these people, these are all high-value people, then it's— the membership is worth the value of the people in the group. So if it's just a bunch of sneakerhead buyers, each individual member is bringing zero like clout to the table. But if it's CMOs of different companies and it's about how much clout do they each bring to the table, that's the value, not so much how much revenue they're going to make. Yes.

And so let's talk about 3 groups that I have that I think this could work for. So if you're going to start a paid community, I'm going to start with the bottom one, or I actually think it's the best one, but it's bottom one on our list. Nurses. We've talked about nurses a ton. It's an interesting demographic. I think nurses are kind of cool for this space for two reasons, or three reasons. The first, work could pay for it. Maybe I think work would maybe pay for it. Second, nurses are typically— I've spent time around nurses, so they're typically women, and they typically are people who feel like downtrodden, like they feel like they're forgotten because they're not overworked, underpaid, underappreciated.

Yeah.

And that is— so groups that are the, um, Whatever you just said, I guess. I don't know how to explain it, but groups that are like the us versus them, like we don't have someone speaking for us. Typically that's like, there's a lot of like, I've looked when I was researching communities, there's so many successful, um, women, like women discussing X, Y, and Z communities. This is just like that. So I think that they have that us versus them mentality. And the third reason is there's a shit ton of nurses.

Yeah. Have you seen this Instagram account Nurse Life RN? No, how many is it? It's 1.2 million members on Instagram. It's run by this guy, I think his name is Ibi or Ebi, I'm not sure exactly how you say his name. And it's this guy, this is a Black nurse and there's a whole bunch of nurses.

I think that's private.

I think this could crush. I think that guy is gonna— that guy's sitting on a gold mine. That, like, if you fast forward 10 years and tell me that he turned this 1.2 million person Instagram page into a $100 million company, I won't be surprised.

Right. If you go and start Truck Life RN right now, I think that's what's gonna happen after this pod.

Trucking. Um, the second one, this is shocking to me. Okay. Google Sheets. There's this guy who tweeted at me and he started this thing called SheetsCon and he had 6,700 people sign up. Is that— I mean, I guess that's shocking because like, I know that probably 100 million people plus use Google Sheets, but, and I guess it doesn't, and I guess it also doesn't shock me because I am a Google Sheets nerd and like I've dorked out about what I want.

Some of the most profitable online courses in the world are become an Excel master, how to use Excel, become better at Excel. Those are like, if you go look at the charts of most profitable online courses, highest revenue online courses, Excel is always in the sort of top 5.

So there's my idea. I just wanted to talk about communities because I think they're actually kind of cool businesses. I think a lot of people think that they want to start one, but, um, I also think that there's a lot of mistakes made of like charging too little. And I wanted to show a few examples of companies that make like a quarter of a billion dollars of value off communities because I think they're kind of cool. So that's all I got to say about communities.

I'll leave it with this, which is a lot of people— I think the majority of people who listen to us, they would love a non-9-to-5 way to make $10,000 a month.

And I read that in your survey results.

And I, and I, and I said before, I actually do think they can scale, but not all of them can. Some of them, some, some of them can, but I, I'm someone, I've built a paid community that makes many, many millions of dollars a year in recurring revenue. And it is, I would say that it's really hard to actually just start because I had to create a lot of the content early on and I had to create the, um, the culture of the community. But now I barely post and it has its own culture. So yeah, once it's taken off, yes, you create that flywheel and it works. Or not flywheel.

But is this still going? Yeah, this goes every month.

Why wouldn't you charge for that?

Because I can actually make much more off the sponsorships. For example, I've been approached by, you know, the companies that want you to build their e-com store on their platform. There's the people who want you to use them for email marketing. There's the people who want— for influencer marketing, who are you using? For Facebook advertising, who are you using? What's the agency that manages your data tracking, like your Pixel stuff? So all these companies each are willing to pay multiple thousands of dollars I just have to onboard them now because now I have the group and the group is where the value is. That's the honeypot. It's the same thing you were talking about where Aventa, they have a free group and they might— they have— they're making $25 million a year on the sponsors who want to make more than that. Oh, sorry, that's the profit. They're making $200 million. But that's the same model that I'm using here. Don't charge the members. Just make sure all the members have successful businesses. And how much is this going to get?

Or do you care?

