From $0 to $100 Million In 3 Years Selling Cold Plunges

All right. Today we're talking about an app that is taking off that I think might be the next TikTok. It's a Chinese app that you've probably never heard of. Uh, Sam got all the numbers behind a cold plunge business that's doing over $100 million a year, including their ad numbers, which is rare. You almost never get to see that. And lastly, we talk about lessons that we learned from Jess Ma, a founder who has built a business up to $900 million, and she shared one or two golden little nuggets that we wanted to talk about. Enjoy this episode.

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. All right. Let me give you an update on something. So we had, you know, I take a lot of pride in the fact that we've had some people on here right before their like fame arc really took off. We had Brian Johnson on here. Uh, you said that he mentioned like, yeah, you guys are one of my first people. Another one, Andrew Huberman. We talked to Andrew Huberman. I remember we talked to him and I think he was like in this hallway in Stanford or something like doing an interview with us. And after the pod, or during the pod, I told him that like cold plunging is interesting to me. And after the pod, he goes, hey, I want to send you a cold plunge. And I was like, that's very kind of you. I would love that. And so he introduced me to this guy named Ryan, Ryan Dewey. Ryan sent me a cold plunge and the company now it's, it's, uh, what's the URL actually? Is it plunge? I don't even know. What is it?

Plunge.com.

Plunge.com. Yeah, it's just called Plunge. He sent me this thing and I started using it and I loved it and I dug it. And by the way, this also sounds like an ad. This is not an ad. I have nothing to do with these guys.

But, but Ryan, I will take a free Plunge. I said no earlier.

I changed my mind. Did you say no when he offered you one?

I said no. I said no the first time.

That's crazy.

And I was wrong. I'm man enough to admit it. I was wrong. I would like a Plunge. Thank you.

It was sort of like a plunge tour. They would go, they would fill up 4 or 5 of these, go on a plunge tour, and they would Instagram while they were doing it. And so people on IG would see it, like, like me, I would see it on IG and it'd be like, damn, this must be like some super successful company because they're, they're, they're only delivering to people that I know, like, you know, influencers basically, even though there were no other customers. It was only those customers.

Yeah. And there's only, it was only like a few of them. It was like they, they threw this thing together. And I guess that's when I kind of, that's when Andrew, like, I guess they were like, Andrew, you know, we have this many for you to give away. Do you want to give away to whoever. They gave one to me, they gave one to Sahil. So far they've given away hundreds of these things and they're killing it. And never in a million years would I have thought a cold plunge business would do north of $100 million in revenue.

By the way, they've given away over 1,000 plunges.

That's insane, right?

That's like the— that means influencer marketing was like so important to them at the beginning. A couple other fun facts. Can I say a couple of these that you have on your notes?

Yeah, do it.

That's a, that's wild.

They basically are riding this wave. So if you look on Google Trends, we'll put this up on the screen on, on YouTube. You could see basically cold plunge versus ice bath and just both of them rising over time as like, you know, the kind of the Huberman era kicks in here. So they're, they're right in the back of that. But the insane thing is this ad spend. You got to talk about this.

You talk about it because this is in your, this is your wheelhouse. But basically what they did was they, um, Ryan, I've met Ryan. He's almost like. He, I don't know the best word to describe it, but he's one of these guys that was doing ayahuasca before ayahuasca was cool. Like when I went and hung out with him, like he had his toenails painted because like there's something around that. I don't exactly know what it is, but there's like something around that. Like he's like eccentric and I don't think he probably knew anything about Google Ads or Facebook Ads. And so he said he hired a guy on Upwork to help run Google Ads for them. And that's how they started. So what, and he even sent me a screenshot.

Basically, it shows their revenue. It shows their ad spend and it shows it broken down on Google, Facebook, and even Bing a little bit. But like, just looking at their total paid media, that's what I want to zoom in on this. This is, these are kind of bonkers numbers. So this is, is this a month? What, what, what is this?

I think this is last month.

I just said, I'm going to talk about you on the pod. Like, let me interview you. And I said, whatever we talk about, this is like on the record. So I guess if they change their mind, they'll let me know.

But I mean, it's cool that they get a big feature. That's cool. But also this is crazy and just props to them. These numbers are insane.

So basically they own the whole thing. So they bootstrapped, they haven't taken any funding. And this is, by the way, 2020. So they're coming up at 4 years.

What do you think this company could sell for? Let's say they, they get to, I have no idea what the profit is. Let's say they get to 100. So 2020, they started at 200, a quarter million dollars in 2020. In year 4, their 4th year of business, they're going to do 100 million. What could this sell for? Could this be a $200 or $300 million company?

Definitely. Definitely. You know, I would, if you're getting, like, just to put this in perspective, if you're getting 8x ROAS on your money, and let's say that continues, let's say they can, if they said they're doing, you know, whatever, $8 to $10 million a month, so they're over $100 million, let's say $120 million in revenue. The minimum that they should be selling for is 1x revenue. So $120 million. In this case, let's say that because of their growth rate, because of the insane profitability on their ads, this company has to be, you know, making bank, right? Like normally most people in e-commerce are break-even or slightly losing money on first order. You know, that gets you, that's like you have a ROAS of like between 1 and 2. These guys are doing, you know, 6 or 7 times better than that. So, so that's kind of insane. This company should be worth, you know, $250, $300 million right now. You know, I don't know how big that Clearlight Sauna company is, but I'm pretty sure it's pretty big.

Man, if I'm these guys, I might take that sale. That to make that amount of money in 3 or 4 years. And I don't know what their financial situation was before, but let's just assume that they were just getting by owning a brick-and-mortar business. That's wild. That is a crazy story.

It's crazy though. And by the way, I don't know like what the science is behind cold plunging. I still, I've had, how long have I owned it? For 2 or 3 years. I still use it 3 days a week. Like I'm into it.

