#198 - How to Build a Unicorn Around the NCAA Reg Changes

really heard this a bunch of times, which is a lot of times as an entrepreneur, you just need to be in the market, you need to be in the game. And even if your current thing's not working, if you are aware of these like inflection points, you're the perfect person to just shift over.

Yeah, I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back. All right. We had a good episode. Well, I think we talked about a lot of stuff. What do we talk about? We talk about the Zapier for sound. We talked about—

yeah, we talked about the opportunity now that college athletes can make money. What are the business opportunities around that that just opened up?

And I think if you're interested in software, I think Sean, you actually gave like one of the, one of the better ideas in the last 3 months that we discussed. So that's kind of interesting. We talked about a new company that's creating a search engine for company documents. It sounds boring, but it's actually could be quite a big business. What else did we talk about?

The last thing is we talked about this business model idea of basically go take the R&D that the big companies do and that they make custom software for themselves, like the Starbucks mobile app or the Domino's pizza ordering app, and then make that available to all the mom and pops. So we did a bunch of examples of that and where the opportunities might be.

All right, listen up. Let us know how, uh, and how you liked it. My Twitter is @TheSamParr, then Sean's is @SeanVP. All right, what's going on? Yo, um, I'm in New York. I, um, I had a hell of a week, but I'm here.

Tell the story.

So I leave, so I'm driving. So I got this like nice car and I love driving it. I, I'm living in New York for a few months. I wanted to do that long drive because it's fun for me in my car. I'm all ready, I got my dog, everything. I get 15 hours into the drive, I get out of my hotel room and I have 2 spare keys on the same ring because you can't leave one of these fancy keys in the car, otherwise the car won't shut. Right. So when I go to the hotel, I put them on this, on one ring, and then when I get in the car, I separate them. I'm on the phone with my mom first thing in the morning, just saying what's up. Put my keys, both of them, on the roof for a second. Get in the car, start the car, drive off. 60 minutes later, I stopped for gas. And I go, shoot, the car's telling me that I can't start it because the keys aren't here. What the heck? Where are the keys? Turns out I left them on the roof 60 miles back, drove off, and I go back to find them. Over many hours of searching for them, someone ran over both the key fobs.

So you actually found the destroyed key?

I found the destroyed parts. And I had a locked bike. My nice bike was locked to the roof along with my Thule rack was locked in there. I find those keys, thankfully. Otherwise I was gonna have to call the welder to like weld my bike off and like pop this lock open. And I find those keys, but my fobs, my $800, I think they're $800 or $1,000, they're expensive, completely smashed to bits. I call Mercedes, they tow my car. This is on a Thursday. They go, we are not going to get a new key in until Thursday.

So I was like, fuck, you got, you're supposed to be in New York, you're stuck in Tennessee. I'm driving from Texas to New York. You get stuck in Tennessee, your car keys get smashed, your car's just sitting at a gas station and you can't get a new car key for a week.

And I'm with my dog too, who's like an 80-pound pit bull. And I'm like, dude, what do I do? And he's like, well, we could just store it here. So I'm like, all right, well, I'm not going to stay in Tennessee for like 8 days. I tried to get a private flight. I tried to fly because you can't fly with a dog. Eventually I like waited in line for hours to get a—

so from my point of view, I get a text message in our group chat that's like, How much does a private jet cost?

What? Yeah.

And I need to get to New York. I'm stuck here. I can't get on a normal flight because I have an 80-pound pit bull with me. I don't want to leave my car, but I guess I have to. And how am I going to come back and get my car? Very confusing situation.

And he searches for all the 5-star hotels in that area, and he just sends the same thing to all the general managers.

Yeah, the hotel thing is great because I feel like anybody can do that. And, uh, and you know, if you have a little social media following or whatever, I know Instagram influencers do this. I've never even thought about doing it. I probably still won't do it because Sounds like it's kind of time-consuming, but, um, I thought that was pretty great, that little tactic that he uses. I thought, uh, you know, these situ— when you got in a pickle, you had to get creative, and, um, you probably like learned a bunch of stuff that you didn't know, you know, 24 hours before that and never really would have paid attention to had you not done that. Like key fobs, you know, what to do when you're stranded, private jets. Can you commission a private jet? Can you hop on to somebody else's thing? Like, what are the other options? You know, somebody's like Somebody from this podcast or the listener was like, I'll drive your car. Like, hey, when you get your key fob, I'll drive it to you in New York if you, uh, like hang out with me for 30 minutes or something like that.