I mean, I put zero effort into it since then, but like we have 75 people who show up every month to the thing, which is like 80%, 85% of the members show up every single month to the event. So they're getting value out of it. And so I bet if I told Ben, hey, go on Twitter and just reach out to these 250, cold email these 250 or these 500 e-commerce stores, because it's very easy to get lists of e-commerce stores that are successful, I bet we could triple the size of the group. If we, if we put some effort into it, but don't really care about it. It's more for fun, but it's cool because it's, it's just free money every month and, uh, it's a good group to be in. I want to learn from these people. I want to learn what they're doing, what's working, what's not, and make these connections.

That's badass. Well, you, uh, you know, I— it's funny, I've, I've built a community as well, but it's like every time I learn something like you, the way you're doing it is a lot different than the way that we've done it, and it's really neat to hear a different point of view and perspective on how to get it done.

Right. I optimize mine for how do I spend the least time, but get just enough value. Whereas I think for you, it was like a part of your business. You were like, I'm gonna, this is gonna be a multimillion dollar thing and we're gonna make it fucking awesome, which is awesome.

By the way, if I had to start over, I would have done it differently. I would have charged way more money. Right. Because I've learned the mistakes that you have to add a ton of people to build a big business and a ton of people for certain groups isn't necessarily good.

Right. Um, fair play. All right, you want to do one more quick one before we go?

Uh, only if it's you, because that's all I prepared.

Okay. Um, okay, I kind of have like a, like an advice thing. This is my PSA. This is my public service announcement. Um, do you know what the word inertia means?

Yeah, it's like, uh, uh, when something starts moving, it's hard to quit moving. Yeah.

I think that's the way to go. Well, you gave advice on two things there. You said basically you cut things off and you burn bridges. That's how you stop current momentum. And then, and when you start, you start with ultra small baby steps. Or, and I've heard this now from many people. So when I went to this Tony Robbins event, he used to say, he's like, how many of you have, like, if you think in your life, has there ever been a decision that has like altered the direction of your life? Like, obviously yes, for all of us, our life is full of choices. And if we had made different choices, we'd be in a different spot right now. And so clearly, like, choice and decisions are like one of the superpowers that we have. And he goes, but how come there's times where, you know, maybe it's like weight loss. You know, you keep saying you want to lose weight. You keep deciding to lose the weight. You make that New Year's resolution and then you don't do it right. Or this and that. You know, you say you want to quit your job, you want to start your business. Then there you are 9 months later, still in your job, still with no business. And so he says, like, the word decision we've kind of, we just use it too freely. He goes, the word decision, the root word of it, like scission, is like kind of incision, which is a cut. And he's like, the word decision means to cut off the other possibility. When you decide X, you remove the possibility for Y. You cut it off completely. And he always says like, I forgot that famous like story or whatever, but it's like, you know, these people going, the general's going, they're trying to surge take over this island. So they arrive on boat and they're trying to make it to land, they're trying to take over the land. And he says, you know, if you wanna win the war, you gotta burn the boats. Like, see, like if the soldiers know there's no boats, there's no place to retreat, there's no boat to get back on and go back home where you came from, they'll win this island. And so, you know, the story, I guess, I don't know if this is real or not, but the story is the general burns all the boats and then the soldiers go and they win. And the same idea. So that's kind of what you're talking about, which is, you're better than most in that when you make the decision, you literally cut off the other option by physically moving, by sending that email, by like changing something drastic.

Or I make the old option really embarrassing or hard to continue doing. So a good example is this, is as we speak, I have— I'm actually going to talk not loud because you can hear me— I have a chef in my kitchen cooking for me. And it's very expensive. It's a very expensive fee, and I'm doing it because I'm trying to— I got actually really fit the summertime, and then I got a little chubby, and now I'm going to get fit again. And it cost me a lot of money to have this guy here doing this, and I don't— and the reason I'm doing it is because I'm going to lose weight quickly and eat only their food because, right, I want to stop doing this. And so that works really well. Another example is if you want to lose weight, you sign up for a competition like an Ironman, right? Or something you can't get out of, something you cannot get out of. And those types of forcing functions are the— I have found for me personally, who's pretty lazy and stubborn, it's the only thing that works, right?