It's clinically proven to make you post on social media at least 3 times more. So that's one proven effect.

There was this one TikTok where these guys were joking. They were like, you know, it's crazy to think about it, but for the first 20 minutes after the Titanic sank, the passengers were actually healthier, uh, until they died.

Uh, they actually were increasing their lifespan by 20% during that first cold plunge until they suddenly died.

They're like, they're like, Too bad Wim Hof wasn't there to teach them how to breathe. Right.

Uh, reduce their risk of heart attack.

They're like, they're like, imagine if Wim Hof was there like, this feels nice. But there was about 15 minutes.

He should do, he should rebrand to the Titanic method. He should be like, oh, you don't do Titanic breathing? This would, this would save, you would live even if you're on the Titanic if you learned this shit.

It was about 15 minutes where they were at peak physical shape. Anyway, that's the update on Plunge. I finally got an update on them. I'm shocked at how they're doing. I guess I'm not that shocked. It's a $5,000 product. I just, I guess I'm shocked at how many people would buy into this. Never in a million years would I've thought this many people would buy into this and want to get cold however many times a week. So that's my update on Plunge.

I got one thing I want to jump right into. It's something that's been on my mind. It's been grinding my gears. It's been a little, a little itch I need to scratch, and that is supplement testing. So you're a big supplements guy.

It sounds like you're setting up an ad, by the way. We have to say this is not an ad.

No, no, this is not an ad. This is just me being corny. So I've been thinking about this idea because I've been buying a shit ton of supplements and I don't know about you, but like people are like, oh, you know, you take that? I'm like, yeah. They're like, how does it, like, is it working? I'm like, how the fuck, how would I know? It's a supplement. You never know if a supplement's working, right? Like, I personally feel that way. I don't know if I'm just not in tune with my body. When you take stuff, do you have like a clear, like, this is helping me versus this is not when it comes to actual like supplements?

There's basically only one or two supplements that I've ever taken where I'm like, this is working. So I take either melatonin or magnesium at night. And that's the only, those are the only two where I'm like, all right, I'm, it helps me go to sleep faster. Besides that, protein. So, but protein is it, protein's a supplement, but it's, you know, it's, it's a nutrient. So like when I eat more protein, whether it comes through a powder or not, I noticed my muscles get bigger. Besides that, I don't think I've noticed a difference in mostly anything.

Even protein for me, it's not even like I feel my muscles getting bigger. I just feel more full. So I'm like, okay, that did something. Like that is like kind of like a meal replacement. I got it. But like even creatine, I started taking creatine and I thought that creatine would be, I thought creatine was gonna be the hard shit. I was like, oh, okay, here we go. I've crossed the line. I'm doing the hard shit now. Now it's just gonna be like a little unfair. These gains that I'm about to be having, can't feel anything. You with creatine?

No, I don't feel anything. When I was taking testosterone, I felt that, but that's, I don't know if that would be under the the, the heading of supplements, but like basically if it's illegal or banned in sports, I've noticed a difference. Besides that, if I could buy it out, if I could buy it at Target, I don't know if I've noticed a difference.

Right. If you're not having to text a guy to get it, you're not going to feel it. So I feel like with supplements there's an opportunity. The opportunity with supplements is to be the most trusted source when it comes to supplements. So for you, where do you go when you want to find out if which brand you should be taking or which brand you should not be taking, or what's the most effective, what's the cleanest, what's the healthiest for you? Where do you go to get that information right now?

So I use examine.com to figure out which supplements are like, which the science has shown that it works. But examine.com—

that's not the brand, right?

That's the— yeah, examine.com, in order to stay neutral, they don't promote any brands.. And so I go to Amazon, I talk to friends. It's pretty challenging. It's also challenging because do you remember the mattress review websites? Like the top one, it ended up being owned by Casper. Exactly. And so it was incredibly challenging to find like which, like for example, some protein brands will say we have 25 grams of protein per scoop and then you go to research it and it's like, no, this one actually only has 18 or this has some certificate certification, which means they had to jump through this hoop or that hoop. It's actually quite challenging to figure out. Who's clean and who to trust.

Yeah, I think it was Casper that owned— was it Casper or Purple that, that owned a bunch of the, the top mattress blogs that had like— they were like for 15 years they were like a normal blog and then they went and bought them out and then they like started promoting their own shit. And it's the same thing with, with supplements, you know, like the— what's rule number one if you create a protein brand? You go, you buy your brand name, your domain, and then you buy thetruthaboutprotein.com because you're going to need that too in order to promote your own shit.

It's really hard. It's really hard.

The reality is that supplements and health and wellness are on the way up. Uh, people are, are, it's becoming more and more normal to take a wider and wider variety of these things. There's more and more brands in the market because now you have D2C brands. So anyone can create a brand. You don't need to fight for shelf space because you could just be on the internet, the infinite shelf. And I think the need has become bigger than ever for somebody to become the trusted person. And I say person specifically here. The trusted person around supplement testing. And, um, have you seen this guy FlavCity?

No, how do you spell it?

So he's doing it right now on Instagram. He's doing it for Veggie Straws, which is like those potato chips that are like, whatever, they're supposedly made out of vegetables. He goes, this is bad for this reason. Here are some, uh, here, here are some better ones for you. Lesser Evil Power Curls. Siete Puffs, Jackson's sweet potato chips. And he, and he looks at the back of Veggie Straws and he tells you what's wrong with it.

Right. And I'm giving this to my kids, right? Veggie Straws. Oh, that's better than chips. It's veggies. Right. And it's like, so he's, he just debunks a lot of things and he's got his whole thing. He's very high energy. He does mainstream products that are in shopping centers, in shopping stores. And he'll be like, this one, Bobby approved. And he's like, got his own little shtick where he's like, this is Bobby approved. And he's like, he's basically Doug DeMuro, but for, you know, packaged goods instead of cars.