Yeah, I, I, so I, I don't know what I'm going to do. My, it's not going to be— the situation's not even resolved till tomorrow, so I got to figure out what I got to do. Coincidentally, I have to be in Nashville for work August 1st-ish. There's like a podcast conference that HubSpot wants me to go to, right? So I might fly down there and drive. But anyway, crazy, uh, week. But can I tell you a few things, uh, I noticed when I— so I've driven, and then we'll get some— we'll get to ideas, but I, I've driven cross-country a lot. I've done it a bunch of times. I love doing long road trips in America, and it's always fun to get out of our little Silicon Valley or New York or whatever, like, fancy tech guy bubble. And a few things that, like, I noticed. The first, dude, the average American eats so poorly.

And it's— what makes you say that?

Well, granted, I am like on the road, but like, I try to like actually go to these small towns. But man, like just seeing what I love, I'll just like go to a gas station or I'll go to McDonald's or I'll go to like a restaurant and I know because I eat in the parking lot with my dog and I'll just like sit at what and just look at what people order and like the lines are packed for Rally's or Sonic, man. People, this whole healthy eating thing that I think is popular amongst like affluent people. I don't think it's popular amongst all types of people. And that is crazy to me because they're just killing themselves.

You didn't see a lot of keto and intermittent fasting on this road trip, is what I'm hearing.

No, man, just processed foods. And I'm not like the healthiest. I mean, I splurge. I like Diet Coke and I'll eat McDonald's.

But oh my gosh, when you're driving, you're going to see it's like pit stops. It's like here, you stop here for gasoline, you stop here for sugar, you stop here for caffeine, and then you just repeat that loop. Gasoline, sugar, caffeine, gasoline, sugar, caffeine.

I'm just shocked at the—

I'm shocked at just how there are very few healthy options.

It's amazing. I just like when I would go to like a fast food place, I'm like, look, dude, just give me a grilled chicken breast and like vegetables. That's all I need.

That's like a billion dollar company. I forget. Starts with a B. Yeah.

Yeah. It's something.

Bevy.

Bevy is the name of it. Yeah. So Bevy is like one of these genius things where it's like, hey, does your office want like fancier water fountain? Good. Use a Bevy. And they just get planted in every company. And then it's just like a recurring charge.

And the guy who, Quinn, the guy who came on to talk about vending machines. He said that the thing is, is that these healthy options, like the, the, the, the honey pot is at WeWork where you have like an $8 sandwich. But he's like, basically like most of America just wants a Monster.

Yeah, but I think, I think that's fair. But I think the one smart thing they're doing is they're going to— there's like, if you just take hospitals and airports and things like that, like they kind of, they're sort of incented to have like another option and a kind of a better option, even just from optics point of view. And so I think you could do pretty well just by getting prime placements through, through that. But anyways, that's a random tangent off of what you said about healthy eating on a road trip.

What was it after, like the World War, whatever, the Roaring Twenties? It seems like we might have the Roaring 2020s here where people are ready to travel. They're ready to just go like kind of like max out all their experiences. After being sheltered in place for, you know, a year plus sometimes and potentially saving money.

Have you— so I like went out and talked to people like, like who I know earn between $50,000 to like $150,000 a year. And I was like, how much money have you saved? And they're like, more than I've ever saved in years. And I was like, what are you going to do? And they're like, I'm ready to— I want to buy a Rolex or I want to buy— they want to spend. So like my traveling lately, we went to Miami and everything and we saw like it just consistently like I try to buy accessories for my trip, like a, like a new rack for my car. Everything is out. And I'm so bullish on America over the next 2 years. So that's just an interesting insight from traveling. You want to talk about ideas?

Yeah, let's do it. All right. So I think the big one is this NCAA thing. We had touched on this briefly, but basically the law changed that allowed college students to make money off their name and likeness. So previously you're a college athlete— sorry, I should have said athletes— previously you're an NCAA athlete. If you make money, you lose your amateur status, you can't play your sport anymore, and you can have your scholarship sort of revoked, even potentially if you've run afoul of those laws. So that changed, and all of a sudden, overnight, a bunch of opportunities opened up, right? So this thing that was just bottled up because of regulations and rules. All of a sudden the cork got taken out of the bottle and you get to see what was going to happen. And so I don't know if you've paid attention to this, but I think we should do like a mini brainstorm on just what we see that's interesting or what you saw people doing.

