Business of Trend Forecasting, Pickleball, And The Lucrative Virtual Gaming World
But I actually think there's an interesting business where you can look at anything that someone is having to spend a substantial sum today for something that's gonna happen in 12 or 36 months, and you help them, uh, guess the right prediction. You can build an interesting business, and I'm gonna give you an example.
Okay. So let's do it. What, uh, what topics you got today? All right.
I've got one idea based on something you sent me.
Oh, wow. We're rich.
Yeah. But you—
thanks, Sam, for having one idea based on something I sent you. You sound like you really put in the work today.
Look, I'm in the final interview stage for my new researcher. Um, but you told me last time you had a lot and, uh, just hear me out. So you sent me this thing called exploding topics, right? Yeah. And you said their traffic's killing it and Exploding Topics. Do you wanna explain what it is?
Yeah, it's basically like a, if you go to the website, you'll see a series of charts and the charts are basically saying, hey, this, um, this thing, this trend is, is growing in, um, in popularity.
I think it started by which keywords were growing in popularity cuz Brian Dean who owned Backlinko, a popular SEO blog, got involved with it and then it kind of changed to what it is now.
Okay.
Yeah.
So I didn't know what the underlying, what are they looking at to tell you what's trending or not, but they'll be like, um, you know, hey, there's this thing called PowerDash. It's a vacuum cleaner for pet owners. It's grown 3,000% right now. Right. And there, but you know, the volume of that key of that search is 320. So not, not huge regenerative agriculture, right? Uh, growing 658% with 12,000 searches. And you could look at that and you'd be like, huh. That's cool. I'm interested in that topic. Maybe there's something I could do here. So I think it's similar to what Trends was, which was, I will tell you about things that are getting more popular before they're fully popular in order for you to take advantage of them with content, business, that sort of thing. Right? That's the idea.
Yes. And the people wondering Trends, so basically I used to own, I sold it. I used to own this thing called trends.co and it was a weekly email on an online community that people would pay $300 a year for. And we got it. I forget what it was when I sold it, but I think it was at like $6 million a year. But it very easily could have been like $1 million a month or so in revenue. But basically we would send a weekly email and we had 3 or 2 researchers and they would comb the web and find interesting things and they would write interesting reports and they would also include 1 to 2 graphics that showed like, here's based off of Reddit searches or based off of Google searches or based off of like 20 different data points. This topic is growing quickly. Anyway, what, uh, Exploding Topics is doing— there's another, another company called MeetGlimpse. So I think it's meetglimpse.co or .com, I don't know. And this is just called trends forecasting. And these versions of it, including my version, they're what I would call prosumer. So people who just wanna spend $10 to $300 a month on it, they're not that big of a deal. But there's this whole other industry of people willing to spend $25,000, $100,000, $10 million a year, all on trends, trend forecasting. And I think it's a very interesting business model and I think it's a very underdeveloped industry. And so the one that I brought up a whole bunch is called WGSN. WGSN, it's basically a monthly report that comes out and it helps people pick which colors are going to be popular, which sounds trivial, but that's a really big deal if you're Starbucks and you got to go and buy 10 million name tags or something like that, and you want to make sure that you've got like a good color that is like hip. Or for example, WGSN. Do you remember, Sean, how pineapple was popular? They helped predict that pineapple, the logo, is going to be popular. Their next one, I think, is the lemon. I think they said lemon is going to be popular. Maybe you told me that actually. And so anyway, that's what this does. But I actually think there's an interesting business where you can look at anything that someone is having to spend a substantial sum today for something that's going to happen in 12 or 36 months. And you help them guess the right prediction, you can build an interesting business. And I'm going to give you an example. And let's just say that it's like HR or like work styles. So what do we think we're going to predict the work— the, the, the— this particular age group, what are they going to want for working from home in the next 36 months? And if you're Google or someone that employs 10,000 of these workers, you're like, all right, I kind of need an idea. Because we're going to be making X policy. We want to know how they're going to react. The way it could work, and this is the way WGSN and this is the way Trends and a few other things work, is you do a combination of surveys. So you survey, like, you need a pool of like 1,000 or 10,000 people you can survey and get intel from and make predictions. Then you look at like different data. So like you look at sentiment, you look at like what people on Reddit, on TikTok are saying, just what trends are saying. And you consolidate that into a fairly easy to understand 1,000 to 2,000 word email. That you send out monthly, and then you have a consultant on staff who you can call on a regular basis and be like, hey, we're thinking about doing X. Based off your research, is that a wise decision? And then you have monthly calls as well as a community and a conference. And I think you could wrap this up and do it in most any industry and have something that you could charge $20,000 to $50,000 a year for. And this is something that, what's his name, what's the bald head guy who I like? Scott Galloway. He did this with, He did a little bit like this with his company that he sold for $300 million. What was it called? It was called L2. But anyway, this is my model that I think not enough people know about and take advantage of that I think could be pretty big.
And I wish you had let me guess which bald guy you like. That could have been— we could have gone on for a couple hours on that one. I have so many that I could— that could have been the answer.
Yeah. Stone Cold Steve Austin.
Yeah. Um, what, uh, so what would you do? So you, what was your, what was your idea here of like how you would create kind of like a trend prediction type business?