And he has 2.5 million followers. That post of the veggie straw ones that I just said has 25,000 likes.

Exactly. Because it's super affordable. Because as soon as he says something and you know somebody who eats that, you share it with them and then he becomes a trusted source. He's not selling you anything. He's just telling you better and worse. He's telling you what to avoid. Or he's like, okay, it's It's the holiday. He's got one holiday booze haul. It's like, these are the things to buy and don't buy when it comes to booze or farm salmon. Is farm salmon good or bad? And he just uses the like thinker emoji. So you're like, oh shit, is there something I need to know about farm salmon? Is that not healthy? I thought that was. He's got another one, ditch the goldfish, right? So he's taking these popular products. He's doing this. So I think this is genius. I think more people should literally just copy him because there's room for more here and you could, differentiate by being, you know, a mom who's going to be trusted by moms and do more mom products than what he's doing. Or you could be a meathead who's doing more protein, gym, gym bro type of content. That's kind of what More Plates, More Dates is doing. But I think this format is beautiful. So let me just tell you about this opportunity. Okay. So here's how I'm thinking about this. Do you know Consumer Reports? They test like every product, ellipticals and You know, coffee machines and whatever else. Do you know about the company itself?

Consumer Reports? I do. We brought them up. I'm not going to steal your stees here, but it's wild.

That's insane. It's crazy, right? And it's all subscription revenue. What's that? It's all subscription revenue too, I think.

Uh, yeah, I don't know the exact mix, but it's, it's a nonprofit. So you can actually go find a bunch of their stuff. Um, so they have like $250 million of assets on their books, which like nonprofits are famous for like having, you know, high revenue, high expenses, and then just like a lot of assets on the books.

And so you have to, you have to spend $160 a year in order to get access to their articles.

Cool.

You could post that on Instagram. You could kind of post it on Facebook. You might be able to post that on Twitter, but it wasn't the native way of doing things. And you know, like, but, but you can't post that on Snapchat the same way. Like you can't do that. But with short-form video, you can literally get on TikTok, YouTube, Instagram, Facebook, Snapchat. Every single social network is compatible with short-form video, which means short-form video is now the dominant, the dominant content format to be creating it. And, um, I, so I think if you do this, you could go across all of them.

You can't monetize that. So typically the way there's basically two ways that you, maybe there's three, there's two main ways you monetize this. So there's affiliate, which is Wirecutter.com. I've got a, uh, I know a guy named Dennis who started BestReviews.com. He sold it for $110 million to the worst named company on earth. It was called Tronk, which was, uh, it's basically the company I think that owns LA Times, uh, and he sold it for $110 million bucks after—

Tronc should definitely be like a women's jeans brand that's like Tronc, all about your butt or something.

Yeah, Tronc is a horrible name.

It's got junk in the trunk, you know what I'm saying?

It's a really bad name. It's one of those names that sounds like a noise. Uh, and so they, they sold the Tronc, I, I think after 4 years, and they monetized it the same way as Wirecutter. So it was through affiliate. But Wirecutter's one of the few, I think NerdWallet does a good job where they do trust, where for some reason I still trust them even though I know they're getting paid per click.

Right.

And then the other one, which is harder to pull off, but a way better business is subscription. And that's what Consumer Reports does.

You know why Wirecutter, I think, has that trust even though they're clearly pushing, you know, they're clearly making money off the recommendations? I think it's two things. One, it's like good design and copywriting. So it feels like a person is talking to you and it feels like it's like Clean.

Same with the Points Guy.

They're not saying who's the best. What they're saying, what they do is they say, best on a budget, this is the one we recommend. If price is no, no problem, this is the best one, period, on the market. And then kind of the most common popular option is this one. So instead of it being, here's our favorite and yeah, it's the one we're getting the best kickback on, they kind of give you options of like, depending on your situation, we think this is the best in that situation. And I feel like for some reason That changes. And then it's like, yeah, we, we make money, you know, we get an affiliate on each one of these, but like, they're all equal. We're not saying one is better than the other. We're saying one is better in this situation.

Yeah, you basically want to write articles that get links so your overall domain authority goes up, but then you got one or two moneymaker pages. And those are, those are the pages that you need to be the number one search result for. The way you do it is by creating all this goodwill around the other pages, this sort of SEO goodwill. So I think you would think that short-form video is hard to monetize, but that's not what you're monetizing. You're not monetizing the short-form video. You're monetizing the trust. So today, who is both the most trusted voice in science and supplements and the man most likely to be in Sam's fantasies?

Yeah, my husband, Andrew Huberman. Exactly.

Yeah. And as a, what do they call them? My Huberman husbands or something like that.

Yeah. What did they say? So I posted a shirtless picture of him and he's like, and I was like, people were like, what did they say? They're, I'm Huber's man. Yeah. He posted his first shirtless video the other day and Men around the world were gasping.

Clear the calendar, honey.

Yeah.

All right. So Huberman makes money through his ads and his podcast. But remember when Rob Dyrdek was on the pod and he was talking about Momentous protein and he's like, yeah, Momentous was kind of dead in the water. We thought we had made the best, cleanest protein, but really wasn't going anywhere. And then we did a deal with Andrew Huberman and we were like, how much did you pay him? And he goes, I don't know, whatever it was, it wasn't enough. It wasn't enough. And he was just like laughing at that. Like how crazy that, that was. So, you know, I think the business model here is you build trust for a couple years and then you come out with your own branded supplement, right? You want to be in the supplements game.

You don't want to be— Ruins your whole premise though of finding the most trusted.