Yeah. So can you explain the rule? Because I think that there's some stuff around it, like you can't actually— can you not make the money yet? Is it like, put it like you can't access the funds? Is there anything weird like that?

I don't know about that. I think they, they, they've, they definitely started getting like signing contracts and getting paid. I don't know what the I don't know what the nuances of the fine print of the law is. I didn't look into that.

So I had this suitemate in college. So if you Google Pure Sweat, have you heard of Pure Sweat basketball?

Pure Sweat?

So this guy named Drew Hanlon, he's from my hometown.

Yeah, he's the trainer, like on Instagram that you always see with every NBA player.

Yeah. So that I've known him since I was a kid and he was my suitemate in college. So I knew him in high school and then we went to college together and I was an, I was a track and field athlete. He was a basketball player in college and he was my suitemate. So we— I got to know him quite well and he'd be working on this thing called Pure Sweat. It started out just as like a binder of like paper binder full of workouts that he would sell for like $50 to kids in the neighborhood. And then eventually he like made a website and an app and I don't know how successful it is, but he was always working at night on this thing. He didn't drink or he didn't party and he was always working on Pure Sweat. And he eventually after college started training. What's that guy like the Greek freak or whatever? And then like Brandon Beal, Bradley Beal, because he's from St. Louis.

Zach Levine.

Yeah, my— I have friends that run these.

Cameo already has an NCAA page.

Yeah, they already have an NCAA page. They were ready to go. And this is like, you know, one of the easy ways celebrities make money. There's like you know, 17 pages of people available on the NCAA page.

Oh my God, that's so funny. And they're also cheap. It's like $25.

Yeah, right. Because they're like, oh, sweet. That's, you know, 3 meals for me on campus here. Okay. So the second is, did you see what Barstool did?

Yeah. So Barstool sponsored an athlete for gambling, right?

I actually think that's the best idea that we, you've had in a long time.

All right, I'll stop there then. I won't give you more.

I don't know what like the total addressable market is for that, but like, I mean, it's enough.

Uh, well, just for, I mean, for what's happening right now, by the way, I mean, universities just, just spend tens of thousands a year for your software.

Like, that's, it's, there's enough.

And you'll be sticky, right? And you'll become the system of record for all these things. They're not going to want to switch 2 years in because this other system of record has a new feature. So whoever gets plugged in as the system of record has the opportunity to own that data. You're entrenched in all these universities who are not looking to take a bunch of risk. And then you could build on all the add-on services. So you could build on other things that allow, whether it's banking or it's contracts or it's marketplace for deals, whatever, you could build all that on top of the data records, uh, record book.

You know what I just realized? Now, this company that you and I invested in, there's actually a lot of competitors, but we invested in this company called Stan.

Yes.

And so this idea of it, and that is how, by the way, I got chills while you were telling that story. I love that.

And that is how, uh, GE came to be eventually was, uh, and a bunch of these companies, uh, that Thomas Edison had on, uh, you know, he was involved in a little bit of everything.

I saw you tweet something that Thomas Edison invented the word hello.

Yeah. So basically before Edison, people would say greetings or good afternoon. Like hello wasn't even a word. In fact, the word hello, it was pronounced a little bit differently. It was like hallo or like something silly like that. And when he invented the phone, he was actually partially deaf and also the phones weren't very good. So he would call like an operator in order to set this up and they would have to think of a word to say to be like the greeting on the phone. And he was like, well, the word hello, I can actually scream that pretty easily. And so I'm going to start saying hello. Like it was hello. It was like originally it was meant to like as a, as a word to like say, oh, you surprised me. Hello, you surprised me, you know? And so that's how he started saying it. And then once people started using the phone, they started saying it and the phone got better and then it just became a hello. Wow. And that's, that's how the word hello came to be. And then anyway, this idea of inflections are actually really interesting. So there's all types of moments where these things are capable. And I think that this NCAA thing, it's interesting. The idea you said is interesting, but the concept here of inflections is actually more important because we're actually seeing it happen right now.