Yeah, there's a business around that, it's called STICK. S T-I-C-K-K, or it's spelled like with two Ks or something. It's like a cute spelling. And you have a referee of a challenge that you want to do. You fund the account with a certain amount of money. You pick something you hate, and the referee deems if you hit it or not. And then that money goes to your anti-charity, right?

Yeah, I, I think that's a cool idea. I think there's even more people can do to like use, use our own psychology to get us to do the thing we really want to do in our life. And of course, you know, like These things are kind of external motivators. They're not great, you know, like what you would rather do is, you know, build great habits and you would rather be internally motivated and make a decision for yourself that this is, this is like a must for you, you're going to do it. It's not a should. But, but, you know, some of these, these tools can help you get leverage. And I'll actually leave it with that.

What, what changed? What are you talking about? Can you say or no?

For what? What do you mean? You— why did I bring this up? Yeah, I was talking to a friend and I just realized like I can help this friend. The friend just needs to make a change. And then the big realization was that the friend didn't even want to be doing what they were doing anyways. They were just doing it because of inertia. And I looked at my own life and I saw all these different examples of where inertia had— inertia was— inertia had the driver's, you know, had the wheel. And inertia should not even be in the passenger seat. Inertia should be in the trunk.. And it's just something you carry with you at the most. And so I just felt like I need to say this in case there's somebody out there listening for whom this happens. 'Cause when my friend was in that situation, I explained it and they were like, dude, thank you. Like I needed to hear that because it made it more clear. And now I'm kind of embarrassed that I'll just keep doing this just because of inertia. Like, no, that's not a good enough reason for me. I'm gonna actually choose the things I do. And then for better, whatever they turn out, at least I chose that path. Rather than like autopilot, sleepwalking.

I think there's a lot of people listening that might say like, and I think you agree with me on like taking drastic changes. I think there's a lot of people listening who are like, well, that's pretty reckless. And my answer to that is, yeah, if you want like a drastic outcome, you'd have to take a drastic measure.

I hope you won't say that.

It could be though, like, because Abrey has big dreams. Abrey wants to start a company, he wants to do all this stuff. And he, you know, this podcast was a passion for him and it turned into a job for him. And I don't know, like, is this what he wants to be doing with his time? Or does he have a bigger dream and he's just doing this because he was doing this?

I don't know. What do you think of— what do we— how— what— this is a weird episode.

This was the weirdest episode.

It kind of became about me, but like that community part felt less like a podcast and like we could charge for that.

There was so much value in there for the right person.

I think for a lot of people listening, I think that's— it was not as entertaining as the stuff that we normally put out, I think, but it was more valuable.

That makes sense. Yeah. I don't know which one is best, so I guess I'll find out.

Tweet at us so we know. And just tweet at us like— I, I don't know if you agree. I don't know if Abreu speaks for the average listener. We think he does, so that's why we ask him. But if you're like, if you're like, yeah, I generally agree with Abreu's grades, then tell us. And if you don't agree usually and you're like, don't listen to that guy, also tell us. Go, just go on Twitter or email us or something.

I don't blame you because I disagree with myself.

So— oh, also, I put this out there. Aubrey, put the link to the hotline in the description of this. I want to start doing Q&As where we take, um, ideally like somebody asking a question, like you talking, somebody asks us a question, we play it and we respond to it, or we take call-ins or something like that. But me and Sam want to do some bonus episodes. I opted him into this, I didn't even ask him if he wants to, but we want to do some bonus episodes.

I committed to a third episode. Um, so, and if it's a Q&A, that's like the— that's, that's required zero work for me.

So yeah, I think it'll be fun. So, uh, we're gonna put a thing in. It's basically a hotline where you can just ask your question to the MFM hotline, and we will get those, we'll sort through them, we'll put the good ones into the episode, and we'll answer them.

So, uh, do that. All right, I'm out.

Hey everyone, we did an interview with Dave Selinger, aka Selly. He's the founder of Deep Sentinel. Really interesting home security company. Dave is also really interesting himself.

He's a multiple-time founder, really cool guy.

Not only do the guys discuss Deep Sentinel, but they also talk about some of the opportunities Dave sees in the moment. So we'll leave this interview here at the end as a little bonus, as a little nugget. Hope you guys enjoy. And as always, leave us some feedback. So we're going to do a relatively quick segment. Uh, Dave, do you go by David or Dave?