No, no, no, no, no. You, you are the most trusted. You build the trust by saying, and then finally you say, look, I've had it with these companies. I've had it with these. I am just going to make the one that I wish existed, the one that is truly clean, that is going to hold the utmost standards, right? Derek from More Plates, More Dates, that's exactly what he did. Uh, somebody like Jessica Alba with Honest Company kind of did the same thing. She built up a bunch of fame and trust in one area, but then she comes out with the Honest Company and she's like, this is going to be the honest brand, the product I want to give to my kids.

Which, by the way, I buy Momentous Protein in part because I trust Rob and Rob was involved. And I buy BPN, which is, uh, Nick Bare, you know, the Jack guy who runs fast. I was like, well, these guys both seem trustworthy. I'll buy their stuff. So I spent all my money with them.

Right. Because what else do you have to go on? You have nothing else to go on. This packaging or that packaging, right? Like, what else do you have to go on besides the words of somebody you trust? And so I think that's the way you do this ultimately, is you, you ultimately build your own supplement franchise around this, more like The Honest Company. But I think first for a couple of years, you are just becoming the most viral trusted source when it comes to the truth about X. And you gotta pick things that are gonna be very shareable as well as, you know, establish your authority in that niche to be able to, I'm the most knowledgeable trusted source when it comes to what should I be taking.

By the way, we've talked about the Eat This, Not That category and we loved it. I think we talked about it a year and a half or 2 years ago. We love the Eat This, Not That category. Yeah. It's the best. Well, I love that stuff.

When did we say that? 'Cause I remember talking about FlavCity, 'cause that's his thing, right? Eat This, Not That. He was doing, I mentioned it maybe a year ago, but I really hadn't like fully wrapped my head around it.

So Eat This, Not That was a line of books. I remember buying it at Barnes Noble. Like, I don't even know how to say it. How do you say it? I used to call them Barnes Nobles. I remember buying it at Barnes Nobles years ago when I was like in 4th grade. It was Eat This, Not That, and it would just show a picture of Doritos and then it would show an alternative and it would explain why. It was a massive hit for a book series. And I remember buying like all of them. And I think we said, we're like, Fine for a book, but this has to be beyond that. And we talked about it, I think, with Steph 2 years ago.

Yes. Yes. So I think this is a clear, like, content niche that can turn into a pretty monster business. And there's a bunch of different angles depending on who you are. Derek from More Plates, More Dates obviously hits the gym bro market, but then FlavCity hits the, like, mom shop Costco shopper market. And you should just keep— there's a lot more niches than that.

The New York Times did this article the other day, or a few weeks ago. And it was My Guru is Better Than Your Guru. And they talked about how people like you and I, you know, you and I are Team Huberman, but then there's this other group who's Team Peter Attia, and then there's this other one who's Team Peter. Like, my father-in-law loves this guy named Mark, uh, Mark Heinemann or something like that. Uh, and it's like, well, my guru said this, and it's just crazy how we find these guys that we stick to, and whatever they say, we don't know Like I can't tell you entirely why Huberman suggests X, Y, and Z, but I know he suggested that and I will go to bat and fight other people whose their guru said X, Y, and Z. And I don't even know why, but I just know that I trust Andrew. That's my guy. And I thought it was really interesting how it is turning into be something like that.

Have you ever heard this explanation of why gossip exists evolutionarily? No, sort of nerdy, but it's kind of fascinating. So. Everything has a value, right? Like even like what we consider negative emotions, like fear. Why does fear have value? Well, you know, if you're a hunter-gatherer and there's a lion, you know, fear or paranoia can be a very useful survival tool. And you needed to be super fearful and paranoid at a certain period of time, maybe less so today, but we can see why that's evolutionarily baked in. But that applies to everything. And so gossip is a good example. Gossip, if you just Talk to most people, gossip, negative thing, right? Shouldn't do it. Bad, you know, poor form. It's a, it's sort of a lowly thing to do. And actually gossip is extremely useful. So you think about humans live in tribes and we're in this society. Well, it's impossible for me to know one by one with each person about their character and their reputation myself through only firsthand experiences. And so how does a tribe function? Well, gossip is actually a necessary thing. I should know that if this person is untrustworthy, because rumors should spread so that the tribe as a whole becomes almost immune to this charlatan through gossip. And I don't have to myself go and have a firsthand bad experience. So in that way, gossip has saved me from getting my, you know, my hand burned on the stove many times. And so I kind of feel like the same thing exists where it's sort of silly in a way to, uh, You just trust these online influencers, these gurus. Don't you know they're just trying to sell you something? Well, yeah, and there's, there's some amount of that, but at the same time, what am I going to do? Go test all my supplements myself? Like the inefficiency that would be brought in if I didn't trust these people. What am I going to go read all the white papers myself about clinical studies? No, I'm not going to do that. I'm going to, we're all going to outsource that task to somebody. And we're going to trust them until they burn our trust and then we're going to move on to the next one. But like, almost like as a tribe, it is the efficient way to do things, even though it's kind of seen as this low IQ move. It's actually not a low IQ move. It is the, like, sort of like game theory optimal move to trust people or to trust gossip in certain situations where you're not going to want to do the firsthand work yourself.

Look, if George Foreman tells me what grill is best for my bratwurst, I listen to George. He looks like he eats a lot of bratwurst. No, I get it. Where, uh, did you just go and read a book on gossiping? Where'd you get this?

I heard this a long time ago and, uh, you know, my brain was just connecting the dots just now.

I want to tell you about another health company that's related to all this, but before you do, we have a quick segment. It's called Thrill of the Shill. And so it's a time where we're each going to take a turn. Your turn is this time to promote whatever we want, but It's the Thrill to Shill because you're going to shill something, but you're going to thrill me a little bit. So about 8 months ago, you invested in a company called Shepherd.

Yeah.