And by the way, I hear this so often. Um, two, two, two examples come to mind. One, I was talking to, um, this guy Jesse Pujji, who we should have on the podcast.

I know him. He lives in St. Louis.

We're seeing these actually constantly. So, um, like there's a thousand examples that we can just give that just happened in the last 5 or 10 years. I mean, you said Facebook, you said Google, you said you could say the same for Snapchat. Clubhouse likely won't pan out, but that was definitely an opportunity to have one. This NCAA thing, the medical thing where now doctors could practice, uh, remotely because of COVID I mean, working remotely. I mean, there's just, it happened constantly. What I like to do is I like to read Politico. Politico is a cool site that tells you on regulation updates. That's a great way to learn about these. But there's like loads of different inflections and they happen consistently. And you, you could be an insider to have to see some of them. So like, you know, if you're not working in tech, you're not going to see like the power of Facebook early on. But like a lot of them are actually like the information is oftentimes blatantly obvious. It's not obvious that this is going to be the one, but it's blatantly obvious, like, all right, this could be an inflection, right?

Yeah. And it goes back to that same 2x2 matrix. This athlete thing is, is basically it's new problem. Like, like all of a sudden a whole bunch of people have a new problem. These athletes have to keep track of their records. They want to make money. They can now do this. And there's going to be old, you know, you can take some old solution and repurpose it for, for this new opportunity, this new problem that, that exists in the world. And so, all right, let's move on. Let's do another one. Uh, do you have one or you want me to do one?

Yeah. So, um, I just found this company and I actually heard of it for a while. I'll tell you two interesting companies that I discovered. Um, the first one, it's called nira.com. Before this, it was called FYI, I think. Yes. Um, so the reason why I came, I found this, do you know who HeatnShaw is?

I know HeatnShaw.

Yeah.

I invested in Nira, by the way.

Oh, you did?

Yeah.

Oh, sick. All right. Well, we can talk about it. So HeatnShaw. So there's this guy named Neil Patel who's like the face. And if you are probably a little bit younger than me, then you probably don't know who he is. But if you're about my age or older, You probably know who, who Neil Patel is. He had this amazing blog called Quick Sprout, and this was like, if you wanted to learn anything about search or Google, his blog for— somehow, I don't know how he managed this— covered pretty much everything. And he built a huge blog for SEO, and it became a huge business, and he launched loads of different software products on top of it. Well, Hiten Shah was his, uh, right-hand man and probably the operator behind and the brains behind this. He just launched this new business a while ago And I had— I looked at my old messages. I DM'd him 2 years ago when he first launched it, but I didn't have any money at the time. And I was like, dude, this is amazing. And so he changed the name to Nira. And it's really simple. What it is, is basically if you are a company like HubSpot, so you have 30 or 3,000 employees, or The Hustle when we had just 10 employees, even when you have 10 employees, my current Gmail has 100 gigs full. So let's say you do times 10, that's 1,000 gigs. That's like a terabyte, I believe, of data. That's like hundreds of thousands of documents and images and whatever. It's really hard to find all of those images, but also it's hard to know who has access to all these things. So for example, you have this document called Salaries and you must have like accidentally said like share to everyone who has access to this, to this folder. You don't fucking see that. Or if someone quits, they still have access to this document called Passwords, like stupid stuff. Yep. Well, Heaton built this software that I didn't even realize this was a problem. I mean, I have had this problem, but I'm like, oh, this is actually a great thing that you could sell.

It was a blind spot. You're just like, oh, this is just the way the world is. You know, it's just like a problem you live with until somebody says, by the way, you know, you can, you could stop that, right? And you're like, oh shit.

And so he's been working on it, but here's so, so anyway, it's the, the, the product is, is interesting, but that's not even what I care about. It's basically just a search engine for an entire company's documents.

But I want to explain why. First of all, how'd you hear about this?

You're—

because you're friends with Heaton? He hollered at you?

Yeah, loosely. He, uh, but he's like, we're cool with each other. And then I saw this, I was like, oh, that's dope.

How did you see— how do you know all this? See, I'm friends with them and he like— I—

we talked in a group chat with him and so I saw he was talking about it there.