I go by Dave, go by Selly. Most of my friends and coworkers call me Selly.

Selly. All right. That's a good one. Selly, S-E-L-L-Y. I dig it. Okay. So I invited you to come on because I have this thing called Sentinel, Deep Sentinel. I say it right? Sentinel? Deep Sentinel.

Yep. Sentinel. My friend Noah— You mispronounced his name. You mispronounced his company.

Is your friend's name really Noah? Yeah, I, I, people make fun of me because I mispronounce a lot of stuff, but, um, I have been using this. It's quite interesting. And I want to give a summary of what this is. My friend gave it to me. Basically, I had Ring, these Ring cameras, and Ring is pretty good. I mean, it's fine, it's cameras. But my friend Noah was like, oh, that's cool, you can watch people steal your shit. Um, and I was like, what do you mean? He's like, well, I mean, what's the point? Like, you gotta monitor all the time. And I was like, yeah, that's actually a great point. He goes, here, try this thing called Deep Sentinel. So I tried it. And basically what it is, is it's a, it's a bunch of security cameras around my house and there's security guards watching it all the time. And if something is triggered and they see someone at my door that looks suspicious, or even just someone at my door, they say, hey, who are you? Do you know the person who lives here? What are you, what are you doing here? Whatever, yada, yada, yada. And I tested it online on my Twitter handle and I like did the secret sign. You can like put your hands above your head and do a sign and someone checks in and goes, "Hey, is everything okay?" And it's just like pretty badass. And so I invited you on 'cause I wanted to learn a little bit about this. Did I describe the company accurately?

You nailed it, right? Like our motto really is, and one of our marketing gimmicks is that we make a t-shirt that says, "Oh, you have Ring, congratulations." You know, now you can watch people steal your shit. And that's literally kind of where Noah got that, is that I personally have a ton of cameras. I've been a camera fanatic for a long time. And my neighbor had a home invasion. And so, you know, the neighborhood, it's a pretty safe neighborhood. We all freak out and we're like, you know, what can we do? We have the police come. And I introduced myself. I'm kind of the head of the neighborhood watch and blah, blah, blah. So I asked the cop, I say, you know, look, my neighbor, she has all these cameras. She has an alarm system. You know, why did she still get a home invasion? And the cop, who I'm now friends with, by the way, says like the rudest possible thing, which is straight on point. He says, well, you're the tech guy. What did you think the freaking cameras were going to do? And it was like this moment of just utter eye-opening WTF, was I thinking? You're right. They're just cameras and they don't actually stop anything. And so I spent the next 5 years building a product that turns cameras into something that can stop crimes.

How many subscribers do you guys have?

We have about 2,500 customers across the country. About half of them are businesses and half of them are residential.

And how many security guards do you have and where are these security guards?

Okay, so you don't have to answer exactly, but if I had to guess, and I mean, you just said it, around 25-ish security guards, a couple dozen, a few dozen, some, some number in that ballpark. Yep. Um, and How can this— how— what the question that I had when I was thinking about this business is two things. The first is this whole idea of like someone real life actually doing manual work is like on the other side of a tech product is kind of interesting to me. I remember— you guys remember when you were younger, there was that service called ChaCha and you could like text them a question and they would answer it? Totally. Like, I think there was a real person on the other end who would just Google the question you had. Because Google wasn't on your phone at the time. Yep, that's exactly what it was. And that's kind of like what you're doing. And so my question is this: how do you scale that? And do you just have to get a ton of guards? And also, what other services can I apply this to?