You sent me a graph. I get updates every once in a while. I try not to get too much information because I don't ever want to reveal something I'm not supposed to reveal, but you sent me a graph. Things are going more than good. I think, I think it's, you could say how many times it's multiplied, but now is your 60-second thrill the shill moment.

Basically what happens is you get in this habit of where you're just like, I'll take any amount, I'll take any customer and take any money, whatever. I'll just do whatever. And then you get all these shit people and then you're like, oh my God, this sucks. Like this guy takes so much time and I don't even make that much money from them. I have to learn who do I fire and who, who's, who, who do I go after instead?

Exactly. And what most people do is they do it at the beginning, which I think is the wrong move because at the beginning you don't really know and you do need to be just a little bit desperate and kind of brute force things. But there's a point where you got to check in, like, you know, if at 9 months in you haven't checked in, do this check-in, which is basically draw a little piece of paper. And write our top, you know, 10 to 20% of customers and our bottom 10 to 20% of customers. Bottom is like drag out your time, lowest profit, you know, like most headache, most support required. And then the top is the opposite. And so we did this little exercise and the thing we realized was we thought the business was people hiring virtual assistants because that was the most common thing people would come in for, right? You come in, you need a VA just to do some tasks, or maybe it's a personal assistant for you or help with travel booking, meeting scheduling, that stuff. And it does do that. That's fine. But then we were like, yo, who's this group of customers that they hire twice as much as everybody else? And the like LTV, the lifetime value of these customers is also like, you know, 40, 50% higher.

So who was it?

You got to give the URL.

Oh yeah. So go to supportshepherd.com for whatever you need to hire for, whether it's bookkeepers, virtual assistants, developers, designers. They got, you know, basically they go find the top 1% of talent in these countries. They got boots on the ground. They're like literally interviewing people. And then you can go find the elite talent there for basically 80% less than if you hire people in the States.

All right. That's the Thrill of the Chill. That's pretty good. Pretty good first thrill of the chill. First thrill. Yeah, I was thrilled.

All right. So let's do another one. So I got, I got one thing for you. So did you see Trung tweeted this out and I found this kind of interesting. So he tweeted out about this Chinese Quibi. Did you ever see this tweet?

No, but is it working?

So yeah, I think it is, which is the funny part.

So Is it Chinese as in in China or for Chinese American, but Chinese content?

It's Chinese like TikTok is Chinese. It's made by a Chinese company, but it's at the top of the US charts. It's a company called ReelShort.

ReelShort, it's called?

ReelShort. Um, so basically here's what he says. It's bite-sized English scripted video content. So it's like Quibi, but instead of paying for Hollywood hitters, it's cheesy, degrade soap operas slash Hallmark films. The shows are all about affairs, scandals, marital intrigue, and absurd plots. For example, Son-in-Law's Revenge, I'm Getting Married Without You, or Never Divorce a Secret Billionaire Heiress. Let me just pause here. I'm in on ReelShort. Okay. That was all I needed to hear. I, this is, this smells like a winner to me. All right. So, so I like this general concept, short video that's scripted versus just like people's, you know, TikToks. Um, but it's like junk food. It's junk food content. Um, it's, it's like, you know, Maury Povich Hallmark film. Like, you know, it's just stuff that like, it's not highbrow. It just appeals to people. People are gen— you know, people have to turn their head to look at this stuff.

It's like Hallmark, right?

I'm, uh, it's, this is insane to me. So the actors and actresses, they're white people. So is it white? Is it like, are they appealing?

To like Asians? This is for Americans. It's like everything else made in China, made for Americans.

So who's, who, who's buying? I mean, so this is just boggling my mind. So, you know, Hallmark, you know, Hallmark, like, you know, the cards and channel.

Familiar.

Yep. So that, that company still does about $5 billion in revenue. I think it's a family-owned business. So it's still like a huge thing. So the Hallmark—

is it the shops plus the TV or are they separate businesses?

It's Uh, so the whole company does $5 billion in sales. Um, but I think a significant amount of their revenue is not from cards. I think it's from the channel. So it says worldwide Hallmark has 27,000 employees. Holy crap. Um, so, and Hallmark Channel is like a big line of their business, which I think they sold part of it to, uh, Liberty Media. And so It, it's like a huge company still, and I think it's, it's family owned based outta Missouri.

Yeah. Yeah. That's great. Uh, okay. So Hallmark's great. So you're in, just tell me you're in.

So a few years ago, I, I've told this before, my friend Ramon and I ran a test where we created this book called, um, Captivating Claire. I think that's what it was. Was it called Captivating Claire? And basically Ramon ran a soap opera website and he had this guy on his staff that loved to write short stories and they were erotic short stories. And what we did was we created a WordPress blog, a WordPress blog, and I think we called it shortbutromantic.com. And basically over the weekend, we, he wrote a story on a Friday, on Friday night, the WordPress blog was made. And at the very bottom of the WordPress blog, it was basically just one page of a blog post and it said, uh, we hope you enjoyed this first iteration of Captivating Claire from Short But Romantic. If you want to see part 2, here's a PayPal link. It's $10 a month. Sign up and we will mail you the part 2 of the story next week when it comes out. And we used Fiverr and we got a narrator to do it. This whole project took $400. We drove traffic for it. The next day on Saturday, we had like $300 in sales. Um, and we were like, holy crap. And if you look up the blog, you might have to use Web Archive to do it. Uh, but because I think we took it down or the domain expired.

I remember reading it.

If you look at the blog and you go to the comment section, you'll see these people were obsessed with this. They were like, oh my God, Claire did this. I can't wait to read part 2. And it was mind-boggling. And then we were on Sunday, we were like, We don't really want to be in this business. Like this doesn't really fit our interest. I think he should still should have done it.

