The Boys React to the News: The New Theranos Scam, Crypto Rally, and Gas App Sells to Discord
You got caught. Okay, you got got. And okay, I think we should create a set of the Forbes 30 Under 30. I think we need like the Madoff 1000 for all the grifters and con artists that are, that are out there. All right. We don't normally let Ben have ideas, but we let the man out of the cage. He's got an idea. Ben, what? You, you texted us this morning you want to try something. What do you want to try?
We're doing a new segment, fellas. We're just gonna— we're going quick through the news and we're having you guys react. People want to know what the fellas think about what's happening, so we're gonna, we're gonna find out.
We'll call it— I'm gonna call this The Boys React. I've been trying to make this The Boys thing a thing for a little while now and it hasn't happened, but as I taught my daughter yesterday, we never give up. And so The Boys React is gonna be, uh, we're gonna react to the news here, so Ben, you have some news segments or news stories, I guess. And Sam actually likes the news. Sam's into the news.
I'm my dude. I read the news like crazy. You don't read the news.
I'm an anti-news-er.
I just love drama.
You know how some people are preppers? I'm like, whatever that is where you avoid the news at all costs.
Yeah. I just like gossip. I'm a big fan of drama. My life's pretty boring, so I need drama. I love the comment sections too.
Somebody said this the other day. I think it was like Naval or one of these smart guys. They go, the goal of the media is to make every problem your problem. And I was like, oh, that's pretty true. That's kind of like what the news is. It's like, oh, there's a flood in this county I don't live in. Shit. Let me watch this for 20 minutes. Why do I care about this? This has nothing to do with me. All right. But anyways, sorry to get into the news.
Let's start. Okay. Let's start with the most interesting one, Ben. What is it?
We're starting a little close to home. Uh, your friend Nikita Beer, uh, his social app Gas was acquired by Discord for an undisclosed amount. What do you guys think about your buddy Nikita being acquired by Discord?
Give the background, Sean, about this guy. Like, cause it's a pretty, he, it's a caper. I call this a caper.
I don't even know what that means. A caper. A caper.
It's like, uh, what is a caper? No, a caper. It's like a, uh, scheme, like, uh, it's like when you would rob a bank, you know, you'd be like, what's that phrase?
Fool me once, shame on you. Fool me twice, shame on me. He just fooled the tech industry twice, dude. He sold the same app. So he built an app called TBH that was like, uh, you know, let a teenager go on and it would basically quiz you about people in your school, your friends, and be like, who's the most cute boy in your life? And you're like, oh, Sam. And it's like, who's the most likely to be famous? Oh, it's Ben, right? Or you just do that, right? And then they would take And this is like 8 years ago. Yeah. So he's like, you download my app. And of course that shit worked. He did that and like it immediately went viral because it went viral. Facebook buys the thing because Facebook has like a system internally that says like viral teen app and then it's like, must acquire, must acquire viral teenage app, you know, like get that young blood in here. And so they acquired it. People had said $100 million. I don't know. It's not $100 million, but But I think something more like $30, $40 million.
And, um, and this was in 2017 that he did this.
2017. He sells the app. Promptly the app gets shut down within like a year because there was never any retention in this app. He then sits at Facebook for 4 years and vests out the entire, every cent of his earnout, which is just hilarious in its own right. Um, and all he did was just tweet all day, you know, like, you know, he, he worked in the new products division and, uh, half-release the maps, I guess. And then he leaves, what's it called? Recidivism? Sam, you're a prison guy. He leaves the jail of Facebook and he does the same goddamn thing again. He creates another teen app for compliments. He tells us this in advance. He goes, yeah, I'm just going to make an app that makes $10 million in 3 months. And we both kind of laughed it off. And we're like, is that even possible? And then he pretty much did it. I think Gas App has made $7 million in gross sales in like 3-ish months. So, you know, pretty much called his shot, which we do respect. But also we have to clarify one thing, Sam. Ben said he's our friend. Is he still our friend after how insufferable he is in the group chat?