Oh my God, that's so funny. You're in on everything. But there's a few things that's interesting. First of all, I'm pretty positive this has— I mean, he could screw it up. And I mean, there's execution risk here, but I think it's going to be pretty big as long as they just have C+ execution. But what is interesting to me is, and this is out of my world, you and I do stuff that we come up with an idea and we can make money off of it in 5 days, but it can also go away pretty easily. He's been working on this for 2 years before he was getting any customers with like 10 employees, because in order to sell these enterprise contracts, especially to the IT department where everyone's like uptight, as they should be, you have to— everything's got to be buttoned up. And it's really cool that I get intel or insight into that because I normally don't ever see that. You have to have so much patience to build these SaaS tools. And so I don't think I'm cut out for it, but I thought it was really interesting to see that.

Yeah. So I just wanted to bring this up because It was interesting to like talk to him and be like, yeah, we've been working for 2 years doing this. Our roadmap is this. And that is just not really what we talk about a lot of like this, like epic planning and like really like, all right, in 3 years, hopefully we'll be here. Uh, next in 2 quarters, we'll be at this. And I actually think that that's good. I wish I were like that a little bit. I'm not. Uh, but I thought it was crazy fascinating to see how you have to sweat the details so much before you even get a customer and you just spend so much money, right? You know, 10, 20 engineers to do this. So I just wanted to bring that up. You want to do another one?

Yeah, let's do one. I think I've said this once before on the pod, but I want to do— I'll do it quickly. You tell me if we've already talked about it, but it's this idea of Zapier for sounds. Have I talked— do you know which idea I have here?

You didn't bring it up last time, but I've heard this phrase before from you.

I don't think you brought it up, though. You were the one who kind of really highlighted Zapier to me, right? I was using it, and Zapier, for all I knew, might have just been like two dudes who built this as a side project, and they're kind of in— they're on IndieHackers.com bootstrapping, and they're at $8,000 a month of MRR. No, Zapier is like a billion-dollar company.

Multi-billion-dollar.

Multi-billion-dollar company that was largely bootstrapped.

I think they raised $1 million in funding and used that $1 million in funding to get to a billion-dollar status.

Right. So, so pretty freaking impressive. And when you go to the product, it's like a very simple thing. Zapier just lets you say, hey, I was trying, it's like a pipe. So it just connects two different services. So you might say, hey, whenever somebody signs up for my, on my website for my mailing list, put them into this spreadsheet or like send me an email. And so you're just connecting like Gmail and your website or you're connecting like whatever Shopify and Slack. So you just connect, you just create these little formulas. If this happens, then do this. And so that's what Zapier is. And Zapier has become very, very successful, obviously, because people want that. They want to say, okay, they want to basically— nobody wants to build anything. It's like there's a million— there's a tool for everything, but they don't speak to each other. So Zapier is like a connector between tools. So anyways, Zapier for Sounds, what is it? So my friend Samir had this idea, and Samir Bala, and he was going to do it, and then he found a better opportunity. Like, there's a fast-growing startup, and he joined as, like, an exec there instead. And I was like, oh, dude, I love this idea. And I agreed for, like, I put, like, a 1.5-year embargo on talking about this idea because I thought he might do it. At this point, I'm pretty confident he's not going to do it. But the vision he outlined was pretty damn good. He goes, every team, every company has something in there, some event that happens in their company that they celebrate. For The Hustle, it might be getting an email subscriber, Maybe it's getting a new advertiser to come on board or selling a trend subscription. And the— like, wouldn't it be great if there was just a sound, right? The old kind of like— and in most offices there's like a gong. I bet you guys had a gong or your sales—

Yeah, you have a gong.

What my reply is going to sound like a tangent, but it's not. So again, I'm on this Edison kick. I'm reading all about him. And in the biography, when he created the phonograph, so basically a record player, people are like, why are you wasting your time on this stupid toy? Like, this is not interesting. This is not going to help anyone. This is so dumb. This looks janky. And obviously it wasn't right. It changed the world. And it was the first time that anyone had ever heard someone's voice before. Besides, you know, just talking and a lot of really cool ideas that great people have or ideas that turn out to be amazing, whether it's Airbnb or Uber, they sound like these stupid, dumb things. You're actually particularly good at finding things that are toys or silly on the surface and making the case for why this can actually be huge and big. And you're, 'cause you kind of default to optimism. What is your default to optimism on how this could be big? Because my default is. This is such a silly— I'm, I'm, I recognize that I default to that, but I, although I'm trying not to, my default is this is just a, what, like, what, that's such a small, silly thing. Tell me everything.