Well, he was going to. Ramon was going to do this business. We had both invested in him. He was about to do this business and then one of his other businesses kind of took off. So that became—

Yeah, Dog Ramps took off, but he was like really dead set on this. And I was like, I don't know. It seems like it could be pretty great. And this real short is proof that, that, that, that That idea, I think, was onto something. It's, it's, I was amazed at young women and what they wanted to buy.

Me and you were undoubtedly, you know, uh, we're trying hard with this channel. We go every, every week. We work on this channel. We have a, we have YouTube and it's growing. We're doing, we're doing great. Small and mighty. We've been climbing up the charts and in about a year we got to about 350,000 subscribers. And when we really knock it out of the park with a great episode, we might get a few hundred thousand views. Well, just go look at Real Short on YouTube. So somebody started uploading the Real Short episodes, but like the, like episodes 1 through 20 together. So Real Short Romance, um, 330,000 subscribers. They posted a video, uh, like 2 months ago and it has, uh, you know, it's, it's the double life of my billionaire husband, 3.7 million views. Go look at the comments. It's exactly what you're talking about. Christine Joy says, I hope there will be more video from these two. The chemistry they have, heart emoji, prayer emoji.

Dude, and they're not even optimized. They have a real short watermark on them and it's vertical video.

Yeah, exactly. And then another person, you know, Jolen Bongo 6996 says, oh, I watched this on Facebook Reels and I got hooked by it. I love the story and the cast. Good job, guys. I can't wait for the next episodes. And there are thousands of comments in this comment thread that are all about, I can't wait for the next episodes. I love the storyline. This is better than Hollywood. Oh my God, I'm hooked. This is working. And this is, you know, what is my take here? So my take is number one, interesting business that I had never heard of. Good job, Trung. I had never heard about this. So I'm glad he put this on my radar. Second thing, the difference between a good idea and a bad idea is just a few small decisions. Quibi gets made fun of as a classic Silicon Valley idiotic startup. It's like, oh man, remember Quibi? It's like the butt of a joke. In Silicon Valley. Uh, yeah, this will be as successful as Quibi. Quibi, I think, was the right idea. Small micro content, like, you know, TV shows shrank down, I think can be really successful. The problem was they raised $2 billion and spent it all on like really high production quality stuff that wasn't that juicy and never got people hooked. Um, whereas ReelShort is basically like starting with getting people hooked and then figuring out, you know, the rest as it goes. The third thing is, the third takeaway is Why do I have so much faith in the Chinese? Like when I even started to read his tweet, I was like, oh, a Chinese company is trying to do Quibi, but better. And I was like, probably gonna work. I would bet more on this random Chinese company that I've never heard of than Jeffrey Katzenberg, the guy who created Quibi that was like the creator of DreamWorks. And why is that? I don't know. Maybe it's because through my e-com brand, I like do business with, you know, Chinese companies and the way they run their businesses. I mean, like. That's my real MBA is when I talk to like the factory owner in China about how he's running his business and I watch how he moves and he came out here to meet us and we were talking to him and you know, just the way they conduct themselves is awesome. The way they work is awesome. They're like level of complexity they can like handle is awesome. And it used to just be with manufacturing only. And then TikTok came and was a total narrative violation. It was like, oh, you think they could just, you know, make cheap plastic toys? No, no, no. Watch this. We'll make the hit social app that's all about cool and culture. We'll appeal to the US teen better than an American startup could.

That's amazing to me. It's a lack of ego is what it is. So, uh, Quibi was this cool LA company. I think they even reached out to you and I. They're like, you guys want to make content for this? Yeah, I was like, I, I don't know, but, but not that we're quote cool guys, but we are based in San Francisco. And we lived a, on paper, what seemed like an interesting life, like people building startups, whereas—

Let's just say it. If you're going to spend money on us to start your platform, your platform's going to fucking fail.

All right.

Obviously, but we should not be part of your platform.

But they went after like cool people. Like, you know, I imagine they had like high, like big time celebrities and shit like that. Whereas I think a lot of people in Silicon Valley and LA, I think they do the same thing. You know, if you look at a lot of the DDC brands, it's like they spend most of their money on shit branding, some agency that was overpriced with lowercase letters based out of Brooklyn. And in reality, like this whole middle America, I think particularly since a lot of entrepreneurs in the tech space are young men, they forget that there's this whole contingency of 150 million people who are at home and they just want to goof around and watch something like this. And their ego prevents them from creating something that's quote, low quality. Which this fits that bill. You would see this and you're like, this is stupid. No one will watch this. Whereas someone else who's just like, yeah, dude, I just want to win. I just want to do whatever it says. I'm going to follow the numbers. And I think a lot of people would be embarrassed to create this thing. And I don't think they should be, but I think they feel that way. Whereas whoever we're talking about, these Chinese folks, they're just like, yeah, but we're just setting out to build a great company. Right.

Supply and demand. What is their demand for? We can be supply. Versus, you know, we hired, you know, if your company has 20% of people that wear non-prescription glasses, like it's, you're not going to make it in this game because you just have too much, you know, sort of like hipster in you that's not actually going to focus on what the market wants. You're going to try to sell them what they should want rather than what they actually do want.

Someone tagged us in this picture of a Thai restaurant and it was called Thai Near Me.

Thai Food Near Me.

Yeah. Thai Food Near Me, where it was clearly someone was just naming the restaurant, you know, AAA Locksmith in order to rank high on Yelp. Yeah. And that's that immigrant hustle that I appreciate and I respect. And they actually made their branding cute. It was like a cute sign and it was clearly a joke. Uh, but that is lacking, I think, in a lot of our circles and this app, Real Short, they don't have that.

Thai food near me.