So he is insufferable, but I kind of like it a little bit. Uh, I, I think it's pretty hilarious. I love a good troll. I think that you're missing some of the data here. So he sold the company to Discord. There's no release on price or anything like that, but, uh, some people can make guesses. But basically between leaving or being at Facebook and Discord, he creates this mystique. I call him the Jewish Great Gatsby. He creates this kind of mystique where he's got this really lovely home in LA. Uh, I, he's single, or at least he's not married. And he like hosts really fun parties and then he posts on Twitter about like his opinion on going viral and all like legends, like, or quote legends start following him and they like message him and they— he's created this aura of sophistication and of like he knows what he's doing with apps, which is true. It's all true. He's very talented, but it was pretty cool how it was like kind of systematic. So he has the talent, he has the skill, But he did a great job of also flexing that he had the talent and he had the skill and people start flocking to him and he starts launching this thing.
And here's the analogy. He's like, he's like the guy who moved, he moved to a new high school as a sophomore and then didn't try to make a single friend, but he just went to lunch and he was just totally content sitting by himself. He wasn't a loser. He was almost too cool to have to try. And because of that, everyone's like, who is this guy? Does he have a— Is his girlfriend in college? Oh my God. And he would just be like, you know, texting his college girlfriend that you don't know if you know if they exist. But he just built this aura, this mystique around him by almost not trying. Whereas everybody else on Twitter is like, hey, follow me for more threads about how great I am, right? And he's, he's trying to do the exact opposite where he's just like only shitposting and, you know, just hinting and posting little screenshots that make you think he's up to something big at all times.
Yeah, you're like, who's this kid coming up to school as a 16-year-old on a motorcycle? You know, like, this guy's got a neck tattoo. Like, I can't confirm that he's a badass, but like, all signs point to it. That was his thing. And he never— he didn't deny it. He didn't confirm it. So it could be true. It could not be true. But the fact is, is that he created this app. Something happened to it. Like, there was a crazy rumor with the app that it was used for child sex trafficking. Sex trafficking, which wasn't true. He changed the name of the app, then he changed the name again a third time, and it takes off and he sells it. Uh, we're recording this on a Wednesday. I believe it was announced yesterday. This is a wonderful caper. Not to say that Discord didn't get value. I have no idea what the truth is. Uh, the truth is probably like they're gonna make something cool of it. Who knows? But he pulled it off. He called the shot, he pulled it off, and he did it in such an obnoxious way. And that's why I love him. You know, I love guys like that.
I love what he did. And honestly, I love the way he did it too. But the problem is he's like a fart. A fart is amazing when you're more than 6 feet away, but you don't want to be too close to the fart.
Like, you know, the fart's not funny when you're right up against it.
And so that's the problem with this is we were too close to it.
We got—
we had to hear him.
And he loves smelling his own scent.
He loves smelling his own fart too. And so, you know, he will in our group chat just post every like Twitter mention where somebody is like, oh my God, Nikita has done it again. Blah blah blah. Nikita is the best. It's like, bro, I don't need your Twitter mentions posted here, you know, for me, for me to see. It is completely— he's an insufferable fart, but I do respect what he's pulled off.
Yeah, it's pretty funny. So this is like an interesting thing. I can't believe he pulled it off, but he called his shot. I respect that. I think it's cool.
Also, He's done a thing like, you know, MrBeast does this thing where like if you go talk to a pretty serious business person, they'll like reference a MrBeast, like a MrBeastism where they're like, well, MrBeast said, yeah, yeah. Jimmy just says, you know, we just try to make great videos as if like nobody else tries to make great videos. Or he'll be like, or he'll be like, you know, we just, we're willing to put more into our content and try to make the best content possible, blah, blah, blah. It's like, And then it, if somebody goes and looks and they're like, bro, you, you, your, your video is put your hand on this car. And the last person to take their hand off, you know, the last person with their hand on the car keeps the car. Like, this is not like, you know, you're not Steven Spielberg over here.