I actually think that there's a great lesson here I didn't used to think about this way when I was a little bit younger and now I'm, I'm changing. But I remember when I first started creating stuff and I see a lot of people who are early in their career of creating stuff, they think like, oh, the market's like too saturated. Like no one buys courses or, uh, you know, there's already like ads, no one clicks ads. But what you actually just did was interesting is you looked at the macro, like the, the high level, like human beings do want this. So you, so the way that you just described it, you goes, you go, everyone I know, all companies wanna celebrate a win. Like we all know celebrating a win is first, or is great. We also know that a lot of them celebrate a win with a sound. Therefore, it actually is plausible that this could be interesting. And I think that that's far more productive and helpful than starting the other way around. So for example, I would justify a course like, we all know that people want to learn how to do this. And we also know that a lot of people buy stuff. So like, it's pretty justifiable that if I execute well, people will buy this. And that's like an easy way to like back yourself into like, of course this can succeed, but can it succeed a lot? I don't know. But, and I think that that's actually a really interesting way that you tend to look at things. Um, and that's cool.

That's cool. Uh, all right. Let's do one more, uh, one more idea right now. Do you have one or you want me to do one?

I could tell you one, and I don't want to make this all about stuff that I'm investing in, but so I will disclose I am an investor in this, but I actually am not entirely sold on the idea. I'll say that. So click that website, stake.rent.

Okay, I'm on it. So let me just tell you what I see. First reaction, it says cashback for rentals is here. Pay your rent and get cashback at a home or office that offers Stake. Okay, so what does that mean?

Okay, so there's this guy, I don't even know his name. I barely talked to him, but he created the rewards program for Amex. And a couple other airlines. And so these reward programs, they give you stuff in order to make you happier. So you want to stay with Amex. So discounts to stuff, uh, to, in order to, you know, when you sign up for Amex, you, you get a discount for movie tickets or on your insurance. And so he was thinking, and this guy knows nothing about real estate. I don't, I don't think so. Um, and he was like, we should do, actually do this for rent. And when you think about it, a lot of actually renters or landlords actually do this. So they say, I'm going to give you a month free or 2 months free. Have you seen signs for that?

Yeah. Especially to start your lease.

Yeah. Yeah. So it's very common. So they're already doing that. And he was like, you know, if you give someone 1 month free, that's 8.3% of annual rents that you're giving someone a year, right? If instead you made it so you get 3 or 4 or 5% cash back every month that you pay your rent on time, that's actually kind of an interesting way to build loyalty amongst the renter. And it's like a smaller, you know, it's like a gold Star, like sometimes Sean might be happier if I give him a gold star versus like giving him $100. Right. You know what I mean?

Okay. That's interesting. And so the math, I mean, 3% every month would add up to more than 8% for the year. So how does the math work? Is it like more like 1% cashback basically, or what?

Yeah, it's a smaller fee. I don't know what the, what the exact fee, but it's usually less than, it's like less than 6% a year. Gotcha. Um, and so it's something like $20 a month. But it— and they get the money if they pay the rent on time.

And they're basically— they're proving to the landlord, hey, look, if I give— if I help your renter— if I— if your renter feels like I'm getting a bonus for paying my rent on time every month, uh, I will lower the— I will lower your, your sort of defaults and your, uh, late payments, uh, on rent by X percent.

Just a little bit.

Yeah, if they can show that one behavior, then they can go to every landlord and say the same thing. That's the idea.

Uh, yeah, I think that this could work. I don't, I, I think it's hard because if you, it depends on your worldview. Like the first time I heard about, um, what's it called, layaway. You know about layaway?

And this is what I want to say. It doesn't really exist much anymore.

I'm gonna sound like privileged. I think it exists. I think it exists in a big way still.

So I think at like, um, you know, I think it was more popular years and years and years ago. Like when I— my dad used to tell me all the time when he was a kid he would do layaway, right?