Yeah, it's Thai food near me. They've got, they're just a, they own a store and they're like, oh, it looks like people buy a lot of vapes. Looks like we're in the vape business. You know what I mean? And I appreciate that. Like, man, these kids love this grape-flavored smoke, right? We're gonna start selling more of that. Uh, even though I don't always agree with it, I appreciate the mentality.

So you, you weren't there for this one, but I did an episode with Jess Ma. I don't know if you heard it, heard it yet.

Yeah, I started watching this morning. I love Jess Ma.

Do you know her besides like the episode? Like, had you met her?

Because she's friends— well, so Jess Ma was, um, I, I was gonna ask you all about her, but Jess Ma, I know her as like she was the prodigy. So she was like on the COVID of magazines at the age of 19 or 20 for starting Indinero, an accounting software.

She was like the, the person on the COVID of Inc before, right? The month before me was Elizabeth Holmes.

Yeah. And so she was like the it person for a minute, but then over the last like 6 years, she's went silent, which in my head, that either means you've done something bad or you're just quietly killing it and you just don't want to talk about it. And it sounds like the second one was definitely the answer. And Indinero has been crushing it and she's been taking the profits or money from that and doing more things. Is that right?

Yeah, pretty much exactly. So she was like, all right, Indinero is a good business. It's not going to be a monster business. She had like a crazy life experience where her boyfriend died suddenly. And then she was like, just kind of depressed, didn't want to even go into work and was just like, all right, what do I want to do with my life? Like, you know, reminder, life is short. Nothing is guaranteed.

But she didn't say how big Indinero was though.

Did she? It's over 9, it's 9 figures and it's profitable is what she had said. Um, so it's over $100 million in revenue and profitable. So she was like, all right, I don't want to run this company anymore. I'm hiring somebody to run that and I'm going to do whatever's most interesting to me. And so her bets were kind of like, she wanted to like, she's like, well, you know, like, what am I like, what if I wasn't afraid of failure? What would I go do? So she had a couple of things in the episode I think are going to get lost in there. But the big thing that I took away that I went and like, basically after every episode, I send a voice memo to Ben about like, here's the 3 things that like really like that are my notes from this episode.

Dude, I, I keep my notebook right here.

But basically the thing I wrote, I was like, she had like 3 or 4 golden questions. One of them was, what would I do if I wasn't afraid to fail? Um, the other one was, uh, what was the other one?

Wasn't it like, what would I do if I was a billionaire?

It's amazing.

I was like, oh, well, it's simple when you say it like that. And so similarly, um, I don't know about you, but every day I go on Twitter and I see AI magic in my feed. And AI is the best magic trick, like awesome, cool demo product that I've ever seen in my life. It's just like an endless supply of awesome, cool 10-second demos. I don't know if those will all become big companies, but they're amazing demos.

And you did a tutor thing.

And so I did a tutor thing. I was like, oh yeah, I should just hire somebody who, 'cause I was like, either I'm gonna drop everything that I'm doing and like go learn about AI from, as a beginner. Or I'm just going to sit this one out because I don't know, it's just this fast moving thing that the kids are doing and I guess I'll just kind of catch up later. That doesn't feel right either. So I was like, why don't I do this? I was like, I put out a tweet that was like, well, if you're somebody who plays around with all these tools, knows how to use them, I will pay you $500 an hour. I'll pay you whatever, $500 plus an hour to just sit with me a couple times a week and just show me, just teach me about these tools to save me the kind of like 10 hours of fumbling around I would be doing myself.

How many emails did you get?

I got like over 100 replies from like interest, like really interesting people. So it's going to be hard to kind of pick. I might pick a couple people actually instead of just one because there's so many good ones and I might publish this. So I'm thinking about creating a side channel that's just like Sean's Playground, my little YouTube channel where I'll actually just publish the call so that even if somebody's not paying $500 an hour for this, they can just get the benefit from it. Because I don't need to hold this close to my vest or anything. But I think this is great and I want to give myself a little pat on the back, but I really want to say it out loud because there's probably a lot of things like this. Like I know you're taking a finance course right now and that's like the same version. That's like the same thing. Like, don't be afraid to go be a beginner. You're supposed to be Sam Parr, Business Podcast, sold a business, you know, you're supposed to be the guy who knows a bunch of stuff and you came out and you're like, I feel like an idiot when it comes to finance, like corporate finance. I just really don't know what the hell I'm doing. What's the best course in this place, in this thing I could take? And you're, I think you spent like $5,000 on a course, right?

How's that going? Yeah, it's called, um, the 4-Day MBA with Keith Cunningham. Um, and yeah, I'm trying to learn how to do all this stuff. It coincidentally, someone did a video, some billionaire guy did a video and he's like, don't get an MBA, just go take this course.

I know, huge endorsement. I like, I saw it when you said it, I went to the website, website sucks. And I was like, this sucks. Why did Sam do this? And then I heard that clip and I was like, okay, that's now 2 people that said this is awesome. I will now go do this thing.

It's a great course. It's a great course. And I think, I think my opinion— how do I say this without sounding like a huge douche? Once I got a little bit of success, I got way less nervous about hiring people to teach me how to do things. Um, additionally, I mean, we talked about a ton, My Body Tutors, or in hiring a fitness coach, hiring coaches and things like that kind of changed my perspective of of the whole quote coaching industry, which I used to think was bullshit. No, like teaching, having people teach me how to do stuff has kind of changed my life a little bit. And this course is awesome. I have nothing to do with it. I posted that link and people thought that I like, I was like, no, I just think it's cool. It's changed my life, to be honest, like going back to school and like learning and having people just teach me things. I think it's going to be really smart for you to do it this way. I also think that if you promote it, it will, uh, pay for itself. So that's always fun. Um, but I think you're going to have a life-changing next 2 months if you follow through with this.