I, what I would do is I would, I would package my product in the way that I explained, but I think that most industries that you work in, you can figure out some type of thing where you can look at your, the buyers of your company and be like, or look at any, any different roles in your company and be like, hey everyone, um, can I just talk to you and like figure out like what decisions are you making that's gonna impact us? In like 2 years. Yeah. And what type of data do you wish that you had today that would make your decision easier?
And I'm sure this exists, but one version of this I could think of that's pretty valuable would be if I could poll like, hey, I, you know, we got a— we're able to survey every, you know, CIO in the Fortune 500 and, you know, we surveyed 70% of the CIOs in the Fortune 500. Here's what they're thinking in terms of their software budget for next year, or here's what they're thinking in terms of, you know, whether they, you know, we HR people at the, at the, you know, top 1,000 companies, here's what they're thinking in terms of remote pay, or here's what they're thinking in terms of the XYZ. And I think if it's sort of like what GLG is, uh, where GLG is expert network and people will pay people like you and me $2,000 for a 1-hour call because they're making investment decisions and they need to do research and they need actual industry input to say, hey, what's the deal with this? I'm not an expert at this. You are, but I need to make a $10 million bet. And so as part of my research and diligence, I'm gonna pay, you know, you and 10 other people like you $2,000 an hour, 20 grand, no problem. That's a, that, that helps me make the right directional bet here. And so I think rather than GLG being a one-way thing, um, I think you could do it as a, as a, you know, kind of like pulse survey to, as long as you had the right key, key audience that was bought in. Now, how do you get them to actually answer this? I think you could A, just do it as part of a broader like media thing. Like if you already have an, a newsletter for HR people or whatever, you could do it like Industry Dive could do this. Um, I also think you could pay them. And so I think there's some, some version of payment and rewards that, that could go with this, cuz you're probably charging a lot of money, thousands of dollars for these reports. Um, but there is another business I wanna tell you from a listener here.
What's it do?
Yes. Yeah. I love the bootstrap company.
Yeah. So these guys, if you go to Eureka Surveys, it just says, outta Utah, right? It just says, get paid for taking surveys, right? Make money online. Here's how you do it. And it's like, These are the small, small-time version of it. So basically you go, you download their app. Um, let me pull it up.
You download their app. Did he say, did he say we could say their revenue? He told me it, but I don't remember if he told me once.
I think we, we should just say it maybe generically, but like, you know, 7 figures in revenue bootstrapped off this, um, off this product idea and, you know, kind of amazing, uh, kind of amazing that they are, um, doing so well. And I, and I think that this is like a really great business. He acquires, I think in his case, I think he's going for kind of younger audience, sort of like, you know, Gen Z, millennial, college students, maybe stay-at-home moms, like, you know, more of the average, average Joe type of consumer and able to survey them. And they offer gift cards in return, like the brands who want to run the surveys offer gift cards. And it's a great way to, um, it's a great way to, you know, get insight, you know, quickly. Like for me, if I have a brand, right, I have a brand, I want to run a survey like this., that's pretty, that's like pretty, time intensive for me to go do. So I would need to go to a service like this if I wanna get an answer.
Well, so that's my idea for, for trends forecasting. I think the survey one's interesting. There, there's a lot of competition in that space, but I still think it's interesting. But that's like a simple, this is like a very simple, straightforward thing. It's a lot of work, but huge business, I think. Um, all right. What do you got?
Um, okay, so I'm gonna tell you, um, a couple names. I'm gonna throw a couple names out at you. You just try to tell me the pattern. Leonardo DiCaprio, Kevin Durant, Ellen DeGeneres, Luka Dončić, George Clooney. You might be thinking movies, you might be thinking sports. It may be celebrity investing. Where am I going with this? No, they all play pickleball. Pickleball is this crazy, crazy thing that is exploding. It's not going to be new to most people here, but I'm just sort of late to the party. I played for the first time the other day when we did our kind of weekend getaway for Founders things, and we played. It's a lot of fun. And I was like, I get it. I totally get why you guys haven't—
it took you that long.
Yeah. I, I don't leave the house, so it's not an in-my-house activity. So therefore this is the first time I got exposed to it. Right. Like, you know, like I'm those people that, that like, you know, came out and they're like, COVID, what? They don't know what's going on. Um, that's what happened to me with pickleball. And so I started looking into it and I think there's something, I think there's a bunch of little interesting things. I want to hear kind of what you, you find interesting in this, but I'm going to throw some stats at you. So my, my, my overall take is pickleball is exploding. Um, here's some opportunities I see, and I think it's gonna be huge. It already is getting huge, but I don't think, uh, but I see some potential traps, and I'll tell you what those are. Okay, so first of all, guess how many people in America— this is a tough one— guess how many people in America played pickleball in the last year?
20, uh, no, uh, uh, 5 million.