But didn't we talk about this where we're like, look, we're going to do this thing and we're going to send them a welcome letter and we're just going to make it really delightful. It's just gonna be a beautiful, really well done, just beautifully done.
He is a content— really thoughtful.
It just, and it's like, you know, uh, watch me fart in people's ears. And like, you know, it's a, it's true that people, I'm on a fart kick today. People, People do like it. The content definitely works, but it creates this almost this mystique around it. And I feel like Nikita did the same thing where he'll tweet out shit where he'll be like, just move the butthole a little closer. He'll tweet out like, you know, the, you know, the underrated metric in social networking is density by far more important than spread. And he's like, you know, like if you're still measuring K-factor, you might as well still be using a BlackBerry. Right. And he'll like, he'll tweet out shit that makes you think like, damn, this, this motherfucker knows shit. Shit that I don't know about social networking. Or he'd be like, there's only 5 people on earth that can tell you about building social networks. The problem is they're all unhirable because their names are Mark Zuckerberg, Jack Dorsey, and Nikita Fyer.
And it's like, so, and, and so by the way, I, I think there's levels to this. There's levels.
So, so I think he does a great job of creating, it's like, bro, you created a, a app that lets me say which, which girl in my high school is the cutest, and then it texts her, somebody said you're cute, right? Like, yeah, there's beauty in the simplicity for sure. But they almost make it sound more complicated and artistic than it really is. And, uh, and, and trust me, it's, it's not.
We're not, we're not like every other social app. You see, we're changing the world one popularity contest at a time. We are, we're democratizing popularity.
He went on, um, on like CNBC or one of these like news networks or whatever. And they were like, we have here the founder of the hit teen app, the sensational app, Jazz. Nikita, what inspired you to do this? And he's like, you know, we just believe that teens, you know, the world needed a little more positivity and that we wanted to create a safe space for whatever.
Dude, the only safe space he wanted was a vacation home in Tahoe.
Exactly, exactly. You wanted to, you know, you wanted to fly private. That's what you wanted. Hey, mission accomplished. I respect that. That is amazing.
Yeah. His next app is going to be called Pleeb. But in all seriousness, he pulled it off. I think it's cool.
Yeah. I make fun of him because, because of how obnoxious he's been for 4 months in this group chat. But, but, you know, deep down, he's my kind of people. I respect, I respect what he's done. And I also respect the massive troll that he's played on everybody here. So this is good.
Speaking of trolls who didn't pull it off, uh, Ben, we got to get to the next story. Before we get to the next story though, we do have to remind everyone we have a gentleman's agreement here. Everyone follows it. If you follow— if you listen to us, it doesn't matter what app you're listening to, you have to go to our YouTube page and you click subscribe. That's the gentleman's agreement.
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I can't find this client info.
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Next topic, Ben.
From someone who pulled off a caper to someone who did not. Uh, JPMorgan Chase bought college financial aid platform Frank for $175 million. It has now shut down the website and claims that they fabricated more than 4 million accounts. Um, on their first email to their customer list, they got a 70% bounce back. Uh, founder Charlie Javice, I think it's pronounced, uh, denies that this is fraud and claims that JPMorgan is just inventing reasons to not pay her. Fellas, boys, who do you believe?
Well, JP Morgan. This lady was on, uh, like, that's easy. Uh, this lady was a Forbes 30 Under 30, and then just like a couple years later sells her app for 9 figures, $100 million plus. And, uh, it's pretty hilarious. They even found, they tracked it down, I believe, where they talked to the developers. It was a, it was like a, they hired one freelancer, I think, who they said, hey, can you like make some test data to put in here? And he starts doing it. And there the guy was like, I think this is fraud, I'm out. So they found those emails and then they did it again with another contractor and who actually did do it. And they convinced the contractor that it wasn't fraud. And so they've kind of like honed in on this, that it seems quite clear that it's fraud. Uh, bold move, very bold move. Very easy to catch though. Really stupid. Like, this seems like really a a foolish mistake.