So that's exactly the way that we think about it, get kind of inside of our 4 virtual walls of the company. Um, so, so number 1, the, the number 1 thing that we do to scale is that if you think about the, the old business of security, right, like a guy or a gal sitting at a chair watching the entrance to, you know, a corporate building. That is inherently not scalable, right? You have no levers because you have a physical chair. And what's neat about Deep Sentinel and the big kind of aha moment for me is that there's all this internet stuff that can sit between the cameras and the guards. And when there's internet stuff, that means you can instrument it. That means you can start measuring things. And then like what I did at Amazon and my last couple companies, You, once you have data, you can start optimizing it. You can start looking at what are the real problems? What are the things that aren't problems? How do I, how do I make the guards into super guards, right? Like, in fact, at our office, we have an Iron Man at the entrance because that's, that's the way that we think about this is that our technology turns these, you know, regular awesome guards into super guards that can, instead of having 4 guards protecting 1 property, you have 1 guard protecting 100, 1 guard protecting 200 properties. Because all of the, the, the AI filters out events. It also sends them clips that it thinks are interesting that they should look at, like, hey, here's a clip from 30 seconds ago, maybe these things are tied together. And so as you do more and more of that, it's not like we're getting rid of the people, but we're making each individual person more powerful, right, and more engaged in their work. Um, the last thing I'll toss out about this too is that One of the other things that a lot of people don't know about guards is let's take, let's take like the most badass special forces guy in the world, right? Like I'm ripped, I've been trained for years, and I'm going to put you on night watch. So you get to stay up between 10:00 AM and 6:00 AM and you're in an area that's like, that's dangerous. It doesn't matter how badass you are, right? Like the tendency to fall asleep when there's nothing happening for 8 hours in a row is incredibly high. One of the other neat things about what we do is because we spread this across all of our customers, there's always something happening. We don't have like a lull time where our guards are just not doing anything. They're always engaged. And so we're able to keep them awake, engaged, like, you know, stimulated in a way that allows us to provide like what you just said. You show the symbol on your cameras and bam, within 10 seconds there's a guard responding. You can do that 24/7. Okay.

And so where are the other opportunities? Like, what do you call this model? I don't know what you call it where you have like real, real people doing stuff. Yeah.

So, so, um, the, the kind of like way to still be called a tech company is you make the human the second part. So you call it human in the loop, that it's a technology loop and there just happens to be a human for a tiny piece of the work. Versus a traditional services business where the human's doing everything. And so human in the loop, it's being applied right now already in some other industries, like cybersecurity uses it. So if they detect like what looks like an intrusion, or like in the case of Rakata, where they don't detect it until after it's done and the hackers release it, you know, that was a jab at them. But like, you know, the idea being that the computers can detect things that are kind of anomalous, but that the human really applies his or her intelligence to figure out the last little bit. So it's also being applied like in medical telehealth, right? So you have these experts and you use technology around them to make sure that you take an expert who could only generally be regional historically, but now a cancer expert because of video conferencing and, you know, remote records and things like that can actually have a lot more impact. For us, what we think about are how do we take this in a security context because we want to stay insecurity, and how do we expand that to a virtual greeter at a multi-tenant apartment building, a skyrise in New York, for example? How do we apply that to watching elderly folks at home who may need just a check-in every 15 minutes? How do we apply it to hotels where you don't need to have a guard there 24/7, but you need to check the lobby every 15 minutes? And how do we do that at a cost that's 10 or 100 times less than having a physical guard on location.

That's interesting. How big is that market of just checking in on— How many doormen are there in New York?

And he should slap— to use another—

So what does your security person do when they see somebody that is a potential intruder? Are they calling the cops? Are they like yelling through the camera, hey buddy, back away, you know, I'm a tough guy inside? You know, what are they doing to actually eliminate the threat?

Yeah. So there's a bunch of different things that we do. And, you know, you mentioned two things on kind of the ends of the spectrum, right? And it's kind of like an escalation spectrum. And so on one end, right, like, hey, I see a kid, right? That's the really most innocent thing. And the kid's kind of like poking at the door. And so we have a juvenile protocol. Each of these things are in their own little protocol that we train the guards on. And that's part of what the technology does. The technology helps them know the potentially relevant protocols to engage here. And the— and with a kid, you'd say, hey, hey, kiddo, I see you're there. Do you belong here? Right? And that's kind of the softest just touch, right? Then there's an adult that may be looking a little creepy, and then we say, "Hello, this is Deep Sentinel Security. Can I help you?" And that way, if it does happen to be a friend or family, we're not insulting them, right? So Sam's best friend from college that we've never seen before shows up, and he decides that the right thing to do is go right up to the door and start looking through the windows without knocking. You know, that's the greeting he's going to get. He's going to know somebody's there, but he's not going to necessarily feel insulted right off the bat. If somebody shows up and they've got a crowbar, it's sirens on. Hey, stop what you're doing! And we automatically escalate. So either that guard or another guard is contacting police. All of that's happening within about 10 seconds. And that's where the neat— the other neat thing starts is that because we have somebody watching, our calls to police are very different than what they get from like if you have ADT or like some I'll use the word again, some other schlocky kind of home security system. ADT calls and they say, hi, uh, this is, this is Becky from ADT, uh, I have a motion alarm in the living room. And the police say, well, is it the homeowner? Is it a cat? Is it the wind? Is it the dog? And she says, no, no, no, this is Becky from ADT, I have no idea, I'm just calling you because I thought I'd waste your time. Hangs up. When we call, I say, hey, I've got a white male, 6 foot 3, He's got a crowbar and I have, and he's trying to break into this building. Here's the address. I've just given them a description of the suspect, a description of the crime, and the existence of weapons. Every single police department in the nation, that's what their dispatch is designed to do.