So, so basically layaway— I, I didn't know about this, but basically let's say you go to a Walmart and, um, You go to Walmart, you want to buy something, you don't want— you don't have the money to pay the whole thing. You basically say, I want to put this on layaway. And you're— but it's what I thought was going to happen is it's more like those, uh, you know, buy now pay later type of things where it's like, um, yeah, like it's like Affirm or something like that where you, you buy the thing and instead of paying the whole $100 up front, you make 4 payments of $25 and you, you pay it over time, but you get your thing from day one. With layaway, from what I understand, it's the exact opposite. Layaway, you just put the thing on hold there and then you come back every month and start making your payments until you own the thing. So it's like kind of like it's like doing a chore in a way, right? It's like, it's like telling your parent, hey, if like I will, I will work hard for 4 straight months in order to get this thing. And so this is apparently like a very big— I should have looked this up. I didn't know we were going to talk about it, but layaway is actually like a pretty huge part of like the economy, especially in, in, in like kind of like lower end retail. Like Walmarts and stuff. And so, um, so I thought that was kind of interesting, and, and it got me thinking about like all these little like incentive structures around paying for things. So what you're talking about is incentive structure for, uh, rent. There's other incentives around rent. I don't know if you've seen— have you seen Rhino? It's like a rent, uh, service. Basically you pay your rent and you build your credit by paying your rent on credit.

I love those. I, I, uh, I wanted to do one of it. So it's SayRhino.com. I wanted to use one of them because for years my credit was only okay because I didn't have credit. But I'm like, it's bullshit that your rent doesn't count as credit.

Yeah. So I don't know if that's what Rhino does, but some people do that. Then what Rhino is doing is they're basically like, they looked at what most people, when you go rent a place, you put the first or the first and second month's rent down as a deposit. And they're like, dude, that means there's like X hundreds of millions or billions of dollars that are just deposits that are just locked away. And so, and so, and so basically what they created, I think, was like an insurance product that said, hey, you don't have to pay, you don't have to pay your, you don't have to put $1,000 down as your deposit. Instead, you pay $5 a month as an insurance policy. And we will, we will cover the landlord if the deposit ever kicks in and you get to keep your money instead of putting down thousands of dollars as a deposit and having that dead money just locked away for a while. And I thought that was a— I think that's what Rhino does now.. But there's all these like interesting things around either real estate incentives. Another one I wanna tell you about is Smile.io. Have you ever seen this? Probably not. It's more of an e-commerce thing, but I'm right now I'm in the process of designing like a loyalty program. And so when you, when you said this thing about the guy who did it for Amex, that's interesting.

That's nice.

I was just researching Amex's loyalty, like the psychology of these programs.

And I, all right, well let me run, let me read it. So Smile.io, turn your hard-earned sales into repeat customers, maximize your customer acquisition efforts and turn transactional sales into passionate brand advocates. I don't really know what that means.

So I'll explain. So do this instead. Go to this website and just look at the bottom left where it says, uh, where it says give 10, get 10. Give 10%, get $10.

Um, well, I see 3 for $40 at the bottom left.

This is sick. I, uh, Yeah, this is sick. I'm looking at it now. Uh, does this work? Have you implemented this? Like when I see these, um, rewards programs or things like that, like when I go to a lot of e-com sites, uh, there's like a wheel that you spin and if you enter in your email, you get something like, there's all these like tricks.

So have you implemented this club tub or—

Yeah, I just, I just started working on this last night to implement it, but I'm like, I'm figuring out what are the perks because you have to find the balance, right? If you give too much value away, it eats all your margins. And if you make it too shitty, then nobody's motivated to do anything. You wasted your time. You got to find the sweet spot where it's like compelling enough to them and it doesn't eat away your margins. And that's the sort of like that's the art of this, of doing it. But I love that I can do this without knowing how to code. I think that's kind of like, you know, a great business model, an idea. And so I would do that if I wanted to think of other ideas like this. I would just go look at what do the top retailers like. I would go to Starbucks, I go to Lululemon, I would go to, you know, whoever, Macy's, Nordstrom, and I would walk around, I would use their online shop and I would walk around their store and I would say, What have they built that's custom and awesome for them? And then how can I make the white-labeled version of that and offer it to every other retailer that's competing with them?

There's this great thing I want to bring up. Basically, I don't know where I heard about it, but at Facebook, Chamath or someone early on discovered that there's like the magic number of 7. Basically, if you create a Facebook account, we need you to add 7 friends right away. And if you add 7 friends, you're likely to become a Facebook user forever or for a long period. You know what I'm talking about?