Yeah, this is like— JPMorgan's got a little egg on their face for not, not noticing this because this is pretty easy to notice. I mean, the fact that they sent one email and 70% bounced back, right? Like that, that sounds like it wasn't this really sophisticated, you know, botnet that, you know, was simulating real users. It was just a bunch of fake, fake emails in a, you know, in a database. So, you know, that sounds pretty easy. And also it says there's, there's an email with where she's asking the professor who ended up doing this. Will the, will the fake emails look real with an eye check, or is it better to use unique ID? Right. So like, you know, hand in the cookie jar, as we say around here, you got caught. Okay, you got got. And okay, I think we should create instead of the Forbes 30 Under 30, I think we need like the Madoff 1000 for all the grifters and con artists that are, that are out there. Um, you know, I, I think that, you know, maybe the Caper, Caper 20 or something like that. We got to come up with something here and we need to just annually, I think we should just do a show where we just rank the best cons of the year and, uh, and give them their due. Let them put that on their bio.
Dude, I'm down. And what's crazy is this is so, so when I sold The Hustle, we had, I think, 1.7 million subscribers. We use this service, HubSpot paid for it, and it was a service. I forget the name of it. But I believe it did two things. We uploaded our whole email list and then I think HubSpot uploaded some of their email. I don't remember exactly how it worked. I think they did it and it showed the crossover, like how many we each shared in a huge amount of emails. I imagine HubSpot has like hundreds of million, I have no idea, a lot of emails. And then I also think it checked for fraud and it was like a couple days to do this. It was pretty simple. Um, there's just a few other services where they make fake data and the reason they do this is if you have a sensitive thing like a bank startup. You put a whole bunch of fake data in it and it like makes up people and you can test your data because you can't use like, you know, obviously real social security numbers when you're testing certain things. And they would make up fake stuff just to test the software and make sure it all works.
I've been trying to invest.
I forgot I need to invest in this.
Yeah, I think it's a cool thing. And so also with, GPT-3, whatever it's called. I was like thinking, I'm like, dude, I should just, I'm not gonna do this, but maybe I, I was like, I should just make up fake, fake reviews for all of my like products. And you could just like make up fake reviews or you could like make up negative reviews for all your competitors' products.
But, uh, yeah, I was like, are you looking for a nomination to the Made Off 1000? We, we'd, we'd be happy to have you, but you do need to formally submit the application.
Put my application in. Yeah. And we have to make everyone pay a, a, a $500 application fee too. Right.
If there's no con going on on our side, what are we doing here?
Yeah, yeah, yeah, yeah. Well, don't you want to win the award? It's an award.
We did a thing with Milk Road where we had this philosophy, which is like, we should be— we should bank that in the future we're going to cut out all advertisers and be our own advertiser. I mean, only promote our own product or our own service in this newsletter. That's the only way to hold yourself accountable to not just acquiring like shitty subscribers, And so we, we had started this new growth channel. We're like, oh, let's try this thing out. We heard they're, you know, the rates are pretty good. We tried it out. We tried it for like a week and we're like, oh, the numbers look pretty good. We're getting cheap signups. They're opening the email. That sounds great. And I was like, hey Ben, just, you know, just for, just to double check here, why don't you just email all those people that signed up and just ask them like, you know, a simple question, like, you know, hey, like ask them a one-line question that would be true for them to answer, just to be like, hey, I just wanted to know blah, blah, blah. I'm the founder of this thing. Just wanted to know blank. 'Cause they're opening the thing daily, it looks like. Okay, fantastic. Surely they would reply to an email from the owner of the thing they read every day, right? And he was like, dude, guess how many? I forgot how many. There was like a couple thousand people on this thing. He was like, guess how many people replied? I was like, well, you didn't say percentage, so man, this is a number of people who replied. I was like, I don't know, like 400, 500. And he was like, 2. We got 2 replies. Turned off the channel. Oh my God. I was like, wow. And I know a bunch of other people that are still buying from this trap, this like, you know, this, this marketing player, this traffic source. And I'm like, well, they're, they're just dumping money down the drain if they're doing that.