And they categorize us. He just described Zach at his own house practicing crowbar combat as police. I know, right?

And that's why two-way audio, but that's a good joke. But like, that's why two-way audio is really important because by the way, homeowners do do crazy stuff.

And so sometimes we say, I have like a sledgehammer that I use to like exercise. You've just described me working out.

Well, and we'll say, hey, like, are you there? And you say, no, no, it's me, Sam, here's my special code word. And then we don't call the police. So when we call police, it's 100% verified. Our calls are 100% verified. And most people don't know this, when alarm companies call the police and ask for dispatch, it's 99% false alarms. In fact, Freakonomics wrote a little piece about this, and they're just like, it's, it's horrendous. It's a waste of police time. And so most police jurisdictions have actually passed laws where they don't have to respond at all to alarm calls.

Yeah, that's what I was gonna say. In San Francisco, I feel like I can call the police and say, hey, this guy's got a gun to my head, and they'd be like, well, you know, let's see if you could— if you can resolve that with your HOA before we send somebody out there, right?

They're not gonna get his name and call us on Monday. That'd be great, right?

And so how many crimes have you guys stopped?

We stop about 15 to 20 crimes a day. Wow. I mean, that's incredible.

And that's— crimes means like stealing packages? It means everything, right?

Drumbeats, right? Like, it's just— it's stealing packages, it's attempted break-ins, it's assault.

Uh, okay, why don't you have a TikTok channel that just publishes every crime that's stopped? Just the footage of the crime? We do.

It's the Stopped Video Channel. Send everyone to it.

Okay. I gotta get—

what is it called? It's stopped. It's on YouTube. We're just starting TikTok. We just found TikTok, right? Like, I'm old. Sorry. So like, I didn't, I didn't really get TikTok. My kids were on it and they were like, look at me dance. And we did like the dances, but I didn't really think about it as like, hey, let's post these things on there. Uh, people are loving it on TikTok because on YouTube, what is it? It stopped what? It's the, uh, it's the Stopped— Deep Sentinel Stopped video series. And every single week we produce the best 5, 10, 15, 20. That's amazing.

These have thousands of views. Great. Good for you.

Some of them have close to a million, I think. Yeah.

We have a couple that have a million. And it's cool. Like what's neat about it is it kind of taps into, you know, if you've ever been the victim of one of these crimes, like you want nothing more than to get back, whether you're getting back at that individual person or just like getting back at the world because it makes you feel powerless. And one of the neatest things that, you know, we actually don't really publicize that we do as a company is we actually reach out to people that have been the victims of like really heinous crimes. And, you know, a lot of times I reach out personally and say like, hey, I'm not asking you to promote us. I'm not asking you to do anything. I just want you to know that we've created a product that actually can make you feel safe in your own skin, safe in your own home again. And I'd love to just give it to you for the next 6 months. And it's the neatest thing. Like, I actually, this morning I happened to drive by, there was a home invasion in my hometown last year. And I gave the system to these people that live in Pleasanton. And I happened to be by their house this morning. So I stopped in this morning and the husband answered the door. And, you know, he's like a big tough dude, right? And he's not the type of person that you would expect to say like, I'm really scared in my home. But we all have like our kids or our family or the moments where we're not home or like we're asleep. And it was really neat to hear him just, you know, eye to eye say like, this is, this has really changed the way that we live. And after something that horrible, you know, it's, it's really life-changing.