So at The Hustle, we found— I don't remember the numbers off the top of my head, but we found like if you open 5 out of 7 days right off in the first 7, 5 times the first 7, you're going to be with us and we're going to call you a gold person. Right. And so whatever. And we have this new thing called Snippets where we're trying to automate a lot of the email content and you sign up for The Hustle and you tell us what type of news you care about and we automatically like give you a customized email. And what we're seeing is that the people who fill that information in and it's like a relatively long flow, they are like 3 or 4 times more engaged than other people. Right. And a debate that I have, and I'm bringing this back to what we're talking about, is that I actually think the question is like, were those people more likely to become power users anyway? And they are filling that out. Or are they becoming power users because they fill that out? And I would argue it was the second one. So like if someone's going to give— what's this, TubHub, whatever this would— e-com, whatever we're talking about. If are they going to become— are they power users already? And so they're more likely to give you your email and like you on Instagram. I would actually say no, because you are there going through this little small indoctrination process. They are now becoming power users. It's like, what are you confident? Therefore you're going to flex your muscles, or do you flex your muscles and then feel like you are work on it, right? And so I actually think that making users do this stuff, you are turning them into power users.

Yeah, I think that's true too. I think there's an element of both. I think that the people who are already power users are going to be like, oh my God, my favorite thing has more value I can go get, like, let me go do it. And then there's a whole bunch of other people that are potential power users if the circumstances were right. If they followed you, so then they would see your updates. If they gave you their email so that you could show them the new stuff. Blah, blah, blah, then you're going to get more— you're going to have a higher likelihood of turning that casual person into a hardcore person. And so I think both do happen.

Do you want to save this? You want to wrap up now and save some of the stuff for next week?

Yeah, actually, I just want to say two more examples of the same trend. So that same trend, if you go and look at the Hustle emails, you guys have at the bottom like a survey thing. It's like, were you happy? Medium or Sad from the CEO. You have an ambassador program. And a lot of those were like things you either got off the shelf and modified or you just built homegrown. And so if you're a newsletter, if you want to build something for the newsletter industry, go look at what The Hustle, go look at what Axios or what these guys are all using and be like, cool, how do I give every newsletter the ability to just have this feature without having to build it themselves? Because clearly it's working. And they're competing with groups like The Hustle that are like years ahead, have employees, have money to be able to spend on this type of stuff.

Yeah. And we did have to build a lot of that, by the way, and it was horrible and it breaks all the time. And like, it's— I would way rather— like a lot of people, a lot of people who— there's this whole— there's a large contingency of people who say, oh, let's build our own stuff. A lot of people who have been there, done that will say the exact opposite, which is never build anything if you don't have to, always use off the shelf, right? I fall into that category. Yeah. And I wish, I wish a lot of this stuff had existed. I'd rather pay a software fee than an engineer.

And you talked about this once. You were talking about paywall software. You're like, yeah, I'm in the media business and like the best sites have really good smart paywalls that convert. And then the rest of us are using this kind of like crappier version of that. Like, why don't we all just— let's just pretend and say the New York Times has the best paywall flow that's causing highest conversion rates. Somebody should take that and just say, do you want the New York Times paywall on your site?

Here's New York Times paywall as a service. An example, another example in this trend is Slice. So basically Domino's had the best pizza ordering experience. It's like you would order the pizza on your phone, then it would show you the progress bar. It's like, oh, you know, like, you know, John has put it in the oven, you know, 20 minutes. Oh, it's out of the oven. We're just putting the toppings on top. Oh, it's in the car. It's almost near you. Hey, it's at your door.. And so like, you know, they spent a lot of money doing that because they're Domino's, they can afford that. And what Slice did was Slice went to every indie poppy, uh, indie pizza shop and basically gave them an app that was the Domino's mobile ordering experience and said, hey, now you can compete against that. So let's just compete on the basis of whose pizza is the best rather than, well, they made it so easy and fun to order and mine still is like, call me and I'll write it down on a piece of paper. Um, and they became a billion dollar company doing that in that space. So it's the same model that when you see 3 or 4 versions of these, that's the pattern recognition to say, okay, that's a, that's a blueprint I can follow to get a new business idea.

I agree. We want to wrap up there.

Let's wrap up this one and then.

Yeah. All right. We— that's the episode. Holler. Yeah, I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back. Life.