Dude, seeing Billy McFarland and the Theranos lady go to jail, like this woman potentially could go to jail. It's pretty crazy that like, what do they not think? Like, just like 8 months in advance. It's like, man, this isn't like internet play games. This is like go to prison games. You're— this is really screwing up a $100+ million acquisition and 70% of the users were fake. That is crazy. You go to prison for that type of stuff. That is wild. And it's just crazy to think that no one's there and they're like, uh, Charlie, um, you know, like, are you— do you like generic Oreos and bologna sandwiches? If yes, then this is great because that's what you're going to be eating for like the next 9 months in prison.
It's gonna get generic Oreos. That's, that's nice.
Well, not, not when it's every day and watered down Kool-Aid, but like, it's just, it's, it's pretty wild that people don't think ahead. But, uh, this is such an obvious scam. Also, JP Morgan, you guys suck, man. You guys gotta be on top of the ball. Like, this is such a, this seems pretty easy to, to figure out. Yeah.
Fair enough. All right. What's, what's next?
All right. Um, Bitcoin and Ethereum are up 23%. Over the last week. Crypto is rallying. One major cause is continued rise of inflation, 6.5% annualized in December. The question for you fellas, is crypto back?
No. You want to just end it there? I don't know. Well, I will give you— that's a great answer, Sam. I will give you a slightly different answer. Do I get to say like, I told you so? No, I don't get to say I told you so. In fact, I might maybe take the other, the other L. Did I, did I sell Book Road too early? Did I sell the bottom? No, I, I think that a lot of things are rallying right now. Why? Because people did. I think it's just a simple answer. People did an end-of-year sell-off in December for tax loss harvesting, and a lot of people will reenter and then that creates some upward momentum. And when there's upward momentum, that makes people think. Hey, is it coming back? Is this the rally? Did we— do we hit the bottom? Is it time to buy back in? And so people are buying back in. I don't think it's because inflation in December, because guess what? We had inflation in October and November and September and August too. Like, where was— you know, if inflation was driving crypto up, it should have been up all year last year, not, not down. And so I don't think that that narrative holds. I think it's much more likely that the same way that tech stocks are having a little brief rally. It's, it's kind of like New Year optimism, people being done with their kind of like in crypto, there's no wash sale rule. So you could sell, book the loss for tax purposes and buy back in 1 minute later if you wanted to. And so I think people are just buying back in and I think there's a little bit of people chasing momentum. That's my guess.
Have you ever looked at the correlation between G-Wagon prices, used Rolex market, and Miami penthouses and how it relates to crypto? There's gotta be a correlation.
I have not.
There's gotta be a correlation there.
We got our best data people on it.
Did you see, um, yeah, Ben, Google that. Did you see, uh, uh, I'm just gonna start telling Ben just to Google random stuff that are ungoogleable. Uh, did you see that there was a guy in like, you know how we have this Facebook group for MFM that we don't really check often, but there was a guy who was like posting in it a bunch and he created this website where you can sell your NFTs. NFT at a loss for tax purposes. It's kind of interesting.
It was a great idea, honestly.
What's it called?
I forgot. I'm going to forget the name. Ben might actually know it. It was called— they advertised in the Milk Road. So I remember seeing it there and being like, oh wow, this is actually a great idea. Hold on, Ben just typed in the chat. What did he say?
It was like a really— it was like a white guy with like blonde hair.
Looks like—
Unsellable.
What is it? Unsellable NFTs?
Yeah.
Yeah, that's it.
So is this the segment Dem Boys? Dem Boys React? Is that it?
I think, I think we're not ready for Dem Boys yet. I think we're still The Boys until, until we get a little more street Go to the YouTube comments and tell us, is The Boys gonna stick? Can I make it a thing? Because I sure would like that. Yeah, just type it, just type a thing or not a thing in the comments. I just want to— I'll do— I'll read the poll, and if it says not a thing, I'll only continue for another 3 or 4 years. If it says it's a thing, I'm totally validated.
All right, that's it.