So we only have a few minutes left in this segment. But what I want to ask you is, where's the opportunities based on what you've discovered? Because I think Like, I've actually read— I like reading about, um, companies that got big 20, 30, 40 years ago. And there's a lot— like, the beginning of ADP. ADP, what's that? What's the security company? ADP payroll. Um, and a bunch of other, like, interesting securities.

Exactly the same company.

But, but yeah, yeah, go ahead.

Uh, a bunch of companies that are just like, like, um, the guy who started, um, you know, Wonderful Brands. No, they make the Palm, the Palm water or the Palm drink, and they make— like, he got a lot of his wealth, I believe, from a security guard company. Like, security guard companies are just kind of interesting to me for some reason. It's kind of weird. Um, in this space with this like human-in-the-loop service in the security space, where's interesting opportunities that I wouldn't know about because I'm not involved?

So construction, is there one more?

What's another?

I've caught a bunch of people— my camera's being, being weird— I get an email where it says a guard intervened I've caught a few people. Uh, I hate it. Yeah, it's almost made me freak out more now that I know.

Well, I mean, I, I, the, the good news is that, you know, you do have a layer of protection. The bad news is you now know, like, for real. Like, if you had a Ring, you're getting 100 alerts a day, and so you just didn't know because who's gonna comb through all 100 of those alerts every single day? It's just not, it's not worth it.

Well, I appreciate you, uh, coming on. This is super interesting. I've been a fan of your product So it's nice to talk to the creator of it, uh, one of the creators of it. Um, this is pretty badass.

Um, well, thank you guys. Yeah, I mean, as you can tell, like, I'm super proud of it. I'm happy to talk about it any day. If you put me on for 5 hours, I'd keep going, right? Like, I love it. It's, it's the neatest company I've ever had a chance to touch, and I'm, I'm so proud to be able to touch people's lives.

Did you help build Ring, or did you work at Amazon? I worked at Amazon.

Yeah, so I was there way before Ring times.

How long— what year did you start there? 2002. Holy moly, I bet we should have you on another time to tell stories about that too.

I have lots of stories. There's lots of people that have great stories about Amazon. Amazon is such a neat company to have watched go from, you know, when I joined, every single quarter the Wall Street Journal would run a story, when does Amazon shut down because it just isn't sustainable.

What number employee were you? Oh gosh, You guys were in the thousands at that point, right?

Like $3,000, something like that.

Hopefully you, uh, haven't sold too many shares. Congratulations. All of them. Oh my God.

But good, good, good news though, I sold them in order to start Redfin. So, and I held on to some Redfin stock.

So I did not know that, dude. You've been doing— wait, Redfin, the real estate thing? Redfin, the real estate thing. I didn't know you started that. So you've done all types of shit, man.

I tried to. Yeah, it's been really neat. I've had a very blessed career. But again, like, what's neat about this one is, you know, Redfin's really, really cool. We invented interactive mapping. But this business, the number of times I get an email every single week that says, "You changed my life," that's the best thing to be told.

Super services. I freaking love that, dude. I'm gonna steal that from you if that's okay.

Yeah, that's great. I think this is awesome. And now, now I'm kicking myself because I'm like, oh shit, that this actually, if I'd asked one question earlier, this would have made sense to me. And now it does. So thanks for coming on and explaining it to us.

Hey, thank you. And if you're still interested, we're raising another round this year. So, hey, you know, let me know.

See, the only problem is I'm a cheap Indian dude who's like, oh, the price back then, the price then would have been— I don't know what you raise your first round at, maybe $10 million or something like that, $20 million. I have no idea what it was. But now, I bet like, have you— you've raised an A, right?

We're in the process of raising the A right now.

So, okay, actually, I'm gonna email you. I'm gonna invest in this company anyways. I will.

No, no, no, no, no, no. You got to send it to me too. Look, you guys have—

I'm not taking your spot. We can both get in, baby. Can we?

I mean, you've raised $24 million, right? Or $23?

We've raised a bit. We have a really unique investment vehicle that's open right now. So, you know, if you're serious, there is an opportunity.

Because, you know, ADT and these guys— what are the other security companies, the big ones? I've looked into this before, but they're all multi-billion dollar sort of sleeping giant incumbent types that for them to do something like this, they either have to buy you or they have to like change their DNA inside their bodies, which is not going to happen.