Yeah. Yeah. Yeah. I'm, I'm already, you know, the, the ROI is, is baked in, in, into this because, because of it. But I guess like I want to say it because I wouldn't have thought to do this unless Jess Ma, she said, she just said that thing in passing. Like I hired a biology tutor and I, in my mind I was like, tutors are something that end. When you're 20 years old, there is no more tutoring after that. And it's like, why, why is that the case? I don't— hold on. There's no rule about that. And there's probably other people out there who kind of could do something similar. So anyways, I said it out loud mostly because if you're the 1% of people that hadn't really thought about this, but could benefit from it, like do it.

Do you know really what I want to do is what I wanted to do was I wanted to take a, like one of those 2-week MBA courses at Columbia or Stanford or something like that. That was, that's my goal for next year to do it. And I went and I looked at like the list of topics that they're going to cover. And I was like, I don't, I don't even know what those topics mean. So I got to go take this online one just to prepare for this in-person one because I was so embarrassed to like see this. And I used to make fun of these people that would put like Stanford, uh, you know, like 2-week course.

One warning though. So I took a similar, like a finance thing last year, I think. And it was good. There's nothing like, it was a good course. There's nothing wrong with the course.

What, you did it in person?

Uh, no, it's an online, online thing, but I attended it and I paid attention. Like I was like, if I'm doing this, I'm going to do it.

Where'd you do it at? What's, what's cool?

It was on Maven. So it was a Maven finance course. And so it was a really good course. There was one thing that I'll say out loud, which is before you go drop thousands of dollars because, oh, Sam Parr said this course is great. Make sure that you like, to me, the way I, the analogy is like, these are all clothes on a hanger, but you need a hook to hang things on. And like, if you don't have a hook, the hook would be like a business you're currently running or like a place you can go apply these learnings. Then I think they can be kind of like fancy procrastination or just like not worth the time or the money. So you have to have enough either battle scars or like a place to go apply these that's actually going to be like relevant for you. Otherwise it's very easy to just like intellectually sit there and be like, yeah, cool. All right. Well, I hope I keep that in mind one day when this becomes relevant. Like you're better off like building the business and then learning the things just in time that you need to know when you need to, like when you need to know them versus trying to learn everything in advance and then be like, now I'm prepared to go do the sport of business.

Well, the reason I'm doing it is because when I was selling The Hustle, we, like this whole thing came at the end called networking capital. And I, I was like, I just don't know what this means. And I optimized my business in one way. But then I didn't know what this term was and there was many things that I could have done differently that would've helped. And like, I felt so emasculated and stupid when these people were talking to me about networking capital. And I'm like, I just can't figure this out when you're explaining it to me. I don't want to experience that pain again. And also I'm getting my balance sheet and my income statement and cash flow statements every month from my accountant. But I'm like, I don't know if this is good. You're just, accountants typically tell you facts and I'm like, but I don't know how to interpret it. I need to know how to interpret this to spot strengths and weaknesses. And I just remember when I was selling my company of not, I'm like, well, I know, I kind of know how to make the money, but I don't know what, I don't know how to optimize any of these equations and I don't know what they mean. And I felt so stupid during that. Um, it was just so challenging to figure out.

Which in our case would be like, would be like, um, maybe like a course business or maybe even this podcast, like this podcast, like grows like mostly organically. We don't need to spend more money in order to grow.

Spending more money is not going to create more money out of this business. The best thing we could do is take the profits from this bad business and invest it in a better business that actually can do that. Um, and so, you know, that, that was that. And what he talks about is like every business over time, like you start out being able to reinvest., but you hit a certain point where a certain dollar threshold where now you can't reinvest more than that into this business at an efficient rate. So you have to identify that point and know that, and then you could judge the business based on that. So similarly, you know, the best business like Constellation Software or Berkshire, they're famous for basically taking profits from one, one bad business, you know, bad defined as like it's a normal cash cow business, but you're not investing it back in that one. You're investing it to buy another one of those. And you invest that to buy another one of those.

And that, by the way, that's the whole point of this book, Good Profit, or Profit First. Um, Andrew recommended, I read it this weekend, he recommended the same thing, was take money out of the business at least and put it into a different bank account and then redeploy it into the, your fast-growing business if it, if it warrants it.

Or if you have a business that can take the reinvestment, then you know that that business is actually even better than you, than it looks on paper because it has this extra capability that most businesses don't have.

Which is what cold plunge is.

All of us are pretty beginner for like anybody in like private equity or whatever, but that's not where we came from, right? Like we're basically like dorks on the internet who then started creating internet companies who then like tried to get rich off internet companies. And now, you know, like we're starting to wrap our heads around like a lot of the, like, you know, 101 type of concept.

Which by the way, I think it's better to go that route. I think it's harder to start things from scratch and then learn how to optimize eventually versus you optimize You're a good optimizer, but you don't know how to start things from scratch. Like just creating the widget that someone wants, I think is more challenging.

100%. Plus it makes me feel good that that's true. But like YC did the same thing. He's like, it's going to be easier for me to take badass engineers and teach them the basics of fundraising and hiring and firing than to take an MBA who knows everything about fundraising, hiring, firing, but can't build shit. And that was like the core bet of YC was we don't need to start these companies with MBAs. We could start these companies with engineers because we could it's easy to teach them that. It's impossible to teach the other way.

Yeah, I, I, and I completely agree with that. And yeah, it makes me feel better that way. So therefore it is true. In summary, we're the best. Yeah, we bragged a lot in this episode. Maybe we'll have another episode where we'll just make fun of each other.

Um, no, the comments will do that for us. Here, let me move the microphone so you get a good look. Uh, here's my face.

Here's my hair.

Here's my body. You can hear my voice. I stutter sometimes. Whatever, whatever you got, go ahead, hit us in the comments.

All right. That's the pod. I feel like I can 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.