It's a good guess. 36 million. So 36 million is a crazy number, right? That's, um, twice as many people as go to like Disneyland every year. It is. That's the population of California, right? So 36 million is a kind of crazy number, right? That's like 14% of the, of the total population. And, um, and you can see this trend growing, right? So like it went from 5 to 36. That was in a 1-year jump. You can see on Google Trends, it's just an up into the right line. You have celebrities, like I said earlier, billionaires buying teams, leagues, that sort of thing. I personally know 2 people who have built multimillion-dollar brands in this space. I'm gonna tell you about them. So one, one guy, I can't say his name, but he built an Amazon FBA store. And this was 2 or 3 years ago, he sold it. So He actually sold way too early. At the time I met him, I was like, oh great, you built a store doing what? I've never even heard of this sport. Um, and he was like, yeah, I just got into it. Um, you know, got really into it. And so I just thought, oh, let me just see if there's much competition on Amazon for this. There wasn't. So I built a popular FBA store and sold it for about $8 to $10 million. And so the guy sells it for $8 to $10 million. And I was like, wow, you know, you know, highway robbery. Um, you know, tell that guy to lose your number. And now that he owns, now that he spent $8 million on this, you know, pickle what, you know, what the hell is this? I bet you if you had that thing now, that'd be a $40 million brand. You know, like this thing has exploded in popularity. Whoever bought it knew what they were doing. Um, the second is there's a guy doing a newsletter called The Dink. So he's doing the hustle or milk road for pickleball. And we talked to him and we were like, Uh, we talked about doing—
how do you spell it? Oh, I see it.
The Dink, like D-I-N-K. And, uh, cool guy. He's doing a bunch of really smart things on the growth and kind of like content side. And he was making more money per reader than we were making on Milk Road. We're in the crypto, like, finance niche, and he was making more money per reader in pickleball than, than we were because he was, A, he's executing well. Um, and B, like, turns out you, there's like, you know, there's a lot of people who wanna advertise and people who wanna buy stuff and there weren't really very many mediums for them to meet each other. And this newsletter was, uh, was that, so this guy was, yeah, I think this newsletter's probably worth $3 million, $4 million today. Um, so two people I personally know that have, that have done this. Okay. And I got a couple ideas here on I want to talk about why this works, um, where this is going, and also just some of the interesting characters that are involved here. Uh, you've played, I assume you've played.
Yeah, but hold on before we— I'm looking stuff up while you're talking. I've got a few I told you so's that I want to bring up. I was, I was looking this up as you were talking. Episode number 147. This aired January 19th, 2021. So almost exactly 2 years ago. Let's go to the listener notes. It says, uh, Sam brings up pickleball, a booming sport in Austin, and he talks about all the opportunities there and why he thinks it's going to be big.
Sean brushes it off, says stupid, never going anywhere.
Sean gives Sam wedgie, tells him to fuck off. Uh, then you talked about dink. I was like, that sounds familiar. So I wish I could— can I share my screen right now? I don't— I won't share my screen, actually. I look up Dink founder. It's a guy named Thomas Shields. I Google Thomas Shields Twitter. I go to his Twitter, I click his DMs, and there's an unread message that he sent me on September 18th, 2020. Hey, Sam, Thomas here. Nice to meet you. I— and he sent me a video on YouTube where it's a custom video of him talking to the camera saying, hey, Sam. And he's explaining to me about this newsletter that he wants to start. And he wants to know if I want to participate in it or something like that. This is the first time I've seen this video, by the way. I, I've not even— I'm watching it for the first time ever. So I was— I take full credit for telling you about pickleball. I take not full credit, but it is cool that this guy hollered at me and this is 4, 3 years later and he's absolutely doing what he said he was going to do.
So, man, he didn't respond to the personal video, huh?
I Well, this is an unread Twitter message. I never saw it, but I, but anyway, that, so that's my, that's my story before we, huh? I, yeah.
Well, I remember seeing it, but Twitter's actually great because you can open up a message and they don't know and they don't know until you hit accept and you can read the whole message. And so we'd be like, hey, you never saw it. I'm like, yeah, never saw it.
So anyway, that's my story. So you were asking me, have I played pickleball? 'Pickleball before?' And my response to that is, 'Does Dolly Parton sleep on her back?' Yes, I've played pickleball before, dude. Of course I have. Have you seen me? Have you looked at me? I'm a tall white guy from the Midwest. Of course I played pickleball. Do I like peanut butter and jelly sandwiches?
Sure am.
Yeah, yeah.
You ever had orange soda?
Of course. Do you know how pickleball started, by the way?
Old people. It was like a senator or something, right?
Yeah, dude, you know your shit, man. This is crazy. That's crazy. You know that it was a congressman. It was a bored congressman who created this. It was 1965. It was in the Pacific Northwest. And they get back from some trip, him and his buddy. They have nothing to do. They're at this house. They have nothing to do.
They're bored.
The house has a badminton court. They're like, great, let's go play some badminton. I guess they go down there. There's no equipment for badminton. They're like, oh fuck, what are we going to do? So they're like, well, we got ping pong inside, but we kind of want to be outside. So they take the ping pong paddles, a wiffle ball, and they go to the badminton court and they start inventing this game and they're just bored and they invent this game and they call it pickleball because I guess there's this phrase called pickleboat, which is like a a hastily assembled crew for a boat. And they're like, oh, it was a mashup of, we just grabbed the paddles and played badminton and lowered the nets. Like this mashup thing, we'll call it pickleball. And so they create this thing. It's like, you know, just a small regional game. Nobody's really playing it. And somehow I, I couldn't figure out the link, but like somehow about the last 5 years, this thing has gone like very, very mainstream. To where now there are professional leagues. There are, um, you know, tons of celebrities own teams that they're— people are buying. Gary Vee is buying a team. Kevin Durant's buying a team. Tom Brady's buying a team. Patrick Mahomes is buying a team. These teams cost $1 million now. Um, there are billionaires that are trying to buy leagues and merging the leagues to try to make this like an official thing. It has become kind of real. And, um, there's people who are trying to create like Topgolf for for pickleball. So there's a place called Chicken and Pickle, uh, and Camp Pickle that's trying to like basically create venues where you can come drink, eat, and play pickleball. And so there's like this, uh, you know, mini gold rush that's happening right now in the world, in the world of pickleball. And I started thinking, okay, where do I think this goes? Because I've seen this now a couple times. I've seen this with MMA, right, going from super fringe to more mainstream. Esports, um, and even some other things like the Drone Racing League. You ever seen the Drone Racing League?
The DRL?
Quite—
yeah, that one hasn't picked up like I thought it was going to, but maybe it will.
Same, same. Um, and so you see these happen and you sort of think, okay, what does it take to make these work? And I'll give you— I'll give you what I think pickleball has going for it, and then I'll tell you what I think is going to be tough for it. So here's what it has going for it, by the way.
We had a writer at, uh, a freelancer at The Hustle who quit for a year and she became, uh, she wanted to compete in pickleball and she did and she started traveling to competitions. Yeah. Like it's like an intense thing.
People love it. What did you say to her when she told you what she was planning here?
What do you think I said? I said, that's awesome. That's a great, that's awesome. Get out. Yeah.
Give me your laptop back.
Give me your laptop.
Give me your laptop right now and then get out.
And that's awesome.
Yeah.
But it is awesome. Text me up. Text me a pic. Go fuck yourself.
Yeah. You're like, objectively, this is awesome. Emotionally, I feel a little wounded and I'm rooting for you to fail.
No, but she did and she's doing good.
Okay, so here's what I think it has going for it. So why? Like, let's brainstorm. We've done this with food. Remember you had your food thing that was, I think, like low-key genius. And nobody really respects you for it except for me.
But like, that's such a left-handed compliment. Look, people don't get it. I do, but no one else does.
No one else does.
Your parents don't understand, but I'm okay with your lifestyle.
We've talked about it 2 or 3 times just to say the joke again to see if it hits. Yeah. And it just doesn't seem to hit. But like, let's do it again. What's your food thing? And then let's, let's do the equivalent for the sports world.
So for food, I was like, there's like a handful of categories that you need to check off in order to make your food go viral. So it's either gotta be like a side food where it becomes the main thing. So it's like instead of like ice cream that has cookie dough in it, it's like only cookie dough. The other thing is it has to be, uh, a different, uh, color than normal. So green ketchup or rainbow bagels. Or it has to be a different, uh, size. So like a huge pizza or a really small thing. Or the last one was it has to be the combination of two things that are related but you wouldn't normally have done it, like the Cronut, right?
Yes, exactly. Again, genius. Finally, hopefully you get your due this time. So I think there's sort of a similar thing when it comes to creating a hit game or hit sport, because when I played pickleball, I was like, okay, that was fun. And here's what was fun about it. There's zero learning curve. Like, we literally— nobody even really explained anything. They were just like, stand here. And when the ball comes to you, hit it. And then they were like, There's two rules: don't go in the kitchen, and like, you know, whatever, you know, here's how the scoring system works. They told me that as we were playing. Uh, it was very intuitive. It's like, okay, cool, got this paddle, similar enough to tennis, similar enough to ping pong. I, I kind of already know how to move my body this way. All right, this will, this will work. Uh, so zero learning curve. Uh, we were playing, and the age range of the players that we were playing with— somebody had their son there, uh, you know, who I think is like, you know, 11 or 12. But I think you could basically play this game from age 8 to like 65. And so everybody—
my mom's close to 70 and she goes to her pickleball league twice a week.
Okay, we might push this to 80, uh, you know, I don't know how, but this is super broad range. And how many sports can you really say that for? Very, very few sports can be played by extremely young and extremely old people. Um, you could just play it with 2 people, so you don't need like 5 on 5 or like, you know, a full football team or basketball, baseball team. Um, it picked up during COVID because it was kind of like an outdoors activity that anybody could do that was sort of socially distanced. And so I think that was like a big factor in why it grew. Um, and it's basically like a lightweight version of, of tennis, um, or even maybe even a lightweight version of golf in the way that people use it. Cause you could talk while you're doing it. You're not like just huffing and puffing and running the whole time. Uh, and lastly, and most importantly, you could play the game drunk. And so this is like, you know, if I wanted to create the perfect game, those would be my criteria. And then, you know, out would come pickleball. So I think it is kind of a perfect game in that way. So I think it has legs for that reason. I think it's going to keep getting more and more popular. The fact that the whole state of California worth of population plays this game, has played this game in the last year, is crazy. And you also see other things going for it, like the founder of Lifetime Fitness You know, like the gym chain got really into pickleball and then put $500 million into building pickleball courts in all of his like locations because he's like, I love pickleball. People are going to love this. And so he deployed half a billion dollars into building infrastructure.
Dude, I love that.
And people are converting tennis courts. All this stuff's crazy. There's 35,000 courts in the United States now.
Dude, tennis sucks anyway. Only like a couple people know how to play it. You know what I mean? Like my wife took lessons on how to play it and I would go and play with her and she would serve it at me and I would basically just try to hit it back. And that was how we played. It sucked. That sucks.
And then I was serving to her. Weird form of abuse, actually, is what you just described.
Tennis is stupid. So to anyone listening who wants to capitalize this, we can brainstorm. But I'm going to summarize this in two simple words. Okay? Vince McMahon. If you are in this business, remember those words. Vince McMahon. Who is Vince McMahon? Vince McMahon is the owner and current or former CEO of the WWE, the World Wrestling Entertainment I don't know what it is, but it's, it's, uh, any time that we grew up, you know, Stone Cold, The Rock. This is WWE. Back then it was WWF. Dude, when you think about it, WWE is just a bunch of ripped dudes in their underwear having a soap opera in front of 50,000 people and then the rest of the people on TV. It's all it is, is a soap opera and there's a little bit of ripped dudes in underwear wrestling. That's all it is. And it's awesome. You've got grown dudes who are like the most like homophobic guys ever, and yet they're like sitting there watching two oily ripped dudes just rolling around. It's like, you know, they get past it all because all they care about is the story, the drama. This is all you need to do. So if you're interested in this, you just go and get a picture of Vince McMahon. You put a picture of him on your wall and you just say, What would Vince do? Yeah. What would Vince do? WWVD. What would Vince do? That's all I'd care about if I was entering into this, because that's exactly what happens with tennis. I only cared about what's her name, Serena, in that last, like, tournament that she was in because it was her last one. You know what I'm saying? Like, I only care about this Naomi Namasaka lady. I only care— what's her name? What's her name? Osaka. Osaka. I only care about her because, like, I hear that she's kind of like going a little like she's having some mental issues and I'm like, oh, okay, now I'm kind of interested.
We got a train wreck. Hang on.
Yeah.
Yeah.
Like I'm into it. And like that, that's like what I get. I get hooked on it. Or like, you know, some of these like sports that I don't think are mainstream. I get it. Like Lance Armstrong, guy gets cancer, maybe he's on drugs, killing these Europeans. All right, cool. You got my attention. Like I need a story. And that's what anyone who's interested in pickleball needs to understand.
This data is wrong every freaking time.
I can see the client's whole history, calls, support tickets, emails, and here's a task from 3 days ago I totally missed.
Grow better. So I think as funny as what you just said is, I think you're totally right. I remember when we started working on an esports product, right? Like that's what got bought by Twitch. So we were building basically an esports company and I met with a venture capitalist, this guy Zach. We, he goes, love esports, but esports needs its Dana White, which is basically Dana White was the Vince McMahon of the UFC. And he goes, Dana White, he's like, there is no UFC without Dana White. Right? Because literally the company was going bankrupt. Uh, so, so, you know, I, I don't think literally there would've been a company without, without Vance, uh, sorry, without Dana and his, and the Fertitta brothers coming in and buying it and putting in, they bought it for $2 million and then they burned another $40 or $50 million trying to make it successful at a loss before it finally turned around and started to become a thing. And so they put in years, millions of dollars, and expertise at promotion, um, and willing to just run through walls to make it happen, going state by state to get this thing licensed so they could even host events. And then hosting events, figuring out how we're going to sell tickets. And once they sell tickets, how are we going to get this thing on TV? Once it gets on TV, how are we going to build these characters and the storylines? Oh, we got to invest in all of these documentaries and dude, reality TV shows and things like that.
Before smartphones were even a thing, Dana used to give his guys— I remember, you remember when the, these, they first came out, there were these video cameras that looked almost like an iPhone looks now, but it was like a flat flip cam. He get— he goes, hey everyone, we're having a meeting. You UFC fighters, everything you do, here's your flip cam, record it, post it on like— I forget what was popular, I think it was YouTube. But we're— he was like one of the first guys to do that.
Totally, totally was the first one. And he had to do it because he— no mainstream channel would let him in. He couldn't get a— you know, now they're on ESPN. It took 20 years to get onto ESPN as a sport. You know, that's how crazy this was.. And so you need somebody like that, which is basically just saying you need a world-class, one-in-a-billion entrepreneur if you're going to make this work. And there are some interesting characters that are involved in this thing. Do you know who this guy is? Dundum? Have you heard about this guy? Just search Dundum pickleball. Um, there is this billionaire who is like really trying to make pickleball a thing. Like, so this guy made his fortune doing subprime auto loans, which like you didn't— I didn't even have to say the— Tom. Yeah.
Tom Dundum. Yeah. Yeah. Subprime mortgage loans. Ugh.
Like you don't even have to say he made his fortune. If I just said, yeah, he worked on subprime auto loans, you'd be like, oh, so he's filthy rich, huh? Like, you know, like there's no, you don't put those 4 words together without being a billionaire. And so he's super rich. He takes a bunch of big wild bets. So he put, I think, like $70 million into an NFL competitor called the AAF that like basically folded before it even had its first game. And he lost $70 million trying to do that. Now he's basically— he owns pickleball.com. He bought the major league, the biggest league for pickleball, or like, there's two competing leagues and he bought one of them. And This guy's like trying to make pickleball happen and he's dude, he also owns the majority of Topgolf. He owns the majority of Topgolf.
Yeah.
He, he does a bunch of stuff like this. So he is a pretty fascinating guy. There's a bunch of like really like interesting characters that have like kind of pushed this forward. So he's one of the guys who've pushed this forward. There's another guy named Seymour Rifkind. You ever heard of this guy? No.
Why would I have heard of him?
Here's some things about Seymour Rifkind. Self-made millionaire by creating a marketing company. All right. Check. Uh, does Ironmans. Check. Does ultramarathons. Check. Taekwondo black belt. Check. He has bicycled solo coast to coast. Check. He, he created, um, the first rating system for pickleball. Check. And he did all of this after the age of 50. That's pretty baller. That's a, that's a pretty baller post-50 resume to have. So, So this guy kind of pushed the ball forward and kind of helped legitimize it, make it more popular as well. And then obviously there's all the players and the people who have been playing at the grassroots as well. So I feel like with pickleball, there's just this tremendous groundswell. And here's a couple of my quick takes. First of all, RIP badminton. I knew from the first time I saw badminton, badminton was a little bit of a bitch sport. I could tell. I saw it coming. And I avoided it like the plague. And it just needed a little, little tweak, a little tweak there for badminton. And, you know, pretty sad for badminton. It was like sitting there the whole time and missed, missed this wave. So, you know, that sucks. Second, could this happen again? Like, I need to go start playing all old people's sports and just sniffing around. Like, what's up with bocce ball? How do you play this shit? Is this good? Is this the next thing? Like, there might be another old person's sport that could be translated down. Third, you may not know this, but I was on the cusp of creating the next pickleball. Back when I was in middle school, me and my buddies created a game called golf. You might be wondering, what's golf, Sean? And golf was basically the combination of golf and ping pong. It was an extreme version of ping pong. And shout out to my guy Steven Dibi, who was there with me in the— in our game room. And we created golf, and it— I guarantee This is the most fun game ever. And we invented it. We just didn't know how to commercialize at the time. Incredible game.
Last version of that. My version of that was in 8th grade. We came up with the game called Nutball.
Where you, it's bloody knuckles with other parts of your body.
Oh no, it's better. It's called Nutball. You sit 20 feet apart and you sit on the ground with your legs and you open your legs. Yeah. And a person has to throw a ball. The first person that flinches loses.
Yeah. And move your knees.
I used to get in trouble.
Yeah.
My, my, the Sister Mary came up to me and said, Sam, no more nutball. So I, I got banned, which is a win of itself.
Uh, third funny story. Um, so I left, you know, I, we did that weekend kind of retreat founders thing where it's like, okay, we're gonna brainstorm, we're gonna really make plans. We're gonna, you know, think about what's next. We're gonna give each other great business advice. Um, I left early on the last day, so I missed the last 24 hours. And so I hit up Ben and I was like, Ben, how was the last day? What'd I miss? Anything good? Anything really? Do you have notes you can share with me? And he goes, no, we basically just played pickleball for 7 hours because Sully really wanted to beat me in pickleball and he couldn't, but he wouldn't let me leave until he beat me, but he just couldn't beat me. And so we just played for 4 and a half, 5 hours straight and I just beat him nonstop. And then after that we didn't talk. And I think like that's the sign of a great game, a game that could take over your life and make you a bit of a degenerate. So I'm all in on pickleball, dude.
They need a leader with a good name. When I was in San Francisco, I got into competitive skee-ball and the guy who ran it was called Joey the Cat. And he, do you remember Joey the Cat? He branded himself in San Francisco as Joey the Cat, the skee-ball guy. And people would rent skee-ball machines from him.
I remember he used to, he was just like renting out skee-ball machines to bars or to offices.
What was he doing? Yeah, yeah, yeah, yeah.
And he was making good money doing it, right?
He was making great money. He owned buildings in the Mission. Yeah, he owned like anywhere where he had like a little warehouse with all the skee-ball machines and it was Joey the Cat and all of his skee-ball machines had like a tiger stripe on it. And, uh, oh yeah, you got a Joey the Cat machine. That's great, man. You, you, this was like a status symbol.
Your office is— yeah, you guys, you guys must be doing well. You're having— you have fun in your office. Oh cool.
Like, yeah. Oh, you're into like local shit.
Nice. Right, right, right. Oh, you still— yeah, you're supporting this local guy, Joey the Cat.
You have kombucha.
Wow, you guys got it going on.
So this guy needs a— the leader of, uh, of, uh, pickleball, they need a cool name like Joey the Cat.
I feel like there should be like a tiger sound every time you say that. All right, um, okay, cool. Let's do one more topic. Okay, I want to give you one more, uh, interesting person, that, that I think is worth talking about. Okay. So have you ever heard of virtual gaming worlds?
No, dude. Whenever we talk about this, what's my answer?
Well, it's just kind of like a rhetorical question, really.
So go— I play sports. That's what I—
I play sports and I eat meat. Um, have you ever heard about Metaverse Quest?
You're like, no, no, I'm too busy having fun.
You're like, I beat up the last guy who said those words to me.
You're going to be kind of interested in this. So go to this website and I just want you to guess their revenue. Just say we're playing a game called guess the revenue.
Uh, well, it's just like a little Squarespace rinky-dink site looking, I don't know, $5 million.
Uh, close, close. $3.5 billion a year.
Oh, great.
Uh, with $500 million of profit and they did this in 10 years. So what they do is they're basically, they're one of the only legal online casinos in the United States. They own one of the largest poker sites in America called Global Poker. And basically it's casino games done via sweepstakes and trade promotions. That's kind of like the legal arbitrage here to make this work is that they do it as it's not gambling, it's basically sweepstakes. Um, and they have a patent on it. So they have like very, he has very little competition at the moment apparently. Um, and I got to give a shout out to the guys. So there's a guy who sent me this message and a bunch of notes on this. I'm going to shout him out real quick. Um, it's kind of, uh, he was like, dude, you got to feature this guy. He's basically a billionaire. He pays like, you know, basically he, he just dividended out, you know, in the latest, like whatever year or quarter and just bought a private jet off the, off the dividend. It's like, uh, so shout out to this guy Ansel who, um, who told me about them. So crazy, crazy, crazy business. He's Ansel on Twitter. Um, all right, so here's what, here's what's interesting. So the guy who started it, he's an ex-financial planner. He basically was not a builder or a seller, right? Like the typical startup archetype is like you're a great engineer or you're the great growth marketer. And he was neither. He was a solo founder. He was a financial planner, didn't know how to do marketing, didn't know how to do coding. He was basically just a badass and he recruited a bunch of— And this is Lawrence? Yeah, Lawrence. Exactly. Uh, he paid a developer agency to handle the buildout. So didn't have a technical co-founder CTO, just hired a dev shop. Um, you know, uh, it wasn't perfect. Like they basically, the code was so buggy, like the slot machines would accidentally just pay you out a bunch. And this happened several times. They had to like survive that. Um, and this was built out in Perth, Australia. So this is like built in the middle of nowhere. So kind of violates all the rules. Single founder didn't have the skillset. Wasn't in a big city where, you know, oh, you gotta move to Silicon Valley or New York or wherever to do this. Uh, he came to Silicon Valley once, couldn't raise any VC cuz they can't invest in, uh, gambling opportunities. But the good news is this, that means this guy didn't take on any invest, take on much investment, didn't, didn't get diluted. So he still owns 66% of this company that's doing $500 million a year in profit. And, um, and just, you know, $3.5 billion in revenue. And so, you know, it's a, you know, basically started fully remote. They, they got their first office 8 years in. 8 years into the business.
It's pretty crazy, dude. It says he, um, wow, this is amazing. So he said they increased their profit and they made $454 million in profit and it paid dividends of $413 million. I actually have a question. So does that mean that the company only needs, uh, $40 million, uh, or whatever the, yeah, $40 million in cash to operate?
Either that or they have enough cash reserves already there to for whatever, let's say their burn might be 100, they might have already a stockpile of cash reserves. So they just divvy out the excess.
That's wild, man. This is wild.
So it's all based around this workaround, which is that the US law lets you do sweepstakes. Um, and so they offer sweeps coins that can be redeemed for cash. And, uh, they have a trademark or a patent around sweepstakes trade promotions. Basically, they worked with the US lawyers to build a system where, um, like customers can basically buy virtual gold coins, use it to play the games. They have no value outside of the game. Um, but then when you buy the gold coins, you get these Sweep Coins with it. And, uh, and yeah, basically like they found a, like a, it was a regulatory insight, not a product or marketing insight that allowed this, um, to happen. So, and sweepstakes are regulated basically like state by state. So in order for something to change every, you know, different states each individually would need to change something in order to make this happen. Um, and, uh, yeah, there's basically like, you know, brands that will use multinational company, like there's like sweepstakes companies that you can use to run sweepstakes across states because of the, of the complication.
Uh, dude, whenever, whenever people tell me, hey, I have an idea, should I hire a developer or should I hire one of these agencies to make an app? 99% of the times I say, No, you're wasting your money. You're never going to do anything with it and it's just going to go to waste. Right. This is the guy. This is the guy. Todd Tal needs to jump on this guy as like a story of how these things work. This is, this is a really fascinating story.
Yeah, exactly. And there's a video of him in 2012. He's pitching at the Launch conference to Jason Calacanis. I don't know if it's this exact idea, but basically, you know, similar, similar sort of gambling idea. And all the judges are basically like, oh, you know, the opportunities outside of the US, it's too hard in the US. And, uh, you know, didn't listen, like knew his, knew his shit, understood that there's like a regulatory moat and a, uh, a patent moat that he could create that would allow him to do this and basically create kind of like a small, not small, sorry, a large cash cow. Um, that's essentially like un, you know, nobody's really competing with him on this, which is kind of crazy. It's surprising to me that a patent would be this, this powerful at, at, at, um, stopping somebody from competing. 'Cause in tech, Patents usually do nothing.
Um, they usually, I don't care about patents at all. When someone says they have a patent. Yeah. Whenever they say someone has, by the way, what do you, Conor McGregor? Nice. I like that word. You should bring that back.
Yeah.
A little, little Brit in me. Yeah. You gotta call me mate. I like that. Uh, that was pretty good. Um, they, uh, whenever I hear someone say they have a patent at like in a pitch, I'm like, I, I think that means nothing. I, I don't think it means anything.
Actually, it's a red flag. I'm usually like, That means you think it's something and it is nothing, which means you don't know anything.
Yeah. It's like asking me to sign an NDA to hear someone's pitch. I'm like, oh, you, yeah, you're, this is a joke.
We, uh, I remember at one of our startups it was like, um, or like when we bought Bebo back, we, we got the patents with it and it was like, oh, this is a patent for, um, like the idea of like going on a social network and whiteboard. Like there's like a whiteboard feature where one user can draw anything on this virtual whiteboard. Blah, blah. I was like, oh, you invented that? He's like, yeah. And I was like, cool. But I use that on Facebook. He's like, yeah, because this means nothing. This piece of paper means nothing and it does nothing. And impossible to really use this or enforce this or just way too hard in the world of internet innovation to make this work. That was my belief coming in. So this is a bit of a frame breaker here for me on why this guy has no competition doing this. And it might be some other reason. There might be another reason, which is might be that this is actually shady AF and like most entrepreneurs don't want to do it or, you know, there's too many lawsuits or whatever.
Definitely that one, by the way. Definitely. I think it's definitely that one without like knowing anything about this and just going strictly off like a guess with zero information other than I see this guy owns a bunch of Ferraris. Probably that one.
Oh, his Instagram is prolific. And speaking of, of, of names, this guy's got a name. Lawrence Escalante. Like, tell, you can't be Lawrence Escalante and not have a profile picture as he does where he's like this at a poker table and he's just looking over. Yeah.
He's them boys. That's what his, that's what his Instagram bio needs to be. Just, I'm them boy. This guy's the, this, this guy's the guy. Well, congrats to him. That's an interesting find. He, this is a crazy story.
So yeah.
Yeah. That's super fascinating.
That's, uh, he knew, he's like, dude, I got something that's great for MFM. And sure enough, it was.
Yeah. That's juicy. That's what that's called. That's called a, that's called a big juicy burger. It's a good find. By the way, we forgot. Oh, I totally forgot.
Speaking of the thing, legal agreements, patents, important, important contracts. There's one more.
Look, if you've made it this far, normally we put this in the beginning. This one's for the, for the real OGs who are into this. There's this thing called the MFM My First Million Gentleman's Agreement. And by the way, Sean, in our last video you called it a gentleman's agreement and then you actually said, shoot, we have 4 women listeners.
Yeah.
We have to call it a woman's agreement. And did you see the, our 4 women listeners actually comment in the YouTube channel?
And in fact, many said, I know you have more, I'm number 5. But what they don't know is that actually there can only really ever be 4 for whatever reason. It's just like a law of physics or something like that. One in, one out. It's like a nightclub. And so we really appreciate all of you. All 4 of you are like near and dear to our hearts. Um, we look forward to getting to know you personally because we can, because it's 4. And so, um, and actually they don't even need to sign the gentleman's agreement. They, they're in, they're grandfathered in, they're grandmothered in.
There's 2 requirements here. If you've made it this far in the video, and also if you've ever listened to more than 1 video, Sean and I dedicate like dozens of hours a week to making these videos. So now you are in debt to us and all you have to do to repay your debt is click a like. If it doesn't matter if you're listening on Spotify or iTunes, or I always call it iTunes, but you know what I mean? It doesn't matter where you're listening to it. You go to our, uh, our YouTube page, type in My First Million, and then click subscribe. And now we're even and we work for you. It's called a gentleman's agreement because we're not there. I can't see your computer, so you just have to do it. Just don't lie. So please go and do that and that's it.
Yeah, it's like, um, you know, Biden was, was thinking about canceling student debt. Well, we're gonna cancel your debt. You're going to cancel all your podcast debt if you just do this one thing. Like, I mean, I couldn't, couldn't think of a better deal for you, honestly. So, um, honor the gentleman's agreement. Go to YouTube, My First Million, click subscribe and, uh, turn the notifications on too. Why not?
Dude, by the way, this part of the pod has become a fan favorite. Yeah. This is really, and I, and I have to say, I stole this from someone, Jesse On Fire. I stole this from him. He's another YouTuber, but this has become a hit.
Don't know why you're admitting that. I would just steal everything and say that he stole it from you. Um, and let the—
well, he's a, he, he's a UFC podcaster, so maybe he can kick my ass. And how does he do it?
I've never heard it.
Uh, he goes, look, the other day I went and I saw the dish at 7-Eleven. It was for Alzheimer's or, uh, like muscle something, dystrophy, dystrophy. And I left a quarter there and I didn't steal the other quarters. I just left that one quarter there because that's called the gentleman's agreement and I stand by it. And that's the same thing with this. I edit the video, I come up with the content, I do all this work, I do it for you. What you're gonna do for me is you're gonna click subscribe. That's, that's our agreement. This is how society works. And right now everyone's doing it. And if you haven't done it, you're, you, you're being left out. So please do that. And, uh, that's his pitch. It's pretty good.
It's good. And it's tough to come up with it each time. And I feel like in doing so, we also earn our, our part of the gentleman's agreement just by having, by making it interesting. Right. Uh, we gotta, we gotta earn it. Uh, all right, we should, uh, we should wrap it up. We're done.