So, um, has a $6 billion market cap and— wait, I'm so confused. ADT has $5 billion in revenue and a $6 billion market cap. Is that right?

Got it. Okay. So there's some—

By the way, the other way we could do this is if you happen to have $10 billion I could borrow, I could do that too.

Yeah. This podcast doesn't pay that well, my friend.

Yeah, we, uh, we missed that one. But, uh, dude, send me the information. I'm definitely interested if you wanted to talk about it, or you're willing to have either of us. That sounds awesome.

Happy to do it.

It's funny how such small thing makes difference. I saw the video Sam posted, and the operator, the security guard who spoke back, was like clearly not like, you know, my relative in India. And I was like, oh wait, this is actually gonna feel totally different to have a human who's got your back, who feels like a trusted American voice.

Right there with you. Right there with you.

And then like right now, my neighborhood, our front gate, we have like a door guy just sitting there all day, couldn't stop anybody if you wanted to. But, you know, just sort of useless. You know, there's all these little points of failure, whether it's mail, it's the doorman, it's your personal house. It's my, for example, for e-commerce, our warehouse, They spend a lot of money, you know, just guarding because they have millions of dollars of goods in their warehouse. And it's just so inefficient, so capital inefficient the way they try to secure, you know, have security for those things nowadays because you have alarms which are just going to be like kind of just a sound. You know, you're playing an MP3 to protect you. Or you have a human, you got, you know, a club bouncer.

I think it's Spotify now, by the way. MP3s are the old ones.

So they just have Spotify for you. That's right. That's right. We're going to stream the security to you. Or you have a guard who's 99.9% of the time going to do nothing. And, um, and so it just doesn't make sense, right? Like I said, finally, you know, a solution that makes more sense. And no, I'm not paid to say this, it just makes sense to me.

Well, I, I, if I can, I'll tell you one more story. One of the things that got me off my butt to do this was, uh, there was a story of this elephant that escaped a zoo, and the video was, uh, the elephant— again, not, not a small animal, right? Like an elephant, right? And the elephant did not escape the zoo by going around the guard. The guard was sitting at the gate and like, you know, the chair is tilted back the way that you expect the chair to be tilted back. Guard is totally asleep and a freaking elephant walks right by him and leaves the zoo. And you're just like, there has to be something better than this. This is ridiculous.

Has there ever been a conversation like in San Francisco, there's all these car break-ins, like can a city adopt this? Do you ever, do you think a city realistically is going to ever adopt this where, you know, the cameras are on the street post or, you know, on the lights, and basically you can guard the whole street of cars that way, or no?

You know, we've talked to a couple of cities about it. The thing that I don't like is I don't like the idea of Big Brother being part of the government. Like, one of the things I really like from kind of an ethical— I'm a pretty principled guy, I like to think— is that by making this surveillance private and focused on private property and protecting that property in service to that individual, you don't have that panopticon risk of turning into the evil eye. And we never question who our customer is. Our customer is the person that pays us and owns this property. And that's a tried and true, deep principle of American liberty.

That's fair enough. I like that. Yeah. The person who buys it is the one who's opting into their own protection, basically. Yeah.

Yeah. That's right. Someone just rang my doorbell and I know that because my— I just got a notification on my phone that Deep Sendhil is talking to him.

This is where you're gonna get made fun of.

Awesome, by the way, dude.

People are gonna be like, you didn't know they rang your doorbell because they rang your doorbell?

Like, you needed an app? I can't hear it, but I know that I can see on my phone. I just got the notification. I love it.

It makes me feel so much safer for my— I've got two little girls and I absolutely love it.

It's great. I'm digging this. I mean, I can see my wife in our courtyard. This is awesome. I'm a fan. Well, thank you guys.

I love, I love getting the opportunity to be here. Thank you so much for bringing me on and, uh, you know, and for being a good customer.

Thank you. Good talking to you, man. I put my all in it like no days off. On the road, let's travel, never looking back.

Oh yeah, feeling like a rebel, I don't wanna hide it. Ain't nobody telling me no, I'm catching feels wherever I go. Yeah, yeah, yeah, feel like I can rule the world. Yeah, yeah, yeah, like I'm on top